EXHIBIT 1.D
Preferred Stock
▇▇▇▇▇▇ BROTHERS HOLDING INC.
UNDERWRITING AGREEMENT
New York, New York
Dated the date set forth
In Schedule I hereto
To the Representative(s)
named in Schedule I
hereto, of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
▇▇▇▇▇▇ Brothers Holdings Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you and the other underwriters named in Schedule
II hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the number of shares identified in Schedule I hereto (the
"Firm Stock") of the Company's preferred stock, par value $1.00 per share (the
"Preferred Stock"). In addition, the Company proposes to grant to the
Underwriters an option to purchase up to an additional number of shares of the
Preferred Stock identified in Schedule I hereto on the terms and for the
purposes set forth in Section 2 (the "Option Stock"). The Firm Stock and the
Option Stock, if purchased, are hereinafter collectively called the "Stock". If
the firm or firms listed in Schedule II hereto include only the firm or firms
listed in Schedule I hereto, then the terms "Underwriters" and "Representatives"
shall each be deemed to refer to such firm or firms. This is to confirm the
agreement concerning the purchase of the Stock from the Company by the
Underwriters named in Schedule II hereto.
1. Representation and Warranties. The Company represents and
warrants to each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations promulgated thereunder (the "Rules"),
and has carefully prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3
(the file number of which is set forth in Schedule I hereto), which
has become effective, for the registration of the Stock under the
Securities Act. The registration statement, as amended at the date of
this Agreement, meets the requirements set forth in Rule 415(a)(1)(x)
under the Securities Act and complies in all other material respects
with such rule. The Company proposes to file with the Commission
pursuant to Rule 424 under the
Securities Act ("Rule 424") a supplement to the form of prospectus
included in the registration statement relating to the initial
offering of the Stock and the plan of distribution thereof and has
previously advised you of all further information (financial and
other) with respect to the Company to be set forth therein. The term
"Registration Statement" means the registration statement, as amended
at the date of this Agreement, including the exhibits thereto,
financial statements, and all documents incorporated therein by
reference pursuant to Item 12 of Form S-3 (the "Incorporated
Documents"), and such prospectus as then amended, including the
Incorporated Documents, is hereinafter referred to as the "Basic
Prospectus"; and such supplemented form of prospectus, in the form in
which it shall be filed with the Commission pursuant to Rule 424
(including the Basic Prospectus as so supplemented), is hereinafter
called the "Final Prospectus". Any preliminary form of the Basic
Prospectus which has heretofore been filed pursuant to Rule 424 is
hereinafter called the "Interim Prospectus". Any reference herein to
the Registration Statement, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus shall be deemed to refer to and
include the Incorporated Documents which were filed under the
Securities Exchange Act of 1934 (the "Exchange Act"), on or before the
date of this Agreement or the issue date of the Basic Prospectus, any
Interim Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
Interim Prospectus or the Final Prospectus shall be deemed to refer to
and include the filing of any Incorporated Documents under the
Exchange Act after the date of this Agreement or the issue date of the
Basic Prospectus, any Interim Prospectus or the Final Prospectus, as
the case may be, and deemed to be incorporated therein by reference.
(b) As of the date hereof, when the Final Prospectus is first
filed with the Commission pursuant to Rule 424, when, before either
Delivery Date (hereinafter defined), any amendment to the Registration
Statement becomes effective, when, before either Delivery Date, any
Incorporated Document is filed with the Commission, when any
supplement to the Final Prospectus is filed with the Commission and at
each Delivery Date, the Registration Statement, the Final Prospectus
and any such amendment or supplement will comply in all material
respects with the applicable requirements of the Securities Act and
the Rules, and the Incorporated Documents will comply in all material
respects with the requirements of the
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Exchange Act or the Securities Act, as applicable, and the rules and
regulations adopted by the Commission thereunder, on the date it
became effective, the Registration Statement did not, and, on the date
that any post-effective amendment to the Registration Statement
becomes effective, the Registration Statement as amended by such
post-effective amendment did not or will not, as the case may be,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statement therein not misleading; on the date the Final Prospectus is
filed with the Commission pursuant to Rule 424 and on each Delivery
Date, the Final Prospectus, as it may be amended or supplemented, will
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not
misleading; and on said dates, the Incorporated Documents will comply
in all material respects with the applicable provisions of the
Exchange Act and rules and regulations of the Commission thereunder,
and, when read together with the Final Prospectus, or the Final
Prospectus as it may be then amended or supplemented, will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided that the foregoing representations and warranties
in this paragraph (b) shall not apply to statements or omissions made
in reliance upon and in conformity with written information furnished
to the Company by or through the Representatives on behalf of any
Underwriter specifically for use in connection with the preparation of
the Registration Statement or the Final Prospectus, as they may be
amended or supplemented.
