EXHIBIT 1.1
_______________ SHARES
XXXXXXX & XXXX FINANCIAL, INC.
SHARES OF CLASS A COMMON STOCK, $.01 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
February , 1998
January , 1998
Xxxxxx Xxxxxxx & Co. Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Xxxxxxx & Xxxx Financial, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below)
________________ shares of its Class A Common Stock, $.01 par value per share
(the "FIRM SHARES").
It is understood that, subject to the conditions hereinafter stated,
____________ Firm Shares (the "U.S. FIRM SHARES") will be sold to the several
U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and __________ Firm Shares (the "INTERNATIONAL SHARES") will be
sold to the several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx,
Sachs & Co. and Xxxxxxx Xxxxx & Co. shall act as representatives (the "U.S.
REPRESENTATIVES") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited shall act as representative (the "INTERNATIONAL
REPRESENTATIVE") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter collectively
referred to as the UNDERWRITERS.
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional __________ shares of its Class A Common
Stock, $.01 par value (the "ADDITIONAL SHARES") if and to the extent that the
U.S. Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Class A Common Stock granted
to the U.S. Underwriters in Section 2 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES". The shares of
Class A Common Stock, $.01 par value of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "CLASS A COMMON STOCK".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus (as described in Rule 434(a)(1) under the Securities
Act) in the respective forms first used to confirm sales of Shares are
hereinafter collectively referred to as the "DISTRIBUTED PROSPECTUS"; the U.S.
prospectus and the international prospectus included in the Registration
Statement at the time of its effectiveness (including the information, if any,
deemed to be a part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act) are hereinafter collectively
referred to as the "FILED PROSPECTUS"; and the Distributed Prospectus and the
Filed Prospectus are hereinafter referred to collectively as the "PROSPECTUS".
As part of the offering contemplated by this Agreement, Xxxxxx Xxxxxxx &
Co. Incorporated and certain of its affiliates (collectively, "XXXXXX XXXXXXX")
has agreed to reserve out of the Shares set forth opposite its name on Schedule
II to this Agreement, up to ___________ shares, for sale to the Company's
employees, officers and directors and other parties associated with the Company
(collectively, "PARTICIPANTS"), as set forth in the Prospectus under the heading
"UNDERWRITERS" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by Xxxxxx
Xxxxxxx pursuant TO THE DIRECTED SHARE PROGRAM (THE "DIRECTED SHARES") will be
sold by Xxxxxx Xxxxxxx pursuant to this Agreement at the public offering price.
Any Directed Shares not orally confirmed for purchase by any Participants by the
end of the business day on which this Agreement is executed will be offered to
the public by Xxxxxx Xxxxxxx as set forth in the Prospectus.
1. Representations and Warranties. Each of Torchmark Corporation, a
Delaware corporation ("TORCHMARK") and the Company represents and warrants
to and agrees with each of the Underwriters that:
(a) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the
Company and its subsidiaries have not incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) the Company
has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its
capital stock other than ordinary and customary dividends; and (3)
there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its subsidiaries,
except in each case as described in the Prospectus.
(b) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them which is material to the
business of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Prospectus.
(c) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse affect on
the Company and its subsidiaries, taken as a whole.
(d) No material labor dispute with the employees of the Company
or any of its subsidiaries exists, except as described in the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any
existing, threatened or imminent labor disturbance by the employees of
any of its principal suppliers, manufacturers or contractors that
could have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in
which they are engaged; neither the Company nor any of its
subsidiaries 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 that would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole, except as described in the Prospectus.
(f) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
business, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as described the
Prospectus.
(g) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(h) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(i) (A) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) the Registration Statement and
the Prospectus comply and, as amended or
supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (C)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.
(j) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(k) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of
the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims.
(l) This Agreement has been duly authorized, executed and
delivered by the Company.
(m) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(n) The shares of Class A Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(o) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(p) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(q) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(r) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(s) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(t) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended
(the "INVESTMENT COMPANY ACT").
