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LIBERTY FINANCIAL COMPANIES, INC.
a Massachusetts corporation
500,000 Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
Dated: July __, 1997
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Table of Contents
PURCHASE AGREEMENT................................................................................. 1
SECTION 1. Representations and Warranties.................................................... 3
(a) Representations and Warranties by the Company..................................... 3
(i) Compliance with Registration Requirements.................................... 4
(ii) Incorporated Documents...................................................... 4
(iii) Independent Accountants..................................................... 5
(iv) Financial Statements........................................................ 5
(v) No Material Adverse Change in Business....................................... 5
(vi) Good Standing of the Company................................................ 5
(vii) Good Standing of Subsidiaries.............................................. 5
(viii) Capitalization............................................................ 6
(ix) Authorization of Agreement.................................................. 6
(x) Authorization and Description of Securities.................................. 6
(xi) Absence of Defaults and Conflicts........................................... 6
(xii) NYSE Listing............................................................... 7
(xiii) Absence of Proceedings.................................................... 7
(xiv) Accuracy of Exhibits....................................................... 7
(xv) Possession of Intellectual Property......................................... 7
(xvi) Absence of Further Requirements............................................. 8
(xvii) Possession of Licenses and Permits......................................... 8
(xviii) Title to Property......................................................... 8
(xix) Compliance with Cuba Act.................................................... 8
(b) Representations and Warranties by the
Selling Shareholders................................................................8
(i) Accurate Disclosure........................................................... 9
(ii) Authorization of Agreements.................................................. 9
(iii) Good and Marketable Title................................................... 9
(iv) Due Execution of Power of Attorney
and Custody Agreement....................................................... 10
(v) Absence of Manipulation.......................................................10
(vi) Absence of Further Requirements............................................. 10
(vii) Restriction on Sale of Securities.......................................... 10
(viii) Certificates Suitable for Transfer.........................................11
(ix) No Association with NASD.................................................... 11
(c) Officer's Certificates............................................................ 11
SECTION 2. Sale and Delivery to Underwriters; Closing........................................ 11
(a) Initial Securities................................................................ 11
(b) Option Securities................................................................. 11
(c) Payment........................................................................... 12
(d) Denominations; Registration....................................................... 13
SECTION 3. Covenants of the Company.......................................................... 13
(a) Compliance with Securities Regulations
and Commission Requests........................................................... 13
(b) Filing of Amendments.............................................................. 13
(c) Delivery of Registration Statements............................................... 13
(d) Delivery of Prospectuses.......................................................... 14
i
(e) Continued Compliance with Securities Laws......................................... 14
(f) Blue Sky Qualifications........................................................... 14
(g) Rule 158.......................................................................... 15
(h) Restriction on Sale of Securities................................................. 15
(i) Reporting Requirements............................................................ 15
SECTION 4. Payment of Expenses............................................................... 15
(a) Expenses.......................................................................... 15
(b) Expenses of the Selling Shareholders.............................................. 16
(c) Termination of Agreement.......................................................... 16
(d) Allocation of Expenses............................................................ 16
SECTION 5. Conditions of Underwriters' Obligations........................................... 16
(a) Effectiveness of Registration Statement........................................... 16
(b) Opinion of Counsel for Company.................................................... 17
(c) Opinion of Counsel for the Selling Shareholders................................... 17
(d) Opinion of Counsel for Underwriters............................................... 17
(e) Officers' Certificate............................................................. 17
(f) Certificates of Selling Shareholders.............................................. 18
(g) Accountant's Comfort Letter....................................................... 18
(h) Bring-down Comfort Letter......................................................... 18
(i) No Objection...................................................................... 18
(j) Lock-up Agreements................................................................ 18
(k) Purchase of Initial U.S. Securities............................................... 18
(l) Conditions to Purchase of Option Securities....................................... 19
(m) Additional Documents.............................................................. 20
(n) Termination of Agreement.......................................................... 20
SECTION 6. Indemnification................................................................... 20
(a) Indemnification of Underwriters by
the Company and LFC Holdings...................................................... 20
(b) Indemnification of Underwriters by
the Selling Shareholders.......................................................... 21