(c) The Basic Prospectus and any Interim Prospectus, as of their
respective dates, complied in all material respects with the
requirements of the Securities Act and of the Rules and did not
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The Commission has not issued an order preventing or
suspending the use of the Basic Prospectus or any Interim Prospectus.
(d) The nationally recognized firm of independent public
accountants whose report appears in the Company's most recent Annual
Report on Form 10-K, which is incorporated by reference in the Final
Prospectus,
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are independent public accountants as required by the Securities Act
and the Rules.
(e) In the event that a report of a nationally recognized firm
of independent public accounts regarding historical financial
information with respect to any entity acquired by the Company is
required to be incorporated by reference in the Final Prospectus, such
independent public accountants were independent public accountants, as
required by the Securities Act and the Rules, during the period of
their engagement to examine the financial statements being reported on
and at the date of their report.
(f) The audited consolidated financial statements of the Company
in the Final Prospectus and the Registration Statement present fairly
on a consolidated basis the financial position, the results of
operations, changes in common stock and other stockholder's equity and
cash flows of the Company and its subsidiaries, as of the respective
dates and for the respective periods indicated, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The unaudited consolidated financial
statements of the Company, if any, included in the Final Prospectus
and the Registration Statement and the related notes are true,
complete and correct, subject to normally recurring changes resulting
from year-end audit adjustments, and have been prepared in accordance
with the instructions to Form 10-Q.
(g) Except as described in or contemplated by the Registration
Statement and the Final Prospectus, there has not been any material
adverse change in or any adverse development which materially affects
the business, properties, financial condition or results of the
Company or the Company and its subsidiaries taken as whole, from the
dates as of which information is given in the Registration Statement
and Final Prospectus.
(h) The Stock conforms to the description thereof contained in
the Final Prospectus, is duly and validly authorized, and, when issued
and delivered against payment therefor as provided in this Agreement,
will be validly issued, fully paid and non-assessable.
(i) The Company does not have any subsidiaries having business
or properties that are material to the business and properties of the
Company and its subsidiaries taken as a whole with the exception of
▇▇▇▇▇▇ Brothers Inc. ("▇▇▇▇▇▇") and the possible exception of ▇▇▇▇▇▇
Commercial Paper Inc. (the "Named
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Subsidiaries"). Neither the Company nor any of the Named Subsidiaries
is in violation of its corporate charter or by-laws or in default
under any agreement, indenture or instrument, the effect of which
violation or default would be material to the Company and its
subsidiaries taken as a whole. The execution, delivery and
performance of this Agreement will not constitute a breach of, result
in the creation or imposition of any material lien, charge or
encumbrance upon any of the assets of the Company or any of its
subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument, or result in a
violation of the corporate charter or by-laws of the Company or any of
its subsidiaries or any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company, any of the
Named Subsidiaries or their property. Except as set forth in the
Final Prospectus or as required by the Securities Act, the Exchange
Act and applicable state securities laws, no consent, authorization or
order of, or filing or registration with, any court or governmental
agency is required for the execution, deliver and performance of this
Agreement.
(j) The Company and each of the Named Subsidiaries have been
duly organized, are validly existing and in good standing under the
laws of their respective jurisdictions of incorporation, are duly
qualified to do business and in good standing as foreign corporations
and are fully registered as a broker-dealer, broker, dealer or
investment advisor, as the case may be, in each jurisdiction in which
their respective ownership of property or the conduct of their
respective businesses requires such qualification or registration and
in which the failure to qualify or register would be reasonably
likely, individually or in the aggregate, to have a material adverse
effect on the business, condition or properties of the Company and its
subsidiaries taken as a whole. Each of the Company and its Named
Subsidiaries holds all material licenses, permits, and certificates
from governmental authorities necessary for the conduct of its
business and owns, or possesses adequate rights to use, all material
rights necessary for the conduct of such business and has not received
any notice of conflict with the asserted rights of others in respect
thereof; and each of the Company and its Named Subsidiaries has the
corporate power and authority necessary to own or hold its properties
and to conduct the businesses in which it is engaged. Except as may
be disclosed in the Registration Statement and the Final Prospectus,
all outstanding shares of capital stock of the Named Subsidiaries are
owned by the Company, directly or
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indirectly through subsidiaries, free and clear of any lien, pledge
and encumbrance or any claim of any third party and are duly
authorized, validly issued and outstanding, fully paid and
non-assessable.
