Exhibit 1.01
Friedman, Billings, ▇▇▇▇▇▇ Group, Inc.
11,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
December __, 1997
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
CREDIT SUISSE FIRST BOSTON
LAZARD FRERES & CO. LLC
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
and the other Underwriters listed on Schedule I hereto,
through their Representatives,
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ & CO., INC. and
LAZARD FRERES & CO. LLC
c/o Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Friedman, Billings, ▇▇▇▇▇▇ Group, Inc., a Virginia corporation (the
"Company"), and the persons listed on Schedule II hereto (the "Selling
Shareholders"), confirm their agreement with Friedman, Billings, ▇▇▇▇▇▇ & Co.,
Inc. ("FBRC"), Bear ▇▇▇▇▇▇▇ & Co. Inc., Credit Suisse First Boston, Lazard
Freres & Co. LLC, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and each of the other Underwriters listed on
Schedule I hereto (collectively, the "Underwriters"), for whom FBRC and Lazard
Freres & Co. LLC are acting as Representatives (in such capacity, the
"Representatives"), with respect to (i) the sale by the Company and the purchase
by the Underwriters, acting severally and not jointly, of the respective numbers
of shares of Class A Common Stock, par value $0.01 per share, of the Company
("Common Stock") set forth on Schedule II hereto, (ii) the sale by the Selling
Shareholders, acting severally and not jointly, and the purchase by the
Underwriters, acting severally and not jointly, of the shares of Common Stock
set forth on Schedule I and Schedule II hereto, and (iii) the grant by the
Company and the Selling Shareholders, acting severally and not jointly, to the
Underwriters, acting severally and not jointly, of the option described in
Section 1(b) hereof to purchase all or any part of 1,650,000 additional shares
of Common Stock to cover over-allotments, if any. The 11,000,000 shares of
Common Stock (the "Initial Shares") to be purchased by the Underwriters and all
or any part of the 1,650,000 shares of Common Stock subject to the option
described in Section 1(b) hereof (the "Option Shares") are hereinafter called,
collectively, the "Shares."
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Shares (the "Offering") as soon as the
Underwriters deem advisable after this Agreement has been executed and delivered
and initially to offer the Shares upon the terms set forth in the Prospectus.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-1 (No. 333-39107) and a
related preliminary prospectus for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations thereunder (the "Securities Act Regulations"). The Company has
prepared and filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared effective
under the Securities Act by the Commission. The registration statement, as
amended, at the time it became effective (including all information deemed to be
a part of the registration statement at the time it became effective pursuant to
Rule 430A(b) of the Securities Act Regulations) is hereinafter called the
"Registration Statement," except that, if the Company files a post-effective
amendment to such registration statement which becomes effective prior to the
Closing Time (as defined below), "Registration Statement" shall refer to such
registration statement as so amended. Any registration statement filed pursuant
to Rule 462(b) of the Securities Act Regulations is hereinafter called the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the 462(b) Registration Statement. Each prospectus
included in the registration statement, or amendments thereof or supplements
thereto, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations is hereinafter called
the "Preliminary Prospectus." The term "Prospectus" means the final prospectus,
as first filed with the Commission pursuant to Rule 424(b) of the Securities Act
Regulations, and any amendments thereof or supplements thereto. The Commission
has not issued any order preventing or suspending the use of any Preliminary
Prospectus.
The Company, the Selling Shareholders and the Underwriters agree as
follows:
1. Sale and Purchase:
-----------------
(a) Initial Shares. Upon the basis of the warranties and representations
and other terms and conditions herein set forth, the Company agrees and each
Selling Shareholder agrees, severally and not jointly, to sell to each
Underwriter, severally and not jointly, and each Underwriter agrees, severally
and not jointly, to purchase from the Company and from each Selling Shareholder,
pro rata, at the purchase price per share of $_____, the number of Initial
Shares set forth in Schedule II opposite such Underwriter's name, plus any
additional number of Initial Shares which such Underwriter may become obligated
to purchase pursuant to the provisions of Section 10 hereof, subject in each
case, to such adjustments among the Underwriters as the Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
shares. The Underwriters may from time to time increase or decrease the public
offering price after the initial public offering to such extent as the
Underwriters may determine.
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(b) Option Shares. In addition, upon the basis of the warranties and
representations and other terms and conditions herein set forth, the Company and
the Selling Shareholders, severally and not jointly, hereby grant an option to
the Underwriters, severally and not jointly, to purchase from (i) the Company up
to an aggregate of 1,500,000 Option Shares and (ii) from the Selling
Shareholders up to an aggregate of 150,000 Option Shares at the purchase price
per share set forth in paragraph (a) above plus any additional number of Option
Shares which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof. The option hereby granted will expire 30 days
after the date hereof and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Shares upon notice by the
Representatives to the Company and the Selling Shareholders setting forth the
number of Option Shares as to which the several Underwriters are then exercising
the option and the time and date of payment and delivery for such Option Shares.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
the Representatives, but shall not be later than three full business days (or
earlier, without the consent of the Company and the Selling Shareholders, than
two full business days) after the exercise of said option, nor in any event
prior to the Closing Time (as hereinafter defined). If the option is exercised
as to all or any portion of the Option Shares, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Shares then being purchased which the number of Initial Shares set forth
in Schedule II opposite the name of such Underwriter bears to the total number
of Initial Shares, subject in each case to such adjustments as the
Representatives in their sole discretion shall make to eliminate any sales or
purchases of fractional shares. The Underwriters may from time to time increase
or decrease the public offering price of the Option Shares after the initial
public offering to such extent as the Underwriters may determine.
2. Payment and Delivery:
--------------------
(a) Initial Shares. Payment of the purchase price for the Initial Shares
shall be made to the Company and the Selling Shareholders, respectively, by wire
transfer of immediately available funds or certified or official bank check
payable in federal (same-day) funds at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (unless
another place shall be agreed upon by the Representatives, the Company and the
Selling Shareholders) against delivery of the certificates for the Initial
Shares to the Representatives for the respective accounts of the Underwriters.
Such payment and delivery shall be made at 9:30 a.m., New York City time, on the
third (fourth, if pricing occurs after 4:30 p.m., New York City time) business
day after the date hereof (unless another time, not later than ten business days
after such date, shall be agreed to by the Representatives, the Company and the
Selling Shareholders). The time at which such payment and delivery are actually
made is hereinafter sometimes called the "Closing Time." Certificates for the
Initial Shares shall be delivered to the Representatives in definitive form
registered in such names and in such denominations as the Representatives shall
specify in writing to the Company and the Selling Shareholders at least two full
business days before the Closing Time. For the purpose of expediting the
checking of the certificates for the Initial Shares by the Representatives, the
Company and the Selling Shareholders agree to make such certificates available
to the Representatives for such purpose at least one full business day preceding
the Closing Time.
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(b) Option Shares. In addition, payment of the purchase price for the
Option Shares shall be made to the Company and the Selling Shareholders,
respectively, by wire transfer of immediately available funds or certified or
official bank check payable in federal (same-day) funds at the offices of
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ (unless another place shall be agreed upon by the
Representatives, the Company and the Selling Shareholders), against delivery of
the certificates for the Option Shares to the Representatives for the respective
accounts of the Underwriters. Such payment and delivery shall be made at 9:30
a.m., New York City time, on each Date of Delivery. Certificates for the Option
Shares shall be delivered to the Representatives in definitive form registered
in such names and in such denominations as the Representatives shall specify at
least two full business days before the Closing Time. For the purpose of
expediting the checking of the certificates for the Option Shares by the
Representatives, the Company and the Selling Shareholders agree to make such
certificates available to the Representatives for such purpose at least one full
business day preceding the relevant Date of Delivery.
