Exhibit 1.01
16,290,235 Shares
FEDERATED INVESTORS, INC.
(a Pennsylvania Corporation)
Class B Common Stock
(Non-Voting)
(No Par Value Per Share)
U.S. PURCHASE AGREEMENT
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May __, 1998
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as U.S. Representatives of the several U.S. Underwriters
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Ladies and Gentlemen:
Federated Investors, Inc., a Pennsylvania corporation (the "Company"), and the
shareholders of the Company named in Schedule D hereto (the "Selling
Shareholders") confirm their agreements with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and PaineWebber Incorporated and ▇▇▇▇▇
▇▇▇▇▇▇ Inc. (the "Other U.S. Representatives") and each of the other
underwriters named in Schedule A hereto (collectively, the "U.S. Underwriters,"
which term shall also include any underwriter substituted as hereinafter
provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Other U.S.
Representatives are acting as representatives (in such capacity, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and the Other U.S. Representatives shall hereinafter be referred to as the "U.S.
Representatives") with respect to the sale by the Company and the Selling
Shareholders, acting severally and not jointly, of an aggregate of 16,290,235
shares of Class B Common Stock (non-voting), no par value per share (the "Class
B Common Stock"), of the Company, and the purchase by the
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U.S. Underwriters, acting severally and not jointly, of the respective numbers
of Class B Common Stock set forth in said Schedule A hereto, and with respect to
the grant by the Company and the Selling Shareholders indicated on Schedule D
hereto to the U.S. Underwriters, acting severally and not jointly, of the
options described in Section 2(b) hereof to purchase all or any part of 312,000
additional shares of Class B Common Stock in the aggregate and 1,642,828
additional shares of Class B Common Stock in the aggregate, respectively, to
cover over-allotments, if any. The 13,032,190 shares of Class B Common Stock
(the "Initial U.S. Securities") to be purchased by the U.S. Underwriters and all
or any part of the 1,954,828 shares of Class B Common Stock subject to the
options described in Section 2(b) hereof (the "U.S. Option Securities") are
hereinafter called, collectively, the "U.S. Securities". The Class B Common
Stock and the Class A Common Stock, no par value per share, of the Company are
hereinafter referred to as the "Common Stock".
The Company and the Selling Shareholders understand that the U.S. Underwriters
propose to make a public offering of the U.S. Securities as soon as the U.S.
Representatives deem advisable after this Agreement has been executed and
delivered.
It is understood and agreed by all parties that the Company and the Selling
Shareholders are concurrently entering into an agreement dated the date hereof
(the "International Purchase Agreement") providing for the sale by the Company
and the Selling Shareholders of up to 3,258,045 shares of Class B Common Stock
(the "Initial International Securities") through arrangements with certain
managing underwriters outside the United States and Canada (the "International
Managers") for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇ International"),
PaineWebber International (U.K.) Ltd. and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as lead
managers (the "Lead Managers") and the grant by the Company and the Selling
Shareholders indicated on Schedule D thereto to the International Managers of
options to purchase all or any part of 78,000 additional shares of Class B
Common Stock in the aggregate and 410,707 additional Class B Common Stock in the
aggregate, respectively (the "International Option Securities"), to cover over-
allotments, if any, of the Initial International Securities. The Initial
International Securities and the International Option Securities are hereinafter
called the "International Securities". The U.S. Securities and the International
Securities, collectively, are hereinafter called the "Securities". It is
understood that the Company is not obligated to sell and the U.S. Underwriters
are not obligated to purchase any Initial U.S. Securities unless all of the
Initial International Securities are contemporaneously purchased by the
International Managers.
The Company and the Selling Shareholders understand that the U.S. Underwriters
and the International Managers (collectively, the "Underwriters") will
concurrently enter into an Intersyndicate Agreement of even date herewith (the
"Intersyndicate Agreement") providing for the coordination of certain
transactions among the Underwriters under the direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
The Company and the U.S. Underwriters agree that up to 750,000 shares of the
Initial U.S. Securities to be purchased by the U.S. Underwriters (the "Reserved
Securities") shall be reserved for sale by the U.S. Underwriters to certain
eligible employees of the Company, as part of the distribution of the U.S.
Securities by the U.S. Underwriters, subject
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to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. and all
other applicable laws, rules and regulations. To the extent that such Reserved
Securities are not orally confirmed for purchase by such eligible employees by
the end of the first business day after the date of this Agreement, such
Reserved Securities may be offered to the public as part of the public offering
contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-48405) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement and the International
Purchase Agreement (collectively, the "Purchase Agreements"), the Company will,
in connection with the offering of each of the U.S. Securities and the
International Securities, either (i) prepare and file a prospectus in accordance
with the provisions of Rule 430A ("Rule 430A") of the rules and regulations of
the Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b)
of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company
has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the provisions
of Rule 434 and Rule 424(b). The information included in any prospectus or in
any Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to paragraph
(b) of Rule 430A is referred to as "Rule 430A Information" or (b) pursuant to
paragraph (d) of Rule 434 is referred to as "Rule 434 Information." Each
prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto,
schedules thereto, if any, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus, in the form first furnished to the U.S. Underwriters for use in
connection with the offering of the U.S. Securities is herein called the "U.S.
Prospectus" and the final prospectus, in the form first furnished to the
International Managers for use in connection with the International Securities,
is herein called the "International Prospectus", and the U.S. Prospectus and the
International Prospectus are hereinafter called, collectively, the
"Prospectuses," and each individually, a "Prospectus." If Rule 434 is relied
on, each of the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary prospectus dated April 24, 1998, together with the
applicable Term Sheet and all references in this Agreement and the International
Purchase Agreement to the date of the U.S. Prospectus and International
Prospectus, respectively, shall mean the date of such Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission
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pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇"). The U.S. Prospectus is identical to the International Prospectus,
except for the front cover page, a "United States Tax Considerations for Non-
United States Holders" section in the International Prospectus, the
"Underwriting" section and the back cover page.
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 Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses as the case may be.
The Company also has filed with the Commission a registration statement on
Form S-4 (No. 333-48361) covering the registration under the 1933 Act of 6,000
shares of Class A Common Stock, no par value, and 83,427,000 shares of Class B
Common Stock, no par value, to be issued by the Company in connection with a
merger (the "Merger") of Federated Investors, a Delaware business trust and
parent of the Company ("Federated Investors"), into the Company, pursuant to
which the Company is the surviving corporation, under the terms of that certain
Agreement and Plan of Merger dated as of February 20, 1998 between Federated
Investors and the Company (the "Merger Agreement"). On April 30, 1998 the S-4
Registration Statement was declared effective by the Commission and definitive
proxy statement/prospectuses were distributed to shareholders of Federated
Investors to vote at a special meeting of the shareholders on May 15, 1998 to
approve and adopt the Merger Agreement.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents and
warrants to each U.S. Underwriter as of the date hereof and as of the Closing
Time referred to in Section 2(a) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company
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meets the requirements for use of Form S-1 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, the Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities are
purchased, up to the Date of Delivery referred to below), (A) the
Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and
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will comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (B) neither the Prospectuses nor any amendments or supplements
thereto contained or will contain an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading and (C) if Rule 434 is used, the Company will
comply with the requirements of Rule 434; provided, however, that the
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representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectuses
made in reliance upon and in conformity with information furnished to the
Company in writing by any U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or by any
International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, expressly for
use in the Registration Statement or Prospectuses.
Each preliminary prospectus and the Prospectuses filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations.
(ii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are independent public accountants, in the case of Ernst & Young
LLP, as required by the 1933 Act and the 1933 Act Regulations and, in the
case of KPMG Peat Marwick LLP, as required by rule 101 of the AICPA's Code
of Professional Conduct.
(iii) Financial Statements. The consolidated financial
--------------------
statements included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
consolidated financial position of Federated Investors and its subsidiaries
(including the Company) at the dates indicated and the statement of
operations, shareholders' equity and cash flows of Federated Investors and
its subsidiaries for the periods specified, on the basis stated in the
Registration Statement at the respective dates or for the respective
periods for which they apply. Such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied, except as disclosed therein, on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectuses are
accurately presented in all material respects and have been compiled on a
basis consistent with such consolidated financial statements included in
the Registration Statement and the books and records of Federated Investors
and its subsidiaries.
(iv) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the Registration
Statement and the Prospectuses, except for the contemplated Merger and
related transactions and as otherwise stated
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therein, (A) there has been no material adverse change in the condition,
financial or other, the business or in the earnings of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or any development involving, or which may
reasonably be expected to involve, prospectively such a material adverse
change (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in
the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock, except to the extent
described in the Prospectuses.
(v) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania with the requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign business trust to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant
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subsidiary" of the Company (as such term in defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries")
has been duly organized, and is validly existing as a corporation, business
trust or partnership, as the case may be, in good standing under the laws
of the jurisdiction of its organization, has the requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation, business trust or partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or to be in good standing would not result in Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock of each Subsidiary of the Company
has been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company (except, in the case of foreign
subsidiaries, for qualifying shares owned by foreign nationals), directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except that all of the stock of
substantially all of the Subsidiaries is pledged as security pursuant to a
Senior Secured Credit Agreement, dated as of January 31, 1996 among
Federated Investors, the lenders named therein and PNC, National
Association, as Agent, and a Note Purchase Agreement, dated as of June 15,
1996 between Federated Investors and the Noteholders named therein; none of
the outstanding shares of capital stock of the Subsidiaries was issued in
violation of any preemptive or similar rights arising by operation of law,
or under the organizational documents or by-laws of the Company or
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any Subsidiary or under any agreement to which the Company or any
Subsidiary is a party. The only subsidiaries of the Company are the
subsidiaries listed on Exhibit 21.01 to the Registration Statement and
certain other subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X.
(vii) Capitalization. Subject to the consummation of the
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Merger, the authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectuses in the column entitled "Actual" under
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement or pursuant to employee benefit or stock option plans referred to
in the Prospectuses).