(k) Except as described in the Registration Statement and the
Final Prospectus, there is no material litigation or governmental
proceeding pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries which might reasonably
be expected to result in any material adverse change in the business,
properties, financial condition or results of operations of the
Company and its subsidiaries taken as a whole or which is required to
be disclosed in the Registration Statement and the Final Prospectus.
(l) The certificates delivered pursuant to paragraph (f) of
Section 6 hereof and all other documents delivered by the Company or
its representatives in connection with the issuance and sale of the
Stock were on the dates on which they were delivered, or will be on
the dates on which they are to be delivered, in all material respects
true and complete.
2. Sale and Purchase of the Stock. The Company agrees to sell to
each Underwriter, and each Underwriter, on the basis of the representations,
warranties and agreements herein contained, but subject to the terms and
conditions herein stated, agrees to purchase from the Company the number of
shares of Firm Stock set forth opposite the name of Underwriter in Schedule II
hereto. The obligations of the Underwriters under this Agreement are several
and not joint.
In addition, the Company grants to the Underwriters an option to
purchase up to an additional number of shares of Option Stock indicated in
Schedule I hereto. Such option is granted solely for the purpose of covering
over-allotments in the sale of Firm Stock and is exercisable as provided in
Section 3 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set forth opposite the name of such Underwriters in Schedule II hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Stock shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Stock other than in 100 share amounts. The price
of both the Firm Stock and any Option Stock shall be the price per share
indicated in Schedule I hereto.
3. Delivery and Payment. Delivery by the Company of the Firm Stock
to the Representatives for the respective accounts of the several Underwriters
and payment by the Underwriters therefor by certified or official bank check or
checks payable
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in, or by wire transfer of, immediately available (federal) funds to or upon the
order of the Company shall take place at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in Section
9 hereof (such date and time of delivery and payment for the Firm Stock being
herein called the "First Delivery Date").
The Firm Stock will be registered in such names and in such authorized
denominations as the Representatives may request no less than two full business
days in advance of the First Delivery Date. The Company agrees to have the Firm
Stock available for inspection, checking and packaging by the Representatives at
such place as is designated by the Representatives, not later than 1:00 p.m.,
New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date as of which
the Registration Statement is declared effective by the Commission, the option
granted in Section 2 may be exercised by written notice being given to the
Company by the Representatives. Such notice shall set forth the aggregate
number of shares of Option Stock as to which the option is being exercised, the
names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes referred to as a "Delivery Date".
Delivery by the Company of the Option Stock to the Representatives for
the respective accounts of the several Underwriters and payment by the
Underwriters therefor by certified or official bank check or checks payable in,
or by wire transfer of, immediately available (federal) funds to or upon the
order of the Company shall take place at the office and at the time specified in
Schedule I hereto, on the Second Delivery Date, which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof.
The Option Stock will be registered in such names and in such
authorized denominations as the Representatives may request in the aforesaid
written notice. The Company agrees to have the Option Stock available for
inspection, checking and packaging by the Representatives at such place as is
designated
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by the Representatives, not later than 1:00 p.m., New York City time, on the
business day prior to the Second Delivery Date.
4. Offering by Underwriters. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed any Interim Prospectus and are authorized to distribute the Final
Prospectus (as from time to time amended or supplemented if the Company
furnishes amendments or supplements thereto to the Underwriters). The
Representatives agree that, as soon as the Representatives believe the offering
of the Stock has been terminated, the Representatives will so advise the
Company.
