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Exhibit 1.4
XXXX XXXXX, INC.
(A Maryland corporation)
4,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: December 15, 2004
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XXXX XXXXX, INC.
(A Maryland corporation)
4,000,000 Shares of Common Stock
(Par Value $.10 Per Share)
PURCHASE AGREEMENT
December 15, 2004
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx, Sachs & Co.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxx Xxxxx, Inc., a Maryland corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), with respect to the issue and sale by the Company and the purchase by
the Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.10 per share, of the Company ("Common
Stock") set forth in said Schedule A, and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of 600,000
additional shares of Common Stock to cover overallotments, if any. The aforesaid
4,000,000 shares of Common Stock (the "Initial Securities") to be purchased by
the Underwriters and all or any part of the 600,000 shares of Common Stock
subject to the option described in Section 2(b) hereof (the "Option Securities")
are hereinafter called, collectively, the "Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as they deem advisable after this Agreement
has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-100156), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Such registration statement, including the exhibits and any
schedules thereto, at the time it became effective, and including documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act at such time and the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final
prospectus in the form first furnished to the Underwriters for use in connection
with the offering of the Securities, including the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time
of the execution of this Agreement, is herein called the "Prospectus." For
purposes of this Agreement, all references to the Registration Statement, the
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934 (the "1934 Act") which is incorporated by reference in the
Registration Statement, or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) The Company meets the requirements for use of Form S-3 under
the 1933 Act. Each of the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendment thereto has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto).
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The prospectus filed as part of the Registration Statement as
originally filed or as part of any amendment thereto, complied when so
filed in all material respects with the 1933 Act Regulations and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they
became effective or at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations or the
1934 Act and the rules and regulations of the Commission thereunder
(the "1934 Act Regulations"), as applicable, and, when read together
with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time (and if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
(iii) PricewaterhouseCoopers LLP, which certified the financial
statements and supporting schedules included in the Registration
Statement, is an independent public accounting firm within the meaning
of the 1933 Act and the 1933 Act Regulations and the regulations of the
Public Company Accounting Oversight Board, for the periods so reported.
(iv) The financial statements included in the Registration
Statement and the Prospectus, together with the related schedules and
notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved and comply as to form with the applicable
accounting requirements of the 1933 Act and the 1933 Act Regulations.
The supporting schedules, if any, included in the Registration
Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in
the Registration Statement.
(v) There are no contracts or documents which are required to be
described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(vi) The Company has been duly incorporated or organized and is
validly existing in good standing under the laws of the jurisdiction in
which it is chartered or organized with all requisite power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation or
organization and is in good standing under the laws of each
jurisdiction which requires such qualification, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Except as would not result in a Material Adverse Effect,
each of the Company's subsidiaries: (A) has been duly incorporated or
organized, (B) is validly existing in good standing under the laws of
the jurisdiction in which it is chartered or organized with all
requisite power
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and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and
(C) is duly qualified to do business as a foreign corporation or
organization and is in good standing under the laws of each
jurisdiction which requires such qualification, whether by reason of
the ownership or leasing of property or the conduct of business.
(viii) The Company's authorized, issued and outstanding capital
stock as of September 30, 2004 is as set forth in the Prospectus
Supplement in the column titled "Actual" under the caption
"Capitalization "; the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and nonassessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or
similar rights of any securityholder of the Company.
(ix) Except as would not result in a Material Adverse Effect: (A)
all the outstanding shares of capital stock of each of the Company's
subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and (B) except as may be otherwise set
forth in the Prospectus, all outstanding shares of capital stock of
such subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim.
(x) All subsidiaries of the Company, other than subsidiaries that
considered in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X, are
listed on Schedule C hereto.
(xi) The Securities have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued, fully
paid and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the same;
no holder of the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the Securities is
not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xii) This Agreement has been duly authorized, executed and
delivered by the Company.
(xiii) The issued and outstanding capital stock of the Company
conforms, and the Securities, upon their issuance and sale in
accordance with this Agreement will conform, in all material respects
to the description of thereof in the Prospectus under the caption
"Description of capital Stock".
