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EXHIBIT 1.1
6,700,000 SHARES
FREEDOM SECURITIES CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
_______ __, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
CORPORATION
SUTRO & CO. INCORPORATED
XXXXXX XXXXXXX INCORPORATED
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Freedom Securities Corporation, a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "UNDERWRITERS"), and certain stockholders of the Company named in
Schedule II hereto (the "SELLING STOCKHOLDERS") severally propose to sell to the
several Underwriters, an aggregate of 6,700,000 shares of the Common Stock, $.01
par value per share, of the Company (the "FIRM SHARES"), of which 4,200,000
shares are to be issued and sold by the Company and 2,500,000 shares are to be
sold by the Selling Stockholders, each Selling Stockholder selling the amount
set forth opposite such Selling Stockholder's name in Schedule II hereto. The
Selling Stockholders also propose to sell to the several Underwriters not more
than an additional 1,005,000 shares of the Company's Common Stock, $.01 par
value per share, (the "ADDITIONAL SHARES") if requested by the Underwriters as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
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hereinafter referred to collectively as the "SHARES". The shares of common stock
of the Company to be outstanding after giving effect to the sales contemplated
hereby are hereinafter referred to as the "COMMON STOCK". The Company and the
Selling Stockholders are hereinafter sometimes referred to collectively as the
"SELLERS."
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), Registration Statement No. 333-44931 on Form S-1,
including a prospectus, relating to the Shares. The registration statement, as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"REGISTRATION STATEMENT"; and the prospectus in the form first used to confirm
sales of Shares is hereinafter referred to as the "PROSPECTUS". If the Company
has filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares of
Common Stock (a "RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) the Company agrees to issue and sell
4,200,000 Firm Shares, (ii) each Selling Stockholder agrees, severally and not
jointly, to sell the number of Firm Shares set forth opposite such Selling
Stockholder's name in Schedule II hereto and (iii) each Underwriter agrees,
severally and not jointly, to purchase from each Seller at a price per Share of
$______ (the "PURCHASE PRICE") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedules I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Stockholders
agree to sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 1,005,000 Additional Shares from the
Selling Stockholders at the Purchase Price. Additional Shares may be purchased
solely for the purpose of covering over-allotments made in connection with the
offering of the Firm Shares. The Underwriters may exercise their right to
purchase
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Additional Shares in whole or in part from time to time by giving written notice
thereof to the Company and the Selling Stockholders within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the
Underwriters and such notice shall specify the aggregate number of Additional
Shares to be purchased pursuant to such exercise and the date for payment and
delivery thereof, which date shall be a business day (i) no earlier than two
business days after such notice has been given (and, in any event, no earlier
than the Closing Date (as hereinafter defined)) and (ii) no later than five
business days after such notice has been given. If any Additional Shares are to
be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Selling Stockholders the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) which bears the
same proportion to the total number of Additional Shares to be purchased from
the Selling Stockholders as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I bears to the total number of Firm Shares,
and each Selling Stockholder, severally and not jointly, agrees to sell to the
Underwriters the number of Additional Shares which bears the same proportion to
the total number of Additional Shares to be purchased from all of the Selling
Stockholders as the number of Additional Shares set forth opposite the name of
such Selling Stockholder in Schedule III bears to the total number of Additional
Shares set forth in Schedule III.
Each Seller hereby agrees not to (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 to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing stock option plans and (ii) the Company may
issue shares of Common Stock upon the exercise of an option, warrant or other
right to acquire shares of Common Stock or upon the conversion of a security
outstanding on the date hereof. The Company also agrees not to file any
registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In addition,
each Selling Stockholder agrees that, for a period of 180 days after the date of
the Prospectus without the prior written consent of
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Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, it will not make any demand
for, or exercise any right with respect to, the registration of any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock. The Company shall, prior to or concurrently with the execution
of this Agreement, deliver an agreement executed by (i) each Selling
Stockholder, (ii) each of the directors and executive officers of the Company
who is not a Selling Stockholder and (iii) each stockholder listed on Annex I
hereto to the effect that such person will not, during the period commencing on
the date such person signs such agreement and ending 180 days after the date of
the Prospectus, without the prior written consent of Xxxxxxxxx, Lufkin &
Xxxxxxxx Corporation, (A) engage in any of the transactions described in the
first sentence of this paragraph, other than, in the case of each person other
than a Selling Stockholder, bona fide pledges or (B) make any demand for, or
exercise any right with respect to, the registration of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock. Notwithstanding the foregoing, THL-CCI, L.P. may transfer Common
Stock to the limited partners of THL-CCI, L.P. provided such limited partners
shall execute and deliver an agreement substantially to the effect of the
preceding sentence for the then-remaining part of the 180 day period referred to
in the preceding sentence.
The Company hereby confirms its engagement of Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation ("DLJ") as, and DLJ hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter", within the meaning of Section (b)(15) of Rule 2720 of the National
Association of Securities Dealers, Inc. with respect to the offering and sale of
the Shares. DLJ, solely in its capacity as the qualified independent underwriter
and not otherwise, is referred to herein as the "QIU". As compensation for the
services of the QIU hereunder, the Company agrees to pay the QIU $5,000 on the
Closing Date. The price at which the Shares will be sold to the public shall not
be higher than the maximum price recommended by the QIU.