5. Agreement. The Company agrees with the several Underwriters
that:
(a) The Company will cause the Final Prospectus to be filed with the
Commission pursuant to Rule 424 not later than 10:00 a.m., New York City
time, on the business day following the date of this Agreement and will
promptly advise the Representatives (A) when the Final Prospectus shall
have been filed with the Commission pursuant to Rule 424, (B) when any
amendment to the Registration Statement relating to the Stock shall have
become effective, (C) of any request by the Commission for any amendment of
the Registration Statement, the Final Prospectus, the Basic Prospectus or
any Interim Prospectus, or for any additional information, (D) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceedings for that purpose and (E) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. After the date of this Agreement and prior to
the termination of the offering of the Stock, the Company will not file any
amendment of the Registration Statement or amendment or supplement to the
Final Prospectus (except an amendment to the Final Prospectus that is
deemed to be incorporated by reference in the Final Prospectus pursuant to
Item 12 of Form S-3) without the consent of the Representatives and will
use its best efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. Prior to
receipt of the advice to be given by the Representatives pursuant to
Section 4, the Company will not file any document that would be deemed to
be incorporated by reference in the Final Prospectus pursuant to Item 12 of
Form S-3 without delivering to the Representatives a copy of the document
proposed to be so filed, such delivery to be made at least twenty-four
hours prior to such filing, and the Company will consult with the
Representatives as to any comments which the Representatives make in a
timely manner with respect to the document so delivered.
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(b) Subject to the last sentence of the immediately preceding
paragraph, if, at any time during which a prospectus relating to the Stock
is required to be delivered under the Securities Act, any event occurs as a
result of which the Final Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it shall be necessary at any time to amend or supplement the Final
Prospectus to comply with the Securities Act or the Rules, the Company
promptly will prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance and will use its best efforts to cause
any amendment of the Registration Statement containing an amended Final
Prospectus to be made effective as soon as possible.
(c) The Company will deliver to the Representatives, without charge,
(i) signed copies of the Registration Statement relating to the Stock and
of any amendments thereto (including all exhibits filed with, or
incorporated by reference in, any such document) and (ii) as many conformed
copies of the Registration Statement and of any amendments thereto which
shall become effective on or before the First Delivery Date (excluding
exhibits) as the Representatives may reasonably request.
(d) During such period as a prospectus is required by law to be
delivered by an Underwriter or dealer, the Company will deliver, without
charge to the Representatives and to Underwriters and dealers, at such
office or offices as the Representatives may designate, as many copies of
the Basic Prospectus, any Interim Prospectus and the Final Prospectus as
the Representatives may reasonably request.
(e) The Company will make generally available to its security holders
and to the Representatives as soon as practicable an earnings statement
(which need not be audited) of the Company and its subsidiaries, covering a
period of at least 12 months beginning after the date the Final Prospectus
is filed with the Commission pursuant to Rule 424, which will satisfy the
provisions of Section 11(a) of the Securities Act.
(f) The Company will furnish such information, execute such
instruments and take such actions as may be required to qualify the Stock
for offering and sale under the laws of such jurisdictions as the
Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Stock; provided,
however, that the Company shall not be required to qualify to do business
in any jurisdiction where it is not now so
9
qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(g) So long as any Stock is outstanding, the Company will furnish or
cause to be furnished to the Representatives copies of all annual reports
and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K,
or such other similar forms as may be designated by the Commission.
(h) If the Company has applied for the listing of the Stock on the
New York Stock Exchange Inc. (the "NYSE"), it will use its best efforts to
cause such listing to be approved as soon as possible.
(i) For a period beginning at the time of execution of this Agreement
and ending on the later of the business day following either the Second
Delivery Date or following the date on which any price restrictions on the
sale of the Stock are terminated, without the prior consent of the
Representatives, the Company will not offer, sell, contract to sell or
otherwise dispose of any shares of Preferred Stock (other than the Stock),
or sell or grant options, rights or warrants with respect to any shares of
registration statement filed under the Securities Act.
(j) The Company will use its best efforts to do and perform all
things to be done and performed hereunder prior to each Delivery Date and
to satisfy all conditions precedent to the delivery of the Stock to be
purchased hereunder.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Stock shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company contained herein as of the date hereof and each Delivery
Date, to the accuracy of any material statements made in any certificates,
opinions, affidavits, written statements or letters furnished to the
Representatives or to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ("Underwriters' Counsel")
pursuant to this Section 6, to the performance by the Company of its respective
obligations hereunder and to the following additional conditions:
(a) The Final Prospectus shall have been filed with the Commission
pursuant to Rule 424 not later than 10:00 a.m., New York City time, on the
business day following the date of this Agreement or such later date and
time as shall be consented to in writing by the Representatives.
(b) No order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall be in effect and no
proceedings for such purpose shall be pending before or threatened by the
Commission and any
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requests for additional information on the part of the Commission (to be
included in the Registration Statement or the Final Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of
the Representatives.
(c) Since the respective dates as of which information is given in
the Registration Statement and the Final Prospectus, there shall not have
been any change or decrease specified in the letter referred to in
paragraph (g) of this Section 6 which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
offering and delivery of the Stock as contemplated by the Registration
Statement and the Final Prospectus.