(c) Indemnification of Company, Directors and
Officers and Selling Shareholders................................................. 23
(d) Actions against Parties; Notification............................................. 23
(e) Settlement without Consent if Failure
to Reimburse...................................................................... 24
(f) Other Agreements with Respect to Indemnification.................................. 24
SECTION 7. Contribution...................................................................... 24
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery............................................................... 25
SECTION 9. Termination of Agreement.......................................................... 26
(a) Termination; General.............................................................. 26
(b) Liabilities....................................................................... 26
ii
SECTION 10. Default by One or More of the Underwriters........................................ 26
SECTION 11. Default by the Selling Shareholders............................................... 27
SECTION 12. Notices........................................................................... 27
SECTION 13. Parties........................................................................... 28
SECTION 14. Governing Law and Time............................................................ 28
SECTION 15. Effect of Headings................................................................ 28
SCHEDULES
Schedule A - List of Underwriters.......................................................Sch A-1
Schedule B - List of Selling Shareholders...............................................Sch B-1
Schedule C - Pricing Information........................................................Sch C-1
Schedule D - List of Subsidiaries........................................................Sch D-1
Schedule E - List of Persons subject to Lock-up..........................................Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel..............................................A-1
Exhibit B - Form of Opinion for the Selling Shareholders......................................B-1
Exhibit C - Form of Lock-up Letter............................................................C-1
iii
Draft of 7/16/97
LIBERTY FINANCIAL COMPANIES, INC.
a Massachusetts corporation
500,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
July __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ Sachs International
PaineWebber International (U.K.) Ltd.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ Ltd.
as Lead Managers of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
Liberty Financial Companies, Inc., a Massachusetts corporation (the
"Company"), and LFC Holdings, Inc. ("LFC Holdings"), a Massachusetts
corporation, and Finplan of America, Inc., C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (together with LFC Holdings,
the "Selling Shareholders"), confirm their respective agreements with ▇▇▇▇▇▇▇
▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other international
underwriters named in Schedule A hereto (collectively, the "International
Managers", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ International, PaineWebber International (U.K.) Ltd., and ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇
NV. are acting as representatives (in such capacity, the "Lead Managers"), with
respect to (i) the sale by the Selling Shareholders, acting severally and not
jointly, and the purchase by the International Managers, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value $.01
per share, of the Company ("Common Stock") set forth in Schedules A and B hereto
and (ii) the grant by LFC Holdings to the International Managers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 75,000 additional shares of Common Stock solely to
cover over-allotments, if any. The aforesaid 500,000 shares of Common Stock (the
"Initial International Securities") to be purchased by the International
Managers and all or any part of the 75,000 shares of Common Stock subject to the
option described in Section 2(b) hereof (the "International Option Securities")
are hereinafter called, collectively, the "International Securities".
1
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Selling Shareholders of
an aggregate of 2,000,000 shares of Common Stock (the "Initial U.S. Securities")
through arrangements with certain underwriters in the United States and Canada
(the "U.S. Underwriters") for which ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., PaineWebber Incorporated and ▇▇▇-▇▇▇▇,
▇▇▇▇▇▇ Inc. are acting as representative(s) (the "U.S. Representative(s)") and
the grant by the Company to the U.S. Underwriters, acting severally and not
jointly, of an option to purchase all or any part of the U.S. Underwriters' pro
rata portion of up to 300,000 additional shares of Common Stock solely to cover
overallotments, if any (the "U.S. Option Securities" and, together with the
International Option Securities, the "Option Securities"). The Initial U.S.
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities". It is understood that the Company is not obligated to sell and the
International Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities".
The Underwriters will concurrently enter into an Intersyndicate
Agreement of even date herewith (the "Intersyndicate Agreement") providing for
the coordination of certain transactions among the Underwriters under the
direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated (in such capacity, the "Global Coordinator").
The Company understands that the International Managers propose to make
a public offering of the International Securities as soon as the Lead Manager(s)
deem(s) advisable after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-29315) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the Form
of U.S. Prospectus, except for the front cover and back cover pages and the
information under the caption "Underwriting." The information included in any
such prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became
2
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final Form of International Prospectus and the final Form of U.S.
Prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the forms first furnished to the
Underwriters for use in connection with the offering of the Securities are
herein called the "International Prospectus" and the "U.S. Prospectus,"
respectively, and collectively, the "Prospectuses." If Rule 434 is relied on,
the terms "International Prospectus" and "U.S. Prospectus" shall refer to the
preliminary International Prospectus dated June 25, 1997 and preliminary U.S.
