EXHIBIT 1.01
Debt Securities
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
UNDERWRITING AGREEMENT
New York, New York
Dated the date set forth
In Schedule I hereto
To the Representative(s)
named in Schedule I
hereto, of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
▇▇▇▇▇▇ Brothers Holdings Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to you and the other underwriters named
in Schedule II hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), the principal amount of its debt
securities identified in Schedule I hereto (the "Securities") to be issued under
the indenture (the "Indenture") identified in such Schedule I, between the
Company and the trustee (the "Trustee") identified therein. If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in Schedule I
hereto, then the terms "Underwriters" and "Representatives" shall each be deemed
to refer to such firm or firms.
1. Representations and Warranties.The Company represents and warrants to each
Underwriter that:
(a) The Company meets the requirements for the use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations promulgated thereunder (the "Rules"), and has
carefully prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(the file number of which is set forth in Schedule I hereto), which
has become effective, for the registration of the Securities under the
Securities Act. The registration statement, as amended at the date of
this Agreement, meets the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complies in all other material respects
with such rule. The Company proposes to file with the Commission
pursuant to Rule 424 under the Securities Act ("Rule 424") a
supplement to the form of prospectus included in the registration
statement relating to the initial offering of the Securities and the
plan of distribution thereof and has previously advised you of all
further information (financial and other) with respect to the Company
to be set forth therein. The term "Registration Statement" means the
registration statement, as amended at the date of this Agreement,
including the exhibits thereto, financial statements, and all
documents incorporated therein by reference pursuant to Item 12 of
Form S-3 (the "Incorporated Documents"), and such prospectus as then
amended, including the Incorporated Documents, is hereinafter referred
to as the "Basic Prospectus"; and such supplemented form of
prospectus, in the form in which it shall be filed with the Commission
pursuant to Rule 424 (including the Basic Prospectus as so
supplemented), is hereinafter called the "Final Prospectus". Any
preliminary form of the Basic Prospectus which has heretofore been
filed pursuant to Rule 424 is hereinafter called the "Interim
Prospectus". Any reference herein to the Registration Statement, the
Basic Prospectus, any Interim Prospectus or the Final Prospectus shall
be deemed to refer to and include the Incorporated Documents which
were filed under the Securities Exchange Act of 1934 (the "Exchange
Act"), on or before the date of this Agreement or the issue date of
the Basic Prospectus, any Interim Prospectus or the Final Prospectus,
as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration
Statement, the Basic Prospectus, any Interim Prospectus or the Final
Prospectus shall be deemed to refer to and include the filing of any
Incorporated Documents under the Exchange Act after the date of this
Agreement or the issue date of the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, as the case may be, and deemed to
be incorporated therein by reference.
2
(b) As of the date hereof, when the Final Prospectus is first filed with
the Commission pursuant to Rule 424, when, before the Closing Date
(hereinafter defined), any amendment to the Registration Statement
becomes effective, when, before the Closing Date, any Incorporated
Document is filed with the Commission, when any supplement to the
Final Prospectus is filed with the Commission and at the Closing Date,
the Registration Statement, the Final Prospectus and any such
amendment or supplement will comply in all material respects with the
applicable requirements of the Securities Act and the Rules, and the
Incorporated Documents will comply in all material respects with the
requirements of the Exchange Act or the Securities Act, as applicable,
and the rules and regulations adopted by the Commission thereunder; on
the date hereof and on the Closing Date, the Indenture shall have been
qualified under and will comply in all material respects with the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act");
on the date it became effective, the Registration Statement did not,
and, on the date that any post-effective amendment to the Registration
Statement becomes effective, the Registration Statement as amended by
such post-effective amendment did not or will not, as the case may be,
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; on the date the Final Prospectus is
filed with the Commission pursuant to Rule 424 and on the Closing
Date, the Final Prospectus, as it may be amended or supplemented, will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading; and on said dates, the Incorporated Documents will comply
in all material respects with the applicable provisions of the
Exchange Act and rules and regulations of the Commission thereunder,
and, when read together with the Final Prospectus, or the Final
Prospectus as it may be then amended or supplemented, 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, in light of the circumstances under which they are made, not
misleading; provided that the foregoing representations and warranties
in this paragraph (b) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished
to the Company by or through the Representatives on behalf of any
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus, as they may be
amended or supplemented, or to any statements in or omissions from the
statement of eligibility and qualification on Form T-1 of the Trustee
under the Trust Indenture Act ("Form T-1").
3
(c) The Basic Prospectus and any Interim Prospectus, as of their
respective dates, complied in all material respects with the
requirements of the Securities Act and of the Rules and did not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The Commission has not issued an order preventing or
suspending the use of the Basic Prospectus or any Interim Prospectus.
(d) The nationally recognized firm of independent public accountants whose
report appears in the Company's most recent Annual Report on Form
10-K, which is incorporated by reference in the Final Prospectus, are
independent public accountants as required by the Securities Act and
the Rules.
(e) In the event that a report of a nationally recognized firm of
independent public accountants regarding historical financial
information with respect to any entity acquired by the Company is
required to be incorporated by reference in the Final Prospectus, such
independent public accountants were independent public accountants, as
required by the Securities Act and the Rules, during the period of
their engagement to examine the financial statements being reported on
and at the date of their report.
(f) The audited consolidated financial statements of the Company in the
Final Prospectus and the Registration Statement present fairly on a
consolidated basis the financial position, the results of operations,
changes in common stock and other stockholder's equity and cash flows
of the Company and its subsidiaries, as of the respective dates and
for the respective periods indicated, all in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. The unaudited consolidated financial
statements of the Company, if any, included in the Final Prospectus
and the Registration Statement and the related notes are true,
complete and correct, subject to normally recurring changes resulting
from year-end audit adjustments, and have been prepared in accordance
with the instructions to Form 10-Q.
4
(g) Except as described in or contemplated by the Registration Statement
and the Final Prospectus, there has not been any material adverse
change in or any adverse development which materially affects the
business, properties, financial condition or results of the Company or
the Company and its subsidiaries taken as whole, from the dates as of
which information is given in the Registration Statement and Final
Prospectus.
(h) The Securities conform to the description thereof contained in the
Final Prospectus, are duly and validly authorized, and, when validly
authenticated, issued and delivered in accordance with the Indenture
and sold to the Underwriters as provided in this Agreement, will be
validly issued and outstanding obligations of the Company entitled to
the benefits of the Indenture.