(xiv) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
(xv) No consent, approval, authorization, order, registration or
qualification with any court or governmental agency or body is required
for the performance by the Company of its obligations hereunder in
connection with the offering, issuance or sale of the Securities or in
connection with the consummation of the transactions contemplated by
this Agreement, except such as have been already obtained or will have
been obtained prior to the Closing Time.
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(xvi) The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated herein and in the
Prospectus (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder will have been duly authorized
by all necessary corporate action and do not and will not, whether with
or without the giving of notice or passage of time or both, conflict
with, result in a breach or violation of, or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to (i) the charter or by-laws of the
Company (ii) the charter or by-laws (or other similar documents) of any
of the Company's subsidiaries; (iii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which the Company or any of its subsidiaries is a party
or bound or to which its or their property is subject; or (iv) any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its subsidiaries or any
of its or their assets, properties, or operations; except in the cases
of clauses (ii) through (iv) as would not result in a Material Adverse
Effect.
(xvii) There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any subsidiary
that (i) could reasonably be expected to result in a material adverse
effect on the performance of this Agreement or the consummation of any
of the transactions contemplated hereby or (ii) could reasonably be
expected to result in a Material Adverse Effect; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect; and
no labor disturbance by or dispute with the employees of the Company or
any of its subsidiaries exists or is, to the best knowledge of the
Company, threatened or imminent that could reasonably be expected to
have a Material Adverse Effect.
(xviii) Each of the Company and each of its subsidiaries has good
and marketable title to all real property owned by them respectively
and good title to all other properties owned by them respectively, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectus or (b) do not in the aggregate
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company or
any of its subsidiaries; each of the Company and each of its
subsidiaries owns or leases all such properties as are necessary to the
conduct of its operations as presently conducted; neither the Company
nor any subsidiary is in non-compliance with any term or condition of,
or has failed to obtain and maintain in effect, any license,
certificate, permit or other governmental authorization required for
the ownership or lease of its property or the conduct of its business,
which violation, noncompliance or failure would individually or in the
aggregate have a Material Adverse Effect and the Company has not
received notice of any proceedings relating to the revocation or
modification of any such license, certificate, permit or other
authorization, which revocation or material modification could
reasonably be expected to have a Material Adverse Effect.
(xix) (A) The Company is not in violation or default of any
provision of its charter or by-laws, (B) none of the Company's
subsidiaries is in violation or default of any provision of its charter
or by-laws (or other similar documents) and (C) neither the Company nor
any subsidiary is in violation or default of (I) the terms of any
indenture, contract, lease, mortgage, deed of trust,
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note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (II) any statute, law, rule,
regulation, judgment, order or decree of any Federal, state, local or
foreign court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the
Company or such subsidiary or any of its or their properties, as
applicable, which violation or default, in the case of clauses (B) and
(C), would have a Material Adverse Effect.
(xx) The Company has filed all foreign, federal, state and local
tax returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested
in good faith or as would not have a Material Adverse Effect.
(xxi) The Company and its subsidiaries, as an entity, are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires, should it elect to do so,
or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material
Adverse Effect.
(xxii) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
may be described in or contemplated by the Prospectus (including in the
Company's Annual Report on Form 10-K for the year ended March 31, 2003,
incorporated therein by reference, under the heading, "Business - Asset
Management Segment") and except as would not result in a Material
Adverse Effect.
(xxiii) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
Federal, state or foreign regulatory authorities necessary to conduct
their respective businesses, except for such certificates,
authorizations and permits as to which the failure to so own, hold or
possess would not have a Material Adverse Effect, and neither the
Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would result in
a Material Adverse Effect.
(xxiv) Neither the Company nor any of its subsidiaries is in
violation of any Federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials; the Company and its
subsidiaries have received all permits, licenses or other approval
required of them under applicable Federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses; and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a
Material Adverse Effect.
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(xxv) The Company and each of its subsidiaries owns, possesses,
licenses, or has other rights to use all material patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct
of their business, taken as a whole, as now conducted and neither the
Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, other than as disclosed in the Company's Annual
Report or Form 10-K for the fiscal year ended March 31, 2004 or other
than infringements or conflicts or conditions of invalidity or
inadequacy which (if the subject of any unfavorable decision, ruling or
finding), singly or in the aggregate, would not result in a Material
Adverse Effect, subject to such limitations on the use of, or the
rights to use such Intellectual Property that, individually or in the
aggregate, would not have a Material Adverse Effect.