Prospectus dated June 25, 1997, respectively, each together with the applicable
Term Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus
(including the Form of U.S. Prospectus and Form of International Prospectus) or
the Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager, as follows:
3
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any International
Option Securities are purchased, at the Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
Neither of the Prospectuses nor any amendments or supplements thereto,
at the time the Prospectuses or any such amendments or supplements were
issued and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the International Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by any International Manager through the Lead Managers
expressly for use in the Registration Statement or the International
Prospectus.
Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the International Managers for use in connection with this
offering were identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or, if
any, deemed to be incorporated by reference in the Registration
Statement and the Prospectuses, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the Prospectuses,
at the time the Registration Statement became effective, at the time
the Prospectuses were issued and at the Closing Time (and, if any
International Option Securities are purchased, at the Date of
Delivery), did not and
4
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated
and the statement of operations, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included in the Prospectuses present fairly the information
shown therein and have been compiled on a basis consistent with that of
the audited financial statements included in the Registration
Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular quarterly cash dividends and
dividends under the Company's Dividend Reinvestment Plan on the Common
Stock and the Series A Convertible Preferred Stock in amounts per share
that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the Commonwealth of Massachusetts and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each of Keyport Life
Insurance Company, The Colonial Group, Inc., ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇
Incorporated, Newport Pacific
5
Management, Inc. and Liberty Asset Management Company (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each such Subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights
of any securityholder of such Subsidiary. The only subsidiaries of the
Company are (a) the subsidiaries listed on Schedule D hereto and (b)
certain other subsidiaries which, considered in the aggregate as a
single Subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The shares of issued and outstanding
capital stock, including the Securities to be purchased by the
International Managers from the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock, including the
Securities to be purchased by the International Managers from the
Selling Shareholders, was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization of Agreement. This Agreement and the U.S.
Purchase Agreement have been duly authorized, executed and delivered by
the Company.
(x) Authorization and Description of Securities. The Common
Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in
the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated herein
and therein and in the Registration Statement and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and do not
6
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or
any of their respective assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) NYSE Listing. The Securities have been approved for
listing on the New York Stock Exchange.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material Adverse Effect, or
which might reasonably be expected to materially and adversely affect
the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the U.S. Purchase
Agreement or the performance by the Company of its obligations
hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a
party or of which any of their respective property or assets is the
subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could
not reasonably be expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectuses or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual
7
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of
the Company or any of its subsidiaries therein, and which infringement
or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder or under the U.S. Purchase Agreement, in
connection with the offering, issuance or sale of the Securities
hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, except such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. All of the leases and subleases
material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in
full force and effect, and neither the Company nor any subsidiary has
any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any
of the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such subsidiary to the continued
possession of the leased or subleased premises under any such lease or
sublease.
(xix) Compliance with Cuba Act. The Company has complied with,
and is and will be in compliance with, the provisions of that certain
Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder (collectively, the "Cuba Act") or is exempt
therefrom.
(b) Representations and Warranties by the Selling Shareholders. Unless
otherwise explicitly narrowed in scope, each Selling Shareholder represents and
warrants, severally and not jointly, to each International Manager as of the
date hereof, as of the Closing Time, and if
8
such Selling Shareholder is selling International Option Securities on a Date of
Delivery as of such Date of Delivery, and agrees with each International
Manager, as follows:
(i) Accurate Disclosure. To the knowledge of LFC Holdings, the
representations and warranties of the Company contained in Section 1(a)
hereof are true and correct; LFC Holdings has reviewed and is familiar
with the Registration Statement and Prospectuses and, to the knowledge
of LFC Holdings, neither the Prospectuses nor any amendments or
supplements thereto includes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Each other Selling Shareholder represents
and warrants that the information concerning it in the Registration
Statement and the Prospectuses is true, complete and correct in all
material respects.
