EXHIBIT 1.1
4,250,091 Shares
XXXXXX XXXXX CORP.
Common Stock
U.S. UNDERWRITING AGREEMENT
---------------------------
June , 1997
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
PAINEWEBBER INCORPORATED
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Xxxxx Corp., a Pennsylvania corporation (the "Company"),
proposes to issue and sell an aggregate of 4,080,000 shares of its common stock,
par value $.01 per share, and the persons named in Part A of Schedule I hereto
(the "Selling Shareholders") propose to sell an aggregate of 170,091 shares of
common stock of the Company (together with the 4,080,000 shares of common stock
to be issued and sold by the Company, the "Firm Shares") to the several
Underwriters named in Schedule II hereto (the "U.S. Underwriters") for whom
Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx & Co. and PaineWebber Incorporated, are acting
as representatives (the "Representatives"). In addition, solely for the purpose
of covering over-allotments, certain of the Selling Shareholders and the Company
propose to sell to the U.S. Underwriters, upon the terms and conditions set
forth in Section 2 hereof, up to an aggregate of an additional 796,892 shares
(the "Additional Shares") of the Company's common stock. The Company and the
Selling Shareholders are hereinafter sometimes referred to as the "Sellers."
The Firm Shares and the Additional Shares are hereinafter collectively referred
to as the "Shares." The Company's common stock, par value $.01 per share,
including the Shares and the International Shares (as defined herein), is
hereinafter referred to as the "Common Stock."
It is understood that the Company and the Selling Shareholders are
concurrently entering into an International Underwriting Agreement, dated the
date hereof (the "International Underwriting Agreement"), providing for the sale
of 1,062,523 shares of the Common Stock (the "International Shares"), of which
1,020,000 shares will be sold by the Company and 42,523 will be sold by the
Selling Shareholders through arrangements with certain underwriters outside the
United States and Canada (the "Managers"), for whom Xxxxx Xxxxxx Inc., Xxxxxxx
Xxxxx International and PaineWebber International are acting as lead Managers
(the "Lead Managers"). The International Shares and the Shares, collectively,
are herein called the "Underwritten Shares."
The Company and the Selling Shareholders also understand that the
Representatives and the Lead Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of the
International Shares or sell to the Managers a portion of the Shares. The
Company and the Selling Shareholders understand that any such purchases and
sales between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the International Underwriting Agreement.
The Company and the Selling Shareholders wish to confirm as follows
their respective agreements with you and the other several Underwriters on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1, including prospectuses subject to
completion, relating to the Underwritten Shares. The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective, or, if the registration statement became effective prior to the
execution of this Agreement, as supplemented or amended prior to the execution
of this Agreement. If it is contemplated, at the time this Agreement is
executed, that a post-effective amendment to the registration statement will be
filed and must be declared effective
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before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. If an abbreviated registration statement is
prepared and filed with the Commission in accordance with Rule 462(b) under the
Act ("an Abbreviated Registration Statement"), the term "Registration Statement"
as used in this Agreement includes the Abbreviated Registration Statement. The
term "Prospectuses" as used in this Agreement means the prospectuses in the
forms included in the Registration Statement, or, if the prospectuses included
in the Registration Statement omit information in reliance on Rule 430A under
the Act and such information is included in prospectuses filed with the
Commission pursuant to Rule 424(b) under the Act, the term "Prospectuses" as
used in this Agreement means the prospectuses in the forms included in the
Registration Statement as supplemented by the addition of the Rule 430A
information contained in the prospectuses filed with the Commission pursuant to
Rule 424(b). The term "Prepricing Prospectuses" as used in this Agreement means
the prospectuses subject to completion in the forms included in the Registration
Statement at the time of the initial filing of the Registration Statement with
the Commission, and as such prospectuses shall have been amended from time to
time prior to the date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and two forms
of Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
Shares that are to be offered and sold in the United States (as defined herein)
or Canada (as defined herein) to U.S. or Canadian Persons (the "U.S. Prepricing
Prospectus" and the "U.S. Prospectus," respectively), and a Prepricing
Prospectus and a Prospectus relating to the International Shares which are to be
offered and sold outside the United States or Canada to persons other than U.S.
or Canadian Persons (the "International Prepricing Prospectus" and the
"International Prospectus," respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses," and
the U.S. Prepricing Prospectus and the International Prepricing Prospectus are
herein called the "Prepricing Prospectuses." For purposes of this Agreement:
"Rules and Regulations" means the rules and regulations adopted by the
Commission under either the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable; "U.S. or Canadian Person" means any
resident or national of the United States or Canada, any corporation,
partnership or other entity created or organized in or under the laws of the
United States or Canada or any estate or trust the income of which is subject to
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United States or Canadian income taxation regardless of the source of its income
(other than the foreign branch of any U.S. or Canadian Person), and includes any
United States or Canadian branch of a person other than a U.S. or Canadian
Person; "United States" means the United States of America (including the states
thereof and the District of Columbia) and its territories, its possessions and
other areas subject to its jurisdiction; and "Canada" means Canada and its
territories, its possessions and other areas subject to its jurisdiction.
2. Agreements to Sell and Purchase. Upon the basis of the
representations, warranties and agreements contained herein and subject to all
the terms and conditions set forth herein and to such adjustments as you may
determine to avoid fractional shares, the Company hereby agrees to issue and
sell to each U.S. Underwriter and each U.S. Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ per
share (the "purchase price per share"), the number of Firm Shares that bears the
same proportion to the aggregate number of Firm Shares to be issued and sold by
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Shareholders.
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein
and to such adjustments as you may determine to avoid fractional shares, each
Selling Shareholder agrees to sell to each U.S. Underwriter and each U.S.
Underwriter agrees, severally and not jointly, to purchase from each Selling
Shareholder, at the purchase price per share, the number of Firm Shares that
bears the same proportion to the number of Firm Shares set forth opposite the
name of such Selling Shareholder in Schedule I hereto as the number of Firm
Shares set forth opposite the name of such U.S. Underwriter in Schedule II
hereto (or such number of Firm Shares increased as set forth in Section 12
hereof) bears to the aggregate number of Firm Shares to be sold by the Company
and the Selling Shareholders.
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Selling Shareholders listed in Part B of Schedule I hereto and the Company
also agree to sell to the U.S. Underwriters, and the U.S. Underwriters shall
have the right to purchase from such Selling Shareholders listed in Part B of
Schedule I hereto and the Company, at the purchase price per
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share, pursuant to an option (the "over-allotment option") which may be
exercised prior to 5:00 p.m., New York City time, on the 30th day after the date
of the U.S. Prospectus (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 796,892 Additional Shares from (i) the
Selling Shareholders listed in Part B of Schedule I hereto (the maximum number
of Additional Shares that each of them agrees to sell upon the exercise by the
U.S. Underwriters of the over-allotment option is set forth opposite their
respective names in Part B of Schedule I) and (ii) the Company (the maximum
number of Additional Shares that the Company agrees to sell upon the exercise by
the U.S. Underwriters of the over-allotment option is set forth opposite its
name in Part B of Schedule II). The number of Additional Shares that the U.S.