(u) Each of Xxxxxxx & Xxxx, Inc. ("WRI") and Xxxxxxx & Xxxx
Investment Management Company ("WRIMCO") is duly registered as an
investment adviser under the Investment Advisers Act of 1940, as
amended (the "ADVISERS ACT") and neither WRI or WRIMCO is prohibited
by any provision of the Advisers Act or the Investment Company Act, or
the respective rules and
regulations thereunder, from acting as an investment adviser. WRI and
WRIMCO are the only direct or indirect subsidiaries of the Company
required to be registered as investment advisers under the Advisers
Act.
(v) WRI is duly registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
under the securities laws of each state where the conduct of its
business requires such registration and is in compliance with all
United States federal and state laws requiring such registration or is
subject to no material liability or disability by reason of the
failure to be so registered in any such jurisdiction or to be in such
compliance in all material respects. WRI is a member in good standing
of the National Association of Securities Dealers (the "NASD"). None
of the Company's other direct or indirect subsidiaries is required to
be registered, licensed or qualified as a broker-dealer under the laws
requiring any such registration, licensing or qualification in any
state in which it conducts business or is subject to any material
liability or disability by reason of the failure to be so registered,
licensed or qualified.
(w) Xxxxxxx & Xxxx Service Company, Inc. ("WRSCO") is duly
registered as a transfer agent under the Exchange Act and under the
securities laws of each state where the conduct of its business
requires such registration and is in compliance in all material
respects with all United States federal and state laws requiring such
registration or is subject to no material liability or disability by
reason of the failure to be so registered in any such jurisdiction or
to be in such compliance. None of the Company's other direct or
indirect subsidiaries is required to be registered, licensed or
qualified as a transfer agent under the laws requiring any such
registration, licensing or qualification in any state in which it
conducts business or is subject to any material liability or
disability by reason of the failure to be so registered, licensed or
qualified.
(x) Each of WRI and WRIMCO is duly registered, licensed or
qualified as an investment adviser in each United States jurisdiction
where the conduct of its business requires such registration and is in
compliance in all material respects with all United States federal and
state laws requiring any such registration, licensing or qualification
or is subject to no material liability or disability by reason of the
failure to be so registered, licensed or qualified or to be in such
compliance. None of the Company's other direct or indirect
subsidiaries is required to be registered, licensed or qualified as an
investment adviser under the laws requiring any such registration,
licensing or qualification in any state in which it or its
subsidiaries conduct business or is not subject to material liability
or disability by reason of the failure to be so registered, licensed
or qualified.
(y) Each of WRI and WRIMCO is and has been in compliance with,
and each such entity has or will have had, as the case may be,
received no notice of any violation of, (A) all laws, regulations,
ordinances and rules (including those of any non-governmental
self-regulatory agencies) applicable to it or its
operations relating to investment advisory or broker-dealer activities
and (B) all other such laws, regulations, ordinances and rules
applicable to it and its operations, except, in either case, where any
failure by the Company, WRI or WRIMCO to comply with any such law,
regulation, ordinance or rule would not have, individually or in the
aggregate, a material adverse effect on the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole.
(z) Each entity for which WRI or WRIMCO acts as investment
adviser and which is required to be registered with the Commission as
an investment company under the Investment Company Act and which is
listed on Appendix 1 of the Prospectus (a "FUND") is, and upon
consummation of the transactions contemplated herein will be, duly
registered with the Commission as an investment company under the
Investment Company Act and to the best knowledge of the Company, each
Fund has been operated in compliance in all material respects with the
Investment Company Act and the rules and regulations thereunder and to
the best knowledge of the Company, there are no facts with respect to
any such Fund that are likely to have a material adverse effect on the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company or its subsidiaries taken as a
whole.
(aa) To the best knowledge of the Company, each Fund's
registration statement complies in all material respects with the
provisions of the Securities Act, the Investment Company Act and the
rules and regulations thereunder and does not contain any untrue
statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(bb) Each agreement between the Company, WRI, WRIMCO or any other
subsidiary of the Company on the one hand and any Fund or private
client on the other hand is a legal and valid obligation of the
parties thereto, and none of the Company, WRI, WRIMCO or any other
subsidiary of the Company is in breach or violation of or in default
under any such agreement which would individually or in the aggregate
have a material adverse effect on, or cause a prospective material
adverse change in, the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole.