(ii) Authorization of Agreements. Such Selling Shareholder has
the full right, power and authority to enter into this Agreement and a
Power of Attorney and Custody Agreement (the "Power of Attorney and
Custody Agreement") and to sell, transfer and deliver the Securities to
be sold by such Selling Shareholder hereunder. The execution and
delivery of this Agreement and the Power of Attorney and Custody
Agreement and the sale and delivery of the Securities to be sold by
such Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by such Selling
Shareholder and does not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of
such Selling Shareholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which the Selling Shareholder is a party or
by which such Selling Shareholder may be bound, or to which any of the
property or assets of such Selling Shareholder is subject, nor will
such action result in any violation of the provisions of the charter or
by-laws or other organizational instrument of such Selling Shareholder,
if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has
and will at the Closing Time and, if any International Option
Securities are purchased, on the Date of Delivery have good and
marketable title to the Securities to be sold by such Selling
Shareholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any
kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such International Manager has no notice of
any adverse claim, each of the International Managers will receive good
and marketable title to the Securities purchased by it from such
Selling Shareholder, free and clear of any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance of any kind.
9
(iv) Due Execution of Power of Attorney and Custody Agreement.
Such Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Representatives, the Power of Attorney and
Custody Agreement with J. ▇▇▇▇ ▇▇▇▇▇▇▇, III, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇ or any of them, as
attorneys-in-fact (the "Attorneys-in-Fact") and ▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇,
as custodian (the "Custodian"); the Custodian is authorized to deliver
the Securities to be sold by such Selling Shareholder hereunder and to
accept payment therefor; and the Attorney-in-Fact is authorized to
execute and deliver this Agreement and the certificate referred to in
Section 5(f) or that may be required pursuant to Section(s) 5(k) and
5(l) on behalf of such Selling Shareholder, to sell, assign and
transfer to the International Managers the Securities to be sold by
such Selling Shareholder hereunder, to determine the purchase price to
be paid by the International Managers to such Selling Shareholder, as
provided in Section 2(a) hereof, to authorize the delivery of the
Securities to be sold by such Selling Shareholder hereunder, to accept
payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder 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 result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Shareholder of its obligations hereunder or in the Power of Attorney
and Custody Agreement, or in connection with the sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously been
made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or the 1934 Act or the 1934 Act Regulations or state
securities laws.
(vii) Restriction on Sale of Securities. During a period of
120 days from the date of the Prospectuses, such Selling Shareholder
will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i)
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
10
(viii) Certificates Suitable for Transfer. Certificates for
all of the Securities to be sold by such Selling Shareholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank with signatures guaranteed, have been placed in custody with the
Custodian with irrevocable conditional instructions to deliver such
Securities to the International Managers pursuant to this Agreement.
(ix) No Association with NASD. Neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the International Managers shall be deemed a representation and
warranty by the Company to each International Manager as to the matters covered
thereby; and any certificate signed by or on behalf of the Selling Shareholders
as such and delivered to the Representatives or to counsel for the International
Managers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Selling Shareholders to the International
Managers as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Selling Shareholders, severally and not jointly, agree to sell to
each International Manager, severally and not jointly, and each International
Manager, severally and not jointly, agrees to purchase from the Selling
Shareholders, at the price per share set forth in Schedule C, that proportion of
the number of Initial International Securities set forth in Schedule B opposite
the name of the Selling Shareholders which the number of Initial International
Securities set forth in Schedule A opposite the name of such International
Manager, plus any additional number of Initial International Securities which
such International Manager may become obligated to purchase pursuant to the
provisions of Section 10 hereof, bears to the total number of Initial
International Securities, subject, in each case, to such adjustments among the
International Managers as the Global Coordinator in its sole discretion shall
make to eliminate any sales or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, LFC Holdings hereby grants an option to the International Managers,
severally and not jointly, to purchase up to an additional 75,000 shares of
Common Stock, as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. 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
11
covering over-allotments which may be made in connection with the offering and
distribution of the Initial International Securities upon notice by the Global
Coordinator to LFC Holdings setting forth the number of International Option
Securities as to which the several International Managers are then exercising
the option and the time and date of payment and delivery for such International
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial International Securities shall be made at the
offices of ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, or at such other place as shall be agreed upon by the Global
Coordinator and the Company and LFC Holdings, at 9:00 A.M. (Eastern time) on the
third (or fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Global Coordinator
and the Company and LFC Holdings (such time and date of payment and delivery
being herein called the "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company and LFC
Holdings, on each Date of Delivery as specified in the notice from the Global
Coordinator to the Company and LFC Holdings.