(xxvi) Except as disclosed in the Prospectus, the Company and
each of its subsidiaries has fulfilled its obligations, if any, under
the minimum funding standards of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx
Employee Retirement Income Security Act of 1974 ("ERISA") and the
regulations and published interpretations thereunder with respect to
each "plan" (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company or its
subsidiaries are eligible to participate and each such plan is in
compliance in all material respects with the presently applicable
provisions of ERISA and such regulations and published interpretations,
other than such non-compliance that would not have a Material Adverse
Effect. The Company and its subsidiaries have not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for
the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(xxvii) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock not described
in the Prospectus.
(xxviii) The Company is subject to the reporting requirements of
Section 13 or Section 15(d) of the 1934 Act.
(xxix) The Company has not taken, and will not take, directly or
indirectly, any action prohibited by Regulation M under the 1934 Act in
connection with the offering of the Securities.
(xxx) The Company is not required to be registered, licensed or
qualified as an investment adviser or a broker-dealer or as a commodity
trading advisor, a commodity pool operator or a future commission
merchant or any or all of the foregoing, as applicable; each of the
Company's subsidiaries that is required to be registered, licensed or
qualified as an investment adviser or a broker-dealer or as a commodity
trading advisor, a commodity pool operator or a futures commission
merchant or any or all of the foregoing, as applicable, is so
registered, licensed or qualified in each jurisdiction where the
conduct of its business requires such registration, license or
qualification (and such registration, license or qualification is in
full force
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and effect), and is in compliance with all applicable laws requiring
any such registration, licensing or qualification, except for any
failures to be so registered, licensed or qualified or to be in such
compliance that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
(xxxi) The Company is not a party as an investment advisor or
distributor to any investment advisory agreement or distribution
agreement; each of the investment advisory agreements and distribution
agreements to which any of the Company's subsidiaries is a party is a
valid and legally binding obligation of such subsidiary which is a
party thereto and complies with the applicable provisions of the
Investment Advisers Act of 1940, as amended (the "Advisers Act"),
except for any failures to be so valid and legally binding and in
compliance that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect; and none of the
Company's subsidiaries is in breach or violation of or in default under
any such agreement which breach, violation, default or invalidity,
individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect.
(xxxii) The Company does not sponsor any funds; each fund
sponsored by any of the Company's subsidiaries (a "Fund" or the
"Funds") and which is required to be registered with the Commission as
an investment company under the Investment Company Act of 1940, as
amended (the "Investment Company Act") is duly registered with the
Commission as an investment company under the Investment Company Act,
except for any failures to be so registered that, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 600,000 shares of Common Stock
at the price per share set forth in Schedule B. The option hereby granted will
expire 30 days after the date hereof and may be exercised in whole or in part
from time to time only for the purpose of covering overallotments which may be
made in connection with the offering and distribution of the Initial Securities
upon notice by Xxxxxxx Xxxxx to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by
Xxxxxxx Xxxxx, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total
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number of Initial Securities, subject in each case to such adjustments as
Xxxxxxx Xxxxx in its discretion shall make to eliminate any sales or purchases
of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Underwriters and the Company, at 9:00
A.M. (Eastern time) on December 21, 2004 (unless postponed in accordance with
the provisions of Section 10), or such other time not later than ten business
days after such date as shall be agreed upon by the Underwriters and the Company
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriters and
the Company, on each Date of Delivery as specified in the notice from the
Underwriters to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriters for their respective accounts of certificates for the
Securities to be purchased by them. Xxxxxxx Xxxxx, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Underwriters may request in writing at least one
full business day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriters in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
and will notify the Underwriters promptly as practicable, and confirm the notice
in writing, (i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or any
document incorporated by reference therein or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
9
(b) Filing of Amendments. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)) or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish the Underwriters with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Underwriters or counsel for the Underwriters shall reasonably object unless
required to do so pursuant to applicable provisions of the securities laws.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the each of the Underwriters, without charge,
a conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits). The copies of the Registration Statement
and each amendment thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Underwriters may designate and to
maintain such qualifications in effect as long as may be required for the
distribution of the Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject.