3. Representations and Warranties of the Company: The Company represents
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and warrants to the Underwriters that:
(a) the Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization;" the outstanding shares of capital
stock of the Company and its direct and indirect subsidiaries ("Subsidiaries")
have been duly and validly authorized and issued and are fully paid and non-
assessable; except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of its Subsidiaries convertible
into or exchangeable for any capital stock of the Company or any such
Subsidiary, (ii) warrants, rights or options to subscribe for or purchase from
the Company or any such Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (iii) obligations of
the Company or any such Subsidiary to issue any shares of capital stock, any
such convertible or exchangeable securities or obligations, or any such
warrants, rights or options;
(b) the Company and its Subsidiaries each has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation with full corporate power and authority
to own its respective properties and to conduct its respective business, where
applicable, as described in the Registration Statement and the Prospectus and,
in the case of the Company, to execute and deliver this Agreement and the
Purchase Agreement between the Company and PNC Bank Corp., dated October 29,
1997 (the "Other Agreement"), and to consummate the transactions described in
this Agreement and in the Other Agreement;
(c) the Company and all of its Subsidiaries are duly qualified or licensed
by each jurisdiction in which they conduct their respective businesses and in
which the failure, individually or in the aggregate, to be so qualified or
licensed could reasonably be expected to have a material adverse effect on the
assets, operations, business, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole, and the Company and its
Subsidiaries are duly qualified, and are in good standing, in each jurisdiction
in which they own or lease real property or maintain an office and in which such
qualification is necessary, except where, individually or in the aggregate, the
failure to be so qualified and in good standing would not have
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a material adverse effect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole; except as disclosed in the Prospectus, no Subsidiary is prohibited or
restricted, directly or indirectly, from paying dividends to the Company, or
from making any other distribution with respect to such Subsidiary's capital
stock or from paying the Company or any other Subsidiary, any loans or advances
to such Subsidiary from the Company or such other Subsidiary, or from
transferring any such Subsidiary's property or assets to the Company or to any
other Subsidiary;
(d) the Company and its Subsidiaries are in compliance with all applicable
federal, state, local and foreign laws, rules and regulations, including,
without limitation, the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Investment Company Act of 1940, as amended
(the "Investment Company Act"), the Investment Advisers Act of 1940, as amended,
and the regulations promulgated thereunder (collectively, the "Securities
Laws"), orders, decrees and judgments, including those relating to transactions
with affiliates, except where, individually or in the aggregate, the failure to
be in compliance in a material respect therewith would not have a material
adverse effect on the assets, operations, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole;
(e) neither the Company nor any of its Subsidiaries is in breach of, or in
default under, nor has any event occurred which with giving of notice, lapse of
time, or both would constitute a breach of, or default under, its respective
articles of incorporation or charter or by-laws or in the performance or
observance of any obligation, agreement, covenant or condition contained in any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which any of them or their respective properties is bound, except
for such breaches or defaults which, individually or in the aggregate, would not
have a material adverse effect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole, and the execution, delivery and performance of this Agreement and the
Other Agreement, and consummation of the transactions contemplated hereby and
thereby will not result in the creation or imposition of any lien, charge, claim
or encumbrance upon any property or asset of the Company or its Subsidiaries, or
conflict with, or result in any breach of, or constitute a default under, or
constitute an event which with giving of notice, lapse of time, or both would
constitute a breach of, or default under, (i) any provision of the articles of
incorporation or charter or by-laws of the Company or any of its Subsidiaries,
or (ii) any provision of any license, indenture, mortgage, deed of trust, loan
or credit agreement or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or (iii) any federal, state, local or
foreign law, regulation or rule, including, without limitation, the Securities
Laws, or any decree, judgment or order applicable to the Company or any of its
Subsidiaries, except in the case of this clause (iii) for such breaches or
defaults which, individually or in the aggregate, would not have a material
adverse effect on the assets, operations, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole;
(f) the Company and each of its Subsidiaries has complied with all
provisions of Florida Statutes, Section 517.075, relating to issuers doing
business in Cuba.
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(g) this Agreement has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity, and except to
the extent that the indemnification and contribution provisions of Section 11
hereof may be limited by federal or state securities laws and public policy
considerations in respect thereof;
(h) the Other Agreement has been duly authorized and is legal, valid and
binding agreements of the Company enforceable against the Company in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity;
(i) no approval, authorization, consent or order of or filing with any
federal, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the execution, delivery and
performance of this Agreement and the Other Agreement, the consummation of the
transactions contemplated hereby and thereby, or the sale and delivery of the
Shares by the Company as contemplated hereby other than (i) such as have been
obtained, or will have been obtained at the Closing Time or the relevant Date of
Delivery, as the case may be, under the Securities Act, (ii) such approvals as
have been obtained in connection with the approval of the quotation of the
Shares on the New York Stock Exchange ("NYSE") and (iii) any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters;
(j) each of the Company and its Subsidiaries has all necessary licenses,
authorizations, consents and approvals and has made all necessary filings
required under any federal, state, local and foreign law, regulation and rule,
including, without limitation, the Securities Laws, and has obtained all
necessary authorizations, consents and approvals from other persons, required in
order to conduct their respective businesses as described in the Prospectus,
except to the extent that any failure to have any such licenses, authorizations,
consents or approvals, to make any such filings or to obtain any such
authorizations, consents or approvals would not, individually or in the
aggregate, have a material adverse effect on the assets, operations, business,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole; neither the Company nor any of its Subsidiaries
is in violation of, in default under, or has received any notice regarding a
possible violation, default or revocation of any such license, authorization,
consent or approval applicable to the Company or any of its Subsidiaries, the
effect of which, individually or in the aggregate, could be material and adverse
to the assets, operations, business, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries taken as a whole; and no such
license, authorization, consent or approval contains a materially burdensome
restriction that is not adequately disclosed in the Registration Statement and
the Prospectus;
(k) each of the Registration Statement and any Rule 462(b) Registration
Statement has become effective under the Securities Act and no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the Securities Act and no
proceedings for that purpose have been instituted or are pending or, to the
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knowledge of the Company, are threatened by the Commission, and any request on
the part of the Commission for additional information has been complied with;
(l) the Preliminary Prospectus and the Registration Statement comply and
the Prospectus and any further amendments or supplements thereto will, when they
have become effective or are filed with the Commission, as the case may be,
comply in all material respects with the requirements of the Securities Act and
the Securities Act Regulations; the Registration Statement did not, and any
amendment thereto will not, in each case as of the applicable effective date,
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; and
the Preliminary Prospectus does not, and the Prospectus or any amendment or
supplement thereto will not, as of the applicable filing date and at the Closing
Time and on each Date of Delivery (if any), 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; provided, however, that the Company
makes no warranty or representation with respect to any statement contained in
the Registration Statement or the Prospectus in reliance upon and in conformity
with the information concerning the Underwriters and furnished in writing by or
on behalf of the Underwriters through the Representatives to the Company
expressly for use in the Registration Statement or the Prospectus (that
information being limited to that described in the last sentence of the first
paragraph of Section 11(c) hereof);
(m) the Preliminary Prospectus was and the Prospectus delivered to the
Underwriters for use in connection with this offering will be identical in all
material respects to the versions of the Preliminary Prospectus and the
Prospectus created to be transmitted to the Commission for filing via the
Electronic Data Gathering Analysis and Retrieval System ("▇▇▇▇▇"), except to the
extent permitted by Regulation S-T;
(n) all legal or governmental proceedings, contracts or documents of a
character required to be filed as exhibits to the Registration Statement or to
be summarized or described in the Prospectus have been so filed, summarized or
described as required and any such summaries or descriptions present fairly the
information required to be shown;
(o) there are no actions, suits, proceedings, inquiries or investigations
pending or, to the Company's knowledge, threatened against the Company or any of
its Subsidiaries or any of their respective officers or directors or to which
the properties, assets or rights of any such entity are subject, at law or in