Underwriters elect to purchase upon any exercise of the over-allotment option
shall be provided first, by each Selling Shareholder who has agreed to sell
Additional Shares in proportion to the respective maximum number of Additional
Shares that each such Selling Shareholder has agreed to sell and second, after
all Additional Shares of the Selling Shareholders have been sold, by the
Company. Upon any exercise of the over-allotment option, each U.S. Underwriter,
severally and not jointly, agrees to purchase from each Selling Shareholder who
has agreed to sell Additional Shares and, if applicable, the Company the number
of Additional Shares (subject to such adjustments as you may determine in order
to avoid fractional shares) that bears the same proportion to the number of
Additional Shares to be sold by each Selling Shareholder who has agreed to sell
Additional Shares first and then from the Company as the number of Firm Shares
set forth opposite the name of such U.S. Underwriter in Schedule II hereto (or
such number of Firm Shares increased as set forth in Section 12 hereof) bears to
the aggregate number of Firm Shares to be sold by the Selling Shareholders and
the Company.
Certificates in transferable form for the Shares that each of the
Selling Shareholders agrees to sell pursuant to this Agreement have been placed
in custody with State Street Bank and Trust Company (the "Custodian") for
delivery under this Agreement pursuant to a Custody Agreement and Power of
Attorney (the "Custody Agreement") executed by each of the Selling Shareholders
appointing J. Xxxxx Xxxxxx and Xxxxxxx X. Xxxxxxx as agents and attorneys-in-
fact (the "Attorneys-in-Fact"). Each Selling Shareholder agrees that (i) the
Shares represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the U.S. Underwriters, the Company and
each other Selling Shareholder, (ii) the arrangements made by the Selling
Shareholders for such custody are, except as specifically provided in the
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Custody Agreement, irrevocable, and (iii) the obligations of the Selling
Shareholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Shareholder or by operation of law, whether by the
death or incapacity of any Selling Shareholder or the occurrence of any other
event or, if the Selling Shareholder is not a natural person, upon any
dissolution, winding up, distribution of assets or other event affecting the
legal existence of such Selling Shareholder. If any Selling Shareholder shall
die or be incapacitated or if any other event shall occur before the delivery of
the Shares hereunder or if the Selling Shareholder is not a natural person,
shall dissolve, wind up, distribute assets or if any other event affecting the
legal existence of such Selling Shareholder shall occur before the delivery of
the Shares hereunder, certificates for the Shares of such Selling Shareholder
shall be delivered to the Underwriters by the Attorneys-in-Fact in accordance
with the terms and conditions of this Agreement and the Custody Agreement as if
such death or incapacity, dissolution, winding up or distribution of assets or
other event had not occurred, regardless of whether or not the Attorneys-in-Fact
or any U.S. Underwriter shall have received notice of such death, incapacity,
dissolution, winding up or distribution of assets or other event. Each
Attorney-in-Fact is authorized, on behalf of each of the Selling Shareholders,
to execute this Agreement and any other documents necessary or desirable in
connection with the sale of the Shares to be sold hereunder by such Selling
Shareholder, to make delivery of the certificates for such Shares, to receive
the proceeds of the sale of such Shares, to give receipts for such proceeds, to
pay therefrom any expenses to be borne by such Selling Shareholder in connection
with the sale and public offering of such Shares, to distribute the balance
thereof to such Selling Shareholder, and to take such other action as may be
necessary or desirable in connection with the transactions contemplated by this
Agreement. Each Attorney-in-Fact agrees to perform his duties under the Custody
Agreement.
Each U.S Underwriter represents, warrants, covenants and agrees that,
except as contemplated under Section 2 of the Agreement Between U.S.
Underwriters and Managers dated the date hereof, (i) it is not purchasing any
Shares for the account of anyone other than a U.S. or Canadian Person, (ii) it
has not offered or sold, and will not offer, sell, resell or deliver, directly
or indirectly, any Shares or distribute any U.S. Prospectus outside the United
States or Canada or to anyone other than a U.S. or Canadian Person, and (iii)
any offer of Shares in Canada will be made only pursuant to an exemption from
the
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requirement to file a prospectus in the relevant province of Canada in which
such offer is made.
3. Terms of Public Offering. The Sellers have been advised by you that
the U.S. Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the U.S. Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the U.S.
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on , 1997 (the "Closing Date"). The place of closing
for the Firm Shares and the Closing Date may be varied by agreement among you,
the Company and the Attorneys-in-Fact.
Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at the
aforementioned office of Xxxxx Xxxxxx Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the U.S.
Underwriters to the Company of the U.S. Underwriters' determination to purchase
a number, specified in such notice, of Additional Shares. The place of closing
for any Additional Shares and the Option Closing Date for such Shares may be
varied by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice, it being understood that a facsimile
transmission shall be deemed written notice, prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates and stock powers
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, against payment of the purchase price therefor in
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immediately available funds as directed by the Company or the Attorneys-in-Fact,
as applicable.
5. Agreements of the Company. The Company agrees with the several U.S.
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectuses or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, including the filing of any information, documents or reports
pursuant to the Exchange Act, that makes any statement of a material fact made
in the Registration Statement or the Prospectuses (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectuses (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectuses (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including
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financial statements and all exhibits to the Registration Statement and will
also furnish to you, without charge, such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto, but
without exhibits, as you may reasonably request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses of which you
shall not previously have been advised or to which you shall reasonably object
in writing after being so advised or (ii) so long as, in the written opinion of
counsel for the U.S. Underwriters (a copy of which shall be delivered to the
Company), a prospectus is required to be delivered in connection with sales by
any U.S. Underwriter or dealer, file any information, documents or reports
pursuant to the Exchange Act, without delivering a copy of such information,
documents or reports to you, as Representatives of the U.S. Underwriters, prior
to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have reasonably requested or may hereafter reasonably request, copies of
each form of the U.S. Prepricing Prospectus. The Company consents to the use,
in accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the several U.S.
Underwriters and by dealers, prior to the date of the U.S. Prospectus, of each
U.S. Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the written
opinion of counsel for the U.S. Underwriters a U.S. Prospectus is required by
the Act to be delivered in connection with sales by any U.S. Underwriter or
dealer, the Company will expeditiously deliver to each U.S. Underwriter and each
dealer, without charge, as many copies of the U.S. Prospectus (and of any
amendment or supplement thereto) as you may reasonably request for a period of
nine months after the date of this Agreement; provided, however, that if a
request for copies of the Prospectuses is made by any U.S. Underwriter or dealer
after such nine-month period, the costs associated with the preparing and filing
of any post-effective amendment to the Registration Statement or any amendment
or supplement to the Prospectuses and delivery of the Prospectuses (and of any
amendment or supplement thereto) shall be borne by such U.S. Underwriter or
dealer. The Company consents to the use of the U.S. Prospectus (and of any
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amendment or supplement thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions in which the
Shares are offered by the several U.S. Underwriters and by all dealers to whom
Shares may be sold, both in connection with the offering and sale of the Shares
and for such period of time thereafter as the U.S. Prospectus is required by the
Act to be delivered in connection with sales by any U.S. Underwriter or dealer.
If during such period of time any event shall occur that in the judgment of the
Company or in the written opinion of counsel for the U.S. Underwriters is
required to be set forth in the U.S. Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the U.S. Prospectus to
comply with the Act or any other law, the Company will make every reasonable
effort to prepare and, subject to the provisions of paragraph (d) above and this
paragraph (f), file with the Commission an appropriate supplement or amendment
thereto and will expeditiously furnish to the U.S. Underwriters and dealers a
reasonable number of copies thereof. Each U.S. Underwriter agrees that after
receipt of any supplement or amendment to the Prospectus, it will not deliver
the Prospectus other than as so supplemented or amended. In the event that the
Company and you, as Representatives of the several Underwriters, agree that the
Prospectus should be amended or supplemented, the Company, if reasonably
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the U.S.