(viii) Authorization of Agreement. This Agreement has been duly
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authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. Subject to
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the consummation of the Merger in accordance with its terms, the
outstanding Class B Common Stock will have been duly authorized and validly
issued and will be fully paid and non-assessable; and none of the
outstanding Class B Common Stock, when issued in connection with the
Merger, will be issued in violation of the preemptive or other similar
rights arising by operation of law, under the Restated Articles of
Incorporation or Restated By-Laws of the Company, under any agreement to
which the Company or any of its subsidiaries is a party, or otherwise. The
Class B Common Stock to be issued and sold by the Company have been duly
authorized for issuance and sale to the U.S. Underwriters and the
International Managers pursuant to this Agreement and the International
Purchase Agreement and, when issued and delivered by the Company pursuant
to this Agreement and the International Purchase Agreement against payment
of the consideration set forth herein and therein, will be validly issued
and fully paid and non-assessable; the Class B Common Stock conforms to all
statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Class B Common Stock will be subject to personal
liability by reason of being such a holder; and the issuance of the Class B
Common Stock to be issued and sold by the Company is not subject to
preemptive or other similar rights arising by operation of law, under the
Restated Articles of Incorporation or Restated By-Laws of the Company,
under any agreement to which the Company or any of its subsidiaries is a
party, or otherwise. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act other than Westinghouse Pension Plan.
(x) Absence of Defaults and Conflicts. Subject to the
---------------------------------
consummation of the Merger in accordance with its terms and the
satisfaction of all conditions set forth in the Merger Agreement, neither
the Company nor any of the Subsidiaries is in violation of its
organizational documents, or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any bond,
8
debenture, note or any contract, indenture, mortgage, deed of trust, loan
or credit agreement, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or the
Subsidiaries is subject (collectively, the "Agreements and Instruments")
except for such defaults that would not have a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated herein, therein and in the Registration Statement (including
the use of the proceeds by the Company from the sale of Class B Common
Stock as described in the Prospectuses under the caption "Use of Proceeds")
and compliance by the Company with its obligations hereunder and thereunder
have been duly authorized by all necessary action and will not, whether
with or without the giving of notice or the passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Subsidiary pursuant to, any of the Agreements and Instruments, except for
such conflicts, breaches, defaults, liens, charges or encumbrances that
would not have a Material Adverse Effect, nor will any such action result
in any violation of the provisions of the Restated Articles of
Incorporation or Restated By-Laws of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
assets or properties. As used herein, a "Repayment Event" means any event
or condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any Subsidiary.
(xi) Absence of Labor Dispute. No labor problems exist with the
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employees of the Company or any Subsidiaries or, to the knowledge of the
Company, are imminent which could reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
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proceeding, inquiry or investigation before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might result in a
Material Adverse Effect or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation
of this Agreement or the International Purchase Agreement or the
performance by the Company of its obligations hereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary of the Company is a party or of which any of their respective
properties or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation
9
incidental to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no contracts or
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documents which are required to be described in the Registration Statement,
the Prospectuses or the documents to be filed as exhibits thereto which
have not been so described and filed as required by the 1933 Act.
(xiv) Possession of Intellectual Property. The Company and the
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Subsidiaries own or possess adequate rights to use all patents, trademarks,
service marks, trade names, copyrights, licenses and rights (collectively,
"Intellectual Property") necessary to carry on the business now operated by
them, and neither the Company nor any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property, or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of the
Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
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authorization, approval, consent, order registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in
connection with the offering, issuance or sale of the U.S. Securities
hereunder or the International Securities under the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement or the International Purchase Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws or in connection with registration of the Securities under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), filing to
list the Securities on the New York Stock Exchange on or prior to the
Closing Time or the filing of a Certificate of Merger of the Company or of
Federated Investors in accordance with applicable law in the State of
Delaware and the Commonwealth of Pennsylvania on or prior to Closing Time
(all of which have been or will be effective in accordance with this
Agreement).
(xvi) Possession of Licenses and Permits. The Company and the
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Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business of the Company as described in the
Prospectuses; the Company and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company nor any
of the Subsidiaries has
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received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and the Subsidiaries have
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good and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
the Subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any Subsidiary holds properties described in
the Prospectuses, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(b) Each of the Selling Shareholders, severally, and not jointly,
represents and warrants to each U.S. Underwriter as of the date hereof and as of
the Closing Time referred to in Section 2(a) hereof, and agrees with each U.S.
Underwriter as follows:
(i) Absence of Defaults and Conflicts. The execution and
---------------------------------
delivery of this Agreement and the International Purchase Agreement and the
consummation of the transactions contemplated by this Agreement and the
International Purchase Agreement will not conflict with or result in a
breach or violation by such Selling Shareholder of, or constitute a default
by such Selling Shareholder under, any indenture, mortgage, loan agreement,
deed or trust, contract or other similar agreement or instrument, any
charter, bylaws or other governing documents, or any decree, judgment,
order, statute, rule or regulation of any court or governmental agency or
body of the United States or any state thereof, in all such cases, to which
such Selling Shareholder is a party or by which such Selling Shareholder is
bound or to which any of the assets or property of such Selling Shareholder
is subject, except in all such cases, for such conflicts, breaches,
defaults and violations as would not, individually or in the aggregate,
adversely effect the sale of Securities by such Selling Shareholder
hereunder.
(ii) Marketable Title. Such Selling Shareholder has or will
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have at the Closing Time referred to in Section 2(c) hereof good and valid
title to the Securities to be sold by such Selling Shareholder hereunder
and under the International Purchase Agreement, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity interest,
other than pursuant to this Agreement or the International Purchase
Agreement; such Selling Shareholder has full right, power and authority to
sell, transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder and under the International Purchase Agreement; and
upon delivery of the Securities to
11
be sold by such Selling Shareholder hereunder and under the International
Purchase Agreement and payment of the purchase price therefor as herein
contemplated, each of the U.S. Underwriters and the International Managers
will receive good and valid title to its ratable share of the Securities
purchased by it from such Selling Shareholder, free and clear of any
pledge, lien, security interest, encumbrance or other adverse claim,
assuming that the U.S. Underwriters and Managers purchase such Securities
in good faith and without notice of any such pledge, security interest,
lien, encumbrance or other adverse claim within the meaning of the Uniform
Commercial Code.
(iii) Absence of Further Requirements. All authorizations,
-------------------------------
approvals and consents necessary for the execution and delivery by such
Selling Shareholder of this Agreement, the International Purchase Agreement
and, if such Selling Shareholder is a party to it, the Power of Attorney
dated on or before the date hereof between such Selling Shareholder, the
Company and the Attorneys-in-Fact named therein (the "Power of Attorney")
and the Custody Agreement dated on or before the date hereof between such
Selling Shareholder, the Company and the Custodian named therein (the
"Custody Agreement") and the sale and delivery of the Securities to be sold
by such Selling Shareholder hereunder and under the International Purchase
Agreement (other than the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations, approvals or
consents as may be necessary under state or foreign securities laws) have
been obtained and are in full force and effect; and such Selling
Shareholder has the full right, power and authority to enter into this
Agreement and the International Purchase Agreement, and to sell, transfer
and deliver the Securities to be sold by such Selling Shareholder hereunder
and under the International Purchase Agreement.
(iv) Authorization of Agreements. This Agreement, the
---------------------------
International Purchase Agreement and, if such Selling Shareholder is a
party to it, the Power of Attorney and the Custody Agreement have been duly
executed and delivered by such Selling Shareholder.
(v) Restriction on Sale of Securities. During the period of 180
---------------------------------
days from the date of the Prospectuses, such Selling Shareholder will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly,
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, any Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or file any registration statement under the 1933 Act with
respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the
issuance of the Securities being sold hereunder and under the International
Purchase Agreement by the Selling Shareholder, (B) any transfer of such
Securities to an affiliate of the Selling Shareholder which agrees in a
writing in form
12
and substance reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇ to agree to be bound
by the provisions hereof as if it was the Selling Shareholder, (C) any
pledge prior to the date of the Prospectuses by a shareholder of the
Company of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, and (D) any pledge after the date of the
Prospectuses by a shareholder of the Company of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
for the purpose of securing a bona fide loan by a financial institution to
such shareholder.
(vi) Absence of Misstatements and Omissions. To the extent that
--------------------------------------
any statements or omissions made in the Registration Statement, any
preliminary prospectus, the Prospectuses or any amendment or supplement
thereto are made in reliance upon and in conformity with information
furnished in writing to the Company by such Selling Shareholder expressly
for use therein, the Registration Statement and such preliminary prospectus
do not, and the Prospectuses and any amendments or supplements thereto will
not, as of the applicable effective date or as of the applicable filing
date, as the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(vii) Absence of Stabilization. Such Selling Shareholder has
------------------------
not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(viii) Share Certificates. If such Selling Shareholder is a
------------------
party to the Custody Agreement, certificates in negotiable form for all
Class B Common Shares of Federated Investors to be exchanged in the Merger
for the Securities to be sold hereunder and under the International
Purchase Agreement have been placed in custody with the Custodian for the
purpose of effecting delivery hereunder.
(c) Officer's Certificates. Any certificate signed by any officer of the
----------------------
Company or by any Selling Shareholder (or any trustee thereof) and delivered to
the U.S. Representatives, the Lead Managers, the U.S. Underwriters or the
International Managers, or to counsel thereof shall be deemed a representation
and warranty by the Company or by such Selling Shareholder, as the case may be,
to each U.S. Representative, U.S. Underwriter, Lead Manager and Manager as to
the matters covered thereby.