Payment shall be made to each Selling Shareholder by wire transfer of
immediately available funds to a bank account designated by it or the Custodian
pursuant to its Power of Attorney and Custody Agreement against delivery to the
Lead Managers for the respective accounts of the International Managers of
certificates for the Securities to be purchased by them. It is understood that
each International Manager has authorized the Lead Managers, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial International Securities and the International Option Securities, if
any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the International Managers, may (but shall not be obligated
to) make payment of the purchase price for the Initial International Securities
or the International Option Securities, if any, to be purchased by any
International Manager whose funds have not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such International Manager from its obligations hereunder.
12
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least two full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify
the Global Coordinator immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration Statement
shall become effective, or any supplement to the Prospectuses or any
amended Prospectuses shall have been filed, (ii) of the receipt of any
comments from the Commission, (iii) of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)),
any Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, and will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use
any such document to which the Global Coordinator or counsel for the
International Managers shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel for the
International Managers, without charge, signed copies of the
Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed
13
copies of all consents and certificates of experts, and will also
deliver to the Lead Managers, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the International Managers. The
copies of the Registration Statement and each amendment thereto
furnished to the International Managers will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each International Manager, without charge, as many copies of each
preliminary prospectus as such International Manager reasonably
requested, and the Company hereby consents to the use of such copies
for purposes permitted by the 1933 Act. The Company will furnish to
each International Manager, without charge, during the period when the
Prospectuses is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Prospectuses (as amended or
supplemented) as such International Manager may reasonably request. The
Prospectuses and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations and the 1934
Act and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the
U.S. Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection
with sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel
for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement the Prospectuses in order
that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectuses in order to comply with the requirements of the 1933 Act
or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectuses comply with such
requirements, and the Company will furnish to the International
Managers such number of copies of such amendment or supplement as the
International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Global Coordinator may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the
14
Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Earnings Statement. The Company will timely file such
reports pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as practicable an
earnings statement (which need not be audited) for the purposes of, and
to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 120
days from the date of the Prospectuses, the Company will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the U.S. Purchase Agreement, (B) any shares of
Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectuses, (C) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectuses
or (D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan.
(i) Reporting Requirements. The Company, during the period
when the Prospectuses is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company and the Selling Shareholders will pay or
cause to be paid all expenses incident to the performance of their respective
obligations under this Agreement, including (i) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among
15
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Securities and (x) any fees
and expenses incurred in connection with the listing of the Securities on the
New York Stock Exchange.
(b) Expenses of the Selling Shareholders. The Selling Shareholders will
pay all expenses incident to the performance of their respective obligations
under, and the consummation of the transactions contemplated by this Agreement
and the U.S. Purchase Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
Underwriters, and their transfer between the Underwriters pursuant to an
agreement between such Underwriters, and (ii) the fees and disbursements of
their respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Lead Managers in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company and the Selling Shareholders shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company or on behalf of the Selling
Shareholders delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have
16
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the International Managers. A
prospectus containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Managers shall have received the favorable opinions of ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Company, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel
of the Company, dated as of Closing Time, in form and substance
satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letters for each of the other
International Managers to the collective effect set forth in Exhibit A
hereto and to such further effect as counsel to the International
Managers may reasonably request.
(c) Opinion of Counsel for the Selling Shareholders. At
Closing Time, the Lead Managers shall have received the favorable
opinion, dated as of Closing Time, of ▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇, counsel
for LFC Holdings, McCarthy, Fingar, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.,
counsel for Finplan of America, Inc. and of ▇▇▇▇ and ▇▇▇▇ LLP, counsel
for the other Selling Shareholders in form and substance satisfactory
to counsel for the International Managers, together with signed or
reproduced copies of such letter for each of the other International
Managers to the collective effect set forth in Exhibit B hereto and to
such further effect as counsel to the International Managers may
reasonably request.