(d) The Company shall have furnished to the Representatives the
opinion of a Deputy General Counsel or the Chief Legal Officer for the
Company, dated the day of each Delivery Date to the effect that:
(i) The Company has been duly organized and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation with all requisite corporate power and authority to own
and operate its properties and to conduct its business as described in
the Final Prospectus.
(ii) The Stock conforms in all material respects to the
descriptions thereof contained in the Final Prospectus.
(iii) The Company has an authorized capitalization as set forth
in the Final Prospectus, and all of the issued shares of capital stock
of the Company (including the shares of Stock being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus;
(iv) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such counsel;
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in this Agreement, except for such consents,
approvals, authorizations or orders as have been obtained under the
Securities Act and such as may be required under the Exchange Act and
the blue sky laws of any
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jurisdiction in connection with the purchase and distribution of the
Stock by the Underwriters.
(vi) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the
Registration Statement by the Securities Act or by the Rules which
have not been filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules.
(vii) To the best of such counsel's knowledge, neither the
Company nor any of its Named Subsidiaries is in violation of its
corporate charter or by-laws, or in default under any material
agreement, indenture or instrument known to such counsel, the effect
of which violation or default would be material to the Company and its
subsidiaries taken as a whole.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company; the execution, delivery and performance of
this Agreement by the Company will not constitute a breach of, or
result in the creation or imposition of any material lien, charge or
encumbrance upon any of the assets of the Company or any of its Named
Subsidiaries pursuant to the terms of, or constitute a default under,
any material agreement, indenture or instrument known to such counsel
and to which the Company or any of its Named Subsidiaries is a party
of is bound, or result in a violation of the corporate charter or
by-laws of the Company or any of its Named Subsidiaries or any order,
rule or regulation known to such counsel of any court or governmental
agency having jurisdiction over the Company, any of its Named
Subsidiaries or any of their respective properties, the effect of
which would be material to the Company and its subsidiaries taken as a
whole.
(ix) The Registrations Statement has become effective under the
Securities Act, and, to the best of the knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose is pending or
threatened by the Commission.
(x) The Registration Statement, the Final Prospectus and each
amendment thereof or supplement thereto (except that no opinion need
be expressed as to the financial statements or other financial or
statistical data included or incorporated by reference therein) comply
as to form in all material respects with the requirements of the
Securities Act and the Rules.
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(xi) If the Stock is to be listed on the NYSE, authorization
therefor has been given, subject to official notice of issuance and
evidence of satisfactory distribution, or the Company has filed a
preliminary listing application and all required supporting documents
with respect to the Stock with the NYSE, and such counsel has no
reason to believe that the Stock will not be authorized for listing,
subject to official notice of issuance and evidence of satisfactory
distribution.
(xii) Each of the Named Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation with all requisite corporate power
and authority to own and operate its properties and to conduct its
business as described in the Final Prospectus. Each of the Company
and its Named Subsidiaries is duly qualified to do business as a
foreign corporation, is in good standing and is duly registered as a
broker-dealer, broker, dealer or investment advisor, as the case may
be, in each jurisdiction in which the nature of the business conducted
by it or in which the ownership or holding by lease of the properties
owned or held by it require such qualification or registration and
where the failure to so qualify or register would have a material
adverse effect on the Company and its subsidiaries taken as a whole.
(xiii) All the outstanding shares of capital stock of each of the
Company's Named Subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable and, except for
directors' qualifying shares, are owned by the Company or a subsidiary
of the Company free and clear of any claims, liens, encumbrances and
security interests.
(xiv) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company or
any of its subsidiaries which would affect the subject matter of this
Agreement or is required to be disclosed in the Final Prospectus which
is not disclosed and correctly summarized therein.
Such opinion shall also contain a statement that although such counsel
is not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Final Prospectus (except as to those matters stated in
paragraph (ii) of such opinion), such counsel has no reason to believe that (i)
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any
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material fact required to be stated therein or necessary in order to make the
statements therein not misleading or (ii) the Final Prospectus contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except that no opinion
need be expressed as to the financial statements or other financial or
statistical data included or incorporated by reference therein).
In rendering such opinion, such counsel may rely upon opinions of
local counsel satisfactory to the Representatives for matters not governed by
New York law and may rely as to matters of fact, to the extent such counsel
deems proper, upon certificates or affidavits of officers of the Company and
public officials.