equity, before or by any federal, state, local or foreign court, governmental or
regulatory commission, board, body, authority, arbitration panel or agency
which, individually or in the aggregate, could result in a judgment, decree,
award or order having a material adverse effect on the assets, operations,
business, prospects or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole;
(p) the financial statements, including the notes thereto, included in the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and its Subsidiaries as of the dates indicated
and the consolidated results of operations and changes in stockholders' equity
and cash flows of the Company and its Subsidiaries for the
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periods specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent basis
during the periods involved (except as indicated in the notes thereto); the
financial statement schedules included in the Registration Statement and the
amounts in the Prospectus under the captions "Prospectus Summary -- Summary
Consolidated Financial Information," "Prospectus Summary -- Recent
Developments," "Capitalization," "Dilution" and "Selected Consolidated Financial
Data" fairly present the information shown therein and have been compiled on a
basis consistent with the financial statements included in the Registration
Statement and the Prospectus;
(q) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, whose reports on the consolidated financial
statements of the Company and its Subsidiaries are filed with the Commission as
part of the Registration Statement and Prospectus, are and were during the
periods covered by their reports independent public accountants as required by
the Securities Act and the Securities Act Regulations;
(r) subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, and except as may be otherwise
stated in the Registration Statement or the Prospectus, there has not been (i)
any material adverse change, in the assets, liabilities, capital, operations,
business or condition (financial or otherwise), present or prospective, of the
Company and its Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, (ii) any transaction, which is material to the
Company and its Subsidiaries taken as a whole, contemplated or entered into by
the Company or any of its Subsidiaries, (iii) any obligation, contingent or
otherwise, directly or indirectly incurred by the Company or any of its
Subsidiaries, which is material to the Company and its Subsidiaries taken as a
whole or (iv) any dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock;
(s) the Company is not, and upon the sale of the Shares as herein
contemplated will not be, an investment company which is required to register
under the Investment Company Act;
(t) the Shares will conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus;
(u) except as disclosed in the Prospectus, there are no persons with
registration or other similar rights to have any equity securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the Securities Act;
(v) the Shares have been duly authorized and, when the Shares have been
issued and duly delivered to the Underwriters against payment therefor as
contemplated by this Agreement, the Shares will be validly issued, fully paid
and nonassessable, free and clear of any pledge, lien, encumbrance, security
interest, mortgage or other claim whatsoever, and the issuance and sale of the
Shares by the Company is not subject to preemptive or other similar rights
arising by operation of law, under the articles of incorporation or by-laws of
the Company, under any agreement to which the Company or any of its Subsidiaries
is a party or otherwise;
(w) the Company has not taken, and will not take, directly or indirectly,
any action which is designed to or which has constituted or which might
reasonably be expected to cause or
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result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(x) any certificate signed by any officer of the Company or any Subsidiary
delivered to the Representatives or to counsel for the Underwriters pursuant to
or in connection with this Agreement shall be deemed a representation and
warranty by the Company to each Underwriter as to the matters covered thereby;
(y) the form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the articles of incorporation and by-laws of the
Company and the requirements of NYSE;
(z) in connection with this offering, the Company has not offered and will
not offer its Common Stock or any other securities convertible into or
exchangeable or exercisable for Common Stock in a manner in violation of the
Securities Act;
(aa) except as disclosed in the Prospectus, the Company has not incurred
any liability for any finder's fees or similar payments in connection with the
transactions herein contemplated; and
(bb) Except for (i) the 1995 short taxable year of FBR Offshore Management,
Inc., a Delaware corporation, and (ii) all taxable years of FBR Investment
Management (Bermuda) Ltd., a Bermuda corporation, FBR Offshore Investments,
Ltd., a Bermuda corporation, and Friedman, Billings, ▇▇▇▇▇▇ International,
Ltd., a United Kingdom corporation, the Company, its Subsidiaries and their
predecessors have qualified as "S corporations" or "qualified subchapter S
subsidiaries" within the meaning of Section 1361 of the Internal Revenue Code of
1986, as amended, for federal and, to the extent applicable, state income tax
purposes, for all taxable periods since their formation. The Company, its
Subsidiaries, and their shareholders have filed all elections and taken all
steps necessary to effectuate such qualification, and the Company has no
knowledge of any fact which could cause any such election with respect to such
entities to be invalid. The Company, its Subsidiaries and their predecessors
have filed all necessary federal, state and foreign income and franchise tax
returns that they were required to file and have paid all taxes shown as due
thereon (including, but not limited to, all penalties, interest and other
additions thereto), except for failures to file or pay which would not,
individually or in the aggregate, have a material adverse effect on the assets,
operations, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole. All such tax returns were
correct and complete in all material respects. All tax liabilities are
adequately provided for on the books of the Company and its Subsidiaries, except
to such extent as would not, individually or in the aggregate, have a material
adverse affect on the assets, operations, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
The Company, its Subsidiaries and their predecessors have made all necessary
payroll and employment tax payments and are current and up-to-date with respect
to such tax payments as of the date of this Agreement, except where failure to
make any such payment would not, individually or in the aggregate, have a
material adverse affect on the assets, operations, business, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole. The Company and its Subsidiaries have no knowledge of any tax
proceedings
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or other action pending or threatened against the Company or any of its
Subsidiaries which, individually or in the aggregate, could have a material
adverse affect on the assets, operations, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
4. Representations and Warranties of the Selling Shareholders:
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Each Selling Shareholder severally represents and warrants to the
Underwriters and the Company that:
(a) all authorizations and consents necessary for the execution and
delivery by such Selling Shareholder of this Agreement and the sale and delivery
of the Shares to be sold by such Selling Shareholder hereunder have been given
and are in full force and effect on the date hereof and will be in full force
and effect at the Closing Time;
(b) such Selling Shareholder has, and at the Closing Time will have good
and valid title to the Shares to be sold by such Selling Shareholder, free and
clear of any pledge, lien, encumbrance, security interest, mortgage, preemptive
or other similar right, or other claim whatsoever, and will have, full right,
power and authority to enter into this Agreement and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Shareholder hereunder;
(c) this Agreement has been duly authorized, executed and delivered by each
Selling Shareholder and is a legal, valid and binding agreement of such Selling
Shareholder enforceable against such Selling Shareholder in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and by general
principles of equity, and except to the extent that the indemnification and
contribution provisions of Section 11 hereof may be limited by federal or state
securities laws and public policy considerations in respect thereof;
(d) upon delivery of and payment for the Shares to be sold by such Selling
Shareholder hereunder, the several Underwriters will acquire valid and
unencumbered title to such Shares, free and clear of any pledge, lien,
encumbrance, security interest, mortgage, preemptive or other similar right, or
other claim whatsoever;
(e) the execution, delivery and performance of this Agreement and
consummation of the transactions contemplated hereby by such Selling Shareholder
will not conflict with, or result in any breach of, or constitute a default
under, or constitute an event which with giving of notice, lapse of time, or
both would constitute a breach of, or default under, (i) any provision of any
license, indenture, mortgage, deed of trust, loan or credit agreement or other
agreement or instrument to which such Selling Shareholder is a party or by which
such Shareholder or such Shareholder's properties may be bound or affected, the
consummation by such Selling Shareholder of the transactions contemplated herein
and the fulfillment by such Selling Shareholder of the terms hereof will not
result in a violation or breach of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, note, loan agreement,
sale and leaseback arrangement or other agreement or instrument to which such
Selling Shareholder is a party, or (ii) any federal, state, local or foreign
law, regulation or rule, including,
10
without limitation, the Securities Laws, or any decree, judgment or order
applicable to such Selling Shareholder;
(f) such Selling Shareholder has not taken, directly or indirectly, any
action which is designed to or which has constituted 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, and
such Selling Shareholder is not aware of any such action taken or to be taken by
affiliates of such Selling Shareholder; and
(g) such information in the Registration Statement and any amendments
thereto as specifically refers to such Selling Shareholder do not and will not,
as the case may be, in each case as of the applicable effective date, 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; and such
information in the Preliminary Prospectus and the Prospectus or any amendment or
supplement thereto does not and will not, as the case may be, in each case as of
the applicable filing date and at the Closing Time, 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.
