EXHIBIT 1
EXECUTION COPY
XXXXXX CORPORATION
(a Virginia corporation)
Liquid Yield Option(TM) Notes due 2031
UNDERWRITING AGREEMENT
Dated: May 30, 2001
Xxxxxx Corporation
Debt Securities
Underwriting Agreement
----------------------
May 30, 2001
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Ladies and Gentlemen:
From time to time Xxxxxx Corporation, a Virginia corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") to be attached as Annex I hereto, subject to the terms and
conditions stated herein and therein, to issue and sell to the firm or firms
named in Schedule I to the applicable Pricing Agreement (such firm or firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its debt securities (the "Securities"),
specified in Schedule II to such Pricing Agreement (with respect to such Pricing
Agreement, the "Firm Securities"). If specified in such Pricing Agreement, the
Company may grant to the Underwriters the right to purchase at their election an
additional aggregate principal amount of debt securities, specified in such
Pricing Agreement as provided in Section 3 hereof (the "Optional Securities").
The Firm Securities and the Optional Securities, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Securities."
The Designated Securities are to be issued pursuant to an indenture
dated as of June 5, 2001 between the Company and The Chase Manhattan Bank as
trustee (the "Trustee"), as amended by the first supplemental indenture thereto
(the "Indenture"). The Designated Securities issued in book-entry form will be
issued to Cede & Co., as nominee of the Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated as of the Time of Delivery (as
defined in Section 4 below), among the Company, the Trustee and DTC. The
Designated Securities and the Indenture are more fully described in the
Prospectus referred to below.
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm
being designated as their representative. This Underwriting Agreement shall not
be construed as an obligation of the Company to sell any of the Securities or as
an obligation of any of the Underwriters to purchase any of the Securities. The
obligation of the Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify the aggregate principal
amount of Firm Securities, the maximum principal amount of Optional Securities,
if any, the initial public offering price of such Designated Securities or the
manner of determining such price, the purchase price to the Underwriters of such
Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters, the number of
such Designated Securities to be purchased by each Underwriter and the
commission, if any, payable to the Underwriters with respect thereto and shall
set forth the date, time and manner of delivery of such Designated Securities,
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect thereto)
the terms of such Designated Securities. A Pricing Agreement shall be in the
form of an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-52544) as
amended by Amendment No. 1 thereto (the "Registration Statement") in
respect of the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); the Registration Statement and any post-
effective amendment thereto, each in the form heretofore delivered or to be
delivered to (i) the Representatives and (ii) excluding exhibits to the
Registration Statement, but including all documents incorporated by
reference in the prospectus included therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; the Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "1934 Act"); other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Registration Statement
or document incorporated by reference therein has heretofore been filed, or
transmitted for filing, with the Commission (other than prospectuses filed
pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Act, each in the form heretofore delivered to the
Representatives); and no stop order suspending the effectiveness of the
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission; the
prospectus relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or
prior to the date of this Underwriting Agreement, is hereinafter called the
"Prospectus"; any reference herein to the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the
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date of such Prospectus; any reference to any amendment or supplement to
the Prospectus shall be deemed to refer to and include any documents filed
after the date of such Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by
reference in such Prospectus; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement; and
any reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to the
applicable Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof, including any documents incorporated by reference therein as
of the date of such filing);
(ii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an 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; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Securities nor shall this representation and warranty apply to that part of
the Registration Statement that constitutes the Statement of Eligibility on
Form T-1 (the "Form T-1") under the 1939 Act of the relevant trustee;
(iii) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
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; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Securities;
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(iv) Neither the Company nor any of its subsidiaries which meets the
definition of a significant subsidiary as defined in Regulation S-X (a
"Significant Subsidiary") has sustained, since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (other than (i) pursuant to the Company's employee stock purchase
plan existing on the date hereof or (ii) exercise of certain employee stock
options existing on the date hereof) or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus;
(v) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Virginia, with power and
authority (corporate and other) to own, lease and operate its properties
and conduct its business in all material respects as described in the
Prospectus; and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which its owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(vi) Each subsidiary of the Company has been duly formed and is
validly existing as a legal entity in good standing under the laws of its