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 and each of the Selling Shareholders, severally and not jointly, agrees
to sell to each U.S. Underwriter, severally and not jointly, and each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Company and
each of the Selling Shareholders, at the price per
13
share set forth in Schedule B, the number of Initial U.S. Securities set forth
in Schedule A opposite the name of such U.S. Underwriter, plus any additional
number of Initial U.S. Securities which such U.S. 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, each of the Selling Shareholders indicated on Schedule D hereto hereby
grant options to the U.S. Underwriters, severally and not jointly, to purchase
the additional number of shares of Class B Common Stock set forth in Schedule D
hereto and the Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase 312,000 additional shares of Class B
Common Stock, in each case at the 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 U.S. Securities but not payable on the U.S.
Option Securities. The options 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 U.S. Securities upon notice by the U.S.
Representatives to the Company or the Selling Shareholder, as the case may be,
setting forth the number of U.S. Option Securities as to which the several U.S.
Underwriters are then exercising the option and the U.S. time and date of
payment and delivery for such U.S. Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the U.S.
Representative(s), but shall not be later than seven full business days after
the exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the options are exercised as to all or any portion of
the U.S. Option Securities, each of the U.S. Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of U.S. Option
Securities then being purchased which the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter bears to the
total number of Initial U.S. Securities, subject in each case to such
adjustments as the U.S. Representative(s) in their discretion shall make to
eliminate any sales or purchases of fractional shares. If the options are
exercised as to less than all of the U.S. Option Securities, the Company and the
Selling Shareholders will sell additional shares of Class B Common Stock to the
U.S. Underwriters pro rata on the basis of the total number of U.S. Option
Securities allocated to them.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Securities shall be made at the office of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the U.S. Representatives, the Company and the Selling Shareholders, at 10:00
A.M. on the third (fourth, if the pricing occurs after 4:30 P.M. on any given
day) business day after the date hereof (unless postponed in accordance with the
provisions of Section 10 or 11), or such other time not later than ten business
days after such date as shall be agreed upon by the U.S. 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 U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of
14
certificates for, such U.S. Option Securities shall be made at the office of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the U.S. Representatives, the Company and the Selling Shareholders, on each
Date of Delivery as specified in the notice from the U.S. Representatives to the
Company or such Selling Shareholders, as the case may be. All payments shall be
made to the Company or the Selling Shareholders, as the case may be, in New York
Clearing House funds or in similar next-day funds payable to the order of the
Company or the custodians named in the Custody Agreement, on behalf of such
Selling Shareholders, as the case may be, against delivery to the U.S.
Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as a U.S.
Representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose payment
has 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 U.S. Underwriter from
its obligations hereunder. In the event that ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as a U.S. Representative of the U.S. Underwriters, shall, as an accommodation to
the Company or any of the Selling Shareholders, arrange for payment of all or a
portion of the Initial U.S. Securities or U.S. Option Securities to be made to
the Company in immediately available funds, the Company agrees to reimburse
▇▇▇▇▇▇▇ ▇▇▇▇▇ for its cost of funds, as determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ in its sole
discretion, in respect of such payment, such reimbursement to be effected by
wire transfer of immediately available funds by the Company or the Selling
Shareholders, as the case may be, to ▇▇▇▇▇▇▇ ▇▇▇▇▇ prior to 10:00 A.M., New York
City time, on the closing date, or the relevant Date of Delivery, as the case
may be.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. 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
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in the City of New
York not later than 10:00 A.M. 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 U.S.
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A and will notify the U.S. 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
Prospectuses or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii)
15
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectuses or for
additional information, and (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus,
or of the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the U.S.
Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the U.S. 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 U.S. Representatives or counsel for the U.S. Underwriters shall
object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the U.S. Representatives and counsel to the U.S.
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 signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the U.S. Underwriters.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. 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 U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
(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 U.S.
16
Securities as contemplated in this Agreement and in the U.S. Prospectus. If
at any time when a prospectus is required by the 1933 Act to be delivered
in connection with sales of the U.S. Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion
of counsel for the U.S. Underwriters or the Company, to amend the
Registration Statement or amend or supplement the U.S. Prospectus in order
that the U.S. Prospectus will not include any untrue statement 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
U.S. Prospectus comply with such requirements, and the Company will furnish
to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the U.S. Underwriters, to qualify the U.S.
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the U.S.
Representatives may designate and to maintain such qualifications 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;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign business
trust or as 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 U.S. Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) 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
security holders 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
Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Class B Common Stock (including the Securities) on the New
York Stock Exchange.
17
(j) Restriction on Sale of Securities. During the period of 180 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, any Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the issuance of the
Securities being sold hereunder and under the International Purchase
Agreement by the Company, (B) any issuance of Common Stock by the Company
upon the exercise of an option or warrant or the conversion or exchange of
a security outstanding on the date hereof and referred to in the
Prospectuses, (C) any issuance of Common Stock, or any grant of options to
purchase Common Stock, pursuant to existing employee benefit plans of the
Company referred to in the Prospectuses, (D) any issuance of Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock by the Company in consideration of the acquisition by the
Company from a third party of a business (whether through a merger, sale of
assets or securities, or otherwise), provided that each transferee of such
Common Stock or securities agrees in a writing in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇ to agree to be bound by the
provisions hereof as if it was the Company, or the filing by the Company of
a registration statement under the 1933 Act with respect to such issuance
and acquisition.
(k) Reporting Requirements. The Company, during the period
when the U.S. 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.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the U.S.
Underwriters of this Agreement, any agreement among U.S. Underwriters and, such
other documents as may be required in connection with the offering, purchase,
sale and delivery of the U.S. Securities; (iii) the preparation, issuance and
delivery of the certificates for the U.S. Securities to the U.S. Underwriters,
including any stock or other transfer taxes or duties payable upon the sale of
the U.S. Securities to the U.S. Underwriters, (iv) the fees and disbursements of
the Company's counsel, accountants and other advisors, (v) the qualification of
the U.S. Securities under securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the U.S. Underwriters in connection therewith and
in connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and
18
delivery to the U.S. Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectuses and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the U.S. Underwriters of copies
of the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses
of any transfer agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the U.S.
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Securities, (x) the fees and expenses incurred in connection with the listing of
the Class B Common Stock on the New York Stock Exchange and (xi) all costs and
expenses of the Underwriters, including the reasonable fees and disbursements of
counsel for the Underwriters, in connection with matters related to the Reserved
Securities which are designated by the Company for sale to employees and others
having a business relationship with the Company.
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Shareholders may make for the allocation or sharing of
such expenses and costs.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations of
--------------------------------------------
the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company,
any Subsidiary or any Selling Shareholder delivered pursuant to the provisions
hereof, to the performance by the Company and the Selling Shareholders of their
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, shall have
become effective not later than 5:30 P.M. on the date hereof, 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 U.S. 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). 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) Opinions of Counsel for Company. At Closing Time the
U.S. Representatives shall have received:
19
(1) The favorable opinion, dated as of Closing Time, of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other
U.S. Underwriters, to the effect set forth in Exhibit A hereto.
(2) The favorable opinion, dated as of the Closing Time, of ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Executive Vice President and General Counsel of the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter
for each of the other U.S. Underwriters, to the effect set forth in
Exhibit B hereto.
(3) The favorable opinions, dated as of the Closing Time, of
counsel for the Selling Shareholders, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with
signed or reproduced copies of such letter for each of the other U.S.
Underwriters, to the effect set forth in Exhibit C hereto.
(c) Opinion of Counsel for Underwriters. At Closing Time
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters, with respect to certain matters. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to you. Such counsel may also state that, insofar as such
opinion involved factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(d) Officer's Certificate. At Closing Time there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any Material Adverse Effect and
the U.S. 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 Effect, (ii) the
representations and warranties in Section 1 hereof are true and correct in
all material respects with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) Accountants' Comfort Letters. At the time of the
execution of this Agreement, the U.S. Representatives shall have received
from each of Ernst & Young LLP and KPMG Peat Marwick LLP a letter dated
such date, in form and substance satisfactory to the U.S. Representatives,
together with signed or reproduced copies of
20
such letters for each of the other U.S. 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 in the Registration Statement and
the Prospectuses.
(f) Bring-down Comfort Letters. At Closing Time the U.S.
Representatives shall have received from Ernst & Young LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in
their respective letter furnished pursuant to subsection (e) of this
Section, except that the specified date referred to shall be a date not
more than three days prior to Closing Time.
(g) Approval of Listing. At the Closing Time, the Class B
Common Stock (including the Securities) shall have been approved for
listing on the New York Stock Exchange, subject only to official notice of
issuance.
(h) The NASD. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-Up Agreements. At the date of this Agreement, the
U.S. Representatives shall have received an agreement substantially in the
form of Exhibit D hereto signed by the persons listed on Schedule C hereto.
(j) Additional Documents. At Closing Time and at each Date
of Delivery, counsel for the U.S. Underwriters shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the U.S.
Securities as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company and
the Selling Shareholders in connection with the issuance and sale of the
U.S. Securities as herein contemplated shall be reasonably satisfactory in
form and substance to the U.S. Representatives and counsel for the U.S.
Underwriters.
(k) Selling Shareholder Certificate. At Closing Time the
U.S. Representatives shall have received a certificate of each Selling
Shareholder, or a certificate of the President or a Vice President or an
Assistant Vice President or a general partner or a managing member or a
trustee, as the case may be, of such Selling Shareholder, as the case may
be, dated as of Closing Time, to the effect that (i) the representations
and warranties of such Selling Shareholder contained in Section 1(b) are
true and correct in all material respects with the same force and effect as
though expressly made at and as of Closing Time and (ii) each Selling
Shareholder has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time.
(l) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement,
21
the International Managers shall have purchased the Initial International
Securities under the International Purchase Agreement.
(m) Consummation of Merger. The Merger shall have been consummated
concurrently therewith.
(n) Conditions to Purchase of Option Securities. In the
event that the U.S. Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the U.S. Option Securities,
the representations and warranties of the Company and the Selling
Shareholders contained herein and the statements in any certificates
furnished by the Company and the Selling Shareholders hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the U.S. Representatives shall have received:
(i) Officer's 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(d) hereof remains true and correct as of such
Date of Delivery.