5. Certain Covenants of the Company and the Selling Shareholders: The
-------------------------------------------------------------
Company and, where expressly indicated, the Selling Shareholders, hereby agree
with each Underwriter that:
(a) The Company will furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states as the Representatives may designate
and to maintain such qualifications in effect as long as required for the
distribution of the Shares, provided that the Company shall not be required to
qualify as a foreign corporation or to consent to the service of process under
the laws of any such state (except for service of process with respect to the
offering and sale of the Shares).
(b) The Company will prepare immediately an amended Prospectus in a form
approved by the Underwriters and file or transmit for filing such Prospectus
with the Commission in accordance with Rule 430A and to furnish promptly to the
Underwriters as many copies of the Prospectus (or of the Prospectus as amended
or supplemented if the Company shall have made any amendments or supplements
thereto after the effective date of the Registration Statement) as the
Underwriters may reasonably request for the purposes contemplated by the
Securities Act Regulations, which Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the version created
to be transmitted to the Commission for filing via ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(c) The Company will advise the Representatives promptly, confirming such
advice in writing, of (i) the receipt of any comments from, or any request by,
the Commission for amendments or supplements to the Registration Statement or
the Prospectus or for additional information with respect thereto, or (ii) the
issuance by the Commission of any stop order
11
suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, or of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Representatives will have two days
from receipt of such written advice to comment upon any such action by the
Commission or other regulatory or governmental body and the response thereto,
and the Company will use reasonable efforts to consider and incorporate the
Representatives' comments. The Company will make every reasonable effort to
obtain the lifting or removal of such order as soon as possible. The Company
will advise the Representatives promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus and will file no such amendment or
supplement to which the Representatives have reasonably objected in writing.
(d) The Company will furnish to the Underwriters for a period of five years
from the date of this Agreement (i) as soon as available, copies of all annual,
quarterly and current reports or other communications supplied to holders of
shares of Common Stock, (ii) as soon as practicable after the filing thereof,
copies of all reports filed by the Company with the Commission, the National
Association of Securities Dealers, Inc. ("NASD") or any securities exchange and
(iii) such other public information as the Representatives may reasonably
request regarding the Company and its Subsidiaries.
(e) The Company will advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a Prospectus
relating to the Shares is required to be delivered under the Securities Act
Regulations which, in the judgment of the Company, would require the making of
any change in the Prospectus then being used so that the Prospectus would not
include 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, and,
during such time, the Company will prepare and furnish, at the Company's
expense, to the Underwriters promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change and to furnish to the
Underwriters a copy of such proposed amendment or supplement before filing any
such amendment or supplement with the Commission.
(f) The Company will furnish promptly to the Representatives a signed copy
of the Registration Statement, as initially filed with the Commission, and of
all amendments or supplements thereto (including all exhibits filed therewith or
incorporated by reference therein) and such number of conformed copies of the
foregoing as the Underwriters may reasonably request.
(g) The Company will furnish to the Underwriters, not less than one
business day before filing with the Commission subsequent to the effective date
of the Prospectus and during the period referred to in paragraph (d) above, a
copy of any document proposed to be filed with the Commission pursuant to
Section 13, 14, or 15(d) of the Exchange Act.
(h) The Company will apply the net proceeds of the sale of the Shares in
accordance with its statements under the caption "Use of Proceeds" in the
Prospectus.
12
(i) The Company will make generally available to its security holders as
soon as practicable, but in any event not later than the end of the fiscal
quarter first occurring after the first anniversary of the effective date of the
Registration Statement, an earnings statement complying with the provisions of
Section 11(a) of the Securities Act (in form, at the option of the Company,
complying with the provisions of Rule 158 of the Securities Act Regulations)
covering a period of 12 months beginning after the effective date of the
Registration Statement.
(j) The Company will use its best efforts to effect and maintain the
quotation of the Shares on NYSE and to file with NYSE all documents and notices
required by NYSE of companies that have securities that are traded in, and
quotations for which are reported by, NYSE.
(k) The Company will refrain during a period of 180 days from the date of
the Prospectus, without the prior written consent of the Representatives, from
(i) offering, pledging, selling, contracting to sell, selling any option or
contract to purchase, purchasing any option or contract to sell, granting any
option for the sale of, or otherwise disposing of or transferring, directly or
indirectly, any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or filing any registration
statement under the Securities Act with respect to any of the foregoing or (ii)
entering into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence of
ownership of any share of Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the Shares to be sold hereunder, (B) any shares of Common
Stock issued pursuant to the PNC Transaction referred to in the Prospectus, (C)
any shares of Common Stock issued by the Company upon the exercise of an option
outstanding on the date hereof and referred to in the Prospectus, (D) any shares
of Common Stock issued pursuant to the Direct Offering referred to in the
Prospectus, (E) up to 100,000 shares of Common Stock reserved pursuant to the
Non-Employee Director Stock Compensation Plan referred to in the Prospectus, (F)
shares of Common Stock that each Eligible Director may elect to receive in lieu
of all or a portion of Director Fees as referred to in the Prospectus, (G)
Director Options for up to ___ shares of Common Stock granted to each Eligible
Director on the day the Offering becomes effective, as referred to in the
Prospectus, (H) Director Options for ____ shares of Common Stock granted to each
Eligible Director after each annual meeting of shareholders during such
director's term, and (I) grants of stock options not to exceed 5,900,000 shares
of Common Stock pursuant to the Company's 1997 Stock and Annual Incentive Plan,
as referred to in the Prospectus, and the Company's 1997 Employee Stock Purchase
Plan, as referred to in the Prospectus.
(l) The Company and the Selling Shareholders will not, and the Company will
use its best efforts to cause its officers, directors and affiliates (other than
pursuant to the underwriting activities of FBRC) not to, (i) take, directly or
indirectly, prior to termination of the underwriting syndicate contemplated by
this Agreement, any action designed to stabilize or manipulate the price of any
security of the Company, or which may cause or result in, or which might in the
future reasonably be expected to cause or result in, the stabilization or
manipulation of the price of any security of the Company, to facilitate the sale
or resale of any of the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares or (iii) pay or
13
agree to pay to any person any compensation for soliciting any order to purchase
any other securities of the Company.
(m) Prior to the Closing Time (and, if applicable, the Delivery Date),
neither the Company nor any Selling Shareholder will issue any press releases or
other communications directly or indirectly and will hold no press conferences
with respect to the Company or its Subsidiaries, on the financial condition,
results of operations, business, properties, assets or liabilities of the
Company or its Subsidiaries, or the offering of the Shares, without the prior
written consent of the Representatives.
(n) The Selling Shareholders, for a period of 18 months commencing on the
date of the final prospectus with respect to the offering (the "Effective
Date"), will not sell (as defined below) any shares of Common Stock, or any
securities convertible into or exchangeable for any shares of Common Stock, or
any option, warrant or other right to acquire any shares of Common Stock, or
publicly announce any intention to do any of the foregoing, without the prior
written consent of the Representatives, which consent may be withheld in their
sole discretion; provided, however, that from nine months after the Effective
Date each Selling Shareholder may sell the greater of 10,000 shares of Common
Stock or 5% of such Selling Shareholder's shares of Common Stock outstanding on
the Effective Date. The word "sell" as used in this paragraph (n) means to,
directly or indirectly, offer to sell, sell, contract to sell, grant any option
to sell (including, without limitation, any short sale), pledge, establish an
open "put equivalent" position within the meaning of Rule 16a-1(h) of the
Exchange Act, as amended, transfer, assign or otherwise dispose of securities.