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several U.S. Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to taxation or to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later
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than 15 months thereafter, as soon as reasonably practicable after the end of
such period, which consolidated earnings statement shall satisfy the provisions
of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission or the New York Stock
Exchange and (ii) from time to time such other information concerning the
Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the U.S. Underwriters because of any failure or refusal
on the part of the Company or any of the Selling Shareholders to comply, in any
material respect, with the terms or fulfill, in any material respect, any of the
conditions of this Agreement, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including reasonable
fees and expenses of counsel for the U.S. Underwriters) incurred by you in
connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will make every
reasonable effort to timely file the Prospectuses pursuant to Rule 424(b) under
the Act and will advise you of the time and manner of such filing.
(m) For a period of 180 days after the date hereof (the "Lock-up
Period"), the Company will not, without the prior written consent of Xxxxx
Xxxxxx Inc., offer, sell, contract to sell or otherwise dispose of any Common
Stock (or any securities convertible into or exercisable or exchangeable for
Common Stock) or grant any options or warrants to purchase Common Stock that are
exercisable during the Lock-up Period, except for (i) sales to the U.S.
Underwriters pursuant to this Agreement and the Managers pursuant to the
International Underwriting Agreement, (ii) the issuance of Shares upon exercise
of outstanding options and (iii) the issuance of Shares in connection with
acquisitions, provided that the recipients of such Shares agree not to sell the
Shares during the Lock-up Period.
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(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current executive officers and directors and will make every reasonable effort
to furnish to you "lock-up" letters signed by each of its shareholders
designated by you.
(o) Except as stated in this Agreement and in the International
Underwriting Agreement and in the Prepricing Prospectuses and Prospectuses, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(p) The Company will use its best efforts to have the Common Stock
listed, subject to notice of issuance, on the New York Stock Exchange
concurrently with the effectiveness of the Registration Statement.
6. Agreements of the Selling Shareholders. Each of the Selling
Shareholders agrees with the several U.S. Underwriters as follows:
(a) Such Selling Shareholder will cooperate to the extent reasonably
necessary to cause the Registration Statement or any post-effective amendment
thereto to become effective at the earliest possible time.
(b) Such Selling Shareholder will pay all Federal and other taxes, if
any, on the transfer or sale of such Shares that are sold by such Selling
Shareholder to the U.S. Underwriters.
(c) Such Selling Shareholder will do or perform all things reasonably
required to be done or performed by such Selling Shareholder prior to the
Closing Date or any Option Closing Date, if applicable, to satisfy all
conditions precedent with respect to such Selling Shareholder to the delivery of
the Shares pursuant to this Agreement.
(d) Such Selling Shareholder has executed or will execute a "lock-up"
letter as provided in Section 5(n) above and will not sell, contract to sell or
otherwise dispose of any Common Stock, except as provided therein or for the
sale of Shares to the Underwriters pursuant to this Agreement, prior to the
expiration of the Lock-Up Period, without the prior written consent of Xxxxx
Xxxxxx Inc.
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(e) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the Prospectuses,
such Selling Shareholder has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(f) To the extent that any statements or omissions made in the
Registration Statement or the Prospectuses (as amended or supplemented, if
amended or supplemented) specifically refer to the information regarding a
Selling Shareholder under the caption "Principal and Selling Shareholders," such
Selling Shareholder will advise you promptly upon becoming aware, and if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in such information that comes
to the attention of such Selling Shareholder that makes any statement made in
the Registration Statement or the Prospectuses (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectuses (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectuses (as then
amended or supplemented) to comply with the Act or any other law.
7. Representations and Warranties of the Company. The Company represents
and warrants to each U.S. Underwriter that:
(a) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act; except that
this representation and warranty does not apply to statements in or omissions
from such U.S. Prepricing Prospectus (or any amendment or supplement thereto)
made in reliance upon and in conformity with information relating to any Selling
Shareholder or to any U.S. Underwriter or Manager furnished to the Company in
writing by a Selling Shareholder or a U.S. Underwriter through the
Representatives or by a Manager through the Lead Managers expressly for use
therein. The Commission has not issued any order preventing or suspending the
use of any Prepricing Prospectus.
(b) The Registration Statement in the form in which it became or
becomes effective, including the information deemed to be
13
part of the Registration Statement at the time of effectiveness pursuant to Rule
430A(b), and also in such form as it may be when any post-effective amendment
thereto shall become effective and the Prospectuses and any supplement or
amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the provisions of the
Act and will not at any such times 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; except that this representation
and warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectuses made in reliance upon and in conformity with
information relating to any Selling Shareholder or to any U.S. Underwriter or
Manager furnished to the Company in writing by a Selling Shareholder or a U.S.
Underwriter through the Representatives or by a Manager through the Lead
Managers expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares to be issued and sold
by the Company have been duly authorized and, when issued and delivered to the
U.S. Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any preemptive
or similar rights; and the capital stock of the Company conforms to the
description thereof in the Registration Statement and the Prospectuses under the
caption "Description of Capital Stock."
(d) The Company is a corporation duly organized and validly subsisting
under the laws of the Commonwealth of Pennsylvania with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectuses. Within
fourteen days of the Closing Date the Company will be duly registered and
qualified to conduct its business and in good standing in each jurisdiction
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not (1) have a material adverse effect on the condition (financial
or other), business, properties, shareholders' equity or results of operations
of the Company and the Subsidiaries (as hereinafter defined), taken as a whole,
(2) materially adversely affect the issuance, validity or enforceability of the
Shares or (3) materially adversely affect the consummation of any of the
14
transactions contemplated by this Agreement (each of (1), (2) and (3) above, a
"Material Adverse Effect").
(e) All the Company's subsidiaries (as defined in Rule 1-02(x) of
Regulation S-X and as required to be identified by Item 601(b)(21) of Regulation
S-K) are listed in an exhibit to the Registration Statement (collectively, the
"Subsidiaries"). Each Subsidiary is either (i) a corporation duly organized,
validly existing and in good standing in the jurisdiction of its incorporation,
or (ii) a partnership duly organized and validly existing under the applicable
laws of the Commonwealth of Pennsylvania. Each Subsidiary has the requisite
corporate or partnership, as the case may be, power and authority to own, lease
and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not individually or in the aggregate have a Material Adverse
Effect. All the outstanding shares of capital stock of each of the corporate
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are 99% or greater owned by the Company directly, or
indirectly through one or more of the other Subsidiaries, free and clear of any
lien, adverse claim, security interest, equity or other encumbrance, other than
the pledge of such shares pursuant to the Pledge and Intercreditor Agreement, as
amended, and the Credit Facility (as defined in the Registration Statement).
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries which are materially adverse to the Company and its Subsidiaries,
taken as a whole, or to which the Company or any of the Subsidiaries, or to
which any of their respective properties is subject, which are material to the
Company and its Subsidiaries, taken as a whole, that are required to be
described in the Registration Statement or the Prospectuses but are not
described as required.