(cc) The offering contemplated by this Agreement (the "OFFERING")
will not, and the special dividend to the shareholders of Torchmark of
all of the Class A Common Stock and Class B Common Stock owned by
Torchmark after the Offering should not, constitute an "assignment" as
defined in the Investment Company Act and the Advisers Act of any of
the investment advisory contracts to which WRI or WRIMCO is a party.
(dd) The Company and its subsidiaries (i) are 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
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except 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 on the Company and its subsidiaries, taken as a whole.
(ee) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(ff) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Securities Act
with respect to any securities of the Company or to require the
Company to include such securities with the Shares registered pursuant
to the Registration Statement except as disclosed in the Prospectus.
(gg) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(hh) The Company does not anticipate incurring significant
operating expenses or costs to ensure that all Company software that
contains or calls on a calendar function that is indexed to a computer
processing unit clock, provides specific dates or calculates spans of
dates, is able to record, store, process and provide true and accurate
dates and calculations for dates and spans of dates including and
following January 1, 2000.
(ii) Furthermore, the Company represents and warrants to Xxxxxx
Xxxxxxx that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or
supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that
(ii) no authorization, approval, consent, license, order, registration
or qualification of or with any government, governmental
instrumentality or court, other than such as have been obtained, is
necessary under
the securities laws and regulations of foreign jurisdictions in which
the Directed Shares are offered outside the United States.
(jj) The Company has not offered, or caused the Underwriters to
offer, Shares to any person pursuant to the Directed Share Program
with the specific intent to unlawfully influence (i) a customer or
supplier of the Company to alter the customer's or supplier's level or
type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the
Company or its products.
(kk) The Company represents and warrants that any loans made to
officers or employees of the Company enabling such officers or
employees to participate in the Directed Share Program will violate
Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
hereto opposite its names at U.S.$_____ a share ("PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to __________
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elects to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares.
Each of Torchmark (for itself and on behalf of its subsidiaries) and the
Company hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx
& Co. Incorporated on behalf of the Underwriters, it will not, during the period
ending 180 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Class A Common Stock or any securities
convertible into or exercisable or exchangeable for Class A Common Stock or (ii)
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Class A Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Class A Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the Shares to be
sold hereunder or (B) the issuance by the Company of shares of Class A Common
Stock upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised in
writing or options on shares of Class A Common Stock issued in connection with
employee benefit plans as described in the Prospectus.
3. Terms of Public Offering. The Company is advised by you that the
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. The Company is further
advised by you that the Shares are to be offered to the public initially at
U.S.$_____ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected
by you at a price that represents a concession not in excess of U.S.$____ a
share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of U.S.$____ a share, to
any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be madeto the
Company in Federal or other funds immediately available in New York City against
delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on ________, 1998, or at such
other time on the same or such other date, not later than _________, 1998, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in Federal
or other funds immediately available in New York City against delivery of such
Additional Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2 or at such other time on the same or on such other date, in any event
not later than _______, 1998, as shall be designated in writing by the U.S.
