Exhibit 1.1
EXECUTION COPY
▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
(a Delaware Corporation)
4,100,000 Shares
Common Stock, par value $.20 per share
UNDERWRITING AGREEMENT
Dated November 19, 2002
Table of Contents
Page
SECTION 1. Representations and Warranties by the Company.....................3
(a) Compliance with Registration Requirements.....................3
(b) Good Standing of the Company..................................3
(c) Good Standing of Subsidiaries.................................3
(d) Authorization and Description of Securities...................4
(e) Absence of Contracts for Brokerage Commissions................4
(f) Absence of Demand and Piggy-Back Registration Rights..........4
(g) NYSE Listing Approval.........................................4
(h) Absence of Further Requirements...............................4
(i) Absence of Conflicts..........................................4
(j) Authorization of Agreement....................................5
(k) Title to Property.............................................5
(l) Possession of Licenses and Permits............................5
(m) Regulatory Filings and Licenses...............................5
(n) Compliance with Laws..........................................6
(o) Reinsurance Treaties, Contracts and Agreements................6
(p) Absence of Changes in Insurance Laws and Regulations..........6
(q) Absence of Labor Dispute......................................6
(r) Possession of Intellectual Property Rights....................6
(s) Environmental Laws............................................6
(t) Absence of Proceedings........................................7
(u) Independent Accountants.......................................7
(v) Statutory Financial Statements................................7
(w) Accounting Controls...........................................7
(x) No Material Adverse Change....................................8
(y) Investment Company Act........................................8
SECTION 2. Sale and Delivery to Underwriters; Closing........................8
(a) Initial Securities............................................8
(b) Option Securities.............................................8
(c) Payment.......................................................9
(d) Denominations; Registration...................................9
SECTION 3. Covenants of the Company..........................................9
(a) Compliance with Securities Regulations and Commission
Requests......................................................9
(b) Filing of Amendments.........................................10
(c) Delivery of Registration Statements..........................10
(d) Delivery of Prospectuses.....................................10
(e) Continued Compliance with Securities Laws....................11
(f) Blue Sky Qualifications......................................11
i
(g) Rule 158.....................................................11
(h) Use of Proceeds..............................................11
(i) Listing......................................................12
(j) Restriction on Sale of Securities............................12
(k) Reporting Requirements.......................................12
(l) Delivery of Annual Reports and Other Documents...............12
SECTION 4. Payment of Expenses..............................................12
SECTION 5. Conditions of Underwriters' Obligations..........................13
(a) Effectiveness of Registration Statement......................13
(b) Opinion of Counsel for Company...............................13
(c) Opinion of General Counsel of Company........................13
(d) Opinion of Counsel for Underwriters..........................13
(e) Officers' Certificate........................................14
(f) Accountant's Comfort Letter..................................14
(g) Bring-down Comfort Letter....................................14
(h) Lock-up Agreements...........................................14
(i) Conditions to Purchase of Option Securities..................14
(j) Additional Documents.........................................15
(k) Termination of Agreement.....................................15
SECTION 6. Indemnification..................................................16
(a) Indemnification of Underwriters..............................16
(b) Indemnification of Company, Directors and Officers...........17
(c) Actions against Parties; Notification........................17
(d) Settlement without Consent if Failure to Reimburse...........18
SECTION 7. Contribution.....................................................18
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...20
SECTION 9. Termination of Agreement.........................................20
(a) Termination; General.........................................20
(b) Liabilities..................................................20
SECTION 10. Default by One or More of the Underwriters.......................20
SECTION 11. Notices..........................................................21
SECTION 12. Parties..........................................................21
SECTION 13. GOVERNING LAW AND TIME...........................................22
SECTION 14. Effect of Headings...............................................22
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SCHEDULES
Schedule A List of Underwriters........................................Sch A-1
Schedule B Pricing Informationn........................................Sch B-1
Schedule C List of Persons and Entities Subject to Lock-Up.............Sch C-1
EXHIBITS
Exhibit A Form of Opinion of Company's Outside Counsel....................A-1
Exhibit B Form of Opinion of Company's General Counsel....................B-1
Exhibit C Form of Lock-Up Letter..........................................C-1
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▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
(a Delaware Corporation)
4,100,000 Shares of Common Stock, Par Value $.20 Per Share
UNDERWRITING AGREEMENT
November 19, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
As Representatives of the Several Underwriters
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇. ▇. ▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the "Company"), confirms
its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Company and the
purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.20 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
615,000 additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 4,100,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 615,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities."