(g) Neither the Company nor any of the Subsidiaries is (i) in
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, (ii) in violation of any statute, law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries or of any ruling, judgment, injunction, order or decree
of any court or governmental agency or body having jurisdiction over the Company
15
or any of the Subsidiaries (except where any such violation or violations in the
aggregate would not have a Material Adverse Effect), or (iii) in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound (except where any such default or
defaults in the aggregate would not have a Material Adverse Effect).
(h) Other than as will be obtained, waived or otherwise corrected
prior to the Closing Date, neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement or the International
Underwriting Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby and thereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except as may be required for the registration of the Shares under the
Act and the Exchange Act (which has been effected) and such as may be required
under state securities or foreign laws) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, or other organizational documents, of
the Company or any of the Subsidiaries or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing (except as may be required for the registration of the
Shares under the Act and the Exchange Act (which has been effected) and such as
may be required under state securities or foreign laws) or judgment, injunction,
order or decree applicable to the Company or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
the Subsidiaries pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject other than security interests
granted pursuant to the Credit Agreement, the 1996 Notes and the 1997 Notes (as
defined in the Registration Statement).
(i) The accountants, Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP,
who have certified or shall certify the financial
16
statements filed or to be filed as part of the Registration Statement or the
Prospectuses (or any amendment or supplement thereto) are independent public
accountants as required by the Act.
(j) The historical consolidated financial statements of the Company,
together with related schedules and notes forming part of the Registration
Statement and the Prospectuses (and any amendment or supplement thereto), and,
to the knowledge of the Company, the historical financial statements of Security
Archives, Inc. and Records Management Services, Inc., together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), comply with the
requirements of the Act and present fairly the consolidated financial position,
results of operations, cash flows and changes in financial position of the
Company and the Subsidiaries and Security Archives, Inc. and Records Management
Services, Inc., as the case may be, on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which they
apply; the statements and related schedules and notes of the Company and, to the
knowledge of the Company, the statements and related schedules and notes of
Security Archives, Inc. and Records Management Services, Inc., have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the pro forma financial information, and the related notes thereto,
included in the Registration Statement and the Prospectuses (and any amendment
or supplement thereto) have been prepared in accordance with the applicable
requirements of the Act and the assumptions used in preparing such information
are reasonable; and the other historical and pro forma financial and statistical
information and data set forth in the Registration Statement and the
Prospectuses (and any amendment or supplement thereto) are accurately presented
in all material respects and prepared on a basis consistent with the books and
records of the Company and its Subsidiaries.
(k) The execution and delivery of, and the performance by the Company
of its obligations under, each of this Agreement and the International
Underwriting Agreement have been duly and validly authorized by the Company, and
each of this Agreement and the International Underwriting Agreement has been
duly executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except (i) the enforceability hereof or thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
17
generally, (ii) the remedy of specific performance and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which the proceedings may be brought and (iii) rights to indemnity
and contribution hereunder or thereunder may be limited by federal or state
securities laws or the public policy underlying such laws.
(l) Except as disclosed or contemplated in the Registration Statement
and the Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock of the Company, or material increase in the short-term debt or long-term
debt, of the Company or any of the Subsidiaries, or any development having or
which may reasonably be expected to result in a Material Adverse Effect.
(m) Each of the Company and the Subsidiaries has good and valid title
to all property (real and personal) described in the Prospectuses as being owned
by it which is material to the business of the Company and its Subsidiaries
taken as a whole, free and clear of all liens, claims, security interests or
other encumbrances except such as are described in the Registration Statement
and the Prospectuses or in a document filed as an exhibit to the Registration
Statement and all the property described in the Prospectuses as being held under
lease by each of the Company and the Subsidiaries which is material to the
business of the Company and its Subsidiaries taken as a whole is held by it
under valid, subsisting and enforceable leases with only such exceptions as in
the aggregate do not interfere in any material respect with the conduct of the
business of the Company and the Subsidiaries, taken as a whole or the use made
or proposed to be made of such property by the Company or its Subsidiaries.
(n) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date or the Option Closing Date, if any, and (ii) completion
of the distribution of the Shares, will not distribute any offering material in
connection with the offering and sale of the Shares other than the Registration
Statement, the Prepricing Prospectuses, the Prospectuses or other materials, if
any, permitted by the Act.
18
(o) Except as described in clause (d) above, the Company and each of
the Subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits") as are necessary to own its
respective properties and to conduct its business in the manner described in the
Prospectuses, except where the failure to so possess would not, individually or
in the aggregate, have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectuses; the Company and each of
the Subsidiaries has fulfilled and performed all its material obligations with
respect to such Permits and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the
Prospectuses, except where any such revocation, termination or impairment would
not have a Material Adverse Effect.
(p) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary or received or retained
any funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectuses.
(r) The Company and, to the Company's knowledge, each of the
Subsidiaries have filed all tax returns required to be filed or obtained
extensions therefor, which returns are true and correct in all material
respects, and neither the Company nor any Subsidiary is in default in the
payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto, except where the failure to file such returns
or to pay such taxes is not reasonably likely to have a Material Adverse Effect.
19
(s) Except as described in the Prospectuses, no holder of any security
of the Company has any right to require registration of shares of Common Stock
or any other security of the Company because of the filing of the Registration
Statement or consummation of the transactions contemplated by this Agreement or
the International Underwriting Agreement, or otherwise. Except as described in
or contemplated by the Prospectuses, there are no outstanding options, warrants
or other rights calling for the issuance of, and there are no commitments, plans
or arrangements to issue, any shares of Common Stock of the Company or any
security convertible into or exchangeable or exercisable for Common Stock of the
Company.
(t) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registration, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectuses as being owned by them or any of them or necessary
for the conduct of their respective businesses, except where the lack of such
ownership or possession would not, individually or in the aggregate, have a
Material Adverse Effect, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
the Subsidiaries with respect to the foregoing.
(u) The Company is not and, upon sale of the Shares to be issued and
sold in accordance herewith and upon application of the net proceeds to the
Company from such sale as described in the Prospectuses under the caption "Use
of Proceeds," will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(v) The Company and, to the Company's knowledge, each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as the Company deems prudent
and customary to cover replacement costs of real and personal property; subject
to certain limitations and deductibles, such policies also cover extraordinary
expenses associated with business interruption and damage or loss from fire,
flood or earthquakes (in certain geographic areas), and losses at the Company's
facilities up to approximately $225 million; neither the Company nor, to the
knowledge of the Company, any such Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor, to the knowledge of
the Company, any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost
20
that would not have a Material Adverse Effect, except as described in or
contemplated by the Prospectuses.
(w) No Subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring
any of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company, except as described in or contemplated by the
Prospectuses.
(x) Except for the shares of capital stock or partnership interests of
each of the Subsidiaries owned by the Company and such Subsidiaries, neither the
Company nor any such Subsidiary owns any shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity, except as described in or contemplated
by the Prospectuses.
(y) There are no labor disputes with the Company's employees or with
employees of the Subsidiaries that exist or, to the Company's knowledge, are
imminent that are reasonably likely to materially adversely affect the Company
and the Subsidiaries taken as a whole, and the Company is not aware of any
existing or imminent labor disturbance by any of its or the Subsidiaries'
principal suppliers, contractors or customers that are reasonably likely to have
a Material Adverse Effect.