jurisdiction of formation with power and authority (corporate and other) to
own, lease and operate its properties and to conduct its business in all
material respects as described in the Prospectus; each subsidiary of the
Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or lease properties or conducts any
business so as to require qualification or is subject to no material
liability or disability by reason of the failure to be so qualified in any
jurisdiction;
(vii) The Company has an authorized capitalization as set forth in
the Prospectus, all of the issued and outstanding shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; all of the issued and outstanding shares of
capital stock of each Significant Subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or
claims;
(viii) The Securities have been duly and validly authorized, and,
when the Firm Securities are issued and delivered pursuant to this
Underwriting Agreement, the Pricing Agreement and the Indenture with
respect to the Designated Securities and, in the case of
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any Optional Securities, pursuant to an Over-allotment Option (as defined
in Section 3 hereof) and the Indenture with respect to such Designated
Securities, such Designated Securities will be duly executed,
authenticated, issued and delivered; the Securities conform to the
description thereof contained in the Registration Statement and the
Designated Securities will conform to the description thereof contained in
the Prospectus as amended or supplemented with respect to such Designated
Securities;
(ix) The issue and sale of the Firm Securities and the Optional
Securities and the compliance by the Company with all of the provisions of
this Underwriting Agreement, any Pricing Agreement and each Over-allotment
Option, if any, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject, except in each case, for such conflicts, breaches, violations
or defaults as could not reasonably be expected, individually or in the
aggregate, to have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Company (a "Material
Adverse Effect"), nor will such action result in any violation of (i) the
provisions of the Articles of Incorporation or By-laws of the Company or
(ii) any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties, except, in the case of clause (ii), for such violations as
could not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Firm Securities
and the Optional Securities or the consummation by the Company of the
transactions contemplated by this Agreement or any Pricing Agreement or any
Over-allotment Option, except such as have been, or will have been prior to
each Time of Delivery (as defined in Section 4 hereof), obtained under the
Act, such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriters and such consents, approvals, authorizations, registrations or
qualifications the failure to obtain which could not reasonably be expected
to have a Material Adverse Effect;
(x) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject, which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xi) Neither the Company nor any of its subsidiaries is (i) in
violation of its Articles of Incorporation or By-laws or (ii) in default in
the performance or observance of
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any obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound, except, in the case of clause (ii), where such
violation or default could not reasonably be expected to have a Material
Adverse Effect;
(xii) Each of the Company and its subsidiaries is in compliance with,
and conducts its business in conformity with, all applicable laws and
governmental regulations, except where the failure to be so in compliance
could not reasonably be expected to have a Material Adverse Effect;
(xiii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the stock, and under the caption "Plan of
Distribution", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate and complete in all
material respects;
(xiv) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company", as such term
is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
(xv) KPMG LLP, who have certified certain financial statements of the
Company and its subsidiaries, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
the Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Securities that the Company thereby grants to the Underwriters the
right (an "Overallotment Option") to purchase at their election up to the
maximum aggregate principal amount of Optional Securities set forth in such
Pricing Agreement, on the terms set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Securities. Any
such election to purchase Optional Securities may be exercised by written notice
from the Representatives to the Company, given within a period specified in the
Pricing Agreement, setting forth the aggregate principal amount of Optional
Securities to be purchased and the date on which such Optional Securities are to
be delivered, as determined by the Representatives but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives and the Company otherwise agree in writing, earlier than or
later than the respective number of business days after the date of such notice
set forth in such Pricing Agreement.
The aggregate principal amount of Optional Securities to be added to
the aggregate principal amount of Firm Securities to be purchased by each
Underwriter, as set forth in Schedule I to the Pricing Agreement applicable to
such Designated Securities, shall be, in each
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case, the aggregate principal amount of Optional Securities which the Company
has been advised by the Representatives have been attributed to such
Underwriter; provided that, if the Company has not been so advised, the
aggregate principal amount of Optional Securities to be so added shall be, in
each case, that proportion of Optional Securities which the aggregate principal
amount of Firm Securities to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate principal amount of Firm Securities. The total
aggregate principal amount of Designated Securities to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the aggregate principal
amount of Firm Securities set forth in Schedule I to such Pricing Agreement plus
the aggregate principal amount of Optional Securities which the Underwriters
elect to purchase.