SECTION 3. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request not later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
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Shares shall be delivered by or on behalf of the Sellers, with any transfer
taxes thereon duly paid by the respective Sellers, to Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "DESIGNATED OFFICE"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on __________ , 1998 or such other time on the same or such
other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the
Company shall agree in writing. The time and date of delivery and payment for
the Firm Shares are hereinafter referred to as the "CLOSING DATE." The time and
date of delivery and payment for any Additional Shares to be purchased by the
Underwriters shall be 9:00 A.M., New York City time, on the date specified in
the applicable exercise notice given by you pursuant to Section 2 or such other
time on the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and the Company shall agree in writing. The time and date of
delivery and payment for any Additional Shares are hereinafter referred to as an
"OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 10 of this Agreement
shall be delivered at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission
for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information, (ii) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction,
or the initiation of any proceeding for such purposes, (iii) when any
amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration
Statement has become effective and (v) of the happening of any event
during the period referred to in Section 5(d) below which makes any
statement of a material fact made in the Registration
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Statement or the Prospectus untrue or which requires any additions to
or changes in the Registration Statement or the Prospectus in order to
make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(b) To furnish to you 5 signed copies of the Registration
Statement as first filed with the Commission and of each amendment to
it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration
Statement as so filed and of each amendment to it, without exhibits, as
you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in Rule
424(b) under the Act; during the period specified in Section 5(d)
below, not to file any further amendment to the Registration Statement
and not to make any amendment or supplement to the Prospectus of which
you shall not previously have been advised or to which you shall
reasonably object after being so advised; and, during such period, to
prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or
supplement to the Prospectus which may be necessary or advisable in
connection with the distribution of the Shares by you, and to use its
best efforts to cause any such amendment to the Registration Statement
to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement and from time to time
thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in
connection with sales by an Underwriter or a dealer, to furnish in New
York City to each Underwriter and any dealer as many copies of the
Prospectus (and of any amendment or supplement to the Prospectus) as
such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the
opinion of counsel for the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is
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necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so delivered, be
misleading, or so that the Prospectus will comply with applicable law,
and to furnish to each Underwriter and to any dealer as many copies
thereof as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or Blue
Sky laws of such jurisdictions as you may request, to continue such
registration or qualification in effect so long as required for
distribution of the Shares and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Company
shall not be required in connection therewith to qualify as a foreign
corporation in any jurisdiction in which it is not now so qualified or
to take any action that would subject it to general consent to service
of process or taxation other than as to matters and transactions
relating to the Prospectus, the Registration Statement, any preliminary
prospectus or the offering or sale of the Shares, in any jurisdiction
in which it is not now so subject.
(g) To make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period
ending June 30, 1999 that shall satisfy the provisions of Section 11(a)
of the Act, and to advise you in writing when such statement has been
so made available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports
or other communications furnished to the record holders of Common Stock
or furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed and
such other publicly available information concerning the Company and
its subsidiaries as you may reasonably request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of the
Sellers' obligations under this Agreement, including: (i) the fees,
disbursements
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and expenses of the Company's counsel, the Company's accountants and
any Selling Stockholder's counsel (in addition to the Company's
counsel) in connection with the registration and delivery of the Shares
under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and
delivering of copies thereof to the Underwriters and dealers in the
quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in
connection with the offering, purchase, sale or delivery of the Shares,
(iv) all expenses in connection with the registration or qualification
of the Shares for offer and sale under the securities or Blue Sky laws
of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification
and memoranda relating thereto), (v) the filing fees and disbursements
of counsel for the Underwriters in connection with the review and
clearance of the offering of the Shares by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with
the preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to the
listing of the Shares on the New York Stock Exchange ("NYSE"), (vii)
the cost of printing certificates representing the Shares, (viii) the
costs and charges of any transfer agent, registrar and/or depositary,
(ix) the fees and expenses of the QIU (including the fees and
disbursements of counsel to the QIU) and (x) all other costs and
expenses incident to the performance of the obligations of the Company
and the Selling Stockholders hereunder for which provision is not
otherwise made in this Section 5(i). Subject to Section 13 hereof, the
Underwriters shall not be entitled to be reimbursed for any costs and
expenses incident to the performance of their obligations hereunder for
which provision is not otherwise made in this Section 5(i). The
provisions of this Section shall not supercede or otherwise affect any
agreement that the Company and the Selling Stockholders may otherwise
have for allocation of such expenses among themselves.
(j) To use its reasonable best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
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(k) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this
Agreement by the Company prior to the Closing Date or any Option
Closing Date, as the case may be, and to satisfy all conditions
precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to
file a Rule 462(b) Registration Statement with the Commission
registering the Shares not so covered in compliance with Rule 462(b) by
10:00 P.M., New York City time, on the date of this Agreement and to
pay to the Commission the filing fee for such Rule 462(b) Registration
Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under
the Act.
(m) To use its best efforts (i) to obtain as promptly as
possible the issuance of an order (the "Order") from the SEC
substantially in the form contemplated by the draft Application for an
Order of Exemption on behalf of Freedom Mutual Fund, Freedom Group of
Tax Exempt Fund, Fundmanager Portfolios and Freedom Capital Management
Corporation (the "Adviser") attached hereto as Exhibit A, (ii) to
obtain the shareholder approvals for new investment advisory agreements
contemplated by the Order within the time frame provided in the Order
and (iii) to obtain as promptly as possible the consent of each client
of the Adviser that is not a registered investment company to the
assignment of such client's investment advisory contract resulting from
same transactions which will cause the termination of the investment
advisory agreements referred to in the Order.
(n) To use its best efforts to amend or replace the credit
facility described in the Prospectus to permit the payment of dividends
by the Company as contemplated in the Prospectus under "Dividend
Policy."
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement); any Rule 462(b)
Registration Statement filed after the effectiveness of this Agreement
will become effective no later than 10:00 P.M., New York City time, on
the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose
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are pending before or, to the knowledge of the Company, threatened by
the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it became effective, did not
contain and, as amended, if applicable, will not contain any 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, (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as
amended or supplemented, if applicable, will comply in all material
respects with the Act, (iii) if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this
Agreement, such Rule 462(b) Registration Statement and any amendments
thereto, when they become effective (A) will not contain any 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 and (B) will comply in all material respects with the Act
and (iv) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in
writing by you expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Act, complied when so
filed in all material respects with the Act, and did 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, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to any
Underwriter furnished to the Company in writing by you expressly for
use therein.
(d) Each of the Company and Xxxxxx Xxxxxxx Incorporated
("XXXXXX XXXXXXX"), Sutro & Co., Incorporated ("SUTRO"), Freedom
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Capital Management Corporation ("FREEDOM CAPITAL"), Freedom Trust
Company ("FREEDOM TRUST"), and Freedom Specialist, Inc. ("FSI", and,
together with Xxxxxx Xxxxxxx, Sutro, Freedom Capital, Freedom Trust and
each subsidiary of the Company directly or indirectly owning any of the
foregoing, the "PRIMARY SUBSIDIARIES") has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and
to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole.
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries relating to
or entitling any person to purchase or otherwise to acquire any shares
of the capital stock of the Company or any of its subsidiaries, except
as otherwise disclosed in the Registration Statement.
(f) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; and the Shares to
be issued and sold by the Company have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued
and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear
of any security interest, claim, lien, encumbrance or adverse interest
of any nature.