Representatives. The time and date of such payment are hereinafter referred to
as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company to sell the Shares to the Underwriters and the several obligations of
the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating
accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole,
from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the
Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx & Xxxx, L.L.P., special counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) each subsidiary of the Company listed in Exhibit 21.1
to the Registration Statement (a "COMPANY SUBSIDIARY") has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus;
(iv) the shares of Class A Common Stock outstanding prior to
the issuance of the Shares have been duly authorized and are
validly issued, fully paid and non-assessable;
(v) all of the issued shares of capital stock of each
Company Subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly
by the Company, free and clear of all liens, encumbrances,
equities or claims;
(vi) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive or
similar rights;
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or, to
the best of such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such counsel's
knowledge, any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares by the U.S. Underwriters;
(ix) the statements (A) in the Prospectus under the captions
"Description of Capital Stock" and "Underwriters" and (B) in the
Registration Statement in Items 14 and 15, in each case insofar
as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(x) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(xi) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment
Company Act;
(xii) WRI and WRIMCO are each duly registered as investment
advisers under the Advisers Act. No other subsidiary of the
Company is an "investment adviser" within the meaning of the
Advisers Act and the rules and regulations of the Commission
promulgated thereunder. WRI is duly registered, licensed or
qualified as a broker-dealer in each United States jurisdiction
where the conduct of its business requires such registration and
is in compliance in all material respects with all United States
federal and state laws requiring any such registration, licensing
or qualification. None of the Company's other direct or indirect
subsidiaries is required to be registered, licensed or qualified
as a broker-dealer under the laws requiring any such
registration, licensing or qualification in any state in which it
or its subsidiaries conduct business. To the best knowledge of
counsel, each of the Company, WRI and WRIMCO is in compliance
with all laws, regulations, ordinances and rules (including those
of any non-governmental self-regulatory agencies) applicable to
it or its operations relating to
investment advisory activities except where any failure by the
Company or any subsidiary to comply with any such law,
regulation, ordinance or rule would not have, individually, or in
the aggregate, a material adverse effect on the general affairs,
management, financial position, stockholders' equity or results
of operations of the Company or its subsidiaries taken as a
whole;
(xiii) each of WRI and WRIMCO is duly registered, licensed
or qualified as an investment adviser in each United States
jurisdiction where the conduct of its business requires such
registration and is in compliance in all material respects with
all laws requiring such registration, licensing or qualification
in all states in which such registration, licensing or
qualification is required. None of the Company or its direct or
indirect subsidiaries other than WRI and WRIMCO is required to be
registered, licensed or qualified as an investment adviser under
the laws of any state in which it or its subsidiaries conduct
business or is subject to any material liability or disability by
reason of the failure to be so registered, licensed or qualified;
(xiv) The dividends to the shareholders of the Company of
(A) all of the capital stock of Xxxxxxx & Xxxx Asset Management
Company ("WRAMCO"), (B) the Company's $480 million principal
amount unsecured promissory notes due November 25, 2002 and (C)
all of the capital stock of United Investors Life Insurance
Company ("UILIC"), were declared and paid by the Company out of
the Company's surplus or profits, as the case may be, in
compliance with Section 170 of the Delaware General Corporation
Law.
(xv) based upon all the facts and circumstances existing as
of the date of each distribution of WRAMCO described in this
paragraph and also as of the Closing Date, including
representations contained in officer certificates made as of the
Closing Date, (A) pursuant to Section 355 of the Internal Revenue
Code of 1986, as amended (the "Code"), no gain or loss was
recognized to (and no amount was included in the income of WRSCO
or Xxxxxxx & Xxxx, Inc. ("WRI") upon the distribution of 100% of
the issued and outstanding stock of WRAMCO (the "WRAMCO STOCK")
by WRSCO, (B) pursuant to Section 355 of the Code, no gain or
loss was recognized to (and no amount was included in the income
of) the Company or WRSCO upon the distribution of the WRAMCO
Stock by WRSCO to the Company, (C) pursuant to Section 355 of the
Code, no gain or loss was recognized to (and no amount included
in the income of) the Company, Liberty National Life Insurance
Company ("LIBERTY") or Torchmark upon the distribution of the
WRAMCO Stock by the Company to Liberty and Torchmark, and (D)
pursuant to Section 355 of the Code, no gain or loss was
recognized to (and no amount was included in the income of)
Liberty or Torchmark upon the distribution of the WRAMCO Stock by
Liberty to
Torchmark; provided, however, that Liberty increased its taxable
income by the amount of the distribution considered to be made
from Liberty's policy holders surplus account pursuant to Section
815 of the Code.