(i) Neither the Company nor any of the Significant Subsidiaries (as
defined below) is in violation of its corporate charter or by-laws or
in default under any agreement, indenture or instrument, the effect of
which violation or default would be material to the Company and its
subsidiaries taken as a whole. The execution, delivery and performance
of this Agreement will not conflict with, result in the creation or
imposition of any material lien, charge or encumbrance upon any of the
assets of the Company or any of its subsidiaries pursuant to the terms
of, or constitute a default under, any material agreement, indenture
or instrument, or result in a violation of the corporate charter or
by-laws of the Company or any of its subsidiaries or any order, rule
or regulation of any court or governmental agency having jurisdiction
over the Company, any of the Significant Subsidiaries or their
property. Except as set forth in the Final Prospectus or as required
by the Securities Act, the Exchange Act, the Trust Indenture Act and
applicable state securities laws, no consent, authorization or order
of, or filing or registration with, any court or governmental agency
is required for the execution, delivery and performance of this
Agreement. "Significant Subsidiary" means ▇▇▇▇▇▇ Brothers Inc., ▇▇▇▇▇▇
Brothers International (Europe), ▇▇▇▇▇▇ Brothers Finance S.A. and
▇▇▇▇▇▇ Brothers Special Financing Inc.
(j) Each of the Company and the Significant Subsidiaries have been duly
organized, are validly existing and in good standing under the laws of
their respective jurisdictions of incorporation, are duly qualified to
do business and in good standing as foreign corporations and are fully
registered as a broker-dealer, broker, dealer or investment advisor,
as the case may be, in each jurisdiction in which their respective
ownership of property or the conduct of their respective businesses
requires such qualification or registration and in which the failure
to qualify or register would be reasonably likely, individually or in
the aggregate, to have a material adverse effect on the business,
condition or properties of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). Each of the Company and the
Significant Subsidiaries holds all material licenses, permits, and
certificates from governmental authorities necessary for the conduct
of its business and owns, or possesses adequate rights to use, all
material rights necessary for the conduct of such business and has not
received any notice of material conflict with the asserted rights of
others in respect thereof, except in each case where the failure to do
so would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect; and each of the Company and the
Significant Subsidiaries has the corporate power and authority
necessary to own or hold its properties and to conduct the businesses
in which it is engaged. Except as may be disclosed in the Registration
Statement and the Final Prospectus, all outstanding shares of capital
stock of the Significant Subsidiaries have been duly authorized and
are validly issued and outstanding, fully paid and non-assessable and,
except for directors' qualifying shares, are owned by the Company,
directly or indirectly through subsidiaries, free and clear of any
lien, pledge and encumbrance or any claim of any third party.
5
(k) Except as described in the Registration Statement and the Final
Prospectus, there is no material litigation or governmental proceeding
pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries which might reasonably be expected
to have a Material Adverse Effect or which is required to be disclosed
in the Registration Statement and the Final Prospectus.
(l) The certificates delivered pursuant to paragraph (f) of Section 6
hereof and all other documents delivered by the Company or its
representatives in connection with the issuance and sale of the
Securities were on the dates on which they were delivered, or will be
on the dates on which they are to be delivered, in all material
respects true and complete.
2. Sale and Purchase of the Securities.The Company agrees to sell to each
Underwriter, and each Underwriter, on the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein stated, agrees to purchase from the Company, at the
purchase price set forth in Schedule I hereto, the principal amount of
Securities set forth opposite the name of such Underwriter in Schedule II
hereto, except that, if Schedule I hereto provides for the sale of
Securities pursuant to delayed delivery arrangements, the respective
principal amounts of Securities to be purchased by the Underwriters shall
be as set forth in Schedule II hereto, less the respective amounts of
Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the
"Underwriters' Securities" and Securities to be purchased pursuant to
Delayed Delivery Contracts (as hereinafter defined) are herein called
"Contract Securities". The obligations of the Underwriters under this
Agreement are several and not joint. The Underwriters have each agreed to
the provisions contained in the Shearson ▇▇▇▇▇▇ Brothers Inc. Agreement
Among Underwriters Basic Provision for Offerings of Securities, dated as of
May 15, 1985.
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities, or a portion thereof, from
the Company pursuant to delayed delivery contracts ("Delayed Delivery
Contracts"), substantially in the form of Schedule III hereto but with such
changes therein as the Company may authorize or approve, and the Underwriters
will endeavor to make such arrangements. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings banks, insurance
companies, pension funds and educational and charitable institutions. The
Company will make Delayed Delivery Contracts in all cases where sales of
Contract Securities arranged by the Underwriters have been approved by the
Company but, except as the Company may otherwise agree, each such Delayed
Delivery Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the total principal amount of Contract Securities
may not exceed the maximum principal amount set forth in Schedule I hereto. The
Underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts. The principal amount of Securities to
be purchased by each Underwriter as set forth in Schedule II hereto shall be
reduced by an amount which bears the same proportion to the total principal
amount of Contract Securities as the principal amount of Securities set forth
opposite the name of such Underwriter bears to the total principal amount of
Securities set forth in Schedule II hereto, except to the extent that the
Representatives determine that such reduction shall be otherwise than in such
proportion and so advise the Company in writing; provided, however, that the
total principal amount of Securities to be purchased by all Underwriters shall
be the total principal amount set forth in Schedule II hereto less the total
principal amount of Contract Securities.
6
3. Delivery and ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇ by the Company of the Underwriters'
Securities to the Representatives for the respective accounts of the
several Underwriters and payment by the Underwriters therefor by certified
or official bank check or checks payable in, or by wire transfer of,
immediately available (federal) funds to or upon the order of the Company
shall take place at the office, on the date and at the time specified in
Schedule I hereto, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in Section 9
hereof (such date and time of delivery and payment for the Underwriters'
Securities being herein called the "Closing Date").
Concurrently with the delivery of any payment for
Underwriters' Securities as provided in this Section 3, the Company will deliver
to the Representatives for the respective accounts of the several Underwriters a
check in an amount equal to the fee set forth in Schedule I hereto with respect
to the principal amount of Securities for which Delayed Delivery Contracts are
made.
The Underwriters' Securities will be registered in such names
and in such authorized denominations as the Representatives may request no less
than two full business days in advance of the Closing Date. The Company agrees
to have the Underwriters' Securities available for inspection, checking and
packaging by the Representatives at such place as is designated by the
Representatives, not later than 1:00 p.m., New York City time, on the business
day prior to the Closing Date.