(h) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
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(i) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(j) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not (i) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency (except such as may be required under the securities or Blue Sky
laws of the various states), (ii) conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the charter
or by-laws of the Company or any of its subsidiaries or any indenture,
loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, any of its
subsidiaries or their respective property or (iv) result in the
suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization.
(k) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required to be
described in the Registration Statement or the Prospectus and are not
so described; nor are there any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL
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LAWS") or any provisions of the Employee Retirement Income Security Act
of 1974, as amended, or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a material adverse effect on the business,
prospects, financial condition or results of operation of the Company
and its subsidiaries, taken as a whole.
(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with
and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental Laws,
as are necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole. Each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which
allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to
the Company or any of its subsidiaries; except where such failure to be
valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any Authorization, any related
constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole.
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(o) This Agreement has been duly authorized, executed and
delivered by the Company.
(p) Ernst & Young, LLP are independent public accountants with
respect to the Company and its subsidiaries as required by the Act.
(q) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present
fairly the consolidated financial position, results of operations and
changes in financial position of the Company and its subsidiaries on
the basis stated therein at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; the supporting schedules, if
any, included in the Registration Statement present fairly in
accordance with generally accepted accounting principles the
information required to be stated therein; and the other financial and
statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and
records of the Company.
(r) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(s) Except as described in the Prospectus under "Certain
Transactions -- The Stockholders Agreement", there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with
the Shares registered pursuant to the Registration Statement.
(t) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
adverse change or any development involving a prospective material
adverse change in the
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condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there has not been any material adverse change or any
development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of its
subsidiaries and (iii) neither the Company nor any of its subsidiaries
has incurred any material liability or obligation, direct or
contingent.
(u) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
(v) The Company has filed a registration statement pursuant to
Section 12(b) of the Exchange Act to register the Common Stock, has
filed an application to list the Shares on the New York Stock Exchange
and has received notification that the listing has been approved,
subject to notice of issuance of the Shares.
(w) The Company and each of its subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(x) All material tax returns required to be filed by the
Company and each of its subsidiaries in any jurisdiction have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company or any of its
subsidiaries have been paid, other than those being contested in good
faith and for which adequate reserves have been provided.
(y) No relationship, direct or indirect, exists between or
among the Company or any of the Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of the Subsidiaries on the other hand, which is required
by the Act to be
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described in the Registration Statement or the Prospectus which is not
so described.
(z) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
("INTELLECTUAL PROPERTY") currently employed by them in connection with
the business now operated by them except where the failure to own or
possess or otherwise be able to acquire such intellectual property
would not, singly or in the aggregate, have a material adverse effect
on the business, prospects, financial condition or results of operation
of the Company and its subsidiaries, taken as a whole; and neither the
Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect
to any of such intellectual property which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(aa) The Company and each of its subsidiaries 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; and neither the Company nor any
of its subsidiaries (i) has received notice from any insurer or agent
of such insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance
or (ii) has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers at a cost that would not
have a material adverse effect on the business, prospects, financial
conditions or results of operations of the Company and its
subsidiaries, taken as a whole.
(bb) The Company has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be
expected to, cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Shares pursuant to the distribution contemplated by this
Agreement (other than any actions taken by Xxxxxx Xxxxxxx or Sutro in
their capacity as Underwriters as permitted by the Act), and other than
as permitted by the Act, the Company has not distributed and will not
distribute any
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prospectus or other offering material in connection with the offering
and sale of the Shares.
(cc) (i) Each of Xxxxxx Xxxxxxx and Sutro is registered as a
broker-dealer with the Commission and under the laws of all fifty U.S.
states, the District of Columbia and Puerto Rico, is a member of the
NASD, the NYSE, the American Stock Exchange and the Pacific Stock
Exchange and, in the case of Xxxxxx Xxxxxxx, the Boston Stock Exchange,
the Chicago Board Options Exchange, the Midwest Stock Exchange, the
Philadelphia Stock Exchange, the Pacific Stock Exchange and the
National Futures Association, and, in each case, is in compliance with
all applicable laws, rules, regulations, orders, by-laws and similar
requirements in connection with such registrations and membership,
including without limitation Rule 15c-1 under the Securities Exchange
Act of 1934 (the "NET CAPITAL RULE"), except where the failure to be so
registered or in such compliance would not have a material adverse
effect on the Company and its subsidiaries taken as a whole, (ii) FSI
is registered as a broker-dealer with the Commission and under the laws
of New York and is a member of the NYSE and is in compliance with all
applicable laws, rules, regulations, orders, by-laws and similar
requirements in connection with such registrations and memberships,
including the Net Capital Rule, except where the failure to be so
registered or in such compliance would not have a material adverse
effect on the Company and its subsidiaries taken as a whole and (iii)
to the extent required by applicable law, rule or regulation, Xxxxxx
Xxxxxxx is appropriately registered with the French securities
regulatory authorities and is in compliance with all applicable laws
and regulations in connection therewith except where the failure to be
so registered or in such compliance would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(dd) (i) Each of Xxxxxx Xxxxxxx, Sutro and Freedom Capital is
registered as an investment advisor with the Commission, is registered
or exempt from regulation in all fifty states, the District of Columbia
and Puerto Rico, and is in compliance in all material respects with all
applicable laws, rules, regulations, orders and similar requirements in
connection therewith except where the failure to be so registered or in
such compliance would not have a material adverse effect on the Company
and its subsidiaries taken as a whole, and (ii) each of the investment
funds advised by Freedom Capital is registered as an investment company
with the Commission and is registered or exempt from registration in
all fifty states, the District of Columbia and Puerto Rico, and each
such entity is in compliance with all applicable laws, rules,
regulation, orders, by-laws and
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similar requirements in connection with such registration, except where
the failure to be so registered or in such compliance would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole.
(ee) Freedom Trust is in compliance with all law, rules,
regulations, orders and similar requirements applicable to its trust
investment management and fiduciary services business except where the
failure to be in compliance would not have a material adverse effect on
the Company and its subsidiaries taken as a whole.
(ff) Since January 1, 1993, the Company and its subsidiaries
have filed all financial reports and registrations, reports,
statements, notices, and other filings required to be filed by the
Company or any of its subsidiaries with any governmental agency or
industry organization having authority for enforcing laws and
regulations applicable to the Company's business as a broker-dealer and
investment adviser in the United States, including, without limitation,
the SEC, the NASD, the NYSE, and state securities commissions (each, a
"FINANCIAL REGULATORY AUTHORITY") or any other governmental agency,
body or official, including all required amendments or supplements to
any of the above, except for filings, the failure of which to make
would not have a material adverse effect on the Company and its
subsidiaries taken as a whole (collectively, including the financial
reports, the "FILINGS"). Each Filing complied as to form and substance
in all material respects with the applicable law or regulation
requiring such Filing to be filed and did not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading and each
financial report was true, complete and correct in all material
respects, and complied in all material respects with applicable
accounting principles and the regulatory requirements applicable to
such report.