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
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The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-88920) and
pre-effective Amendment No. 1 thereto for the registration of the Securities
under the Securities Act of 1933, as amended (the "1933 Act"), and the offering
thereof from time to time in accordance with Rule 415 of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations").
Such registration statement has been declared effective by the Commission. Such
registration statement, as so amended, including the information, if any, deemed
to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the
"Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule
434 Information"), is referred to herein as the "Registration Statement"; and
the final prospectus and the final prospectus supplement relating to the
offering of the Securities, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that all
references to the "Registration Statement" and the "Prospectus" shall also be
deemed to include all documents incorporated therein by reference pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the
date hereof; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then all references to
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the forms first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references to the
date of the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to (i) any prospectus used before the
Registration Statement became effective and (ii) any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the initial delivery of the Prospectus to
the Underwriters by the Company. For purposes of this Agreement, all references
to the Registration Statement, Prospectus, Term Sheet or preliminary prospectus
or to any amendment or supplement to any of the foregoing shall be deemed to
include any 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 or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
2
SECTION 1. Representations and Warranties by the Company.
The Company represents and warrants to each Underwriter as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each Underwriter, as follows:
(a) Compliance with Registration Requirements. The Registration Statement
has become effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, threatened by the
Commission. On the effective date of the Registration Statement, such
Registration Statement conformed in all respects to the requirements of the 1933
Act and the 1933 Act Regulations and did not include 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, and on the date of
this Agreement, the Registration Statement and the Prospectus will conform in
all respects to the requirements of the 1933 Act and the 1933 Act Regulations;
the Prospectus does not include and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein,
in light of the circumstances under which they were made, or necessary to make
the statements therein not misleading, except that the foregoing does not apply
to statements in or omissions from any of such documents based upon written
information furnished to the Company by any Underwriter through the
Representatives, specifically for use therein; and the documents incorporated by
reference in the Prospectus, at the time they were, or hereafter are, filed with
the Commission, complied and, at any time when a prospectus relating to the
Securities is required to be delivered under the 1933 Act in connection with
sales by any Underwriter or dealer, will comply as to form in all material
respects with the requirements of the 1934 Act and the rules and regulations
thereunder.
(b) Good Standing of the Company. The Company has been duly incorporated
and is an existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, except in such jurisdictions where the
failure to be so qualified would not individually or in the aggregate have a
material adverse effect on the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries taken as
a whole ("Material Adverse Effect").
(c) Good Standing of Subsidiaries. Each Significant Subsidiary (as defined
below) of the Company has been duly incorporated and is an existing corporation
in good standing under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each Significant Subsidiary of the
Company is, to the extent applicable, duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not individually or in the
aggregate have a Material Adverse Effect; all of the issued and outstanding
capital stock of each Significant Subsidiary of the Company has been
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duly authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each Significant Subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and defects. As
used herein, "Significant Subsidiaries" means Berkley Regional Insurance
Company, Berkley Insurance Company, Admiral Insurance Company and Nautilus
Insurance Company, which are currently the only operating insurance companies
that are "significant subsidiaries" of the Company as that term is defined in
Rule 1-02(w) of Regulation S-X of the 1933 Act Regulations.
(d) Authorization and Description of Securities. The Securities and all
other outstanding shares of capital stock of the Company have been duly
authorized; all outstanding shares of capital stock of the Company are, and,
when the Securities have been delivered and paid for in accordance with this
Agreement on each of the Closing Date and the Date of Delivery (as defined
below), if applicable, such Securities will have been, validly issued, fully
paid and nonassessable and will conform to the description thereof contained in
the Prospectus; the stockholders of the Company have no preemptive rights with
respect to the Common Stock; and the authorized, issued and outstanding capital
stock of the Company set forth under the caption "Capitalization" in the
Prospectus is accurate as of the date of such information and has not materially
changed since such date.