(e) The Representatives shall have received from Underwriters' Counsel
such opinion or opinions, dated the day of such Delivery Date, with respect to
the issuance and sale of the Stock, the Registration Statement, the Final
Prospectus and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of its Chief Executive Officer, its President or any Managing
Director or Vice President and its Chief Financial Officer or its Treasurer,
dated the day of each Delivery Date, to the effect that, to the best of their
knowledge after due inquiry:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
such Delivery Date with the same effect as if made on such Delivery
Date, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to such Delivery Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened.
(iii) (x) The Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, (y) the Final Prospectus does not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in
14
the light of the circumstances under which they were made, not
misleading, and (z) since the effective date of the Registration
Statement there has not occurred any event required to be set forth in
an amended or supplemented prospectus which has not been so set forth.
(g) At each Delivery Date, a nationally recognized firm of
independent public accountants shall have furnished to the Representatives a
letter, dated the day of such Delivery Date, confirming that they are
independent auditors to the Company within the meaning of the Securities Act
and in form and substance satisfactory to the Representatives, stating in
effect that:
(i) In their opinion, the consolidated financial statements of
the Company and its subsidiaries, and the supporting schedules,
included in the Registration Statement and the Final Prospectus and
audited by them comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
Exchange Act and the related published rules and regulations
thereunder.
(ii) On the basis of a reading of the unaudited consolidated
financial statements of the Company and its subsidiaries, if any,
included in the Registration Statement and the Final Prospectus and
of the latest unaudited consolidated financial statements made
available by the Company and Lehman, carrying out certain specified
procedures (but not an audit in accordance with generally accepted
auditing standards), a reading of the minutes of the meetings of the
directors of the Company and Lehman, and inquiries of certain
officials of the Company and its subsidiaries, who have
responsibility for financial and accounting matters of the Company
and its subsidiaries, as to transactions and events subsequent to
the date of the most recent audited consolidated financial
statements included in the Registration Statement and the Final
Prospectus, nothing came to their attention that caused them to
believe that:
(A) any material modifications should be made to the unaudited
consolidated financial statements of the Company and its subsidiaries,
if any, included in the Registration Statement and the Final
Prospectus, for them to be in conformity with generally accepted
accounting principles; and such financial statements do not comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the published instructions,
rules and regulations thereunder.
(B) the unaudited capsule information of the Company and its
subsidiaries, if any, included in the
15
Registration Statement and the Final Prospectus does not agree with
the amounts set forth in the unaudited consolidated financial
statements of the Company from which it was derived or was not
determined on a basis substantially consistent with that of the
corresponding financial information in the latest audited financial
statements of the Company included in the Registration Statement and
the Final Prospectus.
(C)(I) as of the latest date as of which the Company and its
subsidiaries have monthly financial statements, there was any decrease
in the capital stock, additional paid-in capital or retained earnings,
or increase in long-term indebtedness of the Company and its
subsidiaries, as compared with the amounts shown in the most recent
consolidated statement of financial condition of the Company and its
subsidiaries included in the Registration Statement and the Final
Prospectus, (II) with respect to the period subsequent to the date of
the most recent financial statements included in the Registration
Statement and the Final Prospectus and extending through the latest
date as of which the Company and its subsidiaries have monthly
financial statements, there was a consolidated net loss or (III) with
respect to the amounts of net capital or excess net capital of Lehman
determined pursuant to Commission Rule 15c3-1 and shown in the most
recent financial statement of Lehman filed pursuant to Commission Rule
17a-5, there has been any decrease in such amounts as compared with
the amounts shown in the most recent consolidated financial statements
included in the Registration Statement and the Final Prospectus;
(D) as of a specified date not more than three business days
prior to the date of the letter, there was any decrease in the capital
stock or additional paid-in capital, or increase in long-term
indebtedness of the Company and its subsidiaries, as compared with the
amounts shown in the most recent consolidated statement of financial
condition of the Company and its subsidiaries included in the
Registration Statement and the Final Prospectus;
except in all instances for increase or decreases set forth in such letter, in
which case the letter shall be accompanied by an explanation by the Company as
to the significance thereof, unless said explanation is not deemed necessary by
the Representatives.
(iii) If pro forma financial statements are included in the
Registration Statement or the Final Prospectus, (x) they have read such
pro forma financial statements, (y) they have made inquiries of certain
officials of the Company who have responsibility for
16
financial and accounting matters of the Company as to the basis for their
determination of the pro forma adjustments and whether such pro forma
financial statements comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X and (z)
they have proved in the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts; and as a result thereof,
nothing came to their attention that caused them to believe that such pro
forma financial statements do not so comply with Rule 11-02 of Regulation
S-X and that such pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements.