SECTION 7. Representations and Warranties of the Selling Stockholders.
Each Selling Stockholder, severally with respect to itself and not jointly,
represents and warrants to each Underwriter that:
(a) Such Selling Stockholder has been duly incorporated or
otherwise organized and is validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization and has
the power and authority to carry on its business as it is currently
being conducted and to own, lease and operate its properties.
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(b) Such Selling Stockholder is the lawful owner of the Shares
to be sold by such Selling Stockholder pursuant to this Agreement and
has, and on the Closing Date will have, good and clear title to such
Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever.
(c) Such Selling Stockholder has, and on the Closing Date will
have, full legal right, power and authority, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement signed by such Selling Stockholder and American Stock
Transfer & Trust Company, as Custodian, relating to the deposit of the
Shares to be sold by such Selling Stockholder (the "CUSTODY AGREEMENT")
and the Power of Attorney of such Selling Stockholder appointing
certain individuals as such Selling Stockholder's attorneys-in-fact
(the "ATTORNEYS") to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement and
the Custody Agreement (the "POWER OF ATTORNEY") and to sell, assign,
transfer and deliver the Shares to be sold by such Selling Stockholder
in the manner provided herein and therein.
(d) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Stockholder.
(e) the Custody Agreement of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and
is a valid and binding agreement of such Selling Stockholder,
enforceable in accordance with its terms.
(f) the Power of Attorney of such Selling Stockholder has been
duly authorized, executed and delivered by such Selling Stockholder and
is a valid and binding instrument of such Selling Stockholder,
enforceable in accordance with its terms, and, pursuant to such Power
of Attorney, such Selling Stockholder has, among other things,
authorized the Attorneys, or any one of them, to execute and deliver on
such Selling Stockholder's behalf this Agreement and any other document
that they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and thereby and to
deliver the Shares to be sold by such Selling Stockholder pursuant to
this Agreement.
(g) Upon delivery of and payment for the Shares to be sold by
such Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on
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transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(h) The execution, delivery and performance of this Agreement
and the Custody Agreement and Power of Attorney of such Selling
Stockholder by or on behalf of such Selling Stockholder, the compliance
by such Selling Stockholder with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency (except such as may be required under the securities or Blue
Sky laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
organizational documents of such Selling Stockholder, if such Selling
Stockholder is not an individual, or any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder or any
property of such Selling Stockholder is bound or (iii) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over such Selling Stockholder or any property of such
Selling Stockholder.
(i) To the actual knowledge of such Selling Stockholder
without independent investigation, the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements
or omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in
writing by you expressly for use therein.
(j) At any time during the period described in Section 5(D),
if there is any change in the information referred to in Section 7(I),
such Selling Stockholder will immediately notify you of such change.
(k) Such Selling Stockholder is not and, after giving effect
to the sale of the Shares and the application of the proceeds thereof,
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940.
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(l) Each certificate signed by or on behalf of such Selling
Stockholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by
such Selling Stockholder to the Underwriters as to the matters covered
thereby.
SECTION 8. Indemnification of QIU. (a) The Sellers, jointly and
severally, agree to indemnify and hold harmless the QIU, its directors, its
officers and each person, if any, who controls the QIU within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages, liabilities and judgments (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action, that could give
rise to any such losses, claims, damages, liabilities or judgments) related to,
based upon or arising out of (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof, except in the case of this clause (ii)
insofar as any such losses, claims, damages, liabilities or judgments are found
in a final judgment by a court of competent jurisdiction, not subject to further
appeal, to have resulted solely from the willful misconduct or gross negligence
of the QIU. Notwithstanding the foregoing, (i) no Selling Stockholder shall be
liable with respect to any claim in an amount that exceeds its proportionate
amount of such claim as determined by reference to the total amount of proceeds
received (before deducting underwriting discounts and commissions and expenses)
by such Selling Stockholder as a portion of the total proceeds received (before
deducting underwriting discounts and commissions and expenses) by all of the
Sellers, (ii) the aggregate liability of any Selling Stockholder pursuant to
this Section 8 and Section 9 shall be limited to an amount equal to the total
proceeds (before deducting underwriting discounts and commissions and expenses)
received by such Selling Stockholder from the Underwriters for the sale of the
Shares sold by such Selling Stockholder hereunder and (iii) the Selling
Stockholder shall not be required to honor any demand for indemnity from a QIU
Indemnified Party pursuant to this Section 8 unless, prior to the making of such
demand by a QIU Indemnified Party, such QIU Indemnified Party shall have
delivered a written demand to the Company seeking indemnity and the Company
shall have failed to perform its obligations in respect thereof pursuant to this
Section 8 and such failure shall have continued for a period of 60 days.
(b) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) (the "QIU
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INDEMNIFIED PARTY"), the QIU Indemnified Party shall promptly notify the Sellers
in writing and the Sellers shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the QIU Indemnified Party
and the payment of all fees and expenses of such counsel, as incurred. Any QIU
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the QIU Indemnified Party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the Sellers, (ii) the Sellers shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the QIU Indemnified Party or
(iii) the named parties to any such action (including any impleaded parties)
include both the QIU Indemnified Party and one or more of the Sellers, and the
QIU Indemnified Party shall have been advised by such counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to such Seller (in which case the Sellers shall
not have the right to assume the defense of such action on behalf of the QIU
Indemnified Party). In any such case, the Sellers shall not, in connection with
any one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all QIU Indemnified Parties, which firm
shall be designated by the QIU, and all such fees and expenses shall be
reimbursed as they are incurred. The Sellers shall indemnify and hold harmless
the QIU Indemnified Party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with the Sellers' written consent or (ii) effected without the Sellers' written
consent if the settlement is entered into more than sixty days after the Sellers
shall have received a request from the QIU Indemnified Party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the Sellers) and, prior to the date of such settlement,
the Sellers shall have failed to comply with such reimbursement request. If
during any period of time the Sellers are disputing in good faith the
reasonableness of such fees and expenses of counsel, such period of time shall
not be counted in calculating such sixty day period. The Sellers shall not,
without the prior written consent of the QIU Indemnified Party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the QIU Indemnified
Party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the QIU Indemnified Party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
QIU Indemnified Party from all liability on claims that are or could have been
the subject matter of such action 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 the
QIU Indemnified Party.