(o) The obligations of none of the Selling Shareholders hereunder shall be
terminated by operation of law, whether by the death or incapacity of any
individual Selling Shareholder or by the occurrence of any other event, and if
any Selling Shareholder should die or become incapacitated, or if any other such
event should occur before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of each such Selling
Shareholder in accordance with the terms and conditions of the Agreement.
(p) Each Selling Shareholder will do or perform all things required to be
done or performed by the Selling Shareholders prior to the Closing Time to
satisfy all conditions precedent to the delivery of the Shares under this
Agreement.
6. Payment of Expenses:
-------------------
The Company agrees to pay all costs and expenses incident to the
performance of its obligations under this Agreement, whether or not the
transactions contemplated hereunder are consummated or this Agreement is
terminated, including expenses, fees and taxes in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the preparation,
issuance and delivery of the certificates for the Shares to the Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the Shares to the Underwriters, (iii) the printing of this Agreement and any
dealer agreements and furnishing of
14
copies of each to the Underwriters and to dealers (including costs of mailing
and shipment), (iv) the qualification of the Shares for offering and sale under
state laws that the Company and the Representatives have mutually agreed are
appropriate and the determination of their eligibility for investment under
state law as aforesaid (including the legal fees and filing fees and other
disbursements of counsel for the Underwriters in an amount equal to $5,000
assuming that the Common Stock is approved for quotation on NYSE) and the
printing and furnishing of copies of any blue sky surveys or legal investment
surveys to the Underwriters and to dealers, (v) filing for review of the public
offering of the Shares by NASD, (vi) the fees and expenses of any transfer agent
or registrar for the Shares and miscellaneous expenses referred to in the
Registration Statement, (vii) the fees and expenses incurred in connection with
listing the shares of Common Stock on NYSE, (viii) its making road show
presentations with respect to the offering of the Shares, (ix) preparing and
distributing bound volumes of the transaction documents for the Representatives
and their legal counsel and (x) the performance of the Company's other
obligations hereunder (including, without limitation, costs incurred in closing
the purchase of the Options Shares, if any). Upon the Representative's request,
the Company will provide funds in advance for filing fees.
7. Engagement of "Qualified Independent Underwriter": The Company hereby
-------------------------------------------------
confirms its engagement of Lazard Freres & Co. LLC, and Lazard Freres & Co. LLC
hereby confirms its engagement with the Company to render services, as a
"qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct rules of NASD with respect to the offering and sale of the Shares.
Lazard Freres & Co. LLC, in its capacity as the qualified independent
underwriter and not otherwise, is referred to herein as the "QIU".
8. Conditions of the Underwriters' Obligations: The obligations of the
-------------------------------------------
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company and the Selling Shareholders in all
material respects on the date hereof and at the Closing Time and on each Date of
Delivery, the performance by the Company and each Selling Shareholder of its
respective obligations hereunder in all material respects and to the following
further conditions:
(a) The Company shall furnish to the Underwriters at the Closing Time and
on each Date of Delivery an opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, counsel
for the Company, addressed to the Underwriters and dated the Closing Time and
each Date of Delivery, as the case may be, and in a form reasonably satisfactory
to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, stating that:
(i) the Company has an authorized capitalization as set forth in the
Prospectus under the caption "Capitalization;" the outstanding shares of
capital stock of the Company and its Subsidiaries have been duly and
validly authorized and issued and are fully paid and non-assessable; except
as disclosed in the Prospectus, there are no outstanding (A) securities or
obligations of the Company or any of its Subsidiaries convertible into or
exchangeable for any capital stock of the Company or any such Subsidiary,
(B) warrants, rights or options to subscribe for or purchase from the
Company or any such Subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (C) obligations
of the Company or any such Subsidiary to issue any shares of capital
15
stock, any such convertible or exchangeable securities or obligation, or
any such warrants, rights or options;
(ii) the Company and its Subsidiaries each has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation with full corporate power and
authority to own its respective properties and to conduct its respective
business as described in the Registration Statement and the Prospectus and,
in the case of the Company, to execute and deliver this Agreement and the
Other Agreement;
(iii) the execution, delivery and performance of this Agreement and
the Other Agreement by the Company and the consummation by the Company of
the transactions contemplated under this Agreement or the Other Agreement,
as the case may be, do not and will not (A) conflict with, or result in any
breach of, or constitute a default under, or constitute an event which with
giving of notice, lapse of time, or both would constitute a breach of or
default under, (I) any provisions of the articles of incorporation, charter
or by-laws of the Company or any Subsidiary, (II) to such counsel's
knowledge, any provision of any material license, indenture, mortgage, deed
of trust, loan or credit agreement or other agreement or instrument to
which the Company or any Subsidiary is a party or by which any of them or
their respective properties may be bound or affected, or (III) to such
counsel's knowledge, any law or regulation, including, without limitation,
the Securities Laws, or any decree, judgment or order applicable to the
Company or any Subsidiary, except in the case of clause (II) for such
conflicts, breaches or defaults which, individually or in the aggregate,
would not have a material adverse effect on the assets, operations,
business, prospects or condition (financial or otherwise) of the Company
and its Subsidiaries taken as a whole; or (B) result in the creation or
imposition of any lien, charge, claim or encumbrance upon any property or
assets of the Company or its Subsidiaries;
(iv) this Agreement has been duly authorized, executed and delivered
by the Company and is enforceable against the Company in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, and by general principles of equity, and except that
enforceability of the indemnification and contribution provisions set forth
in Section 11 of this Agreement may be limited by the federal or state
securities laws of the United States or public policy underlying such laws;
(v) the Other Agreement has been duly authorized, executed, and
delivered by the Company and is a legal, valid and binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, and by
general principles of equity;
(vi) no approval, authorization, consent or order of or filing with
any federal or state governmental or regulatory commission, board, body,
authority or agency is required in connection with the execution, delivery
and performance of this Agreement and the
16
Other Agreement, the consummation of the transactions contemplated hereby
and thereby, the sale and delivery of the Shares by the Company as
contemplated hereby other than such as have been obtained or made under the
Securities Act, and except that such counsel need express no opinion as to
any necessary qualification under the state securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or any approval of the underwriting terms and arrangements by
NASD;
(vii) the Company is not, and upon the sale of the Shares as herein
contemplated will not be, an investment company required to be registered
under the Investment Company Act;
(viii) the Shares have been duly authorized and, when the Shares have
been issued and duly delivered against payment therefor as contemplated by
this Agreement, the Shares will be validly issued, fully paid and
nonassessable, free and clear of any pledge, lien, encumbrance, security
interest, mortgage or other claim whatsoever;
(ix) the issuance and sale of the Shares by the Company is not
subject to preemptive or other similar rights arising by operation of law,
under the articles of incorporation or by-laws of the Company, under any
agreement known to such counsel to which the Company or any of its
Subsidiaries is a party or, to such counsel's knowledge, otherwise;
(x) the form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the articles of
incorporation and by-laws of the Company and the requirements of NYSE;
(xi) the Registration Statement has become effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to such counsel's knowledge, no
proceedings with respect thereto have been commenced or threatened;
(xii) as of the effective date of the Registration Statement, the
Registration Statement and the Prospectus (except as to the financial
statements and other financial and statistical data contained in such
Registration Statement or Prospectus, as to which such counsel need express
no opinion) complied as to form in all material respects with the
requirements of the Securities Act and the Securities Act Regulations;
(xiii) the statements under the captions "Capitalization," "Risk
Factors -- Regulations," "Certain Transactions Occurring Prior to the
Offering," "Business -- Regulation," "Business -- Net Capital
Requirements," "Management -- The Non-Employee Director Stock Compensation
Plan," "Management -- Employee Incentive Compensation Plans," "Description
of Capital Stock," and "Shares Eligible for Future Sale," in the
Registration Statement and the Prospectus, insofar as such statements
constitute a summary of the legal matters referred to therein, constitute
accurate summaries thereof in all material respects; and
17
(xiv) to such counsel's knowledge, there are no contracts or
documents of a character which are required to be filed as exhibits to the
Registration Statement or to be described or summarized in the Prospectus
which have not been so filed, summarized or described.