10
(g) Rule 158. The Company will file such reports pursuant to the 1934
Act as are necessary in order to make generally available to its securityholders
an earnings statement for the purposes of, and to provide the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Common Stock on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of sixty (60)
days from the date of the Prospectus, the Company will not, without the prior
written consent of Xxxxxxx Xxxxx, (i) directly or indirectly, offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. This clause (j) shall not apply to (A)
the Securities to be sold hereunder, (B) any shares of Common Stock issued by
the Company upon the exercise of an option or warrant or the conversion or
mandatory exchange of a security outstanding on the date hereof and referred to
in the Prospectus, (C) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus, (D) any shares of Common Stock issued pursuant to
any non-employee director stock plan or dividend reinvestment plan or (E)
securities issued as consideration pursuant to acquisitions and registration
statements registering resales of such securities.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of the Prospectus and any amendments or
supplements thereto, (vii) the fees and expenses of any transfer agent or
registrar for the Securities and (viii) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange.
11
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
shall have received the favorable opinion, dated as of Closing Time, of Shearman
& Sterling LLP, counsel for the Company, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letter for each of the other Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Underwriters may reasonably
request.
(c) Opinion of Counsel for Underwriters. Xxxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, shall have furnished to you such written opinion
or opinions, dated as of Closing Time, with respect to the validity of the
Securities, the Registration Statement, the Prospectus and such other related
matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass
upon such matters.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters shall have
received a certificate of the President or a Vice President of the Company and
of the principal financial or chief accounting officer of the Company, dated as
of Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or, to their knowledge, contemplated by the
Commission.
(e) Accountant's Comfort Letter. Substantially concurrently with the
execution and delivery hereof, the Underwriters shall have received from
PricewaterhouseCoopers LLP a letter dated the date of this Purchase Agreement,
in form and substance satisfactory to the Underwriters and
PricewaterhouseCoopers LLP, containing statements and information of the type
ordinarily included in
12
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Underwriters shall
have received from PricewaterhouseCoopers LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than five business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) Lock-up Agreements. At the date of this Agreement, the Underwriters
shall have received an agreement substantially in the form of Exhibit B hereto
signed by the persons listed on Schedule D hereto.
(i) Maintenance of Rating. Since the execution of this Agreement, there
shall not have been any decrease in the rating of any of the Company's
securities by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the 0000 Xxx) or any notice given of
any intended or potential decrease in any such rating or of a possible change in
any such rating that does not indicate the direction of the possible change.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Underwriters shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of
Shearman & Sterling LLP, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion
of Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Underwriters and PricewaterhouseCoopers LLP and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the Underwriters pursuant to Section 5(f) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
13
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Underwriters and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Underwriters by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written
14
information furnished to the Company by any Underwriter through Xxxxxxx
Xxxxx expressly for use in the Registration Statement (or any amendment
thereto), including the Rule 430A Information or the Prospectus (or any
amendment or supplement thereto).
(2) Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who is a partner of an Underwriter
or who controls an underwriter within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act and who, at the date of this Agreement, is a
director or officer of the Company or controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, such indemnity
agreement is subject to the undertaking of the Company in the Registration
Statement under Item 17 thereof.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection
(a)(1) of this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx Xxxxx
expressly for use in the Registration Statement (or any amendment thereto) or
the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be one or more legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 6(c) for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by Xxxxxxx Xxxxx in the case of paragraph (a) of this Section 6,
representing the indemnified parties under such paragraph (a) who are parties to
such action or actions) or (ii) the indemnifying party does not promptly retain
counsel satisfactory to the indemnified party or (iii) the indemnifying party
has authorized the employment of counsel for the
15
indemnified party at the expense of the indemnifying party. The indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus bear to the aggregate initial public
offering price of the Initial Securities as set forth on the cover of the
Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and
16
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect regardless of (i) any investigation made by or on behalf of any
Underwriter or its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling the Company and
(ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Underwriters may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Underwriters, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or (iv) if a material disruption has occurred in commercial banking
or securities settlement or clearance services in the United States or (v) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
17
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Underwriters
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Underwriters shall not have completed such arrangements within such 24-hour
period, then:
(i) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Underwriters or the Company shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to
Xxxxxxx Xxxxx at 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention
of the Global Origination Counsel Group; and notices to the Company shall be
directed to it at Xxxx Xxxxx, Inc. 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
attention of Xxxxxx X. Xxxxx, Esq., General Counsel.