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(c) To the extent the indemnification provided for in this Section 8 is
unavailable to a QIU Indemnified Party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then the Sellers,
in lieu of indemnifying such QIU Indemnified Party, shall contribute to the
amount paid or payable by such QIU Indemnified Party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers on the one
hand and the QIU on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 8(c)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(c)(i) above but also the relative fault of the
Sellers on the one hand and the QIU on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers on the one hand
and the QIU on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Sellers as set forth in the table on the cover page of the Prospectus, and
the fee received by the QIU pursuant to Section 2 hereof, bear to the sum of
such total net proceeds and such fee. The relative fault of the Sellers on the
one hand and the QIU on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders on the one hand
or the QIU on the other hand and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission
and whether the QIU's activities as QIU under its engagement pursuant to Section
2 hereof involved any willful misconduct or gross negligence on the part of the
QIU.
The Sellers and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by a QIU Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such QIU Indemnified Party
in connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
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(d) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
QIU Indemnified Party at law or in equity.
SECTION 9. Indemnification. (a) The Sellers, jointly and severally,
agree to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with investigating or defending
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or judgments) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Company by
you expressly for use therein. Notwithstanding the foregoing, Notwithstanding
the foregoing, (i) no Selling Stockholder shall be liable with respect to any
claim in an amount that exceeds its proportionate amount of such claim as
determined by reference to the total amount of proceeds received (before
deducting underwriting discounts and commissions and expenses) by such Selling
Stockholder as a portion of the total proceeds received (before deducting
underwriting discounts and commissions and expenses) by all of the Sellers, (ii)
the aggregate liability of any Selling Stockholder pursuant to this Section 9
and Section 8 shall be limited to an amount equal to the total proceeds (before
deducting underwriting discounts and commissions and expenses) received by such
Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Selling Stockholder hereunder and (iii) the Selling Stockholder shall not
be required to honor any demand for indemnity from any Underwriter pursuant to
this Section 9 unless, prior to the making of such demand by the Underwriter,
such Underwriter shall have delivered a written demand to the Company seeking
indemnity and the Company shall have failed to perform its obligations in
respect thereof pursuant to this Section 9 and such failure shall have continued
for a period of 60 days.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, each Selling Stockholder and each person, if
any, who
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controls such Selling Stockholder within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Sellers to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Company by you
expressly for use in the Registration Statement (or any amendment thereto), the
Prospectus (or any amendment or supplement thereto) or any preliminary
prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 9(a) or 9(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 9(a) and 9(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 9(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for (i) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all Underwriters, their officers and
directors and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, (ii)
the fees and expenses of more than one separate firm of attorneys (in addition
to any local counsel) for the Company, its directors, its officers and all
persons, if any, who control the Company within the meaning of either such
Section and (iii) the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Selling Stockholders and
all persons, if any, who control
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any Selling Stockholder within the meaning of either such Section, and all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In the
case of any such separate firm for the Selling Stockholders and such control
persons of any Selling Stockholders, such firm shall be designated in writing by
the Attorneys. The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than sixty days after the indemnifying party
shall have received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and expenses are
at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. If during any period of time the indemnifying parties are
disputing in good faith the reasonableness of such fees and expenses of counsel,
such period of time shall not be counted in calculating such sixty day period.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action 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 the indemnified party.
(d) To the extent the indemnification provided for in this Section 9 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 9(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(d)(i) above but also the
relative fault of the Sellers on the one hand and the Underwriters on the other
hand in connection with the statements or
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omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Sellers on the one hand and the Underwriters on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Sellers,
and the total underwriting discounts and commissions received by the
Underwriters, bear to the total price to the public of the Shares, in each case
as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9(d) 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 in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 9, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and 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 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 Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 9 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) Each Selling Stockholder (except Xxxx Xxxxxxx Subsidiaries, Inc.)
hereby designates the Company, One World Financial Center, New York, New
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York 10281, as its authorized agent, and Xxxx Xxxxxxx Subsidiaries, Inc. hereby
designates [____________], as its authorized agent, in each case upon which
process may be served in any action which may be instituted in any state or
federal court in the State of New York by any Underwriter, any director or
officer of any Underwriter, any person controlling any Underwriter asserting a
claim for indemnification or contribution under or pursuant to this Section 9,
and each Selling Stockholder will accept the jurisdiction of such court in such
action, and waives, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any such
process shall be promptly sent or given to such Selling Stockholder, at the
address for notices specified in Section 13 hereof.
SECTION 10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing
Date with the same force and effect as if made on and as of the Closing
Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such
Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., New York City time, on the date of this Agreement; and no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxx X. Xxxxxxxxx and Xxxxxxx X.
Xxxxxx, Xx., in their capacities as the chief executive officer and
chief financial officer of the Company, confirming the matters set
forth in Sections 6(t), 10(a) and 10(b) and that the Company has
complied in all material respects with all of the agreements and
satisfied in all material respects all of the conditions herein
contained and required to be complied with or satisfied by the Company
on or prior to the Closing Date.