(d) Opinion of Counsel for International Managers. At Closing
Time, the Lead Managers shall have received the favorable opinion,
dated as of Closing Time, of ▇▇▇▇▇ & Wood LLP, counsel for the
International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers with respect
to the matters set forth in clauses (i), (ii), (v), (vi) (solely as to
preemptive or other similar rights arising by operation of law or under
the charter or by-laws of the Company), (viii) through (x), inclusive,
(xii), (xiv) (solely as to the information in the Prospectuses under
"Description of Capital Stock--Common Stock") and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the Lead Managers.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectuses, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries
17
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Lead Managers shall have received a
certificate of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company, dated
as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in
Section 1(a) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time, (iii) the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or are contemplated by the Commission.
(f) Certificates of Selling Shareholders. At Closing Time, the
Lead Managers shall have received a certificate of each Selling
Shareholder or Attorney-in-Fact therefor, dated as of Closing Time, to
the effect that (i) the representations and warranties of such Selling
Shareholder contained in Section 1(b) hereof are true and correct in
all respects with the same force and effect as though expressly made at
and as of Closing Time and (ii) such Selling Shareholder has complied
in all material respects with all agreements and all conditions on its
part to be performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution
of this Agreement, the Lead Managers shall have received from Ernst &
Young LLP a letter dated such date, in form and substance satisfactory
to the Lead Managers, together with signed or reproduced copies of such
letter for each of the other International Managers containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the Lead
Managers shall have received from Ernst & Young LLP a letter, dated as
of Closing Time, to the effect that they reaffirm the statements made
in the letter furnished pursuant to subsection (g) of this Section,
except that the specified date referred to shall be a date not more
than three business days prior to Closing Time.
(i) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement, the
Lead Managers shall have received an agreement substantially in the
form of Exhibit C hereto signed by the persons listed on Schedule E
hereto.
(k) Purchase of Initial U.S. Securities. Contemporaneously
with the purchase by the International Managers of the Initial
International Securities under this Agreement,
18
the U.S. Underwriters shall have purchased the Initial U.S. Securities
under the U.S. Purchase Agreement.
(l) Conditions to Purchase of International Option Securities.
In the event that the International Managers exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
International Option Securities, the representations and warranties of
the Company and LFC Holdings contained herein and the statements in any
certificates furnished by the Company, any subsidiary of the Company
and LFC Holdings hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Lead Managers shall
have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the
Company confirming that the certificate delivered at the
Closing Time pursuant to Section 5(e) hereof remains true and
correct as of such Date of Delivery.
(ii) Certificate of LFC Holdings. A certificate, dated such
Date of Delivery, of LFC Holdings confirming that the
certificate delivered by LFC Holdings at Closing Time pursuant
to Section 5(f) remains true and correct as of such Date of
Delivery.
(iii) Opinion of Counsel for Company. The favorable opinions
of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, and ▇▇▇▇
▇. ▇▇▇▇▇▇▇, General Counsel of the Company, in form and
substance satisfactory to counsel for the International
Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date
of Delivery and otherwise to the same collective effect as the
opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholders. The
favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for LFC
Holdings, in form and substance satisfactory to counsel for
the International Managers, dated such Date of Delivery,
relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for International Managers. The
favorable opinion of ▇▇▇▇▇ & Wood LLP, counsel for the
International Managers, dated such Date of Delivery, relating
to the International Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst & Young,
in form and substance satisfactory to the Lead Managers and
dated such Date of Delivery, substantially in the same form
and substance as the letter furnished to the Lead Managers
pursuant to Section 5(g) hereof, except that the "specified
date" in the
19
letter furnished pursuant to this paragraph shall be a date
not more than five days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the International Managers shall have been
furnished with such documents as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Company and the Selling Shareholders in connection with the issuance
and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Lead Managers and counsel for
the International Managers.
(n) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of International Option Securities on a Date of Delivery which
is after the Closing Time, the obligations of the several International
Managers to purchase the relevant International Option Securities, may
be terminated by the Lead Managers by notice to the Company at any time
at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 6
and 7 shall survive any such termination and remain in full force and
effect.
SECTION 6. Indemnification.