(ii) Selling Shareholder's Certificate. A certificate, dated
---------------------------------
such Date of Delivery, of the Selling Shareholders selling U.S.
Option Securities confirming that the certificate delivered at the
Closing Time pursuant to Section 5(k) hereof remains true and correct
as of such Date of Delivery.
(iii) Opinions of Counsel for Company. The favorable opinions
-------------------------------
of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Executive Vice
President and General Counsel of the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery, and otherwise to the same effect as the
opinions required by Sections 5(b)(1) and 5(b)(2).
(iv) Opinion of Counsel for Selling Shareholders. The favorable
-------------------------------------------
opinions of counsel to the Selling Shareholders selling U.S. Option
Securities, dated such Date of Delivery, relating to such U.S. Option
Securities to be purchased on such Date of Delivery, and otherwise to
the same effect as the opinions required by Section 5(b)(3).
(v) Opinion of Counsel for U.S. Underwriters. The favorable
----------------------------------------
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Sections 5(c)
hereof.
22
(vi) Bring-down Comfort Letters. A letter from Ernst & Young
--------------------------
LLP, in form and substance satisfactory to the U.S. Representatives
and dated such Date of Delivery, substantially the same in form and
substance as the letter furnished to the U.S. Representatives
pursuant to Section 5(f) 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.
(o) 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 U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
Securities, may be terminated by the U.S. Representatives by notice to the
Company and the Selling Shareholders at any time at or prior to Closing Time,
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.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. 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
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission; 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
23
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue statement
or omission, 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
U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇, or by any International Manager through
▇▇▇▇▇▇▇ ▇▇▇▇▇ International, expressly for use in the Registration Statement (or
any amendment thereto), including the 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each U.S.
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
Prospectuses (or any amendment or supplements thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ or by such Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇
International expressly for use in the Registration Statement (or any amendments
thereto) or such preliminary prospectus or the Prospectuses (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 to which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.
24
No indemnifying party shall, without the prior written consent of the
indemnified paries, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent of 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)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such requirements
prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a
request, in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible employees of the Company to pay
for and accept delivery of Reserved Securities which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
The provisions of this Section shall not affect any indemnification agreement
between the Company and any Selling Shareholder, as between them.
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 losses, 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
U.S. Underwriters on the other hand from the offering of the U.S. 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 U.S. 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.
25
The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
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 U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the Prospectuses, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S. Underwriters
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the U.S. 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 U.S. 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 U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) 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 a U.S.
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 U.S.
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 U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are
26
several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any contribution agreement
between the Company and any Selling Shareholder, as between them.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement, or
in certificates of officers of the Company or certificates of the Selling
Shareholders submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholders, and shall survive delivery of the U.S. Securities to the
U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or 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 U.S. Representatives, impracticable to market the U.S.
Securities or to enforce contracts for the sale of the U.S. Securities, or (iii)
if trading in any securities of Company has been suspended or limited by the
Commission or the NYSE, or if trading generally on the American Stock Exchange
or the NYSE or in the Nasdaq National Market has been suspended or 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 NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by either Federal, New York or
Pennsylvania 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 U.S. Underwriters. If one or more
-----------------------------------------------
of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Initial U.S. Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S. Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting U.S. Underwriters, or
27
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 U.S. 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 U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. 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 U.S. Underwriters to purchase and of the Company to sell
the U.S. Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-
defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
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 U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives, the Company or
the Selling Shareholders shall have the right to postpone Closing Time or a Date
of Delivery for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any other
documents or arrangements.
SECTION 11. Default by One or More of the Selling Shareholders. If one or
--------------------------------------------------
more of the Selling Shareholders shall fail at Closing Time to sell and deliver
the number of Initial U.S. Securities or U.S. Option Securities which such
Selling Shareholder or Selling Shareholders are obligated to sell hereunder (the
"Selling Shareholder Defaulting Securities"), the non-defaulting Selling
Shareholders shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Selling Shareholders to sell
all, but not less than all, of the Selling Shareholder Defaulting Securities in
such amounts as may be agreed upon and upon the terms herein set forth; if the
non-defaulting Selling Shareholders have not completed such arrangements within
such 24-hour period, then the U.S. Underwriters may, at their option, by notice
from the U.S. Representatives to the Custodian and the non-defaulting Selling
Shareholders, either (a) terminate this Agreement without any liability on the
part of any non-defaulting party if the sum of the Selling Shareholder
Defaulting Securities under this Agreement and the Selling Shareholder
Defaulting Securities as defined in the International Purchase Agreement exceeds
10% of the number of Securities to be purchased on such date or (b) elect to
purchase the Initial U.S. Securities which the non-
28
defaulting Selling Shareholders have agreed to sell hereunder. If more than one
of the non-defaulting Selling Shareholders want to sell, in the aggregate, a
number of additional shares of Class B Common Stock in excess of the number of
Selling Shareholder Defaulting Securities, each of such non-defaulting Selling
Shareholders shall sell such additional shares of Class B Common Stock pro rata
on the basis of the number of shares of Class B Common Stock being sold by them
as listed on Schedule D.
No action taken pursuant to this Section shall relieve any Selling
Shareholder or Selling Shareholders so defaulting from liability, if any, in
respect of such default.
In the event of a default by any Selling Shareholder as referred to in this
Section, the U.S. Representatives and the non-defaulting Selling Shareholders
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectuses or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives in care of ▇▇▇▇▇▇▇
▇▇▇▇▇ at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
attention of ▇▇▇ ▇▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇; notices to the Company shall be
directed to it at Federated Investors Tower, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, telecopy number (412)
288-7578, with a copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number
(▇▇▇) ▇▇▇-▇▇▇▇; notices to the Selling Shareholders shall be directed to ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Federated Investors Tower, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 13. Parties. This Agreement shall each inure to the benefit of and
-------
be binding upon the U.S. Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or implied in this Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the U.S. Underwriters, the Company and the Selling Shareholders and their
respective successors and the controlling persons and officers, and trustees
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
U.S. Underwriters, the Company and the Selling Shareholders and their respective
successors, and said controlling persons and officers and trustees and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of U.S. Securities from any U.S. Underwriter shall be
deemed to be a successor by reason merely of such purchase.
29
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
----------------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and
------------------
the Table of Contents are for convenience only and shall not affect the
construction hereof.
30
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 U.S. Underwriters, the Company and the Selling Shareholders in accordance
with its terms.
Very truly yours,
FEDERATED INVESTORS
By:______________________________________
Title:
[Selling Shareholders]
By:______________________________________
Title:
Other Selling Shareholders
By:______________________________________
Attorney-in-Fact, acting on behalf of
each of the above Selling Shareholders
CONFIRMED AND ACCEPTED,
as of the date first above
written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:__________________________________
Authorized Signatory
For itself and the Other U.S. Representatives
and on behalf of the other
U.S. Underwriters named in Schedule A hereto
SCHEDULE A
Number of Initial
Name of U.S. Underwriter U.S. Securities
------------------------ -----------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
PaineWebber Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Total .................................................... __________
13,032,190
==========
SCHEDULE B
13,032,190 Shares
Federated Investors
Class B (Non-Voting) Common Stock
(No Par Value Per Share)
1. The initial public offering price per share for the U.S. Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $ , being an amount equal to the initial
public offering price set forth above less $ per share; provided that the
purchase price per share for any U.S. 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 U.S. Securities but not payable on the U.S.
Option Securities.
SCHEDULE C
The following Stockholders shall execute agreements in the form of Exhibit D
hereto:
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE D
Number of Initial U.S. Number of U.S. Option
Name of Selling Shareholder Securities to be Sold Securities to be Granted
------------------------------------------- ---------------------- ------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 469,496 70,424
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 354,960 53,244
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 668,160 100,224
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 31,320 4,698
Westinghouse Pension Plan 2,505,600 375,840
▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 522,000 78,300
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,043,480 156,522
▇▇▇▇ ▇▇▇▇▇ Associates 522,520 78,378
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. affiliates 1,044,000 156,600
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 638,608 95,791
The ▇▇▇▇▇ Financial Companies 1,566,000 234,900
Federated Investors, Inc. Employees
Profit Sharing Plan Trust 187,920 28,188
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 626,400 93,960
▇▇▇▇▇▇▇▇ Investment Company 98,136 14,720
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 52,200 7,830
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 25,200 3,780
▇▇▇▇▇ ▇. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 178,800 26,820
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 22,260 3,339
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 20,872 3,131
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 21,568 3,235
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 10,400 1,560
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 13,564 2,035
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 12,520 1,878
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ 50,160 7,524
PKM/CDM Partners 49,600 7,440
2
Tiger Partners, L.P. 174,000 26,100
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 20,880 3,132
▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ 13,564 2,035
---------- ----------
10,944,188 [1,641,628]
========== ==========
16,290,235 Shares
FEDERATED INVESTORS, INC.
(a Pennsylvania Corporation)
Class B Common Stock
(Non-Voting)
(No Par Value Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
May __, 1998
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
PAINEWEBBER INTERNATIONAL (U.K.) LTD.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
as Lead Managers of the several Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Dear Ladies and Gentlemen:
Federated Investors, Inc., a Pennsylvania corporation (the "Company"), and the
shareholders of the Company named in Schedule D hereto (the "Selling
Shareholders") confirm their agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
("▇▇▇▇▇▇▇ ▇▇▇▇▇ International") and PaineWebber International (U.K.) Ltd. and
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. (the "Other Lead Managers") and each of the other underwriters
named in Schedule A hereto (collectively, the "International Managers," which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ International and the Other Lead
Managers are acting as representatives (in such capacity, ▇▇▇▇▇▇▇ ▇▇▇▇▇
International and the Other Lead Managers shall hereinafter be referred to as
the "Lead Managers") with respect to the sale by the Company and the Selling
Shareholders, acting severally and not jointly, of an aggregate of 16,290,235
shares of Class B Common Stock
2
(non-voting), no par value per share (the "Class B Common Stock"), of the
Company, and the purchase by the International Managers, acting severally and
not jointly, of the respective numbers of shares of Class B Common Stock set
forth in said Schedule A hereto, and with respect to the grant by the Company
and the Selling Shareholders indicated on Schedule D hereto to the International
Managers, acting severally and not jointly, of the options described in Section
2(b) hereof to purchase all or any part of 78,000 additional shares of Class B
Common Stock in the aggregate and 410,707 additional shares of Class B Common
Stock in the aggregate to cover over-allotments, if any. The 3,258,045 shares of
Class B Common Stock (the "Initial International Securities") to be purchased by
the International Managers and all or any part of the 488,707 shares of Class B
Common Stock subject to the option described in Section 2(b) hereof (the
"International Option Securities") are hereinafter called, collectively, the
"International Securities". The Class B Common Stock and the Class A Common
Stock, no par value per share, of the Company are hereinafter referred to as the
"Common Stock".