(z) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), maintained or contributed to by the Company or the
Subsidiaries, or with respect to which the Company or the Subsidiaries could
incur any liability under ERISA (collectively, the "Benefit Plans"), no event
has occurred and there exists no condition or set of circumstances in connection
with which the Company or the Subsidiaries could be reasonably likely to be
subject to any liability under the terms of such Benefit Plan or applicable law
(including, without limitation, ERISA and the Internal Revenue Code of 1986, as
amended (the "Code")) that could have a Material Adverse Effect.
(aa) The Company and, to the Company's knowledge, the Subsidiaries
are (i) (A) in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or
21
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses, and (C) and are in compliance with all terms and
conditions of any such permit, license or approval, except, in each case, where
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect; (ii) except as disclosed in the Registration
Statement or the Prospectuses, there is no civil, criminal or administrative
action, suit, demand, hearing, notice of violation or deficiency, investigation,
proceeding or notice of potential responsibility or liability or demand letter
or request for information pending, or to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries under any
Environmental Laws which, if determined adversely to the Company or any such
Subsidiary, would, individually or in the aggregate, be reasonably likely to
result in a Material Adverse Effect. Neither the Company nor, to the Company's
knowledge, any of the Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended ("CERCLA").
8. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to each U.S. Underwriter that:
(a) Such Selling Shareholder now has, and on the Closing Date and any
Option Closing Date, if applicable, will have, valid and marketable title to the
Shares to be sold by such Selling Shareholder on such date, free and clear of
any lien, claim, security interest or other encumbrance, including, without
limitation, any restriction on transfer, except as otherwise described in the
Prospectuses.
(b) Such Selling Shareholder now has, and on the Closing Date and any
Option Closing Date, if applicable, will have, full legal right, power and
authorization, and any approval required by law (other than any approval under
federal or state securities or foreign laws), to sell, assign, transfer and
deliver such Shares in the manner provided in this Agreement and the
International Underwriting Agreement, and upon delivery of and payment for such
Shares hereunder, the several U.S. Underwriters will acquire valid and
marketable title to such Shares free and clear of any lien, claim, security
interest, or other encumbrance.
22
(c) This Agreement, the International Underwriting Agreement and the
Custody Agreement have been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder and are the valid and binding agreements of
such Selling Shareholder enforceable against such Selling Shareholder in
accordance with their terms, except that (i) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) the remedy of specific performance and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which the proceedings may be brought and (iii) rights to indemnity
and contribution hereunder or thereunder may be limited by federal or state
securities laws or the public policy underlying such laws.
(d) Neither the sale of the Shares, the execution, delivery or
performance of this Agreement, the International Underwriting Agreement or the
Custody Agreement by or on behalf of such Selling Shareholder nor the
consummation by or on behalf of such Selling Shareholder of the transactions
contemplated hereby and thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except as may be required for the registration of the Shares under the
Act and the Exchange Act and such as may be required under state securities or
foreign laws), or (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any agreement, indenture, lease or
other instrument to which such Selling Shareholder is a party or by which such
Selling Shareholder is or may be bound (except any such agreements or other
instruments which will either be terminated or released upon the Closing
hereunder), or violates or will violate any statute, law, regulation or filing
or judgment, injunction, order or decree applicable to such Selling Shareholder,
or will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of such Selling Shareholder pursuant to the terms of
any agreement or instrument to which such Selling Shareholder is a party or by
which such Selling Shareholder may be bound or to which any of the property or
assets of such Selling Shareholder is subject.
(e) The information pertaining to such Selling Shareholder provided to
the Company for inclusion under the caption "Principal and Selling Shareholders"
in the Prospectuses, does not and will not contain an untrue statement of a
material fact or omit
23
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(f) The representations and warranties of such Selling Shareholder in
the Custody Agreement are, and on the Closing Date and any Option Closing Date,
if applicable, will be, true and correct.
(g) Such Selling Shareholder has not taken, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the Shares, except for the lock-up arrangements referred
to in the Prospectuses.
(h) Such Selling Shareholder has not distributed and, prior to the
later to occur of (i) the Closing Date or the Option Closing Date, if
applicable, and (ii) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and sale of the
Shares.
9. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless you and each other U.S. Underwriter and each person, if any,
who controls any U.S. Underwriter within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any U.S. Prepricing Prospectus or in the
Registration Statement or the U.S. Prospectus or in any amendment or supplement
thereto, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to any U.S. Underwriter or Manager furnished in writing to
the Company by or on behalf of any U.S. Underwriter through you or by or on
behalf of any Manager through a Lead Manager expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any U.S. Prepricing Prospectus shall not inure to
the benefit of any U.S. Underwriter (or to the benefit of any person controlling
such U.S. Underwriter) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Shares by such
24
U.S. Underwriter to any person if a copy of the U.S. Prospectus shall not have
been delivered or sent to such person within the time required by the Act and
the regulations thereunder, and the untrue statement or alleged untrue statement
or omission or alleged omission of a material fact contained in such U.S.
Prepricing Prospectus was corrected in the U.S. Prospectus, provided that the
Company has delivered the U.S. Prospectus to the several U.S. Underwriters in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability which the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
U.S. Underwriter or any person controlling any U.S. Underwriter in respect of
which indemnity may be sought against the Company or any Selling Shareholder,
such U.S. Underwriter or such controlling person shall promptly notify the
parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses;
provided, however, that the failure so to notify the indemnifying parties shall
not relieve the indemnifying parties from any obligation or liability except to
the extent that the indemnifying parties have been prejudiced materially by such
failure. Such U.S. Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such U.S. Underwriter or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such U.S. Underwriter
or such controlling person and the indemnifying parties and such U.S.
Underwriter or such controlling person shall have been advised by its counsel in
writing that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of such U.S. Underwriter or such
controlling person). It is understood, however, that in the event that one or
more persons seeking indemnity exercises its right to employ separate counsel
pursuant to the preceding sentence, the indemnifying parties shall, in
connection with any one such action, suit or proceeding or separate
25
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to one local counsel in each such jurisdiction) at any
time for all such U.S. Underwriters and controlling persons, which firm shall be
designated in writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses
as required to be paid by the indemnifying parties hereunder shall be reimbursed
as they are incurred. The indemnifying parties shall not be liable for any
settlement of any such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the
indemnifying parties agree to indemnify and hold harmless any U.S. Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.
(c) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each of you and each other U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, the Company, its directors,
its officers who sign the Registration Statement, and any person who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each U.S. Underwriter, but only with respect to the information furnished in
writing by or on behalf of such Selling Shareholder expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto; provided, however, the liability of a Selling
Shareholder under this paragraph (c) shall not exceed the proceeds received by
such Selling Shareholder from the sale of such Selling Shareholder's Shares
hereunder. If any action, suit or proceeding shall be brought against any U.S.
Underwriter, any such controlling person of any U.S. Underwriter, the Company,
any of its directors, any such officer, or any such controlling person of the
Company, based on the Registration Statement, the Prospectus or any Prepricing
Prospectus or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Selling Shareholder pursuant to this
paragraph (c), such Selling Shareholder shall have the rights and duties given
to the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Selling Shareholder shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of
26
such counsel shall be at such Selling Shareholder's expense), and each
Underwriter, each such controlling person of any U.S. Underwriter, the Company,
its directors, any such officer, and any such controlling person of the Company
shall have the rights and duties given to the U.S. Underwriters by paragraph (b)
above. The foregoing indemnity agreement shall be in addition to any liability
which any Selling Shareholder may otherwise have.