(iv) They have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is expressed in dollars, or
percentages derived from dollar amounts, and has been obtained from the
general accounting records of the Company) set forth in the Registration
Statement, as amended, and the Final Prospectus, as amended or supplemented,
and in Exhibit 12 to the Registration Statement, including specified
information, if any, included or incorporated from the Company's Annual
Report on Form 10-K incorporated therein or specified information, if any,
included or incorporated from any of the Company's Quarterly Reports on
Form 10-Q or its Current Reports on Form 8-K incorporated therein, agrees
with the accounting records of the Company and its subsidiaries or
computations made therefrom, excluding any questions of legal
interpretation.
(h) Subsequent to the execution of this Agreement, there shall not
have been any decrease in the ratings of any of the Company's debt securities by
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Corporation.
Prior to each Delivery Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives or Underwriters' Counsel may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates or opinions furnished to the Representatives or Underwriters'
Counsel pursuant to this Section 6 shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and to
Underwriters' Counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, each Delivery Date by
the Representatives. Notice of such cancellation shall be given to the Company
in writing, or by telegraph confirmed in writing.
17
7. Expenses.(a) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company will pay
all costs and expenses incident to the performance of the obligations of the
Company hereunder, including, without limiting the generality of the foregoing,
all costs, taxes and expenses incident to the issuance, sale and delivery of the
Stock to the Underwriters, all fees and expenses of the Company's counsel and
accountants, all costs and expenses incident to the preparing, printing and
filing of the Registration Statement (including all exhibits thereto), any
Interim Prospectus, the Basic Prospectus, the Final Prospectus and any
amendments thereof or supplements thereto, and the rating of the Stock by one or
more rating agencies, all costs and expenses (including fees of Underwriters'
Counsel and their disbursements) incurred in connection with blue sky
qualifications, advising on the legality of the Stock for investment, the filing
requirements, if any, of the National Association of Securities Dealers, Inc. in
connection with its review of corporate financings, the fee for listing the
Stock on the NYSE and all costs and expenses of the printing and distribution of
all documents in connection with such offering. Except as provided in this
Section 7, the Company will have no responsibility to the Underwriters for the
Underwriters' own costs and expenses, including the fees of Underwriters'
Counsel and any advertising expenses in connection with any offer the
Underwriters may make.
(b)If the sale of the Stock provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 6 hereof is not satisfied or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or comply
with any provision hereof, the Company will, subject to demand by the
Representatives, reimburse the Underwriters for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the Stock.
8. Indemnification.(a) The Company agrees to indemnify and hold
harmless each Underwriter and each person who controls such Underwriter within
the meaning of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, as originally filed or in any amendment
thereof, or in any Interim Prospectus, the Basic Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
18
therein not misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that (i) the Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company as herein stated by the Representatives on
behalf of any Underwriter specifically for use in connection with the
preparation thereof, and (ii) such indemnity with respect to the Basic
Prospectus or any Interim Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the Stock which is
the subject thereof if such person did not receive a copy of the Final
Prospectus at or prior to the confirmation of the sale of such Stock to such
person in any case where such delivery is required by the Securities Act and the
untrue statement or omission of a material fact contained in the Basic
Prospectus or any Interim Prospectus was corrected in the Final Prospectus,
unless such failure to deliver the Final Prospectus was a result of
noncompliance by the Company with Section 5(d) hereof. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b)Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Securities Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus, any Interim
Prospectus or the Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that the same was made therein in reliance upon and in conformity
with written information furnished to the Company as herein stated by the
Representatives on behalf of such Underwriter specifically for use in the
preparation thereof, and agrees to reimburse each such indemnified party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The statements set forth in
19
the last paragraph of the cover page and under the heading "Underwriting" in the
Final Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the Registration Statement
and the Final Prospectus, as the case may be, and you, as the Representatives,
confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 8. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent
that it may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and either (i) the indemnifying party or parties and
the indemnified party or parties mutually agree or (ii) representation of both
the indemnifying party or parties and the indemnified party or parties by the
same counsel is inappropriate under applicable standards of professional conduct
due to actual or potential differing interests between them, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed counsel in connection with the assumption
of legal defenses in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of subparagraph (a) representing the indemnified
parties under subparagraph (a), as the case may be, who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party.