The Company and the Selling Shareholders understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
It is understood and agreed by all parties that the Company and the Selling
Shareholders are concurrently entering into an agreement dated the date hereof
(the "U.S. Purchase Agreement") providing for the sale by the Company and the
Company and the Shareholders of up to 13,032,190 shares of Class B Common Stock
(the "Initial U.S. Securities") through arrangements with certain managing
underwriters in the United States and Canada (the U.S. Underwriters") for whom
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"),
PaineWebber Incorporated and ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. are acting as representatives
(the "U.S. Representatives") and the grant by the Company and the Selling
Shareholders indicated on Schedule D thereto to the U.S. Underwriters of options
to purchase all or any part of 312,000 additional shares of Class B Common Stock
in the aggregate and 1,642,828 additional shares of Class B Common Stock in the
aggregate (the "U.S. Option Securities") to cover over-allotments, if any, of
the Initial U.S. Securities. The Initial U.S. Securities and the U.S. Option
Securities are hereinafter called the "U.S. Securities". The International
Securities and the U.S. Securities, collectively, are hereinafter called the
"Securities". It is understood that the Company is not obligated to sell and
the International Managers are not obligated to purchase any Initial
International Securities unless all of the Initial U.S. Securities are
contemporaneously purchased by the U.S. Underwriters.
The Company and the Selling Shareholders understand that the International
Managers and the U.S. Underwriters (collectively, the "Underwriters") will
concurrently enter into an Intersyndicate Agreement of even date herewith (the
"Intersyndicate Agreement") providing for the coordination of certain
transactions among the Underwriters under the direction of ▇▇▇▇▇▇▇ ▇▇▇▇▇.
The Company and the International Managers understand that up to 750,000
shares of the Initial U.S. Securities to be purchased by the U.S. Underwriters
(the "Reserved Securities") shall be reserved for sale by the U.S. Underwriters
to certain eligible employees
3
of the Company, as part of the distribution of the Securities by the U.S.
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. and all other applicable laws, rules and regulations. To the
extent that such Reserved Securities are not orally confirmed for purchase by
such eligible employees by the end of the first business day after the date of
this Agreement, such Reserved Securities may be offered to the public as part of
the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-48405) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement and the U.S. Purchase
Agreement (collectively, the "Purchase Agreements"), the Company will, in
connection with the offering of each of the International Securities and the
U.S. Securities, either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). The information included in any prospectus or in any Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
1933 Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement," and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus, in the
form first furnished to the International Managers for use in connection with
the offering of the International Securities is herein called the "International
Prospectus" and the final prospectus, in the form first furnished to the
International Managers for use in connection with the International Securities,
is herein called the "International Prospectus", and the International
Prospectus and the U.S. Prospectus are hereinafter called, collectively, the
"Prospectuses," and each individually, a "Prospectus." If Rule 434 is relied
on, each of the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary prospectus dated April 24, 1998 together with the
applicable Term Sheet and all references in this Agreement and the U.S. Purchase
Agreement to the date of the International Prospectus and U.S. Prospectus,
respectively, shall mean the date of such Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the International Prospectus, the U.S. Prospectus or any Term Sheet
or any amendment or
4
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇"). The International Prospectus is identical to the
U.S. Prospectus, except for the front cover page, a "United States Tax
Considerations for Non-United States Holders" section in the International
Prospectus, the "Underwriting" section and the back cover page.
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 Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses as the case may be.
The Company also has filed with the Commission a registration statement on
Form S-4 (No. 333-48361) covering the registration under the 1933 Act of 6,000
shares of Class A Common Stock, no par value, and 83,427,000 shares of Class B
Common Stock, no par value, to be issued by the Company in connection with a
merger (the "Merger") of Federated Investors, a Delaware business trust and
parent of the Company ("Federated Investors"), into the Company, pursuant to
which the Company is the surviving corporation, under the terms of that certain
Agreement and Plan of Merger dated as of February 20, 1998 between Federated
Investors and the Company (the "Merger Agreement"). On April 30, 1998 the S-4
Registration Statement was declared effective by the Commission and definitive
proxy statement/prospectuses were distributed to shareholders of Federated
Investors to vote at a special meeting of the shareholders on May 15, 1998 to
approve and adopt the Merger Agreement.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents and
warrants to each International Manager as of the date hereof and as of the
Closing Time referred to in Section 2(a) hereof, and agrees with each
International Manager, as follows:
(i) Compliance with Registration Requirements. The Company
-----------------------------------------
meets the requirements for use of Form S-1 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, the Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, up to the Date of Delivery referred to below), (A) the
Registration Statement, the Rule 462(b)
5
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (B) neither the Prospectuses nor any amendments or supplements
thereto contained or will contain an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading and (C) if Rule 434 is used, the Company will
comply with the requirements of Rule 434; provided, however, that the
-----------------
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectuses
made in reliance upon and in conformity with information furnished to the
Company in writing by any International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇
International or by any U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇, expressly
for use in the Registration Statement or Prospectuses.
Each preliminary prospectus and the Prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the Registration
Statement are independent public accountants, in the case of Ernst & Young
LLP, as required by the 1933 Act and the 1933 Act Regulations and, in the
case of KPMG Peat Marwick LLP, as required by rule 101 of the AICPA's Code
of Professional Conduct.
(iii) Financial Statements. The consolidated financial
--------------------
statements included in the Registration Statement and the Prospectuses,
together with the related schedules and notes, present fairly the
consolidated financial position of Federated Investors and its subsidiaries
(including the Company) at the dates indicated and the statement of
operations, shareholders' equity and cash flows of Federated Investors and
its subsidiaries for the periods specified, on the basis stated in the
Registration Statement at the respective dates or for the respective
periods for which they apply. Such financial statements have been prepared
in conformity with generally accepted accounting principles ("GAAP")
applied, except as disclosed therein, on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectuses are
accurately presented in all material respects and have been compiled on a
basis consistent with such consolidated financial statements included in
the Registration Statement and the books and records of Federated Investors
and its subsidiaries.
(iv) No Material Adverse Change in Business. Since the
--------------------------------------
respective dates as of which information is given in the Registration
Statement and the Prospectuses,
6
except for the contemplated Merger and related transactions and as
otherwise stated therein, (A) there has been no material adverse change in
the condition, financial or other, the business or in the earnings of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or any development involving,
or which may reasonably be expected to involve, prospectively such a
material adverse change (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company and its subsidiaries considered as one
enterprise, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock,
except to the extent described in the Prospectuses.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the Commonwealth of Pennsylvania with the requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign business trust to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each "significant
-----------------------------
subsidiary" of the Company (as such term in defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the "Subsidiaries")
has been duly organized, and is validly existing as a corporation, business
trust or partnership, as the case may be, in good standing under the laws
of the jurisdiction of its organization, has the requisite power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation, business trust or partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or to be in good standing would not result in Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock of each Subsidiary of the Company
has been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company (except, in the case of foreign
subsidiaries, for qualifying shares owned by foreign nationals), directly
or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, except that all of the stock of
substantially all of the Subsidiaries is pledged as security pursuant to a
Senior Secured Credit Agreement, dated as of January 31, 1996, among
Federated Investors, the lenders named therein and PNC, National
Association, as Agent and a Note Purchase Agreement, dated as of June 15,
1996 between Federated Investors and the Noteholders named therein; none of
the outstanding shares of capital stock of the Subsidiaries was issued in
violation of any preemptive or similar rights arising by
7
operation of law, or under the organizational documents or by-laws of the
Company or any Subsidiary or under any agreement to which the Company or
any Subsidiary is a party. The only subsidiaries of the Company are the
subsidiaries listed on Exhibit 21.01 to the Registration Statement and
certain other subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X.
(vii) Capitalization. Subject to the consummation of the
--------------
Merger, the authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectuses in the column entitled "Actual" under
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement or pursuant to employee benefit or stock option plans referred to
in the Prospectuses).
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. Subject to
-------------------------------------------
the consummation of the Merger in accordance with its terms, the
outstanding Class B Common Stock will have been duly authorized and validly
issued and will be fully paid and non-assessable; and none of the
outstanding Class B Common Stock, when issued in connection with the
Merger, will be issued in violation of the preemptive or other similar
rights arising by operation of law, under the Restated Articles of
Incorporation or Restated By-Laws of the Company, under any agreement to
which the Company or any of its subsidiaries is a party, or otherwise. The
Class B Common Stock to be issued and sold by the Company have been duly
authorized for issuance and sale to the International Managers and the U.S.
Underwriters pursuant to this Agreement and the U.S. Purchase Agreement
and, when issued and delivered by the Company pursuant to this Agreement
and the U.S. Purchase Agreement against payment of the consideration set
forth herein and therein, will be validly issued and fully paid and non-
assessable; the Class B Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to the
rights set forth in the instruments defining the same; no holder of the
Class B Common Stock will be subject to personal liability by reason of
being such a holder; and the issuance of the Class B Common Stock to be
issued and sold by the Company is not subject to preemptive or other
similar rights arising by operation of law, under the Restated Articles of
Incorporation or Restated By-Laws of the Company, under any agreement to
which the Company or any of its subsidiaries is a party, or otherwise.