(a) Indemnification of International Managers by the Company and LFC
Holdings. The Company and LFC Holdings, provided that in no event shall the
obligations of LFC Holdings hereunder exceed the net proceeds received by it
from the sale of the Securities, jointly and severally agree to indemnify and
hold harmless each International Manager and each person, if any, who controls
any International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission
20
of such a material fact, or any such alleged untrue statement or
omission of such a material fact; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company and the Selling Shareholders to be represented by LFC
Holdings;
(iii) against any and all out-of-pocket expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission of such a
material fact, or any such alleged untrue statement or omission of such
a material fact, to the extent that any such expense is not paid under
(i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto); and
provided further, however, that as to any preliminary prospectus, any
preliminary prospectus supplement, the Prospectuses or any amendment or
supplement thereto, this indemnity agreement shall not inure to the benefit of
any International Manager on account of any loss, claim, damage, liability or
action arising from the fact that such International Manager sold Securities to
a person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectuses or
of the Prospectuses as then amended or supplemented in any case where such
delivery is required by the 1933 Act if the Company has previously furnished
copies thereof in sufficient quantity to such International Manager and the
loss, claim, damage or liability of such International Manager results from an
untrue statement or omission of a material fact contained in such preliminary
prospectus, preliminary prospectus supplement, Prospectuses or amendments or
supplements thereto, which was corrected in the Prospectuses or in the
Prospectuses as then amended or supplemented.
(b) Indemnification of International Managers by the Selling
Shareholders. Each Selling Shareholder other than LFC Holdings, severally and
not jointly (in the proportion that the number of Securities being sold by such
Selling Shareholders bears to the total number of Securities being sold, but in
no case in an amount in excess of the net proceeds received by any such Selling
Shareholder from the sale of Securities) agrees to indemnify and hold harmless
each International Manager and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or
21
alleged untrue statement of a material fact included in any preliminary
prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided
that, in the case of a Selling Shareholder other than LFC Holdings,
such untrue statement or alleged untrue statement or omission or
alleged omission was made or omitted in reliance upon and in conformity
with information relating to such Selling Shareholder furnished in
writing for use in connection therewith;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission of such a material fact, or any such alleged untrue statement
or omission of such a material fact; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company and the Selling Shareholders to be represented by LFC
Holdings; and further provided that, in the case of a Selling
Shareholder other than LFC Holdings, such untrue statement or alleged
untrue statement or omission or alleged omission was made or omitted in
reliance upon and in conformity with information relating to such
Selling Shareholder furnished in writing for use in connection
therewith;
(iii) against any and all out-of-pocket expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission of such a
material fact, or any such alleged untrue statement or omission of such
a material fact, to the extent that any such expense is not paid under
(i) or (ii) above; provided that, in the case of a Selling Shareholder
other than LFC Holdings, such untrue statement or alleged untrue
statement or omission or alleged omission was made or omitted in
reliance upon and in conformity with information relating to such
Selling Shareholder furnished in writing for use in connection
therewith;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto); and
provided further, however, that as to any preliminary prospectus, any
preliminary prospectus supplement, the Prospectuses or any amendment or
supplement thereto, this indemnity agreement shall not inure to the benefit of
any International Manager on account of any loss, claim, damage, liability or
action arising from the fact that such International Manager sold Securities to
a person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectuses or
of the Prospectuses as then amended or supplemented in any case
22
where such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof in sufficient quantity to such International Manager
and the loss, claim, damage or liability of such International Manager results
from an untrue statement or omission of a material fact contained in such
preliminary prospectus, preliminary prospectus supplement, Prospectuses or
amendments or supplements thereto, which was corrected in the Prospectuses or in
the Prospectuses as then amended or supplemented.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each International Manager severally agrees to indemnify and hold
harmless each of the Company and LFC Holdings and the directors of each, each of
the Company's officers who signed the Registration Statement, and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act, and each Selling Shareholder and each person,
if any, who controls such Selling Shareholder within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such International Manager through the Lead Managers expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
23
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel payable under this Agreement,
such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the International Managers on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Shareholders on the one hand and of the International Managers on
the other hand in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the International Managers on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Shareholders and the total
underwriting discount received by the International Managers, in each case as
set forth on the cover of the Prospectuses, or, if Rule 434 is used, the
corresponding location on the Term Sheet bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the
one hand and the International Managers on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Selling Shareholders or
by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
24
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the International Managers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such International Manager has otherwise been required to pay by reason of any
such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Selling Shareholder will be
required to contribute any amount in excess of the net proceeds received by such
Selling Shareholder in connection with the sale of the Securities.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company or LFC Holdings, each
officer of the Company who signed the Registration Statement, and each person,
if any, who controls the Company or any of the Selling Shareholders within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company or any of the Selling
Shareholders, as the case may be. The International Managers' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial International Securities set forth opposite their
respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any International Manager or controlling person, or by or on
behalf of the Company or any Selling Shareholder, and shall survive delivery of
the Securities to the International Managers.