(d) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and the
Selling Shareholders, to the same extent as the foregoing indemnity from the
Company and the Selling Shareholders to each U.S. Underwriter, insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based upon
the untrue statement or alleged untrue statement of a material fact contained in
any U.S. Prepricing Prospectus or in the Registration Statement or the U.S.
Prospectus or in any amendment or supplement thereto, or arise out of or are
based upon any omission or 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 that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such U.S.
Underwriter through you specifically for use therein. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, any such controlling person or any Selling Shareholder based on the
Registration Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus,
or any amendment or supplement thereto, and in respect of which indemnity may be
sought against any U.S. Underwriter pursuant to this paragraph (d), such U.S.
Underwriter shall have the rights and duties given to the Company by paragraph
(b) above (except that if the Company or the Selling Shareholders shall have
assumed the defense thereof such U.S. Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such U.S.
Underwriter's expense), and the Company, its directors, any such officer, any
such controlling person, and the Selling Shareholders, shall have the rights and
duties given to the U.S. Underwriters by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which any U.S.
Underwriter may otherwise have.
27
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the U.S. Underwriters
on the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other hand
in connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other hand
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company and the Selling
Shareholders bear to the total underwriting discounts and commissions received
by the U.S. Underwriters, in each case as set forth in the table on the cover
page of the U.S. Prospectus; provided that, in the event that the U.S.
Underwriters shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company, the Selling
Shareholders or the U.S. Underwriters from the offering of the Shares shall
include the net proceeds (before deducting expenses) received by the Company,
and the underwriting discounts and commissions received by the U.S.
Underwriters, from the sale of such Additional Shares, in each case computed on
the basis of the respective amounts set forth in the notes to the table on the
cover page of the U.S. Prospectus. The relative fault of the Company and the
Selling Shareholders 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 the
Selling Shareholders on the one hand or by the U.S. Underwriters on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
28
(f) The Company, the Selling Shareholders and the U.S. Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the U.S.
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in paragraph (e) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (e) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions
of this Section 9, no U.S. Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed 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.
Notwithstanding the provisions of this Section 9, no Selling Shareholder shall
be required to contribute any amount in excess of the total net proceeds of the
Shares sold by such Selling Shareholder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The U.S. Underwriters' obligations to contribute pursuant to
this Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule II hereto (or such numbers of
Firm Shares increased as set forth in Section 12 hereof) and not joint.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling
29
Shareholders set forth in this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation made by or on behalf of
any U.S. Underwriter or any person controlling any U.S. Underwriter, the
Company, its directors or officers or the Selling Shareholders, any director,
officer or partner of a Selling Shareholder or any person controlling the
Company or any Selling Shareholder, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement.
Notwithstanding any other provisions of this Agreement, if this Agreement
terminates prior to the purchase of the Shares by the U.S. Underwriters, the
Company and the Selling Shareholders shall not be liable for any lost profits. A
successor to any U.S. Underwriter or any person controlling any U.S.
Underwriter, or to the Company, its directors or officers, or to a Selling
Shareholder, any director, officer or partner of a Selling Shareholder or any
person controlling the Company or any Selling Shareholder, shall be entitled to
the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 9.
10. Conditions of U.S. Underwriters' Obligations. The several obligations
of the U.S. Underwriters to purchase the Firm Shares hereunder are subject to
the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any U.S. Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectuses or
otherwise) shall have been complied with to your reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company and the
Subsidiaries taken as a whole not contemplated by the Prospectuses, which in
your reasonable
30
opinion, as Representatives of the several U.S. Underwriters, would materially
adversely affect the market for the Shares, or (ii) any event or development
relating to or involving the Company or any officer or director of the Company
or any Selling Shareholder which makes any statement made in the Prospectuses
untrue or which, in the opinion of the Company and its counsel or the U.S.
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectuses in order to state a material fact required by the Act or any
other law to be stated therein or necessary in order to make the statements
therein not misleading, if amending or supplementing the Prospectuses to reflect
such event or development would, in your opinion, as Representatives of the
several U.S. Underwriters, materially adversely affect the market for the
Shares.
(c) You shall have received on the Closing Date and any Option
Closing Date an opinion of Cozen and X'Xxxxxx, counsel for the Company and the
Selling Shareholders, dated the Closing Date, and any Option Closing Date, as
the case may be, and addressed to you, as Representatives of the several U.S.
Underwriters, to the effect that:
(i) The Company is a corporation duly incorporated and validly
subsisting under the laws of the Commonwealth of Pennsylvania with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectuses, and is in the process of qualifying in the jurisdictions set forth
on Annex A to such opinion;
(ii) Each of the Subsidiaries organized under the laws of the
United States or a state thereof ("U.S. Subsidiary") is either (A) a corporation
duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization, or (B) a limited partnership duly organized
under the laws of the Commonwealth of Pennsylvania;
(iii) The authorized and, to such counsel's knowledge,
outstanding capital stock of the Company is as set forth under the caption
"Capitalization" in the Prospectuses; and the authorized capital stock of the
Company conforms in all material respects as to legal matters to the description
thereof contained in the Prospectuses under the caption "Description of Capital
Stock";
(iv) To the knowledge of such counsel, all the shares of
capital stock of the Company outstanding prior to the
31
issuance of the Shares to be issued and sold by the Company pursuant to the
Underwriting Agreements have been duly authorized and validly issued, and are
fully paid and nonassessable;
(v) The Underwritten Shares to be issued and sold to the U.S.
Underwriters and Managers by the Company under the U.S. Underwriting Agreement
and the International Underwriting Agreement have been duly authorized and, when
issued and delivered to the U.S. Underwriters and Managers against payment
therefor in accordance with the terms of the U.S. Underwriting Agreement and the
International Underwriting Agreement, respectively, will be validly issued
(assuming certificates for such Shares have been validly countersigned by the
transfer agent for the Common Stock), fully paid and nonassessable and free of
any (A) statutory preemptive rights or (B) to the knowledge of such counsel,
similar rights that entitle or will entitle any person to acquire any Shares
upon the issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms to the
requirements of the Pennsylvania Business Corporation Law of 1988, as amended;
(vii) The Registration Statement and all post-effective amendments,
if any, have become effective under the Act and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending before
or contemplated by the Commission; and, to such counsel's knowledge, any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in
accordance with Rule 424(b);
(viii) The Company has the requisite corporate power and authority to
enter into the U.S. Underwriting Agreement and the International Underwriting
Agreement and to issue, sell and deliver the Underwritten Shares to be sold by
it to the U.S. Underwriters and Managers as provided therein, and each of the
U.S. Underwriting Agreement and the International Underwriting Agreement has
been duly authorized, executed and delivered by the Company;
(ix) Neither the Company nor, to the knowledge of such counsel, any
of the U.S. Subsidiaries is (A) in violation of its respective certificate of
incorporation or bylaws or other organizational documents or (B) to the
knowledge of such counsel, in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness that is filed as an exhibit to the Registration
Statement, except as may be disclosed in the
32
Prospectuses or where any such default or defaults in the aggregate would not,
singularly or in the aggregate, have a Material Adverse Effect;
(x) None of the offer, issuance, sale or delivery of the
Underwritten Shares, the execution, delivery or performance by the Company of
the U.S. Underwriting Agreement or the International Underwriting Agreement,
compliance by the Company with all provisions of this Agreement and the
International Underwriting Agreement, or consummation by the Company of the
transactions contemplated hereby or by the International Underwriting Agreement
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate of incorporation or bylaws or other
organizational document of the Company or any of the U.S. Subsidiaries or any
material agreement, indenture, lease or other instrument to which the Company is
a party or by which it or any of its properties is bound that is filed as an
exhibit to the Registration Statement, or, except as disclosed in the
Registration Statement, will, to such counsel's knowledge, result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the U.S. Subsidiaries under any such agreement,
indenture, lease or other instrument, nor, to such counsel's knowledge, will any
such action result in any violation of any existing law or regulation (assuming
compliance with all applicable state securities or Blue Sky laws and foreign
laws), or any ruling, judgment, injunction, order or decree of any court or
governmental entity or instrumentality known to such counsel, and applicable to
the Company, the U.S. Subsidiaries or any of their respective properties;
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company (except as have been obtained under the Act or the Exchange Act or such
as may be required under state securities or Blue Sky laws and foreign laws) for
the valid issuance and sale of the Shares to the U.S. Underwriters as
contemplated by the U.S. Underwriting Agreement;
(xii) The Registration Statement and the Prospectuses and any
supplements or amendments thereto (except for the financial statements,
schedules, and notes thereto and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as to
form in all material respects with the requirements of the Act;
33
(xiii) To the knowledge of such counsel, (A) other than as described
or contemplated in the Prospectuses, there are no legal or governmental
proceedings pending or threatened against the Company or any of the U.S.