There are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act other than
Westinghouse Pension Plan.
(x) Absence of Defaults and Conflicts. Subject to the
---------------------------------
consummation of the Merger in accordance with its terms and the
satisfaction of all conditions set forth in the Merger Agreement, neither
the Company nor any of the Subsidiaries is in violation of its
organizational documents, or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any bond,
8
debenture, note or any contract, indenture, mortgage, deed of trust, loan
or credit agreement, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or the
Subsidiaries is subject (collectively, the "Agreements and Instruments")
except for such defaults that would not have a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the U.S.
Purchase Agreement and the consummation of the transactions contemplated
herein, therein and in the Registration Statement (including the use of the
proceeds by the Company from the sale of Class B Common Stock as described
in the Prospectuses under the caption "Use of Proceeds") and compliance by
the Company with its obligations hereunder and thereunder have been duly
authorized by all necessary action and will not, whether with or without
the giving of notice or the passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Subsidiary
pursuant to, any of the Agreements and Instruments, except for such
conflicts, breaches, defaults, liens, charges or encumbrances that would
not have a Material Adverse Effect, nor will any such action result in any
violation of the provisions of the Restated Articles of Incorporation or
Restated By-Laws of the Company or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any Subsidiary or any of their assets or properties. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Subsidiary.
(xi) Absence of Labor Dispute. No labor problems exist with the
------------------------
employees of the Company or any Subsidiaries or, to the knowledge of the
Company, are imminent which could reasonably be expected to result in a
Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
----------------------
proceeding, inquiry or investigation before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any of its
subsidiaries which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might result in a
Material Adverse Effect or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation
of this Agreement or the U.S. Purchase Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary of the
Company is a party or of which any of their respective properties or assets
is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
9
(xiii) Accuracy of Exhibits. There are no contracts or
--------------------
documents which are required to be described in the Registration Statement,
the Prospectuses or the documents to be filed as exhibits thereto which
have not been so described and filed as required by the 1933 Act.
(xiv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess adequate rights to use all patents, trademarks,
service marks, trade names, copyrights, licenses and rights (collectively,
"Intellectual Property") necessary to carry on the business now operated by
them, and neither the Company nor any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any Intellectual Property, or of
any facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Company or any of the
Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, order registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations hereunder in
connection with the offering, issuance or sale of the International
Securities hereunder or the U.S. Securities under the U.S. Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement or the U.S. Purchase Agreement, except such as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws or
in connection with registration of the Securities under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), filing to list the
Securities on the New York Stock Exchange on or prior to the Closing Time
or the filing of a Certificate of Merger of the Company and of Federated
Investors in accordance with applicable law in the State of Delaware or the
Commonwealth of Pennsylvania on or prior to the Closing Time (all of which
have been or will be effective in accordance with this Agreement).
(xvi) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business of the Company as described in the
Prospectuses; the Company and the Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company nor any
of the Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
10
(xvii) Title to Property. The Company and the Subsidiaries have
-----------------
good and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind, except such as (a) are
described in the Prospectuses or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
the Subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any Subsidiary holds properties described in
the Prospectuses, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(b) Each of the Selling Shareholders, severally, and not jointly,
represents and warrants to each International Manager as of the date hereof and
as of the Closing Time referred to in Section 2(a) hereof, and agrees with each
International Manager as follows:
(i) Absence of Defaults and Conflicts. The execution and
---------------------------------
delivery of this Agreement and the U.S. Purchase Agreement and the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement will not conflict with or result in a breach or
violation by such Selling Shareholder of, or constitute a default by such
Selling Shareholder under, any indenture, mortgage, loan agreement, deed or
trust, contract or other similar agreement or instrument, any charter,
bylaws or other governing documents, or any decree, judgment, order,
statute, rule or regulation of any court or governmental agency or body, in
all such cases, to which such Selling Shareholder is a party or by which
such Selling Shareholder is bound or to which any of the assets or property
of such Selling Shareholder is subject, except in all such cases, for such
conflicts, breaches, defaults and violations as would not, individually or
in the aggregate, adversely effect the sale of Securities by such Selling
Shareholder hereunder.
(ii) Marketable Title. Such Selling Shareholder has or will
----------------
have at the Closing Time referred to in Section 2(c) hereof good and valid
title to the Securities to be sold by such Selling Shareholder hereunder
and under the U.S. Purchase Agreement, free and clear of any pledge, lien,
security interest, encumbrance, claim or equity interest, other than
pursuant to this Agreement or the U.S. Purchase Agreement; such Selling
Shareholder has full right, power and authority to sell, transfer and
deliver the Securities to be sold by such Selling Shareholder hereunder and
under the U.S. Purchase Agreement; and upon delivery of the Securities to
be sold by such Selling Shareholder hereunder and under the U.S. Purchase
Agreement and payment of the purchase price therefor as herein
contemplated, each of the International Managers and the U.S. Underwriters
will receive good and valid title to its ratable share of the Securities
purchased by it from such Selling Shareholder, free and clear of any
pledge,
11
lien, security interest, encumbrance or other adverse claim, assuming that
the International Managers and U.S. Underwriters purchase such Securities
in good faith and without notice of any such pledge, security interest,
lien, encumbrance or other adverse claim within the meaning of the Uniform
Commercial Code.
(iii) Absence of Further Requirements. All authorizations,
-------------------------------
approvals and consents necessary for the execution and delivery by such
Selling Shareholder of this Agreement, the U.S. Purchase Agreement and, if
such Selling Shareholder is a party to it, the Power of Attorney dated on
or before the date hereof between such Selling Shareholder, the Company and
the Attorneys-in-Fact named therein (the "Power of Attorney") and the
Custody Agreement dated on or before the date hereof between such Selling
Shareholder, the Company and the Custodian named therein (the "Custody
Agreement") and the sale and delivery of the Securities to be sold by such
Selling Shareholder hereunder and under the U.S. Purchase Agreement (other
than the issuance of the order of the Commission declaring the Registration
Statement effective and such authorizations, approvals or consents as may
be necessary under state or foreign securities laws) have been obtained and
are in full force and effect; and such Selling Shareholder has the full
right, power and authority to enter into this Agreement and the U.S.
Purchase Agreement, and to sell, transfer and deliver the Securities to be
sold by such Selling Shareholder hereunder and under the U.S. Purchase
Agreement.
(iv) Authorization of Agreements. This Agreement, the U.S.
---------------------------
Purchase Agreement and, if such Selling Shareholder is a party to it, the
Power of Attorney and the Custody Agreement have been duly executed and
delivered by such Selling Shareholder.
(v) Restriction on Sale of Securities. During the period of 180
---------------------------------
days from the date of the Prospectuses, such Selling Shareholder will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, directly
or indirectly, (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the issuance of the Securities being sold hereunder and under the
U.S. Purchase Agreement by the Selling Shareholder, (B) any transfer of
such Securities to an affiliate of the Selling Shareholder which agrees in
a writing in form and substance reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇
International to agree to be bound by the provisions hereof as if it was
the Selling Shareholder, (C) any pledge prior to the date of the
Prospectuses by a shareholder of the Company of Common Stock or any
securities convertible into or exercisable or exchangeable for Common
Stock, and (D) any pledge after the date of the Prospectuses by a
shareholder of the Company of
12
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for the purpose of securing a bona fide loan
by a financial institution to such shareholder.
(vi) Absence of Misstatements and Omissions. To the extent that
--------------------------------------
any statements or omissions made in the Registration Statement, any
preliminary prospectus, the Prospectuses or any amendment or supplement
thereto are made in reliance upon and in conformity with information
furnished in writing to the Company by such Selling Shareholder expressly
for use therein, the Registration Statement and such preliminary prospectus
do not, and the Prospectuses and any amendments or supplements thereto will
not, as of the applicable effective date or as of the applicable filing
date, as the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(vii) Absence of Stabilization. Such Selling Shareholder has
------------------------
not taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(viii) Share Certificates. If such Selling Shareholder is a
------------------
party to the Custody Agreement, certificates in negotiable form for all
Class B Common Shares of Federated Investors to be exchanged in the Merger
for the Securities to be sold hereunder and under the U.S. Purchase
Agreement have been placed in custody with the Custodian for the purpose of
effecting delivery hereunder.
(c) Officer's Certificates. Any certificate signed by any officer of the
----------------------
Company or by any Selling Shareholder (or any trustee thereof) and delivered to
the Lead Managers, the U.S. Representatives, the International Managers or the
U.S. Underwriters, or to counsel thereof shall be deemed a representation and
warranty by the Company or by such Selling Shareholder, as the case may be, to
each Lead Manager, U.S. Representative, International Manager and U.S.
Underwriter as to the matters covered thereby.
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 and each of the Selling Shareholders, severally and not jointly, agrees
to sell to each International Manager, severally and not jointly, and each
International Manager, severally and not jointly, agrees to purchase from the
Company and each of the Selling Shareholders, at the price per share set forth
in Schedule B, the number of Initial International Securities set forth in
Schedule A opposite the name of such International Manager, plus any additional
number of Initial International Securities which such International Manager may
become obligated to purchase pursuant to the provisions of Section 10 hereof.