(e) Absence of Contracts for Brokerage Commissions. Except as disclosed in
the Prospectus, there are no contracts, agreements or understandings between the
Company and any person that would give rise to a valid claim against the Company
or any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(f) Absence of Demand and Piggy-Back Registration Rights. There are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the 1933 Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company under the 1933 Act.
(g) NYSE Listing Approval. The Securities have been approved for listing on
the New York Stock Exchange, subject to notice of issuance.
(h) Absence of Further Requirements. No consent, approval, authorization,
or order of, or filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Securities by the Company,
except such as have been obtained and made under the 1933 Act, as contemplated
under Section 3(a) hereof, and such as may be required under state securities
laws.
(i) Absence of Conflicts. The execution, delivery and performance of this
Agreement, and the issuance and sale of the Securities will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having
4
jurisdiction over the Company or any Significant Subsidiaries of the Company or
any of their material properties, or any material agreement or instrument to
which the Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the Company or
any such subsidiary is subject, or the charter or by-laws of the Company or any
such subsidiary, and the Company has full power and authority to authorize,
issue and sell the Securities as contemplated by this Agreement.
(j) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(k) Title to Property. Except as disclosed in the Prospectus, the Company
and its Significant Subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would affect the value thereof or
interfere with the use made or to be made thereof by them, other than liens,
encumbrances and defects that would not individually or in the aggregate have a
Material Adverse Effect; and except as disclosed in the Prospectus, the Company
and its subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would individually or in the
aggregate have a Material Adverse Effect.
(l) Possession of Licenses and Permits. The Company and its Significant
Subsidiaries possess adequate certificates, authorities or permits issued by
appropriate governmental agencies or bodies necessary to conduct the business
now operated by them and have not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its Significant
Subsidiaries, would individually or in the aggregate have a Material Adverse
Effect.
(m) Regulatory Filings and Licenses. The Company has made all required
filings under applicable insurance holding company statutes, and has received
approvals of acquisition of control and/or affiliate transactions, in each
jurisdiction in which such filings or approvals are required, except where the
failure to have made such filings or receive such approvals in any such
jurisdiction would not have individually or in the aggregate a Material Adverse
Effect; each of the Company's Significant Subsidiaries that is required to be
organized and licensed as an insurance or reinsurance company (the "Insurance
Subsidiaries") in its jurisdiction of incorporation is duly organized and
licensed as an insurance or reinsurance company in its respective jurisdiction
of incorporation, and each such Significant Subsidiary is duly licensed or
authorized as an insurer or reinsurer (the "Insurance Licenses") in each other
jurisdiction in which such licensing or authorization is required, except where
the failure to be so licensed or authorized in any such jurisdiction would not
have individually or in the aggregate a Material Adverse Effect; there is no
pending or, to the knowledge of the Company, threatened action, suit, proceeding
or investigation that would reasonably be expected to lead to the revocation,
termination or suspension of any such Insurance Licenses, the revocation,
termination or suspension of which would have individually or in the aggregate a
Material Adverse Effect; and except as disclosed in the Prospectus, no insurance
regulatory agency or body has issued any order or decree impairing, restricting
or prohibiting the payment of dividends of any Company
5
subsidiary to its respective parent which would have individually or in the
aggregate a Material Adverse Effect.
(n) Compliance with Laws. The Company and each of its Significant
Subsidiaries is in compliance with the requirements of all laws, ordinances,
governmental rules or regulations or court decree to which it may be subject,
and has filed all notices, reports, documents or other information required to
be filed thereunder, except where the failure to so comply or file would not
individually or in the aggregate have a Material Adverse Effect.