(d) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change
or any development involving a prospective change in the condition,
financial or otherwise, or the earnings, business, management or
operations of the
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Company and its subsidiaries, taken as a whole, (ii) there shall not
have been any change or any development involving a prospective change
in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause
10(d)(i), 10(d)(ii) or 10(d)(iii), in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling
Stockholder contained in this Agreement shall be true and correct on
the Closing Date with the same force and effect as if made on and as of
the Closing Date and you shall have received on the Closing Date a
certificate dated the Closing Date from each Selling Stockholder to
such effect and to the effect that such Selling Stockholder has
complied in all material respects with all of the agreements and
satisfied in all material respects all of the conditions herein
contained and required to be complied with or satisfied by such Selling
Stockholder on or prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters),
dated the Closing Date, of Xxxxxxxx, Xxxxxxx & Xxxxxxx, counsel for the
Company, to the effect that:
(i) each of the Company and the Primary Subsidiaries
organized under Delaware or Massachusetts law is a corporation
validly existing and in good corporate standing under the laws
of its jurisdiction of incorporation and has the corporate
power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) all the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any
preemptive or similar rights;
(iii) the Shares to be issued and sold by the Company
hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;
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(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(vi) such counsel has been informed that the
Registration Statement has become effective under the Act and,
to such counsel's knowledge, (i) no stop order suspending its
effectiveness has been issued and (ii) no proceedings for that
purpose are pending before or contemplated by the Commission;
(vii) the statements under the captions "Management
--Limitation of Liability; Indemnification of Directors and
Officers", "-- Stock Option and Stock Purchase Plans", "--
1998 Stock Purchase Plan", "--1998 Executive Performance Bonus
Plan", "Certain Transactions", "Description of Capital Stock",
"Shares Eligible for Future Sale", "Underwriting" and "Tax
Consequences to Non-U.S. Holders" in the Prospectus and Items
14 and 15 of Part II of the Registration Statement, insofar as
such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
in all material respects the information called for with
respect to such legal matters, documents and proceedings;
(viii) to the knowledge of such counsel (i) neither
the Company nor any of its Primary Subsidiaries is in
violation of its respective charter or by-laws and (ii)
neither the Company nor any of its subsidiaries is in material
default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument
that is filed as an exhibit to the Registration Statement;
(ix) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with
all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue
Sky laws of the various states), (B) constitute a breach of
any of the terms or provisions of, or a default
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under, the charter or by-laws of the Company or any of its
Primary Subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is filed
as an exhibit to the Registration Statement, (C) violate any
applicable Massachusetts, Delaware or Federal law, rule or
regulation known to such counsel;
(x) after due inquiry but without having performed a
docket search or other independent investigation, such counsel
does not know of any legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries
is a party or to which any of their respective property is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described, or of
any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xii) to such counsel's knowledge, except as
described in the Prospectus under "Certain Transactions -- The
Stockholders Agreement" or "Recent Developments", there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company or to require the
Company to include such securities with the Shares registered
pursuant to the Registration Statement;
(xiii) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for the
financial statements and other financial data included therein
as to which no opinion need be expressed) comply in all
material respects as to form with the Act. In addition, such
counsel has participated in the preparation of the
Registration Statement and Prospectus and in conferences with
officers and other representatives of the Company,
representatives of the independent public accountants for the
Company and representatives of and counsel for the
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Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were
discussed and, although there can be no assurance that all
possible material facts relating to the Company were disclosed
in such meetings or that, if disclosed, such counsel would
have understood their significance, and, although such counsel
has not independently verified and is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except as otherwise
stated in such opinion), on the basis and subject to the
foregoing, no fact has come to the attention of such counsel
to lead such counsel to believe that (a) the Registration
Statement or any amendment thereto (except for the financial
statements, supporting schedules and other financial and
statistical data included therein or omitted therefrom, as to
which such counsel need express no opinion), as of the date
the Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(b) the Prospectus or any amendment or supplement thereto
(except for the financial statements, supporting schedules and
other financial and statistical data included therein or
omitted therefrom, as to which such counsel need express no
opinion), at the time the Prospectus was issued, at the time
such amended or supplemented Prospectus was issued or at the
Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statement therein, in light of
the circumstances under which they were made, not misleading.
[HW&D to confirm this is their standard opinion language.]
The opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx described in
Section 10 above shall be rendered to you at the request of the Company
and shall so state therein.
(g) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters),
dated the Closing Date, of Xxxxx XxXxx, General Counsel of the Company,
to the effect that:
(i) each of [list Primary Subordiners not covered in
HWD opinion] is a corporation validly existing and in good
corporate standing under the laws of its jurisdiction of
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incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to
own, lease and operate its properties;
(ii) each of the Company and its Primary Subsidiaries
is duly qualified and is in good corporate standing as a
foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock
of each of the Company's Primary Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of
any security interest, claim, lien, encumbrance or adverse
interest of any nature;
(iv) the statements under the captions "Business
--Regulation" and "-- Litigation", insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all
material respects the information called for with respect to
such legal matters, documents and proceedings;
(v) to the knowledge of such counsel (i) neither the
Company nor any of its Primary Subsidiaries is in violation of
its respective charter or by-laws and (ii) neither the Company
nor any of its subsidiaries is in material default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is filed
as an exhibit to the Registration Statement;
(vi) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with
all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) violate any
applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or
their respective property or (B) result in the suspension,
termination or revocation of any
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Authorization of the Company or any of its Primary
Subsidiaries or any other impairment of the rights of the
holder of any such Authorization;
(vii) after due inquiry but without having performed
a docket search or other independent investigation, such
counsel does not know of any legal or governmental proceedings
pending or threatened to which the Company or any of its
subsidiaries is a party or to which any of their respective
property is subject that are required to be described in the
Registration Statement or the Prospectus and are not so
described, or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed as required;
(viii) to the knowledge of such counsel, neither the
Company nor any of its subsidiaries has violated any
Environmental Law or any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or the rules and
regulations promulgated thereunder, except for such violations
which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition
or results of operation of the Company and its subsidiaries,
taken as a whole;
(ix) to the knowledge of such counsel, each of the
Company and its Primary Subsidiaries has such Authorizations
of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals as are
necessary to own, lease, license and operate its respective
properties and to conduct its business, except where the
failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole; each such Authorization is
valid and in full force and effect and each of the Company and
its Primary Subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or
governing body) which allows or, after
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notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would result in any
other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions
that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not,
singly or in the aggregate, have a material adverse effect on
the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a
whole;
(x) to such counsel's knowledge, except as described
in the Prospectus under "Certain Transactions -- The
Stockholders Agreement" or "Recent Developments", there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company or to require the
Company to include such securities with the Shares registered
pursuant to the Registration Statement;
(xi) (A) Each of Xxxxxx Xxxxxxx and Sutro is
registered as a broker-dealer with the Commission and under
the laws of all fifty U.S. states, the District of Columbia
and Puerto Rico, is a member of the NASD, the NYSE, the
American Stock Exchange and the Pacific Stock Exchange and, in
the case of Xxxxxx Xxxxxxx, the Boston Stock Exchange, the
Chicago Board Options Exchange, the Midwest Stock Exchange,
the Philadelphia Stock Exchange, the Pacific Stock Exchange
and the National Futures Association, and, in each case, is in
compliance with all applicable laws, rules, regulations,
orders, by-laws and similar requirements in connection with
such registrations and memberships, including without
limitation the Net Capital Rule, except where the failure to
be so registered or in such compliance would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole, (B) FSI is registered as a broker-dealer
with the Commission and under the laws of New York and is a
member of the NYSE and is in compliance with all applicable
laws, rules, regulations, orders, by-laws and similar
requirements in connection with such registrations and
memberships, including without limitation the Net Capital
Rule, except where the failure to be so
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registered or in such compliance would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole and (C) Xxxxxx Xxxxxxx is
appropriately registered with the French securities regulatory
authorities and is in compliance with all applicable laws and
regulations in connection therewith, except where the failure
to be so registered or in such compliance would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(xii) (A) Each of Xxxxxx Xxxxxxx, Sutro and Freedom
Capital is registered as an investment advisor with the
Commission, is registered or exempt from registration in all
fifty states, the District of Columbia and Puerto Rico and is
in compliance with all applicable laws, rules, regulations,
orders and similar requirements in connection therewith except
where the failure to be so registered or in such compliance
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole and (B) each of the
investment funds advised by Freedom Capital is, to the extent
required by applicable law, registered as an investment
company with the Commission and is registered or exempt from
registration in all fifty states, the District of Columbia and
Puerto Rico, and each such entity is in compliance with all
applicable laws, rules, regulation, orders, by-laws and
similar requirements in connection with such registration
except where the failure to be so registered or in such
compliance would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(xiii) Freedom Trust is in compliance in all material
respects with all laws, rules, regulations, orders and similar
requirements applicable to its trust investment management and
fiduciary services business, except where the failure to be in
compliance would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(xiv) (A) Since January 1, 1993, the Company and its
subsidiaries have filed all Filings required to be filed by
the Company or any of its subsidiaries with any Financial
Regulatory Authority or any other governmental agency, body or
official, (B) each Filing (except for the financial statements
and other financial data included therein as to which no
opinion need be expressed) complied as to form and substance
in all material respects with the applicable law or regulation
requiring such Filing
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to be filed and (C) such counsel has no reason to believe that
such Filings (except for the financial statements and other
financial data as to which such counsel need not express any
belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances
under which they were made, not misleading.
(xv) Such counsel has participated in the preparation
of the Registration Statement and Prospectus and in
conferences with officers and other representatives of the
Company, representatives of the independent public accountants
for the Company and representatives of and counsel for the
Underwriters at which the contents of the Registration
Statement and the Prospectus and related matters were
discussed and, although there can be no assurance that all
possible material facts relating to the Company were disclosed
in such meetings or that, if disclosed, such counsel would
have understood their significance, and, although such counsel
has not independently verified and is not passing upon and
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus (except as otherwise
stated in such opinion), on the basis and subject to the
foregoing, no fact has come to the attention of such counsel
to lead such counsel to believe that (a) the Registration
Statement or any amendment thereto (except for the financial
statements, supporting schedules and other financial and
statistical data included therein or omitted therefrom, as to
which such counsel need express no opinion), as of the date
the Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(b) the Prospectus or any amendment or supplement thereto
(except for the financial statements, supporting schedules and
other financial and statistical data included therein or
omitted therefrom, as to which such counsel need express no
opinion), at the time the Prospectus was issued, at the time
such amended or supplemented Prospectus was issued or at the
Closing Date, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statement therein, in light of
the circumstances under which they were made, not misleading.
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The opinion of Xxxxx XxXxx described in Section 10(g) above
shall be rendered to you at the request of the Company and shall so
state therein.
(h) You shall have received on the Closing Date an opinion
(reasonably satisfactory to you and counsel for the Underwriters),
dated the Closing Date, of [Xxxxxxxx, Xxxxxxx & Xxxxxxx], counsel for
the Selling Stockholders, to the effect that:
(i) each of the Selling Stockholders has been duly
incorporated or organized and is validly existing and, in the
case of each Selling Stockholder that is a corporation, is in
good corporate standing under the laws of jurisdiction of its
incorporation, and in each case has the power and authority to
carry on its business as it is currently being conducted and
to own, lease and operate its properties;
(ii) this Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Stockholder;
(iii) each Selling Stockholder has full legal right,
power and authority to enter into this Agreement and the
Custody Agreement and the Power of Attorney of such Selling
Stockholder and to sell, assign, transfer and deliver the
Shares to be sold by such Selling Stockholder in the manner
provided herein and therein;
(iv) The Custody Agreement of each Selling
Stockholder has been duly authorized, executed and delivered
by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in
accordance with its terms;
(v) The Power of Attorney of each Selling Stockholder
has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding instrument of
such Selling Stockholder, enforceable in accordance with its
terms, and, pursuant to such Power of Attorney, such Selling
Stockholder has, among other things, authorized the Attorneys,
or any one of them, to execute and deliver on such Selling
Stockholder's behalf this Agreement and any other document
they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and
thereby and to deliver the Shares to be sold by such Selling
Stockholder pursuant to this Agreement;
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(vi) upon delivery of and payment for the Shares to
be sold by each Selling Stockholder pursuant to this
Agreement, and assuming the Underwriters have no notice of any
adverse claim (as defined in the Uniform Commercial Code as in
effect in the State of New York), good and clear title to such
Shares will pass to the Underwriters, free of all restrictions
on transfer, liens, encumbrances, security interests, equities
and claims whatsoever;
(vii) to the knowledge of such counsel, the
execution, delivery and performance of this Agreement and the
Custody Agreement and the Power of Attorney of each Selling
Stockholder by such Selling Stockholder, the compliance by
such Selling Stockholder with all the provisions hereof and
thereof and the consummation of the transactions contemplated
hereby and thereby will not (A) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various
states), (B) constitute a breach of any of the terms or
provisions of, or a default under, the organizational
documents of such Selling Stockholder or (C) violate or
conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling
Stockholder or any property of such Selling Stockholder;
(viii) each Selling Stockholder is not and, after
giving effect to the sale of the Shares and the application of
the proceeds thereof, will not be, on "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended; and
(ix) to such counsel's knowledge, the statements
under the captions "Certain Transactions" and "Principal and
Selling Stockholders", insofar as such statements relate to
the Selling Stockholders and constitute a summary of the legal
matters, documents or proceedings referred to therein, present
in all material respects the information called for with
respect to such legal matters, documents and proceedings.
The opinion of [Xxxxxxxx, Xxxxxxx & Xxxxxxx] described in Section 10(h)
above shall be rendered to you at the request of the Selling Stockholders and
shall so state therein.