In addition, such counsel shall state that they have participated in the
preparation of the Prospectus and the Registration Statement and in conferences
with officers and other representatives of the Company and representatives of
the independent public accountants for the Company and with the Representatives
at which the contents of the Prospectus and the Registration Statement and
related matters were discussed and, although such counsel is not passing upon
and does not assume responsibility for the accuracy, completeness or fairness of
the statements contained in the Prospectus and the Registration Statement and
have not made any independent investigation or verification thereof, nothing has
come to their attention during the course of such participation (relying as to
materiality and for an explanation of technical terms to a large extent upon the
statements of officers and other representatives of the Company) that leads them
to believe that at the time the Registration Statement became effective, the
Prospectus and the Registration Statement (other than the financial statements
and schedules and other financial and statistical data and information included
therein or omitted therefrom, as to which with they need express no opinion)
contained or contains an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
To an extent reasonably satisfactory to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ may rely in its opinion upon certifications of
certain officers of the Company and, as to matters of Virginia law, upon the
opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP.
(b) The Selling Shareholders shall furnish to the Underwriters at the
Closing Time an opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, counsel for the
Selling Shareholders, addressed to the Underwriters and dated the Closing Time
and in a form reasonably satisfactory to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Underwriters, stating that:
(i) this Agreement has been duly authorized, executed and delivered
on behalf of the Selling Shareholders;
(ii) to such counsel's knowledge, each Selling Shareholder has full
legal right and has obtained any approval required by law (other than as
required by the Securities Act, NASD and state securities and blue sky
laws) to sell, assign, transfer and deliver the Shares to be sold by such
Selling Shareholder;
(iii) to such counsel's knowledge, no consent, approval,
authorization or order of any court, or governmental agency or body is
required for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by the Selling
Shareholders hereunder, except such as may be required under the Securities
Act or the Securities Act Regulations or as may be required by NASD or
under state securities and blue sky laws;
18
(iv) to such counsel's knowledge, each Selling Shareholder owns the
Shares being sold by such Selling Shareholder hereunder, free and clear of
any pledge, lien, encumbrance, security interest, mortgage, preemptive or
other similar right, or other claim whatsoever; and
(v) to such counsel's knowledge, upon delivery of the Shares to be
sold by each Selling Shareholder pursuant to this Agreement and payment
therefor as contemplated herein, and assuming that the Underwriters
purchase such Shares in good faith and without notice of an adverse claim,
each Selling Shareholder will have transferred to the Underwriters
ownership of the Shares being sold by such Selling Shareholder at the
Closing Time, free and clear of any pledge, lien, encumbrance, security
interest, mortgage, preemptive or other similar right, or other claim
whatsoever.
To an extent reasonably satisfactory to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP,
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ may rely in its opinion upon certifications of
the Selling Shareholders and of certain officers of the Company and, as to
matters of Virginia law, upon the opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇
LLP.
(c) The Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
letters dated, respectively, as of the date of this Agreement, the Closing Time
and each Date of Delivery, as the case may be, addressed to the Representatives
as Representatives of the Underwriters and in form and substance satisfactory to
the Representatives, as attached hereto as Exhibit A.
(d) The Underwriters shall have received at the Closing Time and on each
Date of Delivery the favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, dated the
Closing Time or such Date of Delivery, as the case may be, addressed to the
Representatives and in form and substance satisfactory to the Representatives.
(e) No amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Underwriters have objected in
writing.
(f) Prior to the Closing Time and each Date of Delivery (i) no stop order
suspending the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
shall have been issued by the Commission, (ii) no suspension of the
qualification of the Shares for offering or sale in any jurisdiction shall have
occurred, and no proceeding for such suspension shall have been initiated or
threatened; and (ii) the Registration Statement and the Prospectus shall not
contain an untrue statement of material fact or omit to state a material fact,
individually or in the aggregate, 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.
(g) Between the time of execution of this Agreement and the Closing Time
or the relevant Date of Delivery, as the case may be, (i) no material and
unfavorable change in the assets, operations, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole
shall have occurred or become known (whether or not arising in the
19
ordinary course of business), and (ii) no transaction which is material and
unfavorable to the Company shall have been entered into by the Company or any of
its Subsidiaries.
(h) At the Closing Time, the Other Agreement shall have been entered into
and delivered by all required parties.
(i) At the Closing Time, the Shares shall have been approved for listing
on NYSE.
(j) The NASD shall not have raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements.
(k) The Representatives shall have received letters from each of the
Existing Shareholders (as described in the Prospectus), in form and substance
satisfactory to the Representatives, confirming such person's agreement that for
a period of 18 months commencing on the Effective Date such person will not sell
(as defined below) any shares of Common Stock, or any securities convertible
into or exchangeable for any shares of Common Stock, or any option, warrant or
other right to acquire any shares of Common Stock, or publicly announce any
intention to do any of the foregoing, without the prior written consent of the
Representatives, which consent may be withheld in their sole discretion;
provided, however, that from nine months after the Effective Date each Existing
Shareholder may sell the greater of 10,000 shares of Common Stock or 5% of such
Existing Shareholder's shares of Common Stock outstanding on the Effective Date.
The word "sell" as used in this paragraph (k) means to, directly or indirectly,
offer to sell, sell, contract to sell, grant any option to sell (including,
without limitation, any short sale), pledge, establish an open "put equivalent"
position within the meaning of Rule 16a-1(h) of the Exchange Act, as amended,
transfer, assign or otherwise dispose of securities.
(l) The Company shall, at the Closing Time and on each Date of Delivery,
deliver to the Underwriters a certificate of its three principal executive
officers, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, to the
effect that, to each of such officer's knowledge, the representations and
warranties of the Company set forth in this Agreement and the conditions set
forth in paragraphs (f), (g), (h) and (i) have been met and are true and correct
as of such date.
(m) Each Selling Shareholder shall at the Closing Time deliver to the
Underwriters a certificate of such Selling Shareholder to the effect that the
representations and warranties of such Selling Shareholder set forth in this
Agreement are true and correct as of such date.
(n) The Company and its Selling Shareholders shall have furnished to the
Underwriters such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the Prospectus,
the representations, warranties and statement of the Company and the Selling
Shareholders contained herein, and the performance by the Company and the
Selling Shareholders of their covenants contained herein, and the fulfillment of
any conditions contained herein or therein, as of the Closing Time or any Date
of Delivery as the Representatives may reasonably request.
20
(o) The Company and the Selling Shareholders shall have performed such of
their obligations under this Agreement as are to be performed by the terms
hereof at or before the Closing Time or the relevant Date of Delivery, as the
case may be.
9. Termination:
-----------
(a) The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of the Representatives, at any time
prior to the Closing Time or any Date of Delivery, (i) if any of the conditions
specified in Section 8 shall not have been fulfilled when and as required by
this Agreement to be fulfilled, or (ii) if there has occurred outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic, political or other conditions, the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, impracticable to market the Shares or enforce contracts for
the sale of the Shares, or (iii) if trading generally on NYSE has been suspended
(including automatic halt in trading pursuant to market-decline triggers other
than those in which solely program trading is temporarily halted), or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by such exchange or NASD or by order of the Commission or
any other governmental authority, or (iv) any federal or state statute,
regulation, rule or order of any court or other governmental authority has been
enacted, published, decreed or otherwise promulgated which in the reasonable
opinion of the Representatives materially adversely affects or will materially
adversely affect the business or operations of the Company, or (v) any action
has been taken by any federal, state or local government or agency in respect of
its monetary or fiscal affairs which in the reasonable opinion of the
Representatives has a material adverse effect on the securities markets in the
United States.