(o) Reinsurance Treaties, Contracts and Agreements. Except as disclosed in
the Prospectus, neither the Company nor any of its Insurance Subsidiaries is in
violation of, or in default in the performance, observance or fulfillment of,
any obligation, agreement, covenant or condition contained in reinsurance
treaties, contracts, agreements and arrangements to which the Company or any of
its Insurance Subsidiaries is a party, except for such violations or defaults
which would not individually or in the aggregate have a Material Adverse Effect;
except as disclosed in the Prospectus, neither the Company nor any of its
Insurance Subsidiaries has received any notice from any of the other parties to
such treaties, contracts, agreements or arrangements that such other party
intends not to perform its obligations thereunder and none of them has any
reason to believe that any of the other parties to such treaties, contracts,
agreements or arrangements will be unable to perform its obligations thereunder,
except to the extent that such nonperformance would not individually or in the
aggregate have a Material Adverse Effect.
(p) Absence of Changes in Insurance Laws and Regulations. To the knowledge
of the Company and its Insurance Subsidiaries, no change in any insurance law or
regulation is pending that would reasonably be expected to have individually or
in the aggregate a Material Adverse Effect, except as described in the
Prospectus.
(q) Absence of Labor Dispute. No labor dispute with the employees of the
Company or any Significant Subsidiary exists or, to the knowledge of the
Company, is imminent that would reasonably be expected to have individually or
in the aggregate a Material Adverse Effect.
(r) Possession of Intellectual Property Rights. The Company and its
subsidiaries own, possess or can acquire on reasonable terms, adequate
trademarks, trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") necessary to conduct the business
now operated by them and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect.
(s) Environmental Laws. Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any
6
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation which would reasonably be expected to
lead to such a claim.
(t) Absence of Proceedings. Except as disclosed in the Prospectus, there
are no pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that would
individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement; and no such actions, suits or proceedings are,
to the Company's knowledge, threatened or contemplated.
(u) Independent Accountants. KPMG LLP, who have certified the financial
statements and supporting schedules of the Company and its subsidiaries
contained or incorporated by reference in the Prospectus, are independent public
accountants within the meaning of the 1933 Act and the 1933 Act Regulations;
except as disclosed in the Prospectus, the financial statements included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown; except as disclosed in the Prospectus, such
financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; except as disclosed in the Prospectus, the schedules included or
incorporated in the Registration Statement present fairly the information
required to be stated therein; and except as disclosed in the Prospectus, the
Company and its Insurance Subsidiaries have made no material change in their
insurance reserving practices since the most recent audited financial statements
included in the Prospectus.
(v) Statutory Financial Statements. The statutory annual and quarterly
statements of the Insurance Subsidiaries required to file such statutory
statements and the statutory balance sheets and income statements included in
such statutory annual and quarterly statements, most recently filed in each
jurisdiction, have been prepared in conformity with required or permitted or
prescribed statutory accounting principles or practices applied on a consistent
basis, except as may otherwise be indicated in the notes thereto, and present
fairly the financial position of the Insurance Subsidiaries (on a statutory
basis) for the period covered thereby.
(w) Accounting Controls. The Company and its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
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(x) No Material Adverse Change. Except as disclosed in the Prospectus,
since the date of the latest audited financial statements included in the
Prospectus, (i) there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole, (ii) there have not been any
transactions entered into by the Company or any of its subsidiaries other than
in the ordinary course of business which are material to the Company and its
subsidiaries taken as a whole, and, (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.
(y) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional 615,000 shares of Common Stock at a
price per share set forth in Schedule B, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representatives to the Company setting forth the
number of Option Securities as to which the several Underwriters are then
exercising the option and the time, date and place of payment and delivery for
such Option Securities. Any such time and date of delivery (each, a "Date of
Delivery") shall be determined by the Representatives, 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, unless otherwise agreed
upon by the Representatives and the Company. If the option is exercised as to
all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
8
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of, the
Initial Securities shall be made at the offices of LeBoeuf, Lamb, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., or at such other place as shall be agreed upon by the
Representatives and the Company, at 9:00 A.M. (Eastern time) on the third
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 Representatives and the Company
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. During
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, the Company, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations or Rule 434 of the 1933
Act Regulations, as applicable, and will notify the Representatives 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
9
Prospectus or any amended Prospectus shall have been filed, (ii) of the receipt
of any comments from the Commission, (iii) of any request by the Commission for
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus or 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. During the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, the Company will give the
Representatives notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b) of the 1933 Act
Regulations), 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 Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representatives 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 Representatives
or counsel for the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter 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 Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
10
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances existing
at the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and
file with the Commission, subject to Section 3(b), such amendment or supplement
as may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters such number of copies of such amendment
or supplement as the Underwriters may reasonably request. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 5 hereof.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives 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 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. Neither the Representatives' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 5 hereof.