4. Offering by Underwriters.The Company hereby confirms that the Underwriters
and dealers have been authorized to distribute or cause to be distributed
any Interim Prospectus and are authorized to distribute the Final
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters). The
Representatives agree that, as soon as the Representatives believe the
offering of the Securities has been terminated, the Representatives will so
advise the Company.
5. Agreements.The Company agrees with the several Underwriters that:
7
(a) The Company will cause the Final Prospectus to be filed with the
Commission pursuant to Rule 424 as required thereby and will promptly
advise the Representatives (A) when the Final Prospectus shall have
been filed with the Commission pursuant to Rule 424, (B) when any
amendment to the Registration Statement relating to the Securities
shall have become effective, (C) of any request by the Commission for
any amendment of the Registration Statement, the Final Prospectus, the
Basic Prospectus or any Interim Prospectus, or for any additional
information, (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
qualification of the Indenture or the institution or threatening of
any proceedings for that purpose and (E) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. After
the date of this Agreement and prior to the termination of the
offering of these Securities the Company will not file any amendment
of the Registration Statement or amendment or supplement to the Final
Prospectus (except an amendment or supplement to the Final Prospectus
that is deemed to be incorporated by reference in the Final Prospectus
pursuant to Item 12 of Form S-3) without the consent of the
Representatives and will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible
the withdrawal thereof. Prior to receipt of the advice to be given by
the Representatives pursuant to Section 4, the Company will not file
any document that would be deemed to be incorporated by reference in
the Final Prospectus pursuant to Item 12 of Form S-3 without
delivering to the Representatives a copy of the document proposed to
be so filed, such delivery to be made at least twenty-four hours prior
to such filing, and the Company will consult with the Representatives
as to any comments which the Representatives make in a timely manner
with respect to the document so delivered.
(b) Subject to the last sentence of the immediately preceding paragraph,
if, at any time during which a prospectus relating to the Securities
is required to be delivered under the Securities Act, any event occurs
as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it shall be necessary at any time to
amend or supplement the Final Prospectus to comply with the Securities
Act or the Rules, the Company promptly will prepare and file with the
Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance and will use its best efforts to cause any amendment of the
Registration Statement containing an amended Final Prospectus to be
made effective as soon as possible.
(c) The Company will deliver to the Representatives, without charge, (i)
signed copies of the Registration Statement relating to the Securities
and of any amendments thereto (including all exhibits filed with, or
incorporated by reference in, any such document) and (ii) as many
conformed copies of the Registration Statement and of any amendments
thereto which shall become effective on or before the Closing Date
(excluding exhibits) as the Representatives may reasonably request.
8
(d) During such period as a prospectus is required by law to be delivered
by an Underwriter or dealer, the Company will deliver, without charge
to the Representatives and to Underwriters and dealers, at such office
or offices as the Representatives may designate, as many copies of the
Basic Prospectus, any Interim Prospectus and the Final Prospectus as
the Representatives may reasonably request.
(e) The Company will make generally available to its security holders and
to the Representatives as soon as practicable an earnings statement
(which need not be audited) of the Company and its subsidiaries,
covering a period of at least 12 months beginning after the date the
Final Prospectus is filed with the Commission pursuant to Rule 424,
which will satisfy the provisions of Section 11(a) of the Securities
Act.
(f) The Company will furnish such information, execute such instruments
and take such actions as may be required to qualify the Securities for
offering and sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities;
provided, however, that the Company shall not be required to qualify
to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so subject.
(g) So long as any Securities are outstanding, the Company will furnish or
cause to be furnished to the Representatives copies of all annual
reports and current reports filed with the Commission on Forms 10-K,
10-Q and 8-K, or such other similar forms as may be designated by the
Commission.
(h) If the Company has applied for the listing of the Securities on the
New York Stock Exchange Inc. (the "NYSE"), it will use its best
efforts to cause such listing to be approved as soon as possible.
(i) For a period beginning at the time of execution of this Agreement and
ending on the later of the business day following the Closing Date or
following the date on which any price restrictions on the sale of the
Securities are terminated, without the prior consent of the
Representatives, the Company will not offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company covered by the
Registration Statement or any other registration statement filed under
the Securities Act.
(j) The Company will use its best efforts to do and perform all things to
be done and performed hereunder prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Securities to
be purchased hereunder.
9
6. Conditions to the Obligations of the Underwriters.The obligations of the
Underwriters to purchase the Securities shall be subject to the accuracy in
all material respects of the representations and warranties on the part of
the Company contained herein as of the date hereof and the Closing Date, to
the accuracy of any material statements made in any certificates, opinions,
affidavits, written statements or letters furnished to the Representatives
or to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ("Underwriters' Counsel") pursuant to this
Section 6, to the performance by the Company of its respective obligations
hereunder and to the following additional conditions:
(a) The Final Prospectus shall have been filed with the Commission
pursuant to Rule 424 not later than 5:00 p.m., New York City time, on
the second business day following the date of this Agreement or such
later date and time as shall be consented to in writing by the
Representatives.
(b) No order suspending the effectiveness of the Registration Statement,
as amended from time to time, or suspending the qualification of the
Indenture, shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission and any
requests for additional information on the part of the Commission (to
be included in the Registration Statement or the Final Prospectus or
otherwise) shall have been complied with to the reasonable
satisfaction of the Representatives.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Final Prospectus, there shall not have
been any change or decrease specified in the letter referred to in
paragraph (g) of this Section 6 which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with
the offering and delivery of the Securities as contemplated by the
Registration Statement and the Final Prospectus.
(d) The Company shall have furnished to the Representatives the opinion of
a Deputy General Counsel or the Chief Legal Officer for the Company,
dated the day of the Closing Date, to the effect that:
(i) The Company has been duly organized and is validly existing and
in good standing under the laws of the jurisdiction of its
incorporation with all requisite corporate power and authority to
own and operate its properties and to conduct its business as
described in the Final Prospectus.
(ii) The Securities and the Indenture conform in all material respects
to the descriptions thereof contained in the Final Prospectus.
(iii)The Indenture has been duly authorized, executed and delivered
by the Company, has been duly qualified under the Trust Indenture
Act and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms; and
the Securities have been duly authorized, executed and issued by
the Company, and assuming due authentication by the Trustee and
upon payment and delivery in accordance with the Underwriting
Agreement, will constitute legal, valid and binding obligations
of the Company entitled to the benefits of the Indenture;
provided however, that the foregoing is subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and by
an implied covenant of good faith and fair dealing.