25
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and LFC Holdings, at any time at or prior to
Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Lead Managers,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the International Managers. If
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Lead Managers shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers,
or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the International Managers to purchase and of
the Company to sell the International Option Securities to
26
be purchased and sold on such Date of Delivery shall terminate without
liability on the part of any non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
International Managers to purchase and LFC Holdings to sell the relevant
International Option Securities, as the case may be, either (i) the Lead
Managers or (ii) the Company and the Selling Shareholders shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectuses or in any other documents or
arrangements. As used herein, the term "International Manager" includes any
person substituted for an International Manager under this Section 10.
SECTION 11. Default by the Selling Shareholders. If the Selling
Shareholders shall fail at Closing Time or at a Date of Delivery to sell and
deliver the number of Securities which the Selling Shareholders are obligated to
sell hereunder, then the International Managers may, at option of the Lead
Managers, by notice from the Lead Managers to the Company and the non-defaulting
Selling Shareholders, either (a) terminate this Agreement without any liability
on the fault of any non-defaulting party except that the provisions of Sections
4, 6 and 7 shall remain in full force and effect or (b) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve the Selling
Shareholders so defaulting from liability, if any, in respect of such default.
In the event of a default by any of the Selling Shareholders as
referred to in this Section 11, each of the Lead Managers and the Company shall
have the right to postpone Closing Time or Date of Delivery for a period not
exceeding seven days in order to effect any required change in the Registration
Statement or Prospectuses or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of
______________; notices to the Company shall be directed to it at Liberty
Financial Companies, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; notices to LFC
Holdings shall be directed to ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Exchange Place, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of P. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.,
Esq.; notices to Finplan of America, Inc. shall be directed to McCarthy, Fingar,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; and notices to all other
Selling Shareholders shall be directed to ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
27
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the International Managers, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company, LFC Holdings and the
Attorney-in-Fact for the Selling Shareholders other than LFC Holdings a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the International Managers, the Company and the
Selling Shareholders in accordance with its terms.
Very truly yours,
LIBERTY FINANCIAL COMPANIES, INC.
By ______________________________________
Title:
LFC HOLDINGS, INC.
By ______________________________________
Title:
By
As Attorney-in-Fact acting on behalf of the
Selling Shareholders (other than LFC Holdings,
Inc.) named in Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ NV.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By _________________________________________
Authorized Signatory
For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.
29
SCHEDULE A
Number of
Initial
Name of International Manager Securities
----------------------------- ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
▇▇▇▇▇▇▇ Sachs International
PaineWebber International (U.K) Ltd.
▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ NV.
-------
Total.................................................. 500,000
=======
Sch A - 1
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
LFC HOLDINGS, INC. 1,868,475 375,000
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 300,000
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 50,000
FINPLAN OF AMERICA, 94,804
INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 136,721
TOTAL.................................. 2,500,000 375,000
Sch B - 1
SCHEDULE C
LIBERTY FINANCIAL COMPANIES, INC.
500,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by
the several International Managers shall be $ , being an amount equal to
the initial public offering price set forth above less $ per share;
provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial International Securities but not payable on the International
Option Securities.
Sch C - 1
SCHEDULE D
Keyport Life Insurance Company
The Colonial Group, Inc.
▇▇▇▇▇ ▇▇▇ & ▇▇▇ ▇▇▇▇▇▇▇ Incorporated
Newport Pacific Management, Inc.
Liberty Asset Management Company
Sch D- 1
SCHEDULE E
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇....................................Chief Executive Officer
President, and Director
▇▇▇▇ ▇. ▇▇▇▇▇▇▇...................................... Senior Vice President,
General Counsel and Clerk
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.....................................Executive Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇...............................President, The Colonial Group
C. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.................................Executive Vice President
and Treasurer
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇......................President and Chief Executive Officer
of Keyport Life Insurance Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇....................................Chief Executive Officer of
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇ Incorporated
E-1