(g) Rule 158. 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 for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".
11
(i) Listing. The Company will use its best efforts to effect the listing of
the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of ninety (90) days
from the date of this Agreement, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters, (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 for the sale of, or otherwise dispose of or transfer any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the Company or with
respect to which the Company has or hereafter acquires the power of disposition
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 is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Underwriters have been advised in writing, (C)
sales of Common Stock and grants of options to purchase Common Stock pursuant to
the terms of any employee stock option plan, directors' stock option plan,
deferred compensation plan, employee stock purchase plan or dividend
reinvestment plan in effect on the date hereof.
(k) Reporting Requirements. The Company, during the period when the
Prospectus 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.
(l) Delivery of Annual Reports and Other Documents. During the period of
five years hereafter, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, as soon as practicable after the end
of each fiscal year, a copy of its annual report to stockholders for such year;
and the Company will furnish to the Representatives (i) as soon as available, a
copy of each report and any definitive proxy statement of the Company filed with
the Commission under the 1934 Act or mailed to stockholders, and (ii) from time
to time, such other information concerning the Company as the Representatives
may reasonably request.
SECTION 4. Payment of Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company shall pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Securities
under the 1933 Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Securities to the Underwriters, including any
transfer or other taxes payable thereon, (iii) all
12
costs and expenses incident to listing the Securities on the New York Stock
Exchange, (iv) the cost of printing certificates representing the Securities,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, (vi) the costs and charges of any
transfer agent, registrar or depositary, (vii) travel and lodging expenses of
officers and employees of the Company for any "road show" undertaken in
connection with the marketing of the offering of the Securities, and one-half of
the cost of any aircraft utilized in connection with the road show, and (viii)
all other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this Section.
It is understood, however, that except as provided in this Section, Section 6
and Section 7, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, one-half of the cost of any
aircraft utilized in connection with the road show, stock transfer taxes payable
on resale of any of the Securities by them and any advertising expenses
connected with any offers they may make.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof, the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) 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 Representatives
shall have received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, outside counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A hereto.
(c) Opinion of General Counsel of Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President - General Counsel and Secretary
of the Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters to the effect set forth in Exhibit B hereto.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Underwriters,
together with signed or reproduced copies of such
13
letter for each of the other Underwriters with respect to the incorporation of
the Company, the validity of the Securities delivered on such Closing Time, the
Registration Statement, the Prospectus and other related matters as the
Representatives may 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.
(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 Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or operations of the Company
and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives 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 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) to the
knowledge of the Company, 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) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from KPMG LLP a letter dated
the date hereof, in form and substance satisfactory to the Representatives,
together with signed or reproduced copies of such letter for each of the other
Underwriters 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 or incorporated
by reference in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from KPMG LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (f) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to Closing Time.