10
(iv) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of
the transactions contemplated in this Agreement, except for (1)
such consents, approvals, authorizations or orders as have been
obtained under the Securities Act and such as may be required
under the Exchange Act and the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the
Securities by the Underwriters, and (2) the qualification of the
Indenture under the Trust Indenture Act, which has been obtained.
(v) Such counsel does not know of any contracts or other documents
which are required to be filed as exhibits to the Registration
Statement by the Securities Act or by the Rules which have not
been filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules.
(vi) To the best of such counsel's knowledge, neither the Company nor
any Significant Subsidiary that is organized under the laws of
the United States or any State or territory thereof (a "Domestic
Significant Subsidiary") is in violation of its corporate charter
or by-laws, or in default under any material agreement, indenture
or instrument known to such counsel, the effect of which
violation or default would be material to the Company and its
subsidiaries taken as a whole.
(vii)This Agreement and, to the extent applicable, the Delayed
Delivery Contracts have been duly authorized, executed and
delivered by the Company; the execution, delivery and performance
of this Agreement and any Delayed Delivery Contracts by the
Company will not conflict with, or result in the creation or
imposition of any material lien, charge or encumbrance upon any
of the assets of the Company or any Domestic Significant
Subsidiary pursuant to the terms of, or constitute a default
under, any material agreement, indenture or instrument known to
such counsel and to which the Company or any Domestic Significant
Subsidiary is a party or is bound, or result in a violation of
the corporate charter or by-laws of the Company or any Domestic
Significant Subsidiary or any order, rule or regulation known to
such counsel of any court or governmental agency having
jurisdiction over the Company, any Domestic Significant
Subsidiary or any of their respective properties, the effect of
which would be material to the Company and its subsidiaries taken
as a whole.
(viii) The Registration Statement has become effective under the
Securities Act, and, to the best of the knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose is pending or threatened by the Commission.
11
(ix) The Registration Statement, the Final Prospectus and each
amendment thereof or supplement thereto (except that no opinion
need be expressed as to the financial statements or other
financial or statistical data or the Form T-1 of the Trustee
under the Trust Indenture Act included or incorporated by
reference therein) comply as to form in all material respects
with the requirements of the Securities Act and the Rules.
(x) If the Securities are to be listed on the NYSE, authorization
therefor has been given, subject to official notice of issuance
and evidence of satisfactory distribution, or the Company has
filed a preliminary listing application and all required
supporting documents with respect to the Securities with the
NYSE, and such counsel has no reason to believe that the
Securities will not be authorized for listing, subject to
official notice of issuance and evidence of satisfactory
distribution.
(xi) Each Domestic Significant Subsidiary is a duly organized and
validly existing corporation in good standing under the laws of
the jurisdiction of its incorporation with all requisite
corporate power and authority to own and operate its properties
and to conduct its business as described in the Final Prospectus.
Each of the Company and the Domestic Significant Subsidiaries is
duly qualified to do business as a foreign corporation, is in
good standing and is duly registered as a broker-dealer, broker,
dealer or investment advisor, as the case may be, in each
jurisdiction in which the nature of the business conducted by it
or in which the ownership or holding by lease of the properties
owned or held by it require such qualification or registration
and where the failure to so qualify or register would have a
Material Adverse Effect.
(xii)All the outstanding shares of capital stock of each Domestic
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and non-assessable and, except for
directors' qualifying shares, are owned by the Company or a
subsidiary of the Company free and clear of any claims, liens,
encumbrances and security interests.
(xiii) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company
or any of its subsidiaries which would affect the subject matter
of this Agreement or is required to be disclosed in the Final
Prospectus which is not disclosed and correctly summarized
therein.
Such opinion shall also contain a statement that although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Final Prospectus (except as to those matters
stated in paragraph (ii) of such opinion), such counsel has no reason to believe
that (i) the Registration Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or (ii) the Final Prospectus contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (except that no opinion need be expressed
as to the financial statements or other financial or statistical data or the
Form T-1 included or incorporated by reference therein). In rendering such
opinion, such counsel may rely upon opinions of local counsel satisfactory to
the Representatives for matters not governed by New York law and may rely as to
matters of fact, to the extent he deems proper, upon certificates or affidavits
of officers of the Company, the Trustee and public officials. Such counsel may
rely on a certificate of the Trustee with respect to the execution of the
Securities by the Company and the authentication thereof by the Trustee.
12
(e) The Representatives shall have received from Underwriters' Counsel
such opinion or opinions, dated the day of the Closing Date, with
respect to the issuance and sale of the Securities, the Registration
Statement, the Final Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a certificate
of its Chief Executive Officer, its President or any Managing Director
or Vice President and its Chief Financial Officer or its Treasurer,
dated the day of the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Final Prospectus and this Agreement, and that, to the best of
their knowledge after due inquiry:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the
Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
(ii) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or threatened.
(iii)(x) The Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (y) the Final Prospectus does not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (z) since the
effective date of the Registration Statement there has not
occurred any event required to be set forth in an amended or
supplemented prospectus which has not been so set forth.
13
(g) At the Closing Date, a nationally recognized firm of independent
public accountants shall have furnished to the Representatives a
letter, dated the day of the Closing Date, confirming that they are
independent auditors with respect to the Company within the meaning of
the Securities Act and in form and substance satisfactory to the
Representatives, stating in effect that:
(i) In their opinion, the consolidated financial statements of the
Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus
and audited by them comply as to form in all material respects
with the applicable accounting requirements of the Securities Act
and the Exchange Act and the related published rules and
regulations thereunder.
(ii) On the basis of a reading of the unaudited consolidated financial
statements of the Company and its subsidiaries, if any, included
in the Registration Statement and the Final Prospectus and of the
latest unaudited consolidated financial statements made available
by the Company and ▇▇▇▇▇▇ Brothers Inc., carrying out certain
specified procedures (but not an audit in accordance with
generally accepted auditing standards), a reading of the minutes
of the meetings of the directors of the Company and ▇▇▇▇▇▇
Brothers Inc., and inquiries of certain officials of the Company
and its subsidiaries, who have responsibility for financial and
accounting matters of the Company and its subsidiaries, as to
transactions and events subsequent to the date of the most recent
audited consolidated financial statements included in the
Registration Statement and the Final Prospectus, nothing came to
their attention that caused them to believe that:
(A) any material modifications should be made to the unaudited
consolidated financial statements of the Company and its
subsidiaries, if any, included in the Registration Statement and
the Final Prospectus, for them to be in conformity with generally
accepted accounting principles; and such financial statements do
not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
published instructions, rules and regulations thereunder.