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(i) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, as to the matters referred to in Sections 10(f)(iii),
10(f)(iv), 10(f)(vii) (but only with respect to the statements under
the caption "Description of Capital Stock" and "Underwriting") and
10(f)(xiii).
In giving such opinions with respect to the matters covered by
Section 10(f)(xiii), counsel for the Company and counsel for the
Underwriters may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check
or verification except as specified.
(j) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance reasonably satisfactory to
you, from Ernst & Young LLP, independent public accountants, containing
the information and statements of the type ordinarily included in
accountants' "comfort letters" to Underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(k) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force
and effect on the Closing Date.
(l) The Shares shall have been duly listed, subject to notice
of issuance, on the NYSE.
(m) You shall have received evidence satisfactory to you that
the proceeds of the offering to be received by the Company will be
applied on the Closing Date to repay indebtedness of the Company as
described in the Prospectus under "Use of Proceeds".
(n) The Company and the Selling Stockholders shall not have
failed on or prior to the Closing Date to perform or comply in any
material respect with any of the agreements herein contained and
required to be performed or complied with by the Company or the Selling
Stockholders, as the case may be, on or prior to the Closing Date.
(o) You shall have received on the Closing Date, a certificate
of each Selling Stockholder who is not a U.S. Person (as defined under
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applicable U.S. federal tax legislation) to the effect that such
Selling Stockholder is not a U.S. Person, which certificate may be in
the form of a properly completed and executed United States Treasury
Department Form W-8 (or other applicable form or statement specified by
Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 11. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange or the Nasdaq
National Market or limitation on prices for securities or other instruments on
any such exchange or the Nasdaq National Market, (iii) the suspension of trading
of any securities of the Company on any exchange or in the over-the-counter
market, (iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or other
governmental authority which in your opinion materially and adversely affects,
or will materially and adversely affect, the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole, (v) the declaration of a banking moratorium by either federal or New
York State authorities or (vi) the taking of any action by any federal, state or
local government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States and, in your judgment, makes it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm
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Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholders for purchase of such Firm Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Stockholders. In any such case which does not result in termination
of this Agreement, either you or the Sellers shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. If, on an Option Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Shares and the aggregate number of Additional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Additional Shares to be purchased on such date, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
such Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase on such date in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this Agreement.
SECTION 12. Agreements of the Selling Stockholders. Each Selling
Stockholder agrees with you and the Company:
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(a) To pay or to cause to be paid all transfer taxes payable
in connection with the transfer of the Shares to be sold by such
Selling Stockholder to the Underwriters.
(b) To use commercially reasonable efforts to do and perform
all things to be done and performed by such Selling Stockholder under
this Agreement prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Shares to be sold by such Selling
Stockholder pursuant to this Agreement.
SECTION 13. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Freedom
Securities Corporation, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: President, (ii) if to the Selling Stockholders, to X. Xxxxxx Xxxx or
Xxxx X. Xxxxx c/x Xxxxxxxx, Xxxxxxx & Xxxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx and (iii) if to any Underwriter
or to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in
any case to such other address as the person to be notified may have requested
in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, any QIU
Indemnified Party the Company, the officers or directors of the Company, any
person controlling the Company, any Selling Stockholder or any person
controlling such Selling Stockholder, (ii) acceptance of the Shares and payment
for them hereunder and (iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 11), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(I) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers, any persons controlling any
of the Underwriters and the QIU Indemnified Parties for any and all fees and
expenses (including, without limitation, the fees disbursements of counsel)
incurred by
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them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 9 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the QIU Indemnified Parties, the
Company's directors and the Company's officers and their respective successors
and assigns, all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of the Shares
from any of the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
FREEDOM SECURITIES
CORPORATION
By:________________________________
Title:
THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II HERETO,
ACTING SEVERALLY
By:________________________________
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON
CORPORATION
SUTRO & CO., INCORPORATED
XXXXXX XXXXXXX INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:________________________________
Title:
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SCHEDULE I
NUMBER OF FIRM SHARES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Credit Suisse First Boston Corporation
Sutro & Co., Incorporated
Xxxxxx Xxxxxxx Incorporated
[Names of other underwriters]
---------------------
Total
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SCHEDULE II
SELLING STOCKHOLDERS
NUMBER OF FIRM
NAME SHARES BEING SOLD
---- -----------------
Xxxxxx X. Xxx Equity Fund III, L.P. 1,585,007
Xxxxxx X. Xxx Foreign Fund III, L.P. 98,076
THL - CCI, L.P. 164,417
SCP Private Equity L.P. 462,500
Xxxx Xxxxxxx Subsidiaries, Inc. 190,000
---------
Total 2,500,000
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SCHEDULE III
SELLING STOCKHOLDERS
NUMBER OF
NAME ADDITIONAL SHARES
---- -----------------
Xxxxxx X. Xxx Equity Fund III, L.P.
Xxxxxx X. Xxx Foreign Fund III, L.P.
THL - CCI, L.P.
SCP Private Equity X.X.
Xxxx Xxxxxxx Subsidiaries, Inc.
-----------------
Total 1,005,000
Each of the Selling Stockholders hereby agrees with the several Underwriters,
that if any proposed purchase of Additional Shares would otherwise cause Xxxxxx
X. Xxx Equity Fund III, L.P., Xxxxxx X. Xxx Foreign Fund III, L.P. and THL-CCI,
L.P. (collectively, the "THL Entities") to own, in the aggregate, less than
25.1% of the outstanding Common Stock (after giving effect to the Company's
acquisition of Xxxxxx Gull as described in the Prospectus under "Recent
Developments"), then upon the request of the THL Entities, those Additional
Shares, the sale of which would cause the THL Entities to own less than such
25.1%, shall instead be sold by the other Selling Stockholders in such
proportion as the THL Entities shall designate (provided that in no event shall
such proportion to be sold by Xxxx Xxxxxxx Subsidiaries, Inc. be less than the
proportion that its shares of Common Stock owned in the aggregate by Xxxx
Xxxxxxx Subsidiaries, Inc. and SCP Private Equity L.P.)
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ANNEX I
Xxxxxxxx Xxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx
Xxxxx Xxxx
Xxxx Xxxxxxxxx
Xxxxx XxXxx
Xxxxxx X'Xxxxx
Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxx
Xxxx Xxxxxxxxx
XxxxXxxx Xxxxxxx
Xxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxxxxxxxx
2