(xvi) based upon all the facts and circumstances existing as
of the date of the distribution of UILIC described in this
paragraph and also as of the Closing Date, including
representations contained in the officer certificates made as of
the Closing Date, pursuant to Section 355 of the Code, no gain or
loss will be recognized to (and no amount will be included in the
income of) the Company, Liberty or Torchmark upon the
distribution of 100% of the issued and outstanding stock of UILIC
by the Company to Liberty and Torchmark.
(xvii) any loans made to officers or employees of the
Company enabling such officers or employees to participate in the
Directed Share Program will violate Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System.
(xviii) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules 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
Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) has no reason to believe that (except
for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any
belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (C) has no reason
to believe that (except for financial statements and schedules
and other financial and statistical data as to which such counsel
need not express any belief) the Prospectus contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading
and (D) is of the opinion that the Distributed Prospectus is not
materially different from the Filed Prospectus.
(d) The Underwriters shall have received on the Closing Date an
opinion of Dechert Price & Xxxxxx, special outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) The Offering will not constitute an "assignment" as defined
in the Investment Company Act and the Advisers Act of any of the
investment advisory contracts to which WRI or WRIMCO is a party.
(e) The Underwriters shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
Sections 5(c)(vi), 5(c)(vii), 5(c)(ix) (but only as to the statements in
the Prospectus under "Description of Capital Stock" and "UNDERWRITERS") and
5(c)(xviii) above.
With respect to Section 5(c)(xviii) above, Xxxxxx & Xxxx, L.L.P., and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP may state that their opinion and belief
are based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified.
The opinions of Xxxxxx & Xxxx, L.L.P. and Dechert Price & Xxxxxx described
respectively in Sections 5(c) and 5(d) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from KPMG Peat Marwick LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus; provided that the letter deliVered on the Closing Date
shall use a "cut-off date" not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and each shareholder of the Company relating
to sales and certain other dispositions of shares of Class A Common Stock
or certain other securities, delivered to you on or before the date hereof,
shall be in full force and effect on the Closing Date.
(h) The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
6. Covenants of the Company and Torchmark. In further consideration of the
agreements of the Underwriters herein contained, the Company and, with respect
to paragraph (f) below, Torchmark, covenants with each Underwriter as follows:
(a) To furnish to you, without charge, _____ signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without
exhibits thereto) and to furnish to you in New York City, without charge,
prior to 10:00 a.m. New York City time on the business day next succeeding
the date of this Agreement and during the period mentioned in Section 6(c)
below, as many copies of the Distributed Prospectus and any supplements and
amendments thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public offering
of the Shares as in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered in connection with sales by
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses you will furnish
to the Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the
twelve-month period ending March 31, 1999 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to
any of the foregoing, including all printing costs associated therewith,
and the mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky memorandum in connection
with the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters incurred
in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Class A Common Stock and
all costs and expenses incident to listing the Shares on the New York Stock
Exchange, (vi) the cost of printing certificates represen ting the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show, (ix) all expenses in connection with any offer and sale of
the Shares outside of the United States, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with offers and sales outside of the United States, and (x) all
other costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock
transfer taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make.
(g) That in connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted to the extent
required by the NASD or the NASD rules from sale, transfer, assignment,
pledge or hypothecation for a period of three months following the date of
the effectiveness of the Registration Statement. Xxxxxx Xxxxxxx will notify
the Company as to which Participants will need to be so restricted. The
Company will direct the transfer agent to place stop transfer restrictions
upon such securities for such period of time.
(h) To pay all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the Company
will comply with all applicable securities and other applicable laws, rules and
regulations in each foreign jurisdiction in which the Directed Shares are
offered in connection with the Directed Share Program.