13
(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, each of the Selling Shareholders indicated on Schedule D hereto hereby
grant options to the International Managers, severally and not jointly, to
purchase the additional number of shares of Class B Common Stock set forth in
Schedule D hereto and the Company hereby grants an option to the International
Managers severally and not jointly, to purchase 78,000 additional shares of
Class B Common Stock, in each case at the 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 International Securities but not payable
on the International Option Securities. The options 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 International
Securities upon notice by the Lead Managers to the Company or the Selling
Shareholders, as the case may be, setting forth the number of International
Option Securities as to which the several International Managers are then
exercising the option and the time and date of payment and delivery for such
International Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Lead Manager(s), but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the options are
exercised as to all or any portion of the International Option Securities, each
of the International Managers, acting severally and not jointly, will purchase
that proportion of the total number of International Option Securities then
being purchased which the number of Initial International Securities set forth
in Schedule A opposite the name of such International Manager bears to the total
number of Initial International Securities, subject in each case to such
adjustments as the Lead Manager(s) in their discretion shall make to eliminate
any sales or purchases of fractional shares. If the option is exercised as to
less than all of the International Option Securities, the Company and the
Selling Shareholders will sell additional shares of Class B Common Stock to the
International Managers pro rata on the basis of the total number of
International Option Securities allocated to them.
(c) Payment. Payment of the purchase price for, and delivery of certificates
for, the Initial International Securities shall be made at the office of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be agreed upon
by the Lead Managers, the Company and the Selling Shareholders, at 10:00 A.M. on
the third (fourth, if the pricing occurs after 4:30 P.M. on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10 or 11), or such other time not later than ten business
days after such date as shall be agreed upon by the Lead Managers 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 International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the office of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel
for the Company, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place as shall be agreed upon by the Lead Managers, the Company and
the Selling Shareholders, on each Date of Delivery as specified in the
14
notice from the Lead Managers to the Company or such Selling Shareholders, as
the case may be. All payments shall be made to the Company or the Selling
Shareholders, as the case may be, in New York Clearing House funds or in similar
next-day funds payable to the order of the Company or the custodians named in
the Custody Agreement on behalf of such Selling Shareholders, as the case may
be, against delivery to the Lead Managers for the respective accounts of the
International Managers of certificates for the International Securities to be
purchased by them. It is understood that each International Manager has
authorized the Lead Managers, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial International
Securities and the International Option Securities, if any, which it has agreed
to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, individually and not as a Lead Manager
of the International Managers, may (but shall not be obligated to) make payment
of the purchase price for the Initial International Securities or the
International Option Securities, if any, to be purchased by any International
Manager whose payment has not been received by the Closing Time or the relevant
Date of Delivery, as the case may be, but such payment shall not relieve such
International Manager from its obligations hereunder. In the event that ▇▇▇▇▇▇▇
▇▇▇▇▇ International, individually and not as a Lead Manager of the International
Managers, shall, as an accommodation to the Company or any of the Selling
Shareholders, arrange for payment of all or a portion of the Initial
International Securities or International Option Securities to be made to the
Company in immediately available funds, the Company agrees to reimburse ▇▇▇▇▇▇▇
▇▇▇▇▇ International for its cost of funds, as determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇
International in its sole discretion, in respect of such payment, such
reimbursement to be effected by wire transfer of immediately available funds by
the Company or the Selling Shareholders, as the case may be, to ▇▇▇▇▇▇▇ ▇▇▇▇▇
International prior to 10:00 A.M., New York City time, on the closing date, or
the relevant Date of Delivery, as the case may be.
(d) Denominations; Registration. Certificates for the Initial International
Securities and the International Option Securities, if any, shall be in such
denominations and registered in such names as the Lead Managers may request in
writing at least one full business day before the Closing Time or the relevant
Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in the City
of New York not later than 10:00 A.M. on the business day prior to the Closing
Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
International Manager as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Lead Managers immediately,
and confirm the notice in writing, (i) when any post-effective amendment to
the Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended 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 Prospectuses or for additional information, and (iv)
15
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Lead
Managers notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectuses whether pursuant to the 1933 Act, the 1934 Act or
otherwise, will furnish the Lead Managers 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 Lead
Managers or counsel for the International Managers shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Lead Managers and counsel to the
International Managers, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and signed
copies of all consents and certificates of experts, and will also deliver
to the Lead Managers a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the International Managers.
(d) Delivery of Prospectuses. The Company has delivered to
each International Manager, without charge, as many copies of each
preliminary prospectus as such International Manager reasonably requested,
and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each International
Manager, without charge, during the period when the International
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the International Prospectus (as amended or
supplemented) as such International Manager may reasonably request.
(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 International Securities as contemplated in this
Agreement and in the International Prospectus. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the International Securities, any event shall occur
16
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the International Managers or the Company, to amend
the Registration Statement or amend or supplement the International
Prospectus in order that the International Prospectus will not include any
untrue statement 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 International Prospectus comply with such
requirements, and the Company will furnish to the International Managers
such number of copies of such amendment or supplement as the International
Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the International Managers, to qualify the
International Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Lead Managers
may designate and to maintain such qualifications 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; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign business trust or as 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
International Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) 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
security holders 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 Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to
effect the listing of the Class B Common Stock (including the Securities)
on the New York Stock Exchange.
17
(j) Restriction on Sale of Securities. During the period
of 180 days from the date of the Prospectuses, the Company will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, directly
or indirectly, (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the issuance of the Securities being sold hereunder and under the
U.S. Purchase Agreement by the Company, (B) any issuance of Common Stock by
the Company upon the exercise of an option or warrant or the conversion or
exchange of a security outstanding on the date hereof and referred to in
the Prospectuses, (C) any issuance of Common Stock, or any grant of options
to purchase Common Stock, pursuant to existing employee benefit plans of
the Company referred to in the Prospectuses, (D) any issuance of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock by the Company in consideration of the acquisition by the
Company from a third party of a business (whether through a merger, sale of
assets or securities, or otherwise), provided that each transferee of such
Common Stock or securities agrees in a writing in form and substance
reasonably satisfactory to ▇▇▇▇▇▇▇ ▇▇▇▇▇ International to agree to be bound
by the provisions hereof as if it was the Company, or the filing by the
Company of a registration statement under the 1933 Act with respect to such
issuance and acquisition.
(k) Reporting Requirements. The Company, during the period
when the International 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.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
International Managers of this Agreement, any agreement among the International
Managers and, such other documents as may be required in connection with the
offering, purchase, sale and delivery of the International Securities; (iii) the
preparation, issuance and delivery of the certificates for the International
Securities to the International Managers, including any stock or other transfer
taxes or duties payable upon the sale of the International Securities to the
International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the
International Securities under securities laws in accordance with the provisions
of Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the
18
International Managers in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the International Managers of copies of each preliminary
prospectus, any Term Sheets and of the Prospectuses and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
International Managers of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the International Managers in connection with, the
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the listing of the Class B Common Stock on the New York Stock
Exchange and (xi) all costs and expenses of the Underwriters, including the
reasonable fees and disbursements of counsel for the Underwriters, in connection
with matters related to the Reserved Securities which are designated by the
Company for sale to employees and others having a business relationship with the
Company.
(b) Termination of Agreement. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the International Managers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the International Managers.
The provisions of this Section shall not affect any agreement which the
Company and the Selling Shareholders may make for the allocation or sharing of
such expenses and costs.
SECTION 5. Conditions of International Managers' Obligations. The
-------------------------------------------------
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Shareholders contained in Section 1 hereof or in certificates of any officer of
the Company, any Subsidiary or any Selling Shareholder delivered pursuant to the
provisions hereof, to the performance by the Company and the Selling
Shareholders of their 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,
shall have become effective not later than 5:30 P.M. on the date hereof,
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
International Managers. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule
430A). 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).
19
(b) Opinions of Counsel for Company. At Closing Time the
Lead Managers shall have received:
(1) The favorable opinion, dated as of Closing Time, of
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, in form and
substance satisfactory to counsel for the International Managers,
together with signed or reproduced copies of such letter for each of
the other International Managers, to the effect set forth in Exhibit A
hereto.
(2) The favorable opinion, dated as of the Closing Time, of ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Executive Vice President and General Counsel of the
Company, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of
such letter for each of the other International Managers, to the
effect set forth in Exhibit B hereto.
(3) The favorable opinions, dated as of the Closing Time, of
counsel for the Selling Shareholders, in form and substance
satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letter for each of the other
International Managers, to the effect set forth in Exhibit C hereto.
(c) Opinion of Counsel for Underwriters. At Closing Time the Lead
Managers shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the International
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers, with respect to certain matters. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York and
the federal law of the United States, upon the opinions of counsel
satisfactory to you. Such counsel may also state that, insofar as such
opinion involved factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(d) Officer's Certificate. At Closing Time there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any Material Adverse Effect and
the Lead Managers shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such Material Adverse Effect, (ii) the
representations and warranties in Section 1 hereof are true and correct in
all material respects with the same force and effect as though expressly
made at and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
20
(e) Accountants' Comfort Letters. At the time of the execution of
this Agreement, the Lead Managers shall have received from each of Ernst &
Young LLP and KPMG Peat Marwick LLP a letter dated such date, in form and
substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letters for each of the other International
Managers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements and certain financial information contained in the
Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letters. At Closing Time the Lead Managers
shall have received from Ernst & Young LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in their
respective letter furnished pursuant to subsection (e) of this Section,
except that the specified date referred to shall be a date not more than
three days prior to Closing Time.
(g) Approval of Listing. At the Closing Time, the Class B Common
Stock (including the Securities) shall have been approved for listing on
the New York Stock Exchange, subject only to official notice of issuance.
(h) The NASD. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-Up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit D hereof signed by the persons listed on Schedule C hereto.
(j) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers shall have been furnished
with such documents and opinions as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the
International Securities as herein contemplated, or in order to evidence
the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the International Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Lead Managers
and counsel for the International Managers.
(k) Selling Shareholder Certificate. At Closing Time the Lead
Managers shall have received a certificate of each Selling Shareholder, or
a certificate of the President or a Vice President or an Assistant Vice
President or a general partner or a managing member or a trustee, as the
case may be, of such Selling Shareholder dated as of Closing Time, to the
effect that (i) the representations and warranties of such Selling
Shareholder contained in Section 1(b) are true and correct in all material
respects with the same force and effect as though expressly made at and as
of Closing Time and (ii) each Selling Shareholder has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time.