20
(d)In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in subparagraph (a) of
this Section 8 is due in accordance with its terms but is for any reason held by
a court to be unavailable from the Company on grounds of policy or other similar
grounds, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
the Company and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discounts appearing on the cover page of
the Final Prospectus bear to the public offering prices appearing thereon and
the Company is responsible for the balance; provided, however, that (i) in no
case shall any Underwriter (except as may be provided in any agreement among
underwriters) be responsible for any amount in excess of the underwriting
discounts applicable to the Stock purchased by such Underwriter hereunder and
(ii) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(i) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
the Securities Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Securities Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this subparagraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this
subparagraph (d), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this
subparagraph (d).
9. Default by an Underwriter. If, on either Delivery Date, any one or
more Underwriters shall fail to purchase and pay for all of the Stock agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the number
of shares of Firm Stock set forth opposite their names in Schedule II hereto
bear to the aggregate number of shares of Firm Stock set opposite the names of
the remaining Underwriters) the Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date; provided,
however, that in the event that the
21
aggregate number of shares of Stock which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such Delivery Date shall exceed
10% of the aggregate number of shares of the Stock, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Stock, and if such non-defaulting Underwriters do not
purchase all the Stock, this Agreement (or, with respect to the Second Delivery
Date, the obligation of the Underwriters to purchase, and of the Company to
sell, the Option Stock) will terminate without liability to any non-defaulting
Underwriters or the Company. In the event of a default by any Underwriter as
set forth in this Section 9, the particular Delivery Date shall be postponed for
such period, not exceeding seven days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Final
Prospectus or in any other documents or arrangements may be effected. Nothing
herein contained shall relieve any defaulting Underwriter of its liability, if
any, to the Company and any non-defaulting Underwriter for damages occasioned by
its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
at or prior to delivery of and payment for all the Firm Stock, if, prior to such
time (i) trading in securities generally on the NYSE or the over-the-counter
market shall have been suspended or limited or minimum prices shall have been
established on the NYSE or the over-the-counter market, (ii) a banking
moratorium shall have been declared either by federal or New York State
authorities, (iii) any new restriction materially affecting the distribution of
the Stock shall have become effective or trading in any securities of the
Company shall have been suspended or halted by any national securities exchange,
the National Association of Securities Dealers, Inc. or the Commission, (iv) the
United States becomes engaged in hostilities or there is an escalation in
hostilities involving the United States or there is a declaration of a national
emergency or war by the United States, or (v) there shall have been such a
material adverse change in national or international political, financial or
economic conditions, national or international equity markets or currency
exchange rates or controls as to make it, in the judgment of the
Representatives, inadvisable or impracticable to proceed with the payment for
and delivery of the Stock.
11. Representation and Indemnities to Survive Delivery. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers (as such officers) and of the
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or the Company or any of its officers or directors or any
controlling person within the meaning of the Securities Act, and will survive
delivery of the payment for the Stock.
22
12. Notices. All communications hereunder will be in writing, and, if
sent to the Representatives will be mailed, delivered, telegraphed or telexed
and confirmed to them, at the address specified in Schedule I hereto; or, if
sent to the Company will be mailed, delivered, telegraphed or telexed and
confirmed to it at 3 World Financial Center, New York, New York 10285,
Attention: Chief Financial Officer.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their successors and, to the extent and only
to the extent stated in Section 8 hereof, the officers and directors and
controlling persons referred to in Section 8 hereof, and except as provided in
Section 8 hereof, no person other than the parties hereto and their respective
successors will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By: _________________________
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇ BROTHERS INC.
By: ___________________________
Title:
Acting on behalf of the Representatives
named in Schedule I annexed hereto and
the several Underwriters named in
Schedule II annexed hereto.
23
SCHEDULE I
Date of Underwriting Agreement:
Registration Statement No. 333-
Representative and Address: ▇▇▇▇▇▇ Brothers Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Description of Stock:
Title:
Number of shares of Firm Stock: _________shares
Maximum number of shares of Option Stock: _________shares
Price per share: $
Price to public:
Time of payment of dividends:
Sinking fund provisions:
Redemption provisions:
Repayment provisions:
Other provisions:
First Delivery Date, Time and Location:
Date:
Time:
Location:
SCHEDULE II
NUMBER OF
SHARES OF FIRM
STOCK TO BE
UNDERWRITERS PURCHASED
------------ ----------------
▇▇▇▇▇▇ Brothers Inc...........................................................
Total......................................................................