(B) the unaudited capsule information of the Company and its
subsidiaries, if any, included in the Registration Statement and
the Final Prospectus does not agree with the amounts set forth in
the unaudited consolidated financial statements of the Company
from which it was derived or was not determined on a basis
substantially consistent with that of the corresponding financial
information in the latest audited financial statements of the
Company included in the Registration Statement and the Final
Prospectus.
(C) (I) as of the latest date as of which the Company and its
subsidiaries have monthly financial statements compared to
amounts shown in the most recent consolidated financial
statements of the Company and its subsidiaries included in the
Registration Statement and the Final Prospectus, there was any
change in the capital stock (other than issuances of common stock
upon the exercise of options or employee awards and the
repurchase of common stock in the ordinary course of business to
provide for common stock to be issued pursuant to the exercise of
options or employee awards), or increase in long-term
indebtedness, or decrease in net assets or stockholders' equity
of the Company and its subsidiaries and (II) from the latest date
as of which the Company and its subsidiaries have monthly
financial statements to the date of the most recent consolidated
financial statements of the Company and its subsidiaries included
in the Registration Statement and Final Prospectus, there was any
loss in income from operations before taxes or in net income of
the Company and its subsidiaries.
14
(D) as of a specified date no more than three business days prior to
the date of the letter, as compared to the date of the most
recent consolidated financial statements of the Company and its
subsidiaries included in the Registration Statement and Final
Prospectus, there was any change in capital stock (other than
issuances of common stock upon the exercise of options or
employee awards and the repurchase of common stock in the
ordinary course of business to provide for common stock to be
issued pursuant to the exercise of options or employee awards),
or increase in long-term indebtedness, or decrease in net assets
or stockholders' equity of the Company and its subsidiaries;
except in all instances for changes, increases or decreases set forth in such
letter, in which case the letter shall be accompanied by an explanation by the
Company as to the significance thereof, unless said explanation is not deemed
necessary by the Representatives.
(iii)If pro forma financial statements are included in the
Registration Statement or the Final Prospectus, (x) they have
read such pro forma financial statements, (y) they have made
inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company as to the basis for their determination of the pro forma
adjustments and whether such pro forma financial statements
comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X and (z)
they have proved the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts; and as a
result thereof, nothing came to their attention that caused them
to believe that such pro forma financial statements do not so
comply with Rule 11-02 of Regulation S-X and that such pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(iv) They have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is expressed
in dollars, or percentages derived from dollar amounts, and has
been obtained from the general accounting records of the Company)
set forth in the Registration Statement, as amended, and the
Final Prospectus, as amended or supplemented, and in Exhibit 12
to the Registration Statement, including specified information,
if any, included or incorporated from the Company's Annual Report
on Form 10-K incorporated therein or specified information, if
any, included or incorporated from any of the Company's Quarterly
Reports on Form 10-Q or its Current Reports on Form 8-K
incorporated therein, agrees with the accounting records of the
Company and its subsidiaries or computations made therefrom,
excluding any questions of legal interpretation.
15
(h) Subsequent to the execution of this Agreement, there shall not have
been any decrease in the ratings of any of the Company's debt
securities by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
Corporation.
(i) The Company shall have accepted Delayed Delivery Contracts in any case
where sales of Contract Securities arranged by the Underwriters have
been approved by the Company.
(j) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents
as the Representatives or Underwriters' Counsel may reasonably
request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as required by this Agreement, or if any of the
certificates or opinions furnished to the Representatives or Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and to
Underwriters' Counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing, or by telegraph confirmed in writing.
7. Expenses.(a) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company will pay all
costs and expenses incident to the performance of the obligations of the
Company hereunder, including, without limiting the generality of the
foregoing, all costs, taxes and expenses incident to the issuance, sale and
delivery of the Securities to the Underwriters, all fees and expenses of
the Company's counsel and accountants, all costs and expenses incident to
the preparing, printing and filing of the Registration Statement (including
all exhibits thereto), any Interim Prospectus, the Basic Prospectus, the
Final Prospectus and any amendments thereof or supplements thereto and the
Indenture, and the rating of the Securities by one or more rating agencies,
all costs and expenses (including fees of Underwriters' Counsel and their
disbursements) incurred in connection with blue sky qualifications,
advising on the legality of the Securities for investment, the filing
requirements, if any, of the National Association of Securities Dealers,
Inc. in connection with its review of corporate financings, the fee for
listing the Securities on the NYSE, the fees and expenses of the Trustee
and all costs and expenses of the printing and distribution of all
documents in connection with such offering. Except as provided in this
Section 7, the Company will have no responsibility to the Underwriters for
the Underwriters' own costs and expenses, including the fees of
Underwriters' Counsel and any advertising expenses in connection with any
offer the Underwriters may make.
(b) If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth
in Section 6 hereof is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Representatives, reimburse the
Underwriters for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
16
8. Indemnification.(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person who controls such Underwriter within the
meaning of the Securities Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, as
originally filed or in any amendment thereof, or in any Interim Prospectus,
the Basic Prospectus or the Final Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company as herein
stated by the Representatives on behalf of any Underwriter specifically for
use in connection with the preparation thereof, and (ii) such indemnity
with respect to the Basic Prospectus or any Interim Prospectus shall not
inure to the benefit of any Underwriter (or any person controlling such
Underwriter) from whom the person asserting any such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such
person did not receive a copy of the Final Prospectus at or prior to the
confirmation of the sale of such Securities to such person in any case
where such delivery is required by the Securities Act and the untrue
statement or omission of a material fact contained in the Basic Prospectus
or any Interim Prospectus was corrected in the Final Prospectus, unless
such failure to deliver the Final Prospectus was a result of noncompliance
by the Company with Section 5(d) hereof. This indemnity agreement will be
in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement, and each person, if any, who controls the
Company within the meaning of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Basic Prospectus,
any Interim Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that the same was made therein in reliance upon and in
conformity with written information furnished to the Company as herein
stated by the Representatives on behalf of such Underwriter
specifically for use in the preparation thereof, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This
indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The statements set forth in the last
paragraph of the cover page and under the heading "Underwriting" in
the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in
the Registration Statement and the Final Prospectus, as the case may
be, and you, as the Representatives, confirm that such statements are
correct.
17
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing
of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8. In
case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from
such indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and either (i) the indemnifying party or
parties and the indemnified party or parties mutually agree or (ii)
representation of both the indemnifying party or parties and the
indemnified party or parties by the same counsel is inappropriate
under applicable standards of professional conduct due to actual or
potential differing interests between them, the indemnified party or
parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 8 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party
shall have employed counsel in connection with the assumption of legal
defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel, approved
by the Representatives in the case of subparagraph (a) representing
the indemnified parties under subparagraph (a), as the case may be,
who are parties to such action), (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice
of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or
not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action effected without
its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from
and against any loss or liability by reason of such settlement or
judgment.