7. Indemnity and Contribution. (a) Torchmark and the Company, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by 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 or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(b) The Company agrees to indemnify and hold harmless Xxxxxx Xxxxxxx
and each person, if any, who controls Xxxxxx Xxxxxxx within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
("XXXXXX XXXXXXX ENTITIES"), from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating
any such action or claim) (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent of the Company for distribution in
foreign jurisdictions in connection with the Directed Share Program
attached to the Prospectus or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement therein, when
considered in conjunction with the Prospectus or any applicable preliminary
prospectus, not misleading; (ii) caused by the failure of any Participant
to pay for and accept delivery of the shares which, immediately following
the effectiveness of the Registration Statement, were subject to a properly
confirmed agreement to purchase; or (iii) related to, arising out of, or in
connection with the Directed Share Program, provided that, the Company
shall not be responsible under this subparagraph (iii) for any losses,
claim, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of Xxxxxx Xxxxxxx Entities.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless Torchmark and the Company, their directors, their
officers who sign the Registration Statement and each person, if any, who
controls the Company or Torchmark within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from Torchmark and the Company to such
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 7(a) or 7(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a),
and by Torchmark and the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
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 proceeding.
Notwithstanding anything contained herein to the contrary, if indemnity may
be sought pursuant to Section 7(b) hereof in respect of such action or
proceeding, then in addition to such separate firm for the indemnified parties,
the indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for Xxxxxx
Xxxxxxx for the defense of any losses, claims, damages and liabilities arising
out of the Directed Share Program, and all persons, if any, who control Xxxxxx
Xxxxxxx within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act.
(e) To the extent the indemnification provided for in Section 7(a),
7(b) or 7(c) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each indemnifying party under such paragraph, in lieu of indemnifying
such indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by Torchmark and the Company on the one hand
and the Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause 7(e)(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 7(e)(i) above but also the
relative fault of Torchmark and the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by Torchmark and the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be
deemed to be in the same respective proportions as the net proceeds from
the offering of the Shares (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of
the Prospectus, bear to the aggregate Public Offering Price of the Shares.
The relative fault of Torchmark and the Company on the one hand and the
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 Torchmark or the Company or by the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the respective number of Shares they have
purchased hereunder, and not joint.
(f) Each of Torchmark, the Company and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation that does not
take account of the equitable considerations referred to in Section 7(e).
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph 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 or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of
Torchmark and the Company contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any
Underwriter or any person controlling any Underwriter or by or on behalf of
the Company, its officers or directors or any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Shares that it
has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I or Schedule II bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case 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 in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company or Torchmark to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company or Torchmark shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
Very truly yours,
TORCHMARK CORPORATION
By:
-----------------------
Name:
Title:
XXXXXXX & XXXX FINANCIAL, INC.
By:
-----------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX, SACHS & CO.
XXXXXXX XXXXX & CO.
Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
Acting severally on behalf of itself
and the several International Underwriters
named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
---------------------------
Name:
Title:
SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
Xxxxxxx Xxxxx & Co.
[NAMES OF OTHER U.S. UNDERWRITERS]
-----------------
Total U.S. Firm Shares ..............
=================
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. International Limited
[NAMES OF OTHER INTERNATIONAL CO-MANAGERS]
-----------------
Total International Firm Shares ......
=================
EXHIBIT A
FORM OF LOCK-UP LETTER
____________, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
Xxxxxxx Xxxxx & Co.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated ("XXXXXX
XXXXXXX") and Xxxxxx Xxxxxxx & Co. International Limited ("MSIL") propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with Xxxxxxx
& Xxxx Financial, Inc., a Delaware corporation (the "COMPANY") providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Xxxxxx Xxxxxxx and MSIL (the "UNDERWRITERS"), of ___ shares (the "SHARES") of
the Class A common stock, $.01 par value per share of the Company (the "CLASS A
COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the final prospectus relating
to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of
Class A Common Stock or any securities convertible into or exercisable or
exchangeable for Class A Common Stock, or (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Class A Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Class A Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) the sale of any Shares to the
Underwriters pursuant to the Underwriting Agreement or (b) transactions relating
to shares of Class A Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering. In addition, the
undersigned agrees that, without the prior written consent of Xxxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Class A Common Stock or any security convertible into or exercisable or
exchangeable for Class A Common Stock.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
-------------------------
(Name)
-------------------------
(Address)