4. Certificates for the Firm Securities and the Optional Securities
to be purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company to the Representatives at least forty-eight
hours in advance, as specified in such Pricing Agreement, (i) with respect to
the Firm Securities, all in the manner and at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives and the Company may agree upon in writing, such time and
date being herein called the "First Time of Delivery" and (ii) with respect to
the Optional Securities, if any, in the manner and at the time and date
specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional
Securities, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and date
for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of the Pricing Agreement
relating to the applicable Designated Securities or, if applicable, such
earlier time as may be required by Rule 424(b); to make no further
amendment or any supplement to the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing Agreement relating to
such Designated Securities and prior to any Time of Delivery for such
Designated Securities which shall be disapproved by the Representatives for
such Designated Securities promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after any Time of Delivery for such Designated Securities and furnish the
Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a
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prospectus is required in connection with the offering or sale of such
Designated Securities, and during such same period to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed with the Commission, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities, of the suspension of the
qualification of such Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the
Securities or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Promptly as practicable after the date of the Pricing Agreement
applicable to the Designated Securities and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus as
amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Act or the Exchange Act, to
notify the Representatives and upon their request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many written and electronic copies as the Representatives
may from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or omission
or effect such compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
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(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including 90
days after the date of the Prospectus, not to offer, sell, contract to sell
or otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the common shares of the
Company, no par value ("Common Shares"), including but not limited to any
securities that are convertible into or exchangeable for, or that represent
the right to receive, Common Shares or any such substantially similar
securities (other than pursuant to (i) employee stock purchase plans
existing on, or (ii) employee stock option plans existing on, or (iii) the
contingent value rights existing on, the date of the Pricing Agreement for
such Designated Securities) without the prior written consent of the
Representatives;
(f) To apply the net proceeds from the sale of the Designated
Securities sold by the Company substantially in accordance with the
description set forth in the Prospectus; and not to use any such net
proceeds for reserves or payments relating to any insurance claims of
Xxxxxx International Limited;
(g) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act;
(h) To reserve and keep available at all times, free of preemptive or
other similar rights, a sufficient number of Common Shares for the purpose
of satisfying any obligations to issue Common Shares upon conversion of
Designated Securities; and
(i) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's trade
names and corporate logo for use on the website, if any, operated by such
Underwriter for the purpose of facilitating the on-line offering of the
Securities (the "License"); provided, however, that the License shall be
used solely for the purpose described above for a period not to exceed 120
days, is granted without any fee and may not be assigned or transferred.
6. The Company hereby covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, any
Blue Sky Memorandum, closing documents (including compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in
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connection with such qualification and in connection with the Blue Sky
survey(s); (iv) any filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, any required reviews by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) the cost of preparing certificates for the Securities; and (vi)
the cost and charges of any transfer agent or registrar or dividend disbursing
agent. It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of each Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to such
Designated Securities shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated each Time of
Delivery for such Designated Securities, with respect to the matters
covered in paragraphs (i), (vi) and (x) of subsection (c) below, as well as
such other related matters as the Representatives may reasonably request,
and such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters. As to all
matters of Virginia law, such counsel may rely on the opinion of
McGuireWoods LLP;
(c) McGuireWoods LLP, counsel for the Company, shall have furnished
to the Representatives their written opinions, dated each Time of Delivery
for such Designated Securities, respectively, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full corporate power and authority to
own its properties and conduct its business as described in the
Prospectus as amended or supplemented;
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(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented, and all of the issued
and outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-
assessable; the shares of Common Stock, no par value, of the Company
issuable on conversion of the Designated Securities have been duly and
validly authorized and when issued in accordance with the terms of the
Designated Securities will be duly issued, fully paid and non-
assessable; and the Designated Securities delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, and, in the case of any Optional Securities, pursuant to
Over-allotment Option (as defined in Section 3 hereof) with respect to
such Optional Securities, have been duly authorized, executed,
authenticated, issued and delivered;
(iii) This Underwriting Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly authorized,
executed and delivered by the Company;
(iv) The Designated Securities have been duly authorized and
executed by the Company for issuance and sale pursuant to the terms of
the Pricing Agreement and, assuming due authorization, execution and
delivery by the Trustee, and when delivered against payment therefor
as contemplated by the Pricing Agreement, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and are entitled to the benefits of
the Indenture.