SECTION 12. Parties.
This Agreement shall each inure to the benefit of and be binding upon
the Underwriters and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all
18
conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the Underwriters and the Company and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
SECTION 14. TIME.
TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
SECTION 16. Effect of Headings.
The Section headings herein are for convenience only and shall not
affect the construction hereof.
19
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
XXXX XXXXX, INC.
By
-----------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXXX, SACHS & CO.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
--------------------------------------
Authorized Signatory
20
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated .......................... 1,333,334
Xxxxxxx, Sachs & Co............................................ 1,333,333
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 1,333,333
Incorporated ......................................
Total.......................................................... 4,000,000
===============
Sch A-1
SCHEDULE B
XXXX XXXXX, INC.
4,000,000 Shares of Common Stock
(Par Value $.10 Per Share)
1 The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $70.30.
2 The purchase price per share for the Securities to be paid by the
several Underwriters shall be $67.60, being an amount equal to the initial
public offering price set forth above less $2.70 per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the overallotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
[SCHEDULE C]
Certain Subsidiaries
State (Jurisdiction) of
Name of Subsidiary Incorporation or Organization
--------------------------------------------------------------------------------
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated Maryland
--------------------------------------------------------------------------------
Xxxxxx Xxxx Financial Corporation Louisiana
--------------------------------------------------------------------------------
Western Asset Management Company California
--------------------------------------------------------------------------------
Xxxx Xxxxx Fund Adviser, Inc. Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Capital Management, Inc. Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Financial Services, Inc. Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Mortgage Capital Corporation Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Trust, fsb USA
--------------------------------------------------------------------------------
Xxxx Xxxxx Funding, Corp. Delaware
--------------------------------------------------------------------------------
Xxxxxx Xxxx Incorporated Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Properties, Inc. North Carolina
--------------------------------------------------------------------------------
Batterymarch Financial Management, Inc. Maryland
--------------------------------------------------------------------------------
Xxxxxxxx & Co. Ohio
--------------------------------------------------------------------------------
Xxxxxxxx Real Estate, Inc. Ohio
--------------------------------------------------------------------------------
Brandywine Asset Management, LLC Delaware
--------------------------------------------------------------------------------
Berkshire Asset Management, Inc. Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Funds Management, Inc. Maryland
--------------------------------------------------------------------------------
Xxxx Xxxxx Real Estate Investors, Inc. Maryland
--------------------------------------------------------------------------------
Xxxxxxx Associates, Inc. New York
--------------------------------------------------------------------------------
Xxxx Xxxxx Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Focus Capital, Inc. Maryland
--------------------------------------------------------------------------------
LM Holdings Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Holdings Limited England and Wales
--------------------------------------------------------------------------------
Western Asset Management Company Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx (UK) Holdings Plc England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Investments Holdings Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Investments Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Investments (Europe) Limited England and Wales
--------------------------------------------------------------------------------
Xxxx Xxxxx Investments Funds Limited England and Wales
--------------------------------------------------------------------------------
3040692 Nova Scotia Company Canada
--------------------------------------------------------------------------------
Xxxx Xxxxx Canada Holdings Ltd. Canada
--------------------------------------------------------------------------------
Xxxx Xxxxx Canada Inc. Canada
--------------------------------------------------------------------------------
Royce & Associates, LLC Delaware
--------------------------------------------------------------------------------
Royce Fund Services, Inc. New York
--------------------------------------------------------------------------------
Royce Management Company, LLC New York
--------------------------------------------------------------------------------
PCN Holdings I, Inc. Delaware
--------------------------------------------------------------------------------
PCM Holdings II, LLC Delaware
--------------------------------------------------------------------------------
Xxxxxx Capital Corporation New York
--------------------------------------------------------------------------------
Private Capital Management, L.P. New York
--------------------------------------------------------------------------------
LMM LLC Delaware
--------------------------------------------------------------------------------
Xxxx Xxxxx Asset Management (Asia) Pte Ltd. Singapore
Sch C-1
NY12528:210265.6
SCHEDULE D
List of Persons Subject to Lock-Up
Directors of the Company
------------------------
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxxx
Xxxx Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxx, Xx.
Xxxxxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxx, III
Xxxxxxx X. Xxxxx
Xxxxxx X. X'Xxxxx
Xxxxx X. X'Xxxxxx
Xxxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Xxxxxxxx X. St. Xxxxxx
Xxxxx X. Xxxxx
Officers of the Company
-----------------------
Xxxxx X. Xxxx
Xxxxx X. Bilson
Xxxxxx Xxxxxxxxx
Xxxxxxx X. Xxxxx, Xx.
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx III
Sch D-1
Exhibit A-1
FORM OF OPINION OF SHEARMAN & STERLING LLP COUNSEL TO THE COMPANY
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has corporate power and authority to enter into
and perform its obligations under the Purchase Agreement;
(ii) The Purchase Agreement has been duly authorized, executed
and delivered by the Company;
(iii) The Securities have been duly authorized by the Company
and, when delivered to and paid for by you in accordance with the terms
of the Purchase Agreement, will be validly issued, fully paid and
non-assessable and free and clear of any preemptive or similar rights;
(iv) The Company has an authorized capitalization as set forth in
the Prospectus, as supplemented or amended, and the authorized capital
stock of the Company conforms as to legal matters to the description
thereof contained in the Prospectus under the heading "Description of
Capital Stock".
(v) The statements in the Base Prospectus under the captions
"Description of Capital Stock" and "Plan of Distribution" and in the
Prospectus Supplement under the caption "Underwriting" insofar as such
statements constitute summaries of legal matters, documents or
proceedings referred to therein, fairly summarize the matters referred
to therein;
(vi) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and compliance by the Company with its obligations
under the Purchase Agreement do not and will not, whether with or
without the giving of notice or lapse of time or both, result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries;
(vii) The documents incorporated by reference in the Registration
Statement and the Prospectus (other than the financial statements and
supporting schedules therein, as to which we express no opinion), when
they were filed with the Commission (or, if an amendment with respect
to any such document was filed, when such amendment was filed) complied
as to form in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder; and we
are not aware of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required; and
(viii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the 1940 Act.
In addition Shearman & Sterling LLP shall provide a separate letter to the
following effect:
In our capacity as counsel to the Company, we have examined copies of
the Registration Statement and the Prospectus. We have also reviewed and
participated in discussions concerning the preparation of the Registration
Statement and the Prospectus with certain officers and employees of the
A-1
Company, and its auditors and with representatives of the Underwriters and
counsel. The limitations inherent in the independent verification of factual
matters and in the role of outside counsel are such, however, that we cannot and
do not assume any responsibility for the accuracy, completeness or fairness of
any of the statements made in the Registration Statement and the Prospectus,
except as set forth in paragraphs (ix) and (x) of our opinion addressed to you,
dated the date hereof.
Subject to the limitations set forth in the immediately preceding
paragraph, we advise you that, on the basis of the information we gained in the
course of performing the services referred to above, no facts came to our
attention which gave us reason to believe that (i) any amendment to the
Registration Statement as of the date hereof is required to be filed, (ii) the
Registration Statement, as of the time it was declared effective and at the date
hereof, contained or contains any untrue statement of a material fact, or
omitted or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, (iii) any
document incorporated by reference into the Registration Statement, on the date
it was filed contained an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents were
so filed, not misleading, or (iv) the Prospectus, as of its date and as of the
date of the delivery of this letter, contained or contains any untrue statement
of a material fact, or omitted or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that we do not express any belief with respect to the financial
statements, schedules, notes, or other financial and accounting data included in
the Registration Statement or the Prospectus).