(b) If the Representatives elect to terminate this Agreement as provided in
this Section 8, the Company and the Underwriters shall be notified promptly by
telephone, promptly confirmed by facsimile.
(c) At the Company's request, the Representatives will refrain from
exercising their right to terminate this Agreement pursuant to Section 9(a)(i)
of this Agreement for a period of up to three business days, in order for the
Company to fulfill one or more of the conditions set forth in Section 8 of this
Agreement. This provision shall not apply, however, if the Representatives
determine that any such condition cannot reasonably be expected to be fulfilled
within three business days.
(d) If the sale to the Underwriters of the Shares, as contemplated by this
Agreement, is not carried out by the Underwriters for any reason permitted under
this Agreement or if such sale is not carried out because the Company shall be
unable to comply in all material respects with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under this
Agreement (except to the extent provided in Sections 6 and 11 hereof) and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 11 hereof) or to one another
hereunder, provided, however that in such case the Company will reimburse
reasonable out-of-pocket accountable expenses actually incurred by the
Underwriters in preparation for the sale of the Shares contemplated by this
Agreement.
21
10. Increase in Underwriters' Commitments: If any Underwriter shall
-------------------------------------
default at the Closing Time or on a Date of Delivery in its obligation to take
up and pay for the Shares to be purchased by it under this Agreement, on such
date the Representatives shall have the right, within 36 hours after such
default, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Shares which such Underwriter shall have agreed but failed to take up and
pay for (the "Defaulted Shares"). Absent the completion of such arrangements
within such 36 hour period, (i) if the total number of the Defaulted Shares does
not exceed 10% of the total number of Shares to be purchased on such date, each
non-defaulting Underwriter shall take up and pay for (in addition to the number
of Shares which it is otherwise obligated to purchase on such date pursuant to
this Agreement) the portion of the total number of Shares agreed to be purchased
by the defaulting Underwriter on such date in the proportion that its
underwriting obligations hereunder bears to the underwriting obligations of all
non-defaulting Underwriters; and (ii) if the total number of Defaulted Shares
exceeds 10% of such total, the Representatives may terminate this Agreement by
notice to the Company, without liability to any non-defaulting Underwriter.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company agrees with the non-defaulting Underwriters that it will
not sell any Shares hereunder on such date unless all of the Shares to be
purchased on such date are purchased on such date by the Underwriters (or by
substituted Underwriters selected by the Representatives with the approval of
the Company or selected by the Company with the approval of the
Representatives).
If a new Underwriter or Underwriters are substituted for a defaulting
Underwriter in accordance with the foregoing provision, the Company or the non-
defaulting Underwriters shall have the right to postpone the Closing Time or the
relevant Date of Delivery, as the case may be, for a period not exceeding five
business days in order that any necessary changes in the Registration Statement
and the Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and include
any Underwriter substituted under this Section 10 with the like effect as if
such substituted Underwriter had originally been named in this Agreement.
11. Indemnity and Contribution by the Company and the Underwriters:
--------------------------------------------------------------
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and any person who controls any such Underwriter, within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any loss, expense, liability, damage or claim (including the reasonable
cost of investigation) which, jointly or severally, any such Underwriter or
controlling person may incur under the Securities Laws or otherwise, insofar as
such loss, expense, liability, damage or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus (the term
Prospectus for the purpose of this Section 11 being deemed to include any
Preliminary Prospectus, the Prospectus and the Prospectus as amended or
supplemented by the Company), or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or
22
Prospectus or necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, except insofar as any
such loss, expense, liability, damage or claim arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in and in conformity with information furnished in
writing by the Underwriters through the Representatives to the Company expressly
for use in such Registration Statement or such Prospectus, provided, however,
that the indemnity agreement contained in this subsection (a) with respect to
the Preliminary Prospectus or the Prospectus shall not inure to the benefit of
an Underwriter (or to the benefit of any person controlling such Underwriter)
with respect to any person asserting any such loss, expense, liability, damage
or claim which is the subject thereof if the Prospectus or any supplement
thereto prepared with the consent of the Representatives and furnished to the
Underwriters prior to the Closing Time corrected any such alleged untrue
statement or omission and if such Underwriter failed to send or give a copy of
the Prospectus or supplement thereto to such person at or prior to the written
confirmation of the sale of Shares to such person, unless such failure resulted
from noncompliance by the Company with Section 5(b).
If any action is brought against an Underwriter or controlling person in
respect of which indemnity may be sought against the Company pursuant to the
preceding paragraph, such Underwriter shall promptly notify the Company in
writing of the institution of such action and the Company shall assume the
defense of such action, including the employment of counsel and payment of
expenses, provided, however, that any failure or delay to so notify the Company
will not relieve the Company of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. Such
Underwriter or controlling person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person, unless the
employment of such counsel shall have been authorized in writing by the Company
in connection with the defense of such action or the Company shall not have
employed counsel to have charge of the defense of such action within a
reasonable time or such indemnified party or parties shall have reasonably
concluded (based on the advice of counsel) that there may be defenses available
to it or them which are different from or additional to those available to the
Company and which counsel to the Underwriter believes may present a conflict for
counsel representing the Company and the Underwriter (in which case the Company
shall not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events such fees and expenses
shall be borne by the Company and paid as incurred (it being understood,
however, that the Company shall not be liable for the expenses of more than one
separate firm of attorneys for the Underwriters or controlling persons in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Company shall not be liable for
any settlement of any such claim or action effected without its written consent.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and any person who controls any
such Underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the extent of the proceeds to the Selling
Shareholders as stated on the cover of the Prospectus. In case any action or
claim is brought or asserted against any Underwriter or any such controlling
person in respect of which indemnity may be sought against a Selling Shareholder
pursuant to this paragraph (b),
23
such Selling Shareholder shall have the rights and duties given to the Company,
and each Underwriter and any such controlling person shall have the rights and
duties given to the Underwriters, under paragraph (a) above. The foregoing
indemnity agreement shall be in addition to any liability which any Selling
Shareholder may otherwise have.
(c) Each Underwriter agrees, severally and not jointly, to indemnify,
defend and hold harmless the Company, its directors, the officers that signed
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and the Selling Shareholders from and against any loss, expense, liability,
damage or claim (including the reasonable cost of investigation) which, jointly
or severally, the Company or any such person may incur under the Securities Laws
or otherwise, insofar as such loss, expense, liability, damage or claim arises
out of or is based upon (i) any untrue statement or alleged untrue statement of
a material fact contained in and in conformity with information furnished in
writing by such Underwriter through the Representatives to the Company expressly
for use in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or in a
Prospectus, or (ii) any omission or alleged omission to state a material fact in
connection with such information that is required to be stated either in such
Registration Statement or Prospectus or that is necessary to make the statements
made therein in connection with such information, in the light of the
circumstances under which they were made by the Representatives, not misleading.
The statements set forth in the last paragraph on the cover page and under the
caption "Underwriting" in the Preliminary Prospectus and the Prospectus (to the
extent such statements relate to the Underwriters) constitute the only
information furnished by or on behalf of any Underwriter through the
Representatives to the Company for purposes of Section 3(k) and this Section 11.