(v) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery by the Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law); the Indenture is qualified under the
1939 Act.
(vi) The issue and sale of the Designated Securities being
delivered at such Time of Delivery and the compliance by the Company
with all of the provisions of this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation of the
transactions herein and therein contemplated will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
11
mortgage, deed of trust, loan agreement or other agreement or
instrument that would constitute a material contract as described in
Item 601(b)(10) of Regulation S-K known to such counsel to which the
Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject or (ii) result in any
violation of the provisions of the Articles of Incorporation or By-
laws of the Company, except, in the case of clause (i), for such
conflicts, breaches, violations or defaults that could not reasonably
be expected to have a Material Adverse Effect; in rendering the
opinion in clause (i) hereof, such counsel may rely upon a certificate
of the Company in respect of which contracts constitute material
contracts as described in Item 601(b)(10) of Regulation S-K, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such certificate;
(vii) The issue and sale of the Firm Securities and the Optional
Securities being delivered at such Time of Delivery and the compliance
by the Company with all of the provisions of this Agreement and the
Pricing Agreement with respect to such Firm Securities and Optional
Securities and the consummation of the transactions herein and therein
contemplated will not result in a violation of any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties, except for such conflicts, breaches, violations
or defaults that could not reasonably be expected to have a Material
Adverse Effect;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
having jurisdiction over the Company or any of its properties is
required for the issue and sale of the Firm Securities and Optional
Securities being delivered at such Time of Delivery or the
consummation by the Company of the transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been obtained
under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters;
(ix) The statements set forth in the Prospectus under the
caption "Description of XXXXx", insofar as they purport to constitute
a summary of the terms of the Designated Securities, under the caption
"Description of Capital Stock", insofar as they purport to constitute
a summary of the terms of the Securities, and under the captions "Plan
of Distribution", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate and
complete in all material respects;
(x) The Company is not an "Investment Company", as such term
is defined in the Investment Company Act;
12
(xi) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules and other financial data therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder;
(xii) The Registration Statement and the Prospectus as amended or
supplemented, and any further amendments and supplements thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and other financial data
therein, as to which such counsel need express no opinion), comply as
to form in all material respects with the requirements of the Act and
the rules and regulations thereunder. Such counsel shall also state
that, although they are not passing upon, do not assume any
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, the Prospectus and any further amendments or
supplements to the Prospectus made by the Company prior to such Time
of Delivery, except for those referred to in the opinion in subsection
(viii) of this Section 7(c), in the course of their review and
discussion of the contents of the Registration Statement and the
Prospectus with certain officers and employees of the Company, nothing
has come to their attention that causes them to believe that, as of
its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need make no
statement) contained an 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 or that, as of its date,
the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules and other
financial data therein, as to which such counsel need make no
statement) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or
any further amendment or supplement thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules and other financial data therein, as to which such
counsel need make no statement) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or required to be
described in the
13
Registration Statement or the Prospectus as amended or supplemented
which are not filed or incorporated by reference or described as
required;
(xiii) The issuance of the shares of common stock upon conversion
of the Designated Securities is not subject to (a) any preemptive
rights under the Articles of Incorporation or By-laws of the Company
or (b) to our knowledge, other similar rights of any securityholder of
the Company.
(xiv) The Designated Securities will be treated as indebtedness
for United States federal income tax purposes and the statements in
the Prospectus under the caption "Certain United States Federal Income
Tax Considerations" insofar as such statements constitute a summary of
the United States federal tax laws referred to therein, are accurate
and fairly summarize the United States federal tax laws referred to
therein.