18
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in
subparagraph (a) of this Section 8 is due in accordance with its terms
but is for any reason held by a court to be unavailable from the
Company on grounds of policy or other similar grounds, the Company and
the Underwriters shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending same) to which
the Company and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discounts
appearing on the cover page of the Final Prospectus bear to the public
offering prices appearing thereon and the Company is responsible for
the balance; provided, however, that (i) in no case shall any
Underwriter (except as may be provided in any agreement among
underwriters) be responsible for any amount in excess of the
underwriting discounts applicable to the Securities purchased by such
Underwriter hereunder and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the
meaning of the Securities Act shall have the same rights to
contribution as such Underwriter, and each person who controls the
Company within the meaning of either the Securities Act or the
Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to
clauses (i) and (ii) of this subparagraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which
a claim for contribution may be made against another party or parties
under this subparagraph (d), notify such party or parties from whom
contribution may be sought, but the omission to so notify such party
or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may
have hereunder or otherwise than under this subparagraph (d).
19
9. Default by an Underwriter.If any one or more Underwriters shall fail to
purchase and pay for all of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under
this Agreement, the remaining Underwriters shall be obligated severally to
take up and pay for (in the respective proportions which the principal
amount of Securities set forth opposite their names in Schedule II hereto
bear to the aggregate principal amount of Securities set opposite the names
of the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of
Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate principal amount of
the Securities, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the
Securities, and if such non-defaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
non-defaulting Underwriters or the Company. In the event of a default by
any Underwriter as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing herein contained shall relieve any
defaulting Underwriter of its liability, if any, to the Company and any
non-defaulting Underwriter for damages occasioned by its default hereunder.
10. Representations and Warranties of the Underwriters.
Each Underwriter represents and warrants to the Company that
(i) with respect to Securities which have a maturity of one year or more, it and
each of its affiliates have not offered or sold and prior to the date six months
after the date of issue of the Securities will not offer or sell any Securities
to persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the public offers of
Securities Regulations 1995; (ii) it and each of its affiliates have only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of any
Securities in circumstances in which Section 21(1) of the FSMA does not apply to
▇▇▇▇▇▇ Brothers Holdings; and (iii) it and each of its affiliates have complied
and will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom.
11. Termination. This Agreement shall be subject to termination in the absolute
discretion of the Representatives, by notice given to the Company at or
prior to delivery of and payment for all the Securities, if, prior to such
time (i) trading in securities generally on the NYSE or the
over-the-counter market shall have been suspended or limited or minimum
prices shall have been established on the NYSE or the over-the-counter
market, (ii) a banking moratorium shall have been declared either by
federal or New York State authorities, (iii) any new restriction materially
affecting the distribution of the Securities shall have become effective;
trading in any securities of the Company shall have been suspended or
halted by any national securities exchange, the National Association of
Securities Dealers, Inc. or the Commission, (iv) the United States becomes
engaged in hostilities or there is an escalation in hostilities involving
the United States or there is a declaration of a national emergency or war
by the United States, or (v) there shall have been such a material adverse
change in national or international political, financial or economic
conditions, national or international equity markets or currency exchange
rates or controls as to make it, in the judgment of the Representatives,
inadvisable or impracticable to proceed with the payment for and delivery
of the Securities.
20
12. Representations and Indemnities to Survive Delivery.The respective
agreements, representations, warranties, indemnities and other statements
of the Company or its officers (as such officers) and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force
and effect regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its officers or directors or any
controlling person within the meaning of the Securities Act, and will
survive delivery of the payment for the Securities.
13. Notices.All communications hereunder will be in writing, and, if sent to
the Representatives will be mailed, delivered, telegraphed or telexed and
confirmed to them, at the address specified in Schedule I hereto; or, if
sent to the Company will be mailed, delivered, telegraphed or telexed and
confirmed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer.
14. Successors.This Agreement will inure to the benefit of and be binding upon
the parties hereto and their successors and, to the extent and only to the
extent stated in Section 8 hereof, the officers and directors and
controlling persons referred to in Section 8 hereof, and except as provided
in Section 8 hereof, no person other than the parties hereto and their
respective successors will have any right or obligation hereunder.
15. Applicable Law.This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
21
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇ BROTHERS INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Acting on behalf of the Representatives named in Schedule I annexed hereto and
the several Underwriters named in Schedule II annexed hereto.
SCHEDULE I
Date of Underwriting Agreement: As of March 21, 2002
Registration Statement No.: 333-60474
Representative and Address: ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Indenture, Title, Purchase Price and Description of Securities:
Indenture: Indenture dated as of
September 1, 1987, as
supplemented, with
Citibank, N.A. as trustee
Title: Floating Rate Convertible
Notes due April 1, 2022
Principal amount: $500,000,000
Price to public: 100%
Purchase price: 98%
Interest rate: Floating rate, based upon 3-
Month LIBOR
Interest payment dates: January 1, April 1, July 1
and October 1, commencing
April 1, 2002
Maturity: April 1, 2022
Other provisions: As described in Exhibit A to
this Schedule I
Closing Date, Time and Location:
Date: March 26, 2002
Time: 9:00 A.M., New York City
time
Location: ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Delayed Delivery Arrangements: None
Option Securities: Up to $75,000,000 aggregate
principal amount of
Securities
Other terms:
The following sentence is added at the end of the introductory
paragraph at the beginning of the Underwriting Agreement:
Such Securities are hereinafter collectively referred to as the "Firm
Securities".
The following paragraph is added as a second introductory paragraph at
the beginning of the Underwriting Agreement:
In addition, if so identified in Schedule I hereto, the
Company proposes to grant to the Underwriters an option to purchase up
to an additional principal amount Securities (the "Option Securities").
Such Firm Securities and Option Securities, if purchased, are
hereinafter collectively referred to as the "Securities".
Section 1 of the Underwriting Agreement is amended by adding the
following additional paragraph:
(m) The shares of the Company's common stock into
which the Securities are convertible (the "Conversion Shares")
have been duly and validly authorized and reserved for
issuance upon conversion of the Securities and are free of
preemptive rights; and all Conversion Shares, when so issued
and delivered upon such conversion in accordance with the
terms of the Indenture, will be duly and validly authorized
and issued, fully paid and nonassessable and free and clear of
any liens and will conform, when issued, in all material
respects to the descriptions thereof in the Final Prospectus.