(h) Lock-up Agreements. The "lock-up" agreements, each substantially in the
form of Exhibit C hereto, between the Representatives and certain persons
identified in Schedule C hereto relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the Closing Time.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
14
(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) Opinions of General Counsel and Outside Counsel for Company. The
favorable opinion of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice President - General
Counsel and Secretary of the Company, together with the favorable
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, outside counsel for the Company,
each in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) and 5(c)
hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from KPMG LLP, in form and
substance satisfactory to the Representatives and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to the Representatives pursuant to Section 5(g) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
15
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information 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 Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever, in each case, based upon any such untrue statement
or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company; and
(iii) against any and all 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, in
each case, based upon any such untrue statement or omission, or any
such alleged untrue statement or omission to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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
Prospectus (or any amendment or supplement thereto) it being understood and
agreed that the only such information furnished by any Underwriter consists of
the written information furnished to the Company by such Underwriter through
▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment
thereto) or such preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the
16
person asserting any such losses, claims, damages, liabilities or expenses
purchased the Securities, or any person controlling such Underwriter, if a copy
of the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages, liabilities or
expenses, unless such failure is the result of noncompliance by the Company with
Sections 3(d) and 3(e) hereof.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) 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 Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In 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. In any such proceeding,
any indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them; 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
17
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
that is the subject matter of such proceeding and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party. Subject to the provisions set forth in
Section 6(d), the indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) 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, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is
entered into more than 30 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; provided, that an indemnifying party shall not be liable for any
such settlement effected without its consent if such indemnifying party (1)
reimburses such indemnified party in accordance with such request to the extent
it considers such request to be reasonable and (2) provides written notice to
the indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the
18
cover of the Prospectus, 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 on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus (exclusive of any
supplement thereto), any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or in the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the
American Stock Exchange or the New York Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, 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 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives 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
Underwriters shall be
20
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(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
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Department; and notices to the Company shall be directed to it at ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of General Counsel.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company
21
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. 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.
22
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriters and the Company in accordance with its terms.
Very truly yours,
▇. ▇. ▇▇▇▇▇▇▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President,
Chief Financial Officer and
Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
By: /s/ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
23
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated........................................ 1,525,300
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.................................. 1,525,300
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. ......................................... 762,600
▇▇▇▇▇▇▇ & Partners Securities, L.L.C. ............................. 71,700
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Incorporated.................................. 71,700
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ..................................... 71,700
Sandler ▇'▇▇▇▇▇ & Partners, L.P. .................................. 71,700
Total.............................................................. ------------
4,100,000
============
Sch A-1
SCHEDULE B
PRICING INFORMATION
▇.▇. ▇▇▇▇▇▇▇ CORPORATION
4,100,000 Shares of Common Stock
(Par Value $.20 Per Share)
1. The initial public offering price per share for the Securities, determined as
provided in said Section 2, shall be $37.32.
2. The purchase price per share for the Securities to be paid by the several
Underwriters shall be $35.5006, being an amount equal to the public offering
price set forth above less $1.8194 per share; provided that the purchase price
per share for any 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 Securities but not payable on the Option Securities.
Sch B-1
SCHEDULE C
LIST OF PERSONS AND ENTITIES
SUBJECT TO LOCK-UP
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇
Sch C-1
Exhibit A
FORM OF OPINION OF COMPANY'S OUTSIDE COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware;
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement;
(iii) The Securities have been duly authorized by all necessary
corporate action and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of the Underwriting Agreement,
will be validly issued, fully paid and nonassessable and conform in all
material respects to the description thereof contained in the Prospectus;
and the stockholders of the Company have no statutory preemptive rights
with respect to the Securities;
(iv) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Underwriting Agreement
in connection with the issuance or sale of the Securities by the Company,
except such as have been obtained and made under the 1933 Act and such as
may be required under state securities and insurance laws, and the
execution and delivery of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or constitute a
breach of, or default under, the certificate of incorporation or by-laws of
the Company;
(v) The Registration Statement has become effective under the 1933
Act, the Prospectus (other than the documents incorporated by reference
therein) was filed with the Commission pursuant to the subparagraph of Rule
424(b) specified in such opinion on the date specified therein, and, to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act, and the Registration Statement and the
Prospectus (but not including any document incorporated by reference
therein), as of the date of this Agreement, and any amendment or supplement
thereto, and as of its date, complied as to form in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations; it
being understood that we express no opinion as to the financial statements
or other financial data contained or incorporated by reference in the
Registration Statement or the Prospectus;
(vi) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
A-1
(vii) The information in the Prospectus under the captions
"Description of Our Capital Stock -- Common Stock" and "Underwriting," to
the extent that such information is applicable to the Securities and
constitutes matter of law or legal conclusions or descriptions of documents
referred to therein, has been reviewed by us and is correct in all material
respects; and
(viii) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
Our opinion is limited to matters governed by the Federal laws of the
United States of America, the laws of the State of New York and the corporate
law of the State of Delaware. In rendering such opinions, we have relied, as to
matters of fact and to the extent it deems proper, on certificates of
responsible officers of the Company or public officials. In addition, based upon
our participation in the preparation of the Registration Statement and the
Prospectus (other than the documents incorporated therein by reference), and our
review and discussion with representatives of the Company of the content
thereof, but without having undertaken to verify, check or independently
determine the accuracy, completeness or fairness of statements of fact contained
therein, we have no reason to believe that the Registration Statement, as of the
date of this Agreement or as of the Closing Time, or any amendment thereto, as
of its date or as of the Closing Time, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectus, as of the date of the Underwriting Agreement or as of such Closing
Time, or any amendment or supplement thereto, as of its date or as of the
Closing Time, contained any untrue statement of a material fact or omitted 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; it
being understood that express no view as to the financial statements or other
financial data contained or incorporated by reference in the Registration
Statement or the Prospectus.