If any action is brought against the Company or any such person in respect
of which indemnity may be sought against any Underwriter pursuant to the
foregoing paragraph, the Company or such person shall promptly notify the
Representatives in writing of the institution of such action and the
Representatives, on behalf of the Underwriters, shall assume the defense of such
action, including the employment of counsel and payment of expenses, provided,
however, that any failure or delay to so notify the Representatives will not
relieve any such Underwriter of any obligation hereunder, except to the extent
that its ability to defend is actually impaired by such failure or delay. The
Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person, unless the employment of such counsel shall have
been authorized in writing by the Representatives in connection with the defense
of such action or the Representatives shall not have employed counsel to have
charge of the defense of such action within a reasonable time or such
indemnified party or parties shall have reasonably concluded (based on the
advice of counsel) that there may be defenses available to it or them which are
different from or additional to those available to the Underwriters (in which
case the Representatives shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
such fees and expenses shall be borne by such Underwriter and paid as incurred
(it being understood, however, that the Underwriters shall not be liable for the
expenses of more than one separate firm of attorneys in any one action or series
of related actions in the same jurisdiction representing the indemnified parties
who are parties to such action). Anything in this paragraph
24
to the contrary notwithstanding, no Underwriter shall be liable for any
settlement of any such claim or action effected without the written consent of
the Representatives.
(d) If the indemnification provided for in this Section 11 is unavailable
to an indemnified party under subsections (a), (b) and (c) of this Section 11 in
respect of any losses, expenses, liabilities, damages or claims referred to
therein, then each applicable 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, expenses, liabilities, damages or
claims (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Selling Shareholders on the one hand and the
Underwriters on the other from the offering of the Shares or (ii) if (but only
if) the allocation provided by clause (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 (i) above but also the relative fault of the
Company and/or the Selling Shareholders on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, expenses, liabilities, damages or claims, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Selling Shareholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Shareholders bear to the
underwriting discounts and commissions received by the Underwriters. The
relative fault of the Company and the Selling Shareholders on the one hand and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission relates to information supplied by
the Company and the Selling Shareholders on the one hand and by the Underwriters
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include any legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any claim or action.
(e) The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 11 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 paragraph (d) above. Notwithstanding
the provisions of this Section 11, no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and commissions
applicable to the Shares purchased by such Underwriter. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities 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 11 are several in proportion to their
respective underwriting commitments and not joint.
(f) The Company agrees to indemnify, defend and hold harmless the QIU and
any person who controls the QIU, within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any loss,
expense, liability, damage or claim (including the reasonable cost of
investigation) which the QIU may incur under the Securities
25
Laws or otherwise, insofar as such loss, expense, liability, damage or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. The indemnity agreement provided in this paragraph (f) shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the QIU
within the meaning of the Securities Act.
If any action is brought against the QIU in respect of which indemnity may
be sought against the Company pursuant to the preceding paragraph, the QIU shall
promptly notify the Company in writing of the institution of such action and the
Company shall assume the defense of such action, including the employment of
counsel and payment of expenses, provided, however, that any failure or delay to
so notify the Company will not relieve the Company of any obligation hereunder,
except to the extent that its ability to defend is actually impaired by such
failure or delay. The QIU shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the QIU, unless the employment of such counsel shall have been authorized in
writing by the Company in connection with the defense of such action or the
Company shall not have employed counsel to have charge of the defense of such
action within a reasonable time or the QIU shall have reasonably concluded
(based on the advice of counsel) that there may be defenses available to it
which are different from or additional to those available to the Company and
which counsel to the QIU believes may present a conflict for counsel
representing the Company and the QIU (in which case the Company shall not have
the right to direct the defense of such action on behalf of the QIU), in any of
which events such fees and expenses shall be borne by the Company and paid as
incurred (it being understood, however, that the Company shall not be liable for
the expenses of more than one separate firm of attorneys for the QIU in any one
action or series of related actions in the same jurisdiction representing the
QIU). Anything in this paragraph to the contrary notwithstanding, the Company
shall not be liable for any settlement of any such claim or action effected
without its written consent.
(g) If the indemnification provided for in paragraph (f) above is
unavailable to Lazard Freres & Co. LLC, in its capacity as the QIU, in respect
of any losses, expenses, liabilities, damages or claims referred to therein,
then the Company, in lieu of indemnifying the QIU, shall contribute to the
amount paid or payable by the QIU as a result of such losses, expenses,
liabilities, damages or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the QIU on the other from the offering of the
Shares or (ii) if (but only if) the allocation provided by clause (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 (i) above but also the
relative fault of the Company on the one hand and the QIU on the other in
connection with the statements or omissions which resulted in such losses,
expenses, liabilities, damages or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the QIU on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting
26
expenses) received by the Company and the Selling Shareholders bear to the fee
payable to the QIU pursuant to Section 7 hereof. The relative fault of the
Company on the one hand and of the QIU on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission relates to
information supplied by the Company on the one hand and by the QIU on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any claim or action.
(h) The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 11 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 paragraph (g) above. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
12. Survival: The indemnity and contribution agreements contained in
--------
Section 11 and the covenants, warranties and representations of the Company and
the Selling Shareholders contained in Sections 3, 4, 5 and 6 of this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of any Underwriter, or any person who controls any Underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the QIU, or any person who controls the QIU within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, or by or on behalf of the Company, its directors and officers or any person
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, or by or on behalf of any Selling
Shareholder, and shall survive any termination of this Agreement or the sale and
delivery of the Shares. The Company, each Selling Shareholder, each Underwriter
and the QIU agree promptly to notify the others of the commencement of any
litigation or proceeding against it and, in the case of the Company, against any
of the Company's officers or directors, in connection with the sale and delivery
of the Shares, or in connection with the Registration Statement or the
Prospectus.
13. Notices: Except as otherwise herein provided, all statements,
-------
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered to Friedman,
Billings, ▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, and to Lazard Freres & Co. LLC, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: _________________; if to
the Company, shall be sufficient in all respects if delivered to the Company at
the offices of the Company at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: President; if to the QIU, delivered to Lazard Freres & Co. LLC, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
__________________.
14. Governing Law; Headings: THIS AGREEMENT SHALL BE GOVERNED BY, AND
-----------------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
27
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. The section
headings in this Agreement have been inserted as a matter of convenience of
reference and are not a part of this Agreement.
15. Parties at Interest: The Agreement herein set forth has been and is
-------------------
made solely for the benefit of the Underwriters, the Company and the controlling
persons, directors and officers referred to in Sections 11 and 12 hereof, the
Selling Shareholders and their respective successors, assigns, heirs, executors,
legal representatives and administrators, and the QIU. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any rights under
or by virtue of this Agreement.
16. Counterparts: This Agreement may be signed by the parties in
------------
counterparts which together shall constitute one and the same agreement among
the parties.
If the foregoing correctly sets forth the understanding among the Company,
the Selling Shareholders, the Underwriters and the QIU, please so indicate in
the space provided below for the purpose, whereupon this Agreement shall
constitute a binding agreement among the Company and the Underwriters.
Very truly yours,
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇
GROUP, INC.
--------------------------
By:
Title:
[include signature blocks for Selling
Shareholders]
Accepted and agreed to as
of the date first above written:
FRIEDMAN, BILLINGS, ▇▇▇▇▇▇ &
CO., INC.
--------------------------------
By:
Title:
28
LAZARD FRERES & CO. LLC
-------------------------------------
By:
Title:
For themselves and as Representatives
of the other Underwriters named on
Schedule I hereto.
LAZARD FRERES & CO. LLC, in its capacity
as the qualified independent underwriter
-------------------------------------
By:
Title:
29
Schedule I
Number of Initial
Shares to be
Number of Initial ------------
Shares to be Purchased Purchased
---------------------- ---------
Underwriter from Selling Shareholders from the Company
----------- -------------------------- --------------------
Friedman, Billings, ▇▇▇▇▇▇
& Co., Inc.
Lazard Freres & Co. LLC
Total.............
Schedule II
Number of Initial
Selling Shareholders Shares to be Sold
---------------------- -----------------