The first paragraph of Section 2 of the Underwriting Agreement is
amended by adding the following two sentences immediately following the first
sentence of the paragraph:
In addition, the Company grants to the Underwriters an option to
purchase up to the principal amount of Option Securities specified in
Schedule I hereto. Such option is granted solely for the purpose of
covering over-allotments in the sale of Firm Securities and is
exercisable as provided in Section 3 hereof. The price of the Option
Securities to the Underwriters shall equal the price of the Firm
Securities set forth in Schedule I hereto.
Section 3 of the Underwriting Agreement is amended in its entirety to
read as follows:
Delivery and Payment. Delivery by the Company of the Firm
Securities to the Representatives for the respective accounts of the
several Underwriters and payment by the Underwriters therefor by
certified or official bank check or checks payable in, or by wire
transfer of, immediately available (federal) funds to or upon the order
of the Company shall take place at the office, on the date and at the
time specified in Schedule I hereto, which date and time may be
postponed by agreement between the Representatives and the Company or
as provided in Section 9 hereof (such date and time of delivery and
payment for the Firm Securities being herein called the "First Closing
Date").
Concurrently with the delivery of any payment for Firm
Securities as provided in this Section 3, the Company will deliver to
the Representatives for the respective accounts of the several
Underwriters a check in an amount equal to the fee set forth in
Schedule I hereto with respect to the principal amount of Securities
for which Delayed Delivery Contracts are made.
The Firm Securities will be registered in such names and in
such authorized denominations as the Representatives may request no
less than two full business days in advance of the First Closing Date.
The Company agrees to have the Firm Securities available for
inspection, checking and packaging by the Representatives at such place
as is designated by the Representatives, not later than 1:00 p.m., New
York City time, on the business day prior to the First Closing Date.
At any time on or before the eleventh day after the First
Closing Date the option granted in Section 2 may be exercised by
written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate principal amount of Option
Securities as to which the option is being exercised, the names in
which the Option Securities are to be registered, the denominations in
which the Option Securities are to be issued and the date and time, as
determined by the Representatives, when the Option Securities are to be
delivered, provided, however, that this date and time shall not be
earlier than the First Closing Date nor earlier than the second
business day after the date on which the option shall have been
exercised nor later than the fifth business day after the date on which
the option shall have been exercised. The date and time the Option
Securities are delivered are sometimes referred to as the "Second
Closing Date" and the First Closing Date and the Second Closing Date
are sometimes each referred to as a "Closing Date."
Delivery by the Company of the Option Securities to the
Representatives for the account of the Underwriters and payment by the
Underwriters therefor by certified or official bank check or checks
payable in, or by wire transfer of, immediately available (federal)
funds to or upon the order of the Company shall take place on the
Second Closing Date at the office and at the time specified in Schedule
I hereto, which date and time may be postponed by agreement between the
Representatives and the Company.
The Option Securities will be registered in such names and in
such authorized denominations as the Representatives may request no
less than two full business days in advance of the Second Closing Date.
The Company agrees to have the Option Securities available for
inspection, checking and packaging by the Representatives at such place
as is designated by the Representatives, not later than 1:00 p.m., New
York City time, on the business day prior to the Second Closing Date.
Paragraph (d) of Section 6 of the Underwriting Agreement is amended by
adding the following subparagraphs:
(xiv) The Conversion Shares initially issuable upon
conversion of the Securities have been duly reserved for
issuance, and such shares, when issued in accordance with the
Indenture and the Securities, will be validly issued, fully
paid and nonassessable.
(xv) The issuance of the Conversion Shares will not
conflict with, or result in the creation or imposition of any
material lien, charge or encumbrance upon any of the assets of
the Company or any Domestic Significant Subsidiary pursuant to
the terms of, or constitute a default under, any material
agreement, indenture or instrument known to such counsel and
to which the Company or any Domestic Significant Subsidiary is
a party or is bound, or result in a violation of the corporate
charter or by-laws of the Company or any Domestic Significant
Subsidiary or any order, rule or regulation known to such
counsel of any court or governmental agency having
jurisdiction over the Company, any Domestic Significant
Subsidiary or any of their respective properties, the effect
of which would be material to the Company and its subsidiaries
taken as a whole.
The condition described in paragraph (g) of Section 6 of the
Underwriting Agreement is eliminated.
ANNEX A TO SCHEDULE I
Issuer................................. ▇▇▇▇▇▇ Brothers Holdings Inc.
("Holdings")
Securities Offered..................... $500,000,000 aggregate principal
amount of Floating Rate Convertible
Notes due April 1, 2022. Holdings
has also granted the underwriter an
option to purchase up to an
additional $75,000,000 aggregate
principal amount of notes solely to
cover over-allotments.
Offering Price......................... Each note will be issued at a price
of 100% of its principal amount plus
accrued interest, if any, from March
26, 2002.
Maturity Date.......................... April 1, 2022.
Ranking................................ The notes will be senior unsecured
obligations of Holdings and will
rank equal in right of payment with
all existing and future senior
unsecured indebtedness of Holdings.
Interest Payment Dates................. January 1, April 1, July 1 and
October 1, beginning July 1, 2002,
unless any such interest payment
date (other than an interest payment
date at maturity) would otherwise be
a day that is not a business day, in
which case the interest payment date
will be postponed to the next
succeeding business day (except if
that business day falls in the next
succeeding calendar month, that
interest payment date will be the
immediately preceding business day).
If the maturity date of the notes is
a day that is not a business day,
all payments to be made on such day
will be made on the next succeeding
business day, with the same force
and effect as if made on the due
date, and no additional interest
will be payable as a result of such
a delay in payment.
Interest Rate.......................... Interest will accrue at a per annum
rate equal to 3-month LIBOR minus a
spread of 0.90%, subject to
adjustment under certain
circumstances. Notwithstanding any
such adjustments, the interest rate
on the notes will never be less than
zero
Contingent Interest.................... Holdings will pay contingent
interest to the holders of notes
during any quarterly interest
period, commencing with the
quarterly interest period
beginning July 1, 2002, if the
average trading price of the notes
for the five trading days ending on
the second trading day immediately
preceding the relevant quarterly
interest period equals 120% or more
of the principal amount of the notes.