X-0
Xxxxxxx X-0
FORM OF OPINION OF GENERAL COUNSEL TO THE COMPANY
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland;
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus, as supplemented or amended;
(iii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus, as supplemented or amended;
(iv) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect;
(v) The shares of issued and outstanding capital stock of the
Company, including the Securities, have been duly authorized and
validly issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company;
(vi) Except as would not result in a Material Adverse Effect: (A)
each of the Company's subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business; (B) except as otherwise disclosed in the Prospectus, all of
the issued and outstanding capital stock of each of the Company's
subsidiaries has been duly authorized and validly issued, is fully paid
and non-assessable and, to the knowledge of such counsel, is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and (C) none of the outstanding shares of capital stock of any
of the Company's subsidiaries was issued in violation of the preemptive
or similar rights of any securityholder of such subsidiary.
(vii) The Securities have been duly authorized by the Company
and, when delivered to and paid for by you in accordance with the terms
of the Purchase Agreement, will be validly issued, fully paid and
non-assessable and free and clear of any preemptive or similar rights;
(viii) To the knowledge of such counsel, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary of the Company is a party, or to
which the property of the Company or any subsidiary of the Company is
subject, before or brought by any court or governmental agency or body,
(A) which might reasonably be expected to result in a Material Adverse
Effect, or (B) which might reasonably be expected to materially and
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in the Purchase Agreement or the
performance by the Company
A-3
of its obligations thereunder or the transactions contemplated by the
Prospectus, or (C) required to be described in the Prospectus but not
so described;
(ix) To the knowledge of such counsel, neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or
other organizational documents and no default by the Company or any of
its subsidiaries exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Prospectus or filed or incorporated by reference therein;
(x) To such counsel's knowledge, no filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency, domestic or foreign (other than such as may be required under
the applicable securities or Blue Sky laws of the various jurisdictions
in which the Securities will be offered or sold, as to which such
counsel expresses no opinion) is necessary or required in connection
with the due authorization, execution and delivery of the Purchase
Agreement by the Company or for the offering, issuance, sale or
delivery of the Securities to the Underwriters or the resale by the
Underwriters;
(xi) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and the Prospectus (including the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use Of Proceeds") and compliance by the Company with
its obligations under the Purchase Agreement, do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary of the Company
pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument,
known to such counsel, to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary of the
Company is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances for which waivers have been obtained or
that would not have a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries, or, to such counsel's
knowledge, any applicable law, statute, rule, regulation (assuming
compliance with all applicable state securities and Blue Sky laws)
applicable to the Company or any judgment, order, writ or decree, known
to such counsel, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties, assets or
operations.
A-4
Exhibit B
December 15, 2004
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Xxxxxxx, Sachs & Co.
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Xxxx Xxxxx, Inc.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of Xxxx
Xxxxx, Inc., a Maryland corporation (the "Company"), understands that Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx") Xxxxxxx, Xxxxx & Co. and Xxxx Xxxxx Xxxx Xxxxxx, Incorporated propose to
enter into a Purchase Agreement (the "Purchase Agreement") with the Company
providing for the public offering of shares (the "Securities") of the Company's
common stock, par value $.10 per share (the "Common Stock"). In recognition of
the benefit that such an offering will confer upon the undersigned as a
stockholder and an officer and/or director of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Purchase Agreement that, during a period of sixty (60) days from the date of the
Purchase Agreement, the undersigned will not, without the prior written consent
of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant for the sale of, or otherwise
dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file, or cause to be filed, any registration statement under the Securities Act
of 1933, as amended, with respect to any of the foregoing (collectively, the
"Lock-Up Securities") or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Lock-Up Securities, whether any such
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Notwithstanding the foregoing, the restrictions contained in this
letter shall not apply to (i) transfers of shares of Common Stock or options to
purchase the Common Stock made as a bona fide gift or gifts, provided that (A)
the donee or donees thereof agree to be bound by the restrictions set forth
herein, or (B) such gift is a charitable donation to a tax exempt organization
in an amount of 5% or less of the Common Stock owned at the date hereof by the
undersigned, (ii) transfers of shares of Common Stock or options to purchase the
Common Stock
B-1
made to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein and provided
further that any such transfer shall not involve a disposition for value or
(iii) transfers or sales or shares of Common Stock for the payment of exercise
costs (including taxes) in respect of any purchase of Common Stock pursuant to
an option granted pursuant to existing employee benefit plans or director
compensation plans of the Company.
Very truly yours,
Signature:
-------------------------------
Print Name:
-----------------------------
B-2