Subsidiaries, or to which the Company, the U.S. Subsidiaries or any of their
respective properties is subject, which are required to be described in the
Registration Statement or Prospectuses (or any amendment or supplement thereto)
and (B) there are no agreements, contracts, indentures, leases or other
instruments relating to the Company or any of the U.S. Subsidiaries, of a
character that are required to be described in the Registration Statement or the
Prospectuses (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required, as the case may be;
(xiv) To the knowledge of such counsel, the U.S. Underwriting
Agreement, the International Underwriting Agreement and the Custody Agreement
have each been duly executed and delivered by or on behalf of each of the
Selling Shareholders;
(xv) The statements in the Registration Statement and Prospectuses,
under the caption "Shares Eligible for Future Sale," insofar as they refer to
statements of law or legal conclusions, are accurate in all material respects;
(xvi) Except as described in the Prospectuses, such counsel does not
know of any outstanding option, warrant or other right calling for the issuance
of, and such counsel does not know of any commitment, plan or arrangement to
issue, any share of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company; and,
except as described in the Prospectuses, such counsel does not know of any
holder of any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue to
them, or permit them to underwrite the sale of, any of the Shares or the right
to have any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of Common Stock or
other securities of the Company;
(xvii) The Company is not now and upon the sale of the Shares to be
issued and sold in accordance herewith and upon application of the net proceeds
from such sale as described in the Prospectuses under the caption "Use of
Proceeds" will not be an "investment company" within the meaning of the 1940
Act;
34
(xviii) Each Selling Shareholder has full legal right, power and
authority, and any approval required by law (except such as may be required
under state securities or Blue Sky laws or foreign laws), to sell, assign,
transfer and deliver good and valid title to the Shares which such Selling
Shareholder has agreed to sell pursuant to this Agreement and the International
Underwriting Agreement;
(xix) The execution and delivery of this Agreement and the sale of
the Shares by each Selling Shareholder to the Underwriters, and compliance by
such Selling Shareholder with the terms of this Agreement, including the
delivery to the Underwriters of certificates evidencing such shares and the
execution and delivery to the U.S. Underwriters of a stock power in blank, have
been duly authorized by all necessary action on the part of such Selling
Shareholder and, to the knowledge of such counsel, do not, and will not,
conflict with, or result in a breach of any of the terms and provisions of, or
constitute a default under (I) any statute, rule or regulation (assuming
compliance with all applicable state securities and Blue Sky laws or foreign
laws) relating to such Selling Shareholder or its legal status in each case,
that in the experience of such counsel are normally applicable to transactions
of the type provided for in this Agreement, (II) any material judgment, order,
rule, injunction or regulation of any court or governmental agency or body,
domestic or foreign, known to such counsel or (III) any material contract,
agreement or other instrument known to such counsel to which such Selling
Shareholder is a party or by which it or any of its properties are subject;
(xx) Upon delivery of the Shares to be sold by the Selling
Shareholders pursuant to this Agreement and payment therefor as contemplated
herein, the Underwriters will have acquired all rights of the Selling
Shareholder in the Shares free and clear of any security interest, mortgage,
lien, pledge, encumbrance or claim.
In addition, such counsel shall state that although counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Registration Statement (except
to the extent set forth in paragraphs (iii) and (xv) above), such counsel has
participated in the preparation of the Registration Statement and the
Prospectuses, including general review and discussion of the contents thereof
and nothing has come to the attention of such counsel that would lead them to
believe that the Registration
35
Statement at the time the Registration Statement became effective, or the
Prospectuses, as of their respective dates and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated or,
necessary to make the statements therein, in the case of the Prospectuses, in
the light of the circumstances under which they were made, not misleading or
that any amendment or supplement to the Prospectuses, as of its respective date,
and as of the Closing Date or the Option Closing Date, as the case may be,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated in the Prospectuses or necessary in order to make the
statements therein, in the case of the Prospectuses, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no statement with respect to the financial
statements, financial schedules, pro forma financial statements and the notes
thereto and other financial and statistical data included in the Registration
Statement or the Prospectuses).
In rendering their opinion as aforesaid, counsel may, as to factual
matters, rely, to the extent such counsel deems proper, upon written
certificates or statements of officers of the Company and the Selling
Shareholders. The foregoing opinion may be limited to the federal laws of the
United States of America and the Commonwealth of Pennsylvania, and counsel
rendering the foregoing opinion may rely as to questions of fact upon the
representations of the Selling Shareholders as set forth in this Agreement and
in the Custody Agreement.
(d) You shall have received on the Closing Date and any Option
Closing Date an opinion of Blake, Xxxxxxx & Xxxxxxx and/or Xxxxxxx XxXxxxxx
Stirling Seals (as appropriate), Canadian counsel for the Canadian Subsidiary,
dated the Closing Date and any Option Closing Date, as the case may be, and
addressed to you, as Representatives of the several U.S. Underwriters, to the
effect that:
(i) The Canadian Subsidiary is a corporation duly organized
and validly existing under the laws of the jurisdiction of their organization
with full corporate power and authority to own, lease, and operate their
properties and to conduct its business as described in the Registration
Statement and the Prospectuses (and any amendment or supplement hereto); and all
the outstanding shares of capital stock of each of the Subsidiaries have been
duly authorized and validly issued, are fully paid and
36
nonassessable, and is 99% indirectly owned by the Company registered in the name
of ___________.
(ii) The Canadian Subsidiary is not in violation of its
certificate of incorporation or bylaws or other organizational documents.