The rate of contingent interest
payable in respect of any quarterly
interest period will equal the
greater of (i) a per annum rate
equal to 5.00% of Holdings'
estimated per annum borrowing rate
for senior non-convertible
fixed-rate indebtedness with a
maturity date and other terms
comparable to the notes and (ii)
0.25% per annum. Contingent interest
will be computed on the basis of the
actual number of days elapsed in the
relevant quarterly interest period,
divided by 360.
Conversion Rights...................... Holders may convert their notes
prior to stated maturity under any of
the following circumstances:
o during any quarterly
conversion period if the
closing sale price of
Holdings' common stock for
a period of at least 20
trading days in the period
of 30 consecutive trading
days ending on the first
day of such conversion
period is more than 125% of
the conversion price on
that thirtieth day;
o........on or before April 1, 2017,
during the five
business-day period
following any 10
consecutive trading-day
period in which the average
of the trading prices for
the notes was less than
105% of the average
conversion for the notes
during that period;
o........during any period in which
the credit rating assigned
to the notes by either
▇▇▇▇▇'▇ or Standard &
Poor's is below "Baa3" and
"BBB-", respectively, in
which the credit rating
assigned to the notes is
suspended or withdrawn by
either rating agency or in
which neither rating agency
continues to rate the notes
or provide ratings services
or coverage to Holdings;
o........if the notes have been
called for redemption; or
o........upon the occurrence of
specified corporate. For each of the
notes surrendered for conversion,
holders initially will receive
10.4062 shares of Holdings' common
stock per $1,000 principal amount of
notes. This represents an initial
conversion price of approximately
$96.10 per share of common stock.
The conversion rate (and the
conversion price) may be adjusted
for certain reasons, but will not be
adjusted for accrued interest
(including contingent interest), if
any. Upon conversion, holders will
not receive any cash payment
representing accrued interest.
Instead, accrued interest will be
deemed paid by the common stock
received by holders on conversion.
Notes called for redemption may be
surrendered for conversion until the
close of business one business day
prior to the redemption date.
Sinking Fund........................... None.
Optional Redemption by Holdings........ Holdings may not redeem the notes
prior to April 1, 2004. Holdings may
redeem some or all of the notes on
or after April 1, 2004 for a price
equal to 100% of the principal
amount of the notes plus any accrued
and unpaid interest (including
contingent interest) to, but
excluding, the redemption date.
Holdings will therefore be required
to make eight quarterly interest
payments before being able to redeem
any notes.
Optional Repurchase Right of Holders...
Holders may require Holdings to
repurchase all or a portion of their
notes on April 1 of 2004, 2007, 2012
and 2017 at a repurchase price equal
to 100% of the principal amount of
those notes plus any accrued and
unpaid interest (including
contingent interest) to the date of
purchase. Holdings will pay the
purchase price, at Holdings option,
in cash, common stock or a
combination of cash and shares of
Holdings common stock (if Holdings
elects to pay all or a portion of
the purchase price in common stock,
it will be issued at the prevailing
market price as described herein.
Change of Control Repurchase Right of
Holders................................ Upon a change of control of
Holdings, holders may require
Holdings, subject to certain
conditions, to repurchase all or a
portion of their notes. Holdings
will pay a repurchase price equal to
100% of the principal amount of the
notes plus any accrued and unpaid
(including contingent interest) to,
but excluding, the repurchase date.
DTC Eligibility........................ The notes will be issued in book-
entry form and will be represented
by permanent global certificates
without coupons deposited with a
custodian for and registered in the
name of a nominee of DTC in New
York, New York. Beneficial
interests in any such securities
will be shown on, and transfers will
be effected only through, records
maintained by DTC and its direct and
indirect participants, and any such
interest may not be exchanged for
certificated securities, except in
limited circumstances.
Use of Proceeds........................ Holdings intends to use the net
proceeds for working capital and
general corporate purposes. See
"Use of Proceeds."
Listing................................ Holdings does not intend to list the
notes on any securities exchange.
New York Stock Exchange Symbol For
Holdings' Common Stock................. Holdings' common stock is traded on
the New York Stock Exchange under
the symbol "LEH".
SCHEDULE II
Principal
Amount of
Firm Securities
to be
Underwriter Purchased
▇▇▇▇▇▇ Brothers Inc. ........................................ $ 500,000,000
===========
SCHEDULE III
Delayed Delivery Contract
, 20
[Insert name and address of lead Representative]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from ▇▇▇▇▇▇ Brothers
Holdings Inc. (the "Company"), and the Company agrees to sell to the
undersigned, on , 20 (the "Delivery Date"), $ principal amount of the Company's
% due (the "Securities") offered by the Company's Prospectus dated , 20 , and
related Prospectus Supplement dated
, 20 , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus accrued interest or
amortization of original issue discount, if any, thereon from , 20 , to the date
of payment and delivery, and on the further terms and conditions set forth in
this contract.
Payment for the Securities to be purchased by the undersigned
shall be made on or before 11:00 a.m., New York City time, on the Delivery Date
to or upon the order of the Company in New York Clearing House (next day) funds,
at your office or at such other place as shall be agreed between the Company and
the undersigned upon delivery to the undersigned of the Securities in definitive
fully registered form and in such authorized denominations and registered in
such names as the undersigned may request by written or telegraphic
communication addressed to the Company not less than five full business days
prior to the Delivery Date. If no request is received, the Securities will be
registered in the name of the undersigned and issued in a denomination equal to
the aggregate principal amount of Securities to be purchased by the undersigned
on the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date, and the obligation of the Company
to sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the failure
thereof) that (1) the purchase of Securities to be made by the undersigned,
which purchase the undersigned represents is not prohibited on the date hereof,
shall not on the Delivery Date be prohibited under the laws of the jurisdiction
to which the undersigned is subject, and (2) the Company, on or before the
Delivery Date, shall have sold to certain underwriters (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Underwriting Agreement referred to in the Prospectus and Prospectus Supplement
mentioned above. Promptly after completion of such sale to the Underwriters, the
Company will mail or deliver to the undersigned at its address set forth below
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith. The obligation of
the undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
2
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other. It is
understood that acceptance of this contract and other similar contracts is in
the Company's sole discretion and, without limiting the foregoing, need not be
on a first come, first served basis. If this contract is acceptable to the
Company, it is required that the Company sign the form of acceptance below and
mail or deliver one of the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract between the Company and the
undersigned, as of the date first above written, when such counterpart is so
mailed or delivered.
This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
Very truly yours,
Name of Purchaser)
By
(Signature and Title of Officer)
(Address)
Accepted:
▇▇▇▇▇▇ Brothers Holdings Inc.
By
---------------------------------------------------
Authorized Signature)