21
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(m) Consummation of Merger. The Merger shall have been consummated
concurrently herewith.
(n) Conditions to Purchase of Option Securities. In the event that
the International Managers exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company and the
Selling Shareholders contained herein and the statements in any
certificates furnished by the Company and the Selling Shareholders
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Lead Managers shall have received:
(i) Officer's 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(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Selling Shareholder's Certificate. A certificate,
---------------------------------
dated such Date of Delivery, of the Selling Shareholders selling
International Option Securities confirming that the certificate
delivered at the Closing Time pursuant to Section 5(k) hereof remains
true and correct as of such Date of Delivery.
(iii) Opinions of Counsel for Company. The favorable
-------------------------------
opinions of ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Executive Vice President and General Counsel of the Company, in form
and substance satisfactory to counsel for the International Managers,
dated such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery, and otherwise to
the same effect as the opinions required by Sections 5(b)(1) and
5(b)(2).
(iv) Opinion of Counsel for Selling Shareholders. The
-------------------------------------------
favorable opinions of counsel to the Selling Shareholders selling
International Option Securities, dated such Date of Delivery, relating
to such International Option Securities to be purchased on such Date
of Delivery, and otherwise to the same effect as the opinions required
by Section 5(b)(3).
(v) Opinion of Counsel for International Managers. The
---------------------------------------------
favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
International Managers, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Sections 5(c) hereof.
22
(vi) Bring-down Comfort Letter. A letter from Ernst & Young LLP, in
-------------------------
form and substance satisfactory to the Lead Managers and dated such
Date of Delivery, substantially the same in form and substance as the
letter furnished to the Lead Managers pursuant to Section 5(f) 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.
(o) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of
International Option Securities on a Date of Delivery which is after the
Closing Time, the obligations of the several International Managers to
purchase the relevant Option Securities, may be terminated by the Lead
Managers by notice to the Company and the Selling Shareholders at any time
at or prior to Closing Time, 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.
SECTION 6. Indemnification.
---------------
(a) Indemnification of International Managers. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇
International) reasonably
23
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, 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
International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, or by any U.S.
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇, expressly for use in the Registration
Statement (or any amendment thereto), including the 430A Information and the
Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
International Manager 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 Prospectuses (or any amendment or supplements thereto) in
reliance upon and in conformity with written information furnished to the
Company by such International Manager through ▇▇▇▇▇▇▇ ▇▇▇▇▇ International or by
such U.S. Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendments thereto) or such preliminary
prospectus or the Prospectuses (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 to 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 ▇▇▇▇▇▇▇
▇▇▇▇▇ International, and, in the case of parties indemnified pursuant to Section
6(b) above, counsel to the indemnified parties shall be selected by the Company.
An indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
24
No indemnifying party shall, without the prior written consent of the
indemnified paries, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent of 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)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such requirements
prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with the
offer and sale of the Reserved Securities, the Company agrees, promptly upon a
request, in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of eligible employees of the Company to pay
for and accept delivery of Reserved Securities which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
The provisions of this Section shall not affect any indemnification
agreement between the Company and any Selling Shareholder, as between them.
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 losses, 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 International Managers on the other hand from the offering of the
International 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
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
25
The relative benefits received by the Company on the one hand and the
International Managers on the other hand in connection with the offering of the
International 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
International Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
International Managers, in each case as set forth on the cover of the
Prospectuses, or, if Rule 434 is used, the corresponding location on the Term
Sheet bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company and the International Managers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such International Manager has otherwise been required to pay
by reason of 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
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, 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
26
Company. The International Managers' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
International Securities set forth opposite their respective names in Schedule A
hereto and not joint.
The provisions of this Section shall not affect any contribution
agreement between the Company and any Selling Shareholder, as between them.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement, or in certificates of officers of the Company or certificates of the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any International Manager or controlling person, or by or on behalf of the
Company or the Selling Shareholders, and shall survive delivery of the
International Securities to the International Managers.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectuses, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or 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 Lead Managers, impracticable to market the International
Securities or to enforce contracts for the sale of the International Securities,
or (iii) if trading in any securities of Company has been suspended or limited
by the Commission or the NYSE, or if trading generally on the American Stock
Exchange or the NYSE or in the over-the-counter market has been suspended or
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 order of
the Commission or any other governmental authority, or (iv) if a banking
moratorium has been declared by either Federal, New York or Pennsylvania
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 International Managers. If
----------------------------------------------------
one or more of the International Managers shall fail at Closing Time or a Date
of Delivery to purchase the Initial International Securities which it or they
are obligated to purchase under this Agreement (the "Defaulted Securities"), the
Lead Managers shall have the right, within
27
24 hours thereafter, to make arrangements for one or more of the non-defaulting
International Managers, or any other underwriters, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and
upon the terms herein set forth; if, however, the Lead Managers shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of
the non-defaulting International Managers shall be obligated, severally and
not jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the International Managers to purchase and of the Company
to sell the International Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of any
non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers,
the Company or the Selling Shareholders shall have the right to postpone Closing
Time or a Date of Delivery for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectuses or in
any other documents or arrangements.
SECTION 11. Default by One or More of the Selling Shareholders. If
--------------------------------------------------
one or more of the Selling Shareholders shall fail at Closing Time to sell and
deliver the number of Initial International Securities or International Option
Securities which such Selling Shareholder or Selling Shareholders are obligated
to sell hereunder (the "Selling Shareholder Defaulting Securities"), the non-
defaulting Selling Shareholders shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting Selling
Shareholders to sell all, but not less than all, of the Selling Shareholder
Defaulting Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if the non-defaulting Selling Shareholders have not completed
such arrangements within such 24-hour period, then the International Managers
may, at their option, by notice from the Lead Managers to the Custodian and the
non-defaulting Selling Shareholders, either (a) terminate this Agreement without
any liability on the part of any non-defaulting party if the sum of the Selling
Shareholder Defaulting Securities under this Agreement and the Selling
Shareholder Defaulting Securities as defined in the U.S. Purchase Agreement
exceeds 10% of the number
28
of Securities to be purchased on such date (b) elect to purchase the Initial
International Securities which the non-defaulting Selling Shareholders have
agreed to sell hereunder. If more than one of the non-defaulting Selling
Shareholders want to sell, in the aggregate, a number of additional shares of
Class B Common Stock in excess of the number of Selling Shareholder Defaulting
Securities, each of such non-defaulting Selling Shareholders shall sell such
additional shares of Class B Common Stock pro rata on the basis of the number of
shares of Class B Common Stock being sold by them as listed on Schedule D.
No action taken pursuant to this Section shall relieve any Selling
Shareholder or Selling Shareholders so defaulting from liability, if any, in
respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section, the Lead Managers and the non-defaulting Selling Shareholders
shall have the right to postpone the Closing Time for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectuses or in any other documents or arrangements.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers in care of ▇▇▇▇▇▇▇
▇▇▇▇▇ International Limited, Ropemaker Place, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇, attention of Managing Director, Equity Capital Markets, telecopy
number (▇▇▇) ▇▇ ▇▇ ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇; notices to the Company shall be directed to it
at Federated Investors Tower, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇, with
a copy to ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopy number (412) 355-
6501; notices to the Selling Shareholders shall be directed to ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Federated Investors Tower, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 13. Parties. This Agreement shall each inure to the benefit
-------
of and be binding upon the International Managers, the Company and the Selling
Shareholders and their respective successors. Nothing expressed or implied in
this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the International Managers, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers, and trustees referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the International Managers, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and trustees and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of International
Securities from any International Manager shall be deemed to be a successor by
reason merely of such purchase.
29
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
----------------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings
------------------
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
30
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 International Managers, the Company and the Selling Shareholders in
accordance with its terms.
Very truly yours,
FEDERATED INVESTORS, INC.
By:
----------------------------
Title:
[Selling Shareholders]
By:
----------------------------
Title:
Other Selling Shareholders
By:
----------------------------
Attorney-in-Fact, acting on behalf of each of
the above Selling Shareholders
CONFIRMED AND ACCEPTED,
as of the date first above
written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
----------------------------------
Authorized Signatory
For itself and the Other Lead Managers
and on behalf of the other
International Managers named in
Schedule A hereto
SCHEDULE A
Number of Initial
International
Name of International Manager Securities
----------------------------- -----------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
PaineWebber International (U.K.) Ltd.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
---------
Total............................................ 3,258,045
=========
SCHEDULE B
3,258,045 Shares
Federated Investors, Inc.
Class B (Non-Voting) Common Stock
(No Par Value Per Share)
1. The initial public offering price per share for the International
Securities, determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $ , being an amount equal
to the initial public offering price set forth above less $ per share;
provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial International
Securities but not payable on the International Option Securities.
SCHEDULE C
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE D
Number of Initial Number of International
International Securities Option Securities
Name of Selling Shareholder to be Sold to be Granted
--------------------------- ---------- -------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 117,374 17,606
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 88,740 13,311
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 167,040 25,056
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 7,830 1,175
Westinghouse Pension Plan 626,400 93,960
▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 130,500 19,575
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 260,870 39,131
▇▇▇▇ ▇▇▇▇▇ Associates 130,630 19,595
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. affiliates 261,000 39,150
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 159,652 23,948
The ▇▇▇▇▇ Financial Companies 391,500 58,725
Federated Investors, Inc. Employees 46,980 7,047
Profit Sharing Plan Trust
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 156,600 23,490
▇▇▇▇▇▇▇▇ Investment Company 24,534 3,680
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 13,050 1,958
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 6,300 945
▇▇▇▇▇ ▇. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 44,700 6,705
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 5,565 835
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,218 783
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 5,392 809
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,600 390
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 3,391 509
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,130 470
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ 12,540 1,881
PKM/CDM Partners 12,400 1,860
Tiger Partners, L.P. 43,500 6,525
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,220 783
▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ 3,391 509
-------- --------
2,736,047 [410,407]
========= ========