(iii) Neither the offer, issuance, sale or delivery of the
Underwritten Shares, nor the execution, delivery or performance by the Company
of this Agreement or the U.S. Underwriting Agreement or compliance by the
Company with all provisions of this Agreement and the U.S. Underwriting
Agreement, nor consummation by the Company of the transactions contemplated
hereby or by the U.S. Underwriting Agreement conflicts or will conflict with or
constitutes or will constitute a breach of, or default under, the certificate of
incorporation or bylaws, or other organizational document, or the Canadian
Subsidiary or to such counsel's knowledge, except as disclosed in the
Registration Statement, will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Canadian Subsidiary
under any material agreement, indenture, lease or other instrument, nor, to such
counsel's knowledge, will any such action result in any violation of any
existing law, regulation, ruling (assuming compliance with all applicable state
securities or Blue Sky laws and foreign laws), or any ruling, judgment,
injunction, order or decree of any court or governmental entity or
instrumentality known to such counsel, and applicable to the Canadian Subsidiary
or any of its respective properties.
(e) You shall have received on the Closing Date and any Option
Closing Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, counsel
for the U.S. Underwriters, dated the Closing Date and any Option Closing Date,
as the case may be, with respect to the matters referred to in clauses (v)
(other than subclause (B) thereof), (vii), (viii), (x) and the paragraph
immediately following clause (xx) of the foregoing paragraph (c) and such other
related matters as you may request.
(f) You shall have received letters addressed to you, as
Representatives of the several U.S. Underwriters, and dated the date hereof and
the Closing Date and any Option Closing Date from Xxxxxx Xxxxxxxx LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the
37
Company, shall be contemplated by the Commission at or prior to the Closing Date
or any Option Closing Date, as the case may be; (ii) there shall not have been
any material change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectuses (or any amendment or Supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectuses
(or any amendment or supplement thereto), except as may otherwise be stated or
contemplated in the Registration Statement and Prospectuses (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries taken as a whole, other than those reflected in the
Registration Statement or the Prospectuses (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the date hereof and on and as of the Closing Date or such Option
Closing Date, as the case may be, as if made on and as of the Closing Date or
any Option Closing Date, as the case may be, and you shall have received a
certificate, dated the Closing Date or such Option Closing Date, as the case may
be, and signed by the chief executive officer and the chief financial officer of
the Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 10(g) and in Section 10(h) hereof.
(h) The Company shall not have failed at or prior to the Closing
Date or any Option Closing Date, as the case may be, to have performed or
complied in all material respects with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date or such Option Closing Date.
(i) All the representations and warranties of the Selling
Shareholders contained in this Agreement and in the International Underwriting
Agreement shall be true and correct in all material respects, on and as of the
date hereof and on and as of the Closing Date or any Option Closing Date, as the
case may be, as if made on and as of the Closing Date or such Option Closing
Date, as the case may be, and you shall have received a certificate, dated the
Closing Date or such Option Closing Date, as
38
the case may be, and signed by or on behalf of each of the Selling Shareholders
to the effect set forth in this Section 10(i) and in Section 10(j) hereof.
(j) The Selling Shareholders shall not have failed at or prior to
the Closing Date or any Option Closing Date, if applicable, to have performed or
complied in all material respects with any of their agreements contained in this
Agreement or the International Underwriting Agreement and required to be
performed or complied with by them at or prior to the Closing Date or such
Option Closing Date, if applicable.
(k) The Sellers shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have reasonably
requested.
(l) The Common Stock shall have been listed or approved for listing,
subject to notice of issuance, on the New York Stock Exchange.
(m) The closing under the International Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the Closing Date.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
any Attorney-in-Fact or any Selling Shareholder and delivered to you, as
Representatives of the U.S. Underwriters, or to counsel for the U.S.
Underwriters, shall be deemed a representation and warranty by the Company, the
Selling Shareholders or the particular Selling Shareholder, as the case may be,
to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 10 shall be dated the Option
Closing Date in question and the opinions or letters called for by paragraphs
(c), (d), (e) and (f) shall be revised to reflect the sale of Additional Shares.
39
11. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by the Company of
its obligations hereunder: (i) the printing (or reproduction) and filing with
the Commission and delivery (including postage, air freight (or reproduction)
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (ii) the preparation, printing, authentication, issuance
and delivery of certificates for the Shares, including any stamp taxes in
connection with the original issuance and sale of the Shares by the Company;
(iii) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the original
issuance and sale of the Shares; (iv) the registration of the Common Stock under
the Exchange Act and the listing of the Shares on the New York Stock Exchange;
(v) the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vi) the filing fees in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc.; (vii) the transportation and other expenses incurred by or on behalf of
representatives of the Company in connection with presentations to prospective
purchasers of the Shares; and (viii) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company. Each Selling Shareholder agrees to pay for any
transfer taxes on the sale by such Selling Shareholder of such Selling
Shareholder's Shares to the U.S. Underwriters.
12. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying you, or
by you, as Representatives of the
40
several U.S. Underwriters, by notifying the Company and the Selling
Shareholders.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting U.S.
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule II hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all non-
defaulting U.S. Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Xxxxx
Xxxxxx Inc., to purchase the Shares which such defaulting U.S. Underwriter or
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the U.S. Underwriters shall fail or refuse to purchase Shares which it or
they are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the U.S. Underwriters are obligated to purchase
on the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting U.S. Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting U.S. Underwriter or the Company (provided that if such
default occurs with respect to the Additional Shares after the Closing Date,
this Agreement will not terminate as to the Firm Shares or any Additional Shares
purchased prior to such termination). In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting U.S. Underwriter
from liability in respect of any such default of any such Underwriter under this
Agreement. The term "U.S. Underwriter" as used in this Agreement includes, for
all purposes of this Agreement, any party not listed in Schedule II hereto
which, with your approval and the approval of the Company, purchases Shares
which a defaulting U.S. Underwriter is obligated, but fails or refuses, to
purchase.
41
Any notice under this Section 12 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company or any Selling Shareholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the U.S.
Prospectus or to enforce contracts for the resale of the Shares by the U.S.
Underwriters.
Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the U.S. Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page, and the statements in the first through third, sixth
through ninth and thirteenth paragraphs under the caption "Underwriting" in any
U.S. Prepricing Prospectus and in the U.S. Prospectus constitute the only
information furnished by or on behalf of the U.S. Underwriters through you as
such information is referred to in Sections 7(b) and 9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or the Selling Shareholders
at the office of the Company at, 000 Xxxx Xxxxxx, Xxxx xx Xxxxxxx, XX 00000,
Attention: President; or (ii) if to you, as Representatives of the several U.S.
Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx,
00
Xxx Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, the other
controlling persons referred to in Section 9 hereof and the Selling Shareholders
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any U.S. Underwriter of
any of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
43
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and the several U.S. Underwriters.
Very truly yours,
XXXXXX XXXXX CORP.
By .......................
Name:
Title:
Each of the Selling Shareholders
named in Schedule I hereto
By ..........................
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several U.S.
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
PAINEWEBBER INCORPORATED
As Representatives of the Several U.S. Underwriters
By XXXXX XXXXXX INC.
By ............................
Managing Director
44
SCHEDULE I
XXXXXX, XXXXX CORP.
Part A - Firm Shares
--------------------
Number of
Selling Shareholders Firm Shares
-------------------- -----------
--------------
Total........
--------------
Part B - Additional Shares
--------------------------
45
SCHEDULE II
XXXXXX XXXXX CORP.
Part A - Firm Shares
--------------------
Number of Number of
Underwriter Firm Shares Underwriter Firm Shares
----------- ----------- ----------- -----------
Xxxxx Xxxxxx Inc. . . .
Xxxxxxx Xxxxx & Co. . .
PaineWebber Incorporated
Part B - Additional Shares
--------------------------
-----------
Total.....
-----------
46