(d) On the date of the Pricing Agreement for such Designated
Securities and at each Time of Delivery for such Designated Securities, the
independent accountants of the Company who have certified the financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the date of the Pricing Agreement, and a
letter dated such Time of Delivery, respectively (a draft of the form of
letter to be delivered on the date of the Pricing Agreement for such
Designated Securities is attached as Annex II hereto), and with respect to
such letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(e) (i) Neither the Company nor any of its Significant Subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended prior to the date of the Pricing Agreement relating to the
Designated Securities any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended
prior to the date of the Pricing Agreement relating to the Designated
Securities, and (ii) since the respective dates as of which information is
given in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Securities there shall not have been
any change in the capital stock (other than pursuant to (i) the Company's
employee stock purchase plans existing on the date hereof, or (ii) the
exercise of certain employee stock options existing on the date hereof), or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Securities, the effect of
which, in any such case described in clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
14
the Designated Securities on the terms and in the manner contemplated in
the Prospectus as amended relating to the Designated Securities;
(f) On or after the date of the Pricing Agreement relating to the
Designated Securities no downgrading shall have occurred in the rating
accorded the Company's debt securities or the Company's financial strength
or claims paying ability by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and on or after the date of the Pricing
Agreement relating to the Designated Securities no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or the Company's financial strength or claims paying ability;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the following:
(i) a suspension or material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Representatives makes
it impracticable or inadvisable to proceed with the public offering or the
delivery of the Firm Securities or Optional Securities or both on the terms
and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Securities;
(h) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of the Pricing Agreement relating to
such Designated Securities; and
(i) The Company shall have furnished or caused to be furnished to the
Representatives at each Time of Delivery for the Designated Securities
certificates of officers of the Company satisfactory to the Representatives
as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and
(e) of this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus as amended
or supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein
15
not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Prospectus as amended
or supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such
16
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include any statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities on the other from the offering of the Designated
Securities to which such loss, claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (d) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company one hand and the
Underwriters of the Designated Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. The relative fault 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 on the one hand
or such Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (e) shall be deemed to include 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
subsection (e), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of 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 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (e) to contribute are several in proportion to their
respective underwriting obligations with respect to such Securities and not
joint.
17
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities or Optional Securities which it has agreed to purchase under
the Pricing Agreement relating to such Securities, the Representatives may in
their discretion arrange for themselves or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not arrange
for the purchase of such Firm Securities or Optional Securities, as the case may
be, then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Securities on such terms. In the event that,
within the respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Securities, or the Company
notifies the Representatives that it has so arranged for the purchase of such
Securities, the Representatives or the Company shall have the right to postpone
a Time of Delivery for such Securities for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Securities or Optional Securities, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate number of such Securities which remains
unpurchased does not exceed one-eleventh of the aggregate number of the Firm
Securities or Optional Securities, as the case may be, to be purchased at the
respective Time of Delivery, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Firm Securities or
Optional Securities, as the case may be, which such Underwriter agreed to
purchase under the Pricing Agreement relating to such Designated Securities and,
in addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Securities or Optional Securities, as the
case may be, which such Underwriter agreed to purchase under such Pricing
Agreement) of the Firm Securities or Optional Securities, as the case may be, of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Securities or Optional Securities, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate
18
number of Firm Securities or Optional Securities, as the case may be, which
remains unpurchased exceeds one-eleventh of the aggregate number of the Firm
Securities or Optional Securities, as the case may be, to be purchased at the
respective Time of Delivery, as referred to in subsection (b) above, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Securities or Optional
Securities, as the case may be, of a defaulting Underwriter or Underwriters,
then the Pricing Agreement relating to such Firm Securities or the Over-
allotment Option relating to such Optional Securities, as the case may be, shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company and
shall survive delivery of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Securities or Optional
Securities with respect to which such Pricing Agreement shall have been
terminated except as provided in Sections 6 and 8 hereof; but, if for any other
reason, Designated Securities are not delivered by or on behalf of the Company
as provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the
19
Company by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters and the Company to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
20
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof.
Very truly yours,
Xxxxxx Corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice Chairman
CONFIRMED AND ACCEPTED
as of the date hereof:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ (SIGNATURE ILLEGIBLE