A-2
Exhibit B
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) The Company has an authorized capitalization as is set forth in
the Prospectus; and, to the best of my knowledge, the stockholders of the
Company have no preemptive rights with respect to the Securities;
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not
individually or in the aggregate have a Material Adverse Effect;
(iii) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
the business described in the Registration Statement and, to the extent
applicable, is duly qualified as a foreign corporation to transact business
and is in good standing as such in each jurisdiction in which it owns or
leases substantial properties or in which the conduct of its business
requires such qualification (except in such jurisdictions where the failure
to be so qualified would not individually or in the aggregate have a
Material Adverse Effect); except as set forth in the Registration
Statement, all of the issued and outstanding shares of capital stock of
each Significant Subsidiary have been duly authorized and validly issued
and are owned directly or indirectly by the Company, free and clear of any
pledges, liens, encumbrances, claims or equities; and all such shares are
fully paid and nonassessable;
(iv) There are no contracts, agreements or understandings known to me
between the Company and any person granting such person the right to
require the Company to file a registration statement under the 1933 Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the 1933 Act;
(v) To the best of my knowledge, there are no licenses, franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described in the Registration Statement or to be
filed as an exhibit thereto other than those described therein or filed or
incorporated by reference as exhibits thereto;
(vi) The execution, delivery and performance of the Underwriting
Agreement and the issuance and sale of the Securities and compliance with
the terms and provisions thereof will not result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or body
or any court having jurisdiction over the Company or any Significant
B-1
Subsidiary of the Company or the charter or by-laws of any such subsidiary,
or, to the best of my knowledge, any of their material properties, or any
material agreement, contract, indenture, mortgage, loan agreement, note,
lease or other instrument to which the Company or any such subsidiary is a
party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject;
(vii) The Company has made all required filings under applicable
insurance holding company statutes, and has received approvals of
acquisition of control and/or affiliate transactions, in each jurisdiction
in which such filings or approvals are required, except where the failure
to have made such filings or receive such approvals in any such
jurisdiction would not reasonably be expected to have individually or in
the aggregate a Material Adverse Effect; each of the Insurance Subsidiaries
is duly organized and licensed as an insurance or reinsurance company in
its respective jurisdiction of incorporation, and each such Insurance
Subsidiary owns the Insurance Licenses in each other jurisdiction in which
such licensing or authorization is required, except where the failure to be
so licensed or authorized in any such jurisdiction would not reasonably be
expected to have individually or in the aggregate a Material Adverse
Effect; there is no pending or, to the best of my knowledge, threatened
action, suit, proceeding or investigation that would be reasonably likely
to lead to the revocation, termination or suspension of any such Insurance
Licenses, the revocation, termination or suspension of which would
reasonably be expected to have individually or in the aggregate a Material
Adverse Effect; and except as disclosed in the Prospectus, no insurance
regulatory agency or body has issued any order or decree impairing,
restricting or prohibiting the payment of dividends of any Company
subsidiary to its respective parent which would reasonably be expected to
have individually or in the aggregate a Material Adverse Effect;
(viii) Except as would not individually or in the aggregate have a
Material Adverse Effect and except as described in the Prospectus, (i) to
the best of my knowledge, there are no legal or governmental proceedings
pending or threatened which are required to be disclosed in the
Registration Statement, other than those disclosed therein, and (ii) there
are no pending legal or governmental proceedings, to the best of my
knowledge, to which the Company or any subsidiary is a party or of which
any of their property is the subject which are not described in the
Registration Statement but are required to be so described in the
Registration Statement, including ordinary routine litigation incidental to
the business;
(ix) The documents incorporated by reference in the Prospectus
pursuant to Item 12 of Form S-3 under the 1933 Act (other than the
financial statements, supporting schedules and other financial information
included or incorporated by reference therein, as to which I express no
opinion), at the time they were filed with the Commission or delivered to
the security holders, as the case may be, complied as to form in all
material respects with the requirements of the 1934 Act and the rules and
regulations thereunder; and
B-2
(x) The descriptions in the Registration Statement and Prospectus of
legal and governmental proceedings and contracts and other documents are
accurate in all material respects and fairly present the information
required to be shown; and, to the best of my knowledge, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the 1933 Act.
My opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of New York and the corporate law of
the State of Delaware. In rendering such opinions, I have relied, as to matters
of fact and to the extent it deems proper, on certificates of responsible
officers of the Company or public officials. In addition to the matters set
forth above, based upon my participation in the preparation of the Registration
Statement and the Prospectus, including the documents incorporated therein by
reference, and my review and discussion with other representatives of the
Company of the content thereof, but without having undertaken to verify, check
or independently determine the accuracy, completeness or fairness of statements
of fact contained therein, I have no reason to believe that the Registration
Statement, as of the date of this Agreement or as of the Closing Time, or any
amendment thereto, as of its date or as of the Closing Time, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Underwriting Agreement
or as of such Closing Time, or any amendment or supplement thereto, as of its
date or as of the Closing Time, contained any untrue statement of a material
fact or omitted 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; it being understood that I express no view as to the
financial statements or other financial data contained or incorporated by
reference in the Registration Statement or the Prospectus.
As to the opinions expressed in paragraph (iii) above, I express no opinion
with respect to Nautilus Insurance Company other than that all of the issued and
outstanding shares of capital stock of Nautilus Insurance Company are owned
directly or indirectly by the Company, free and clear of any pledges, liens,
encumbrances, claims or equities and I note that the insurance laws of certain
jurisdictions in which the Significant Subsidiaries conduct business do not
require such due qualification as a foreign corporation. As to the opinion
expressed in paragraph (vi) above, I express no opinion as to the laws of the
State of Arizona or the charter or by-laws of Nautilus Insurance Company.
B-3
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(i)
November , 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Underwriting Agreement
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by ▇. ▇. ▇▇▇▇▇▇▇ Corporation
-----------------------------------------------------
Dear Sirs:
The undersigned, a stockholder and/or director of ▇. ▇. ▇▇▇▇▇▇▇
Corporation, a Delaware corporation (the "Company"), understands that ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. propose
to enter into an Underwriting Agreement (the "Underwriting Agreement") with the
Company providing for the public offering of shares (the "Securities") of the
Company's common stock, par value $.20 per share (the "Common Stock"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder and/or director of the Company, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter to be named in the
Underwriting Agreement that, during a period of ninety (90) days from the date
of the Underwriting Agreement, the undersigned will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters, (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 for the sale of, or otherwise dispose of or transfer any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
C-1
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction is to be settled by delivery of Common Stock or
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) the sale of Securities to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
public offering or (c) transfers as a bona fide gift, provided that the
transferee agrees to be bound by the terms of this lock-up agreement. In
addition, the undersigned agrees that, without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending ninety (90) days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this lock-up agreement in proceeding toward consummation of the
public offering. The undersigned further understands that this lock-up agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the public offering actually occurs depends on a number of
factors, including market conditions. Any public offering will only be made
pursuant to the Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
Signature:______________________________
Print Name:_____________________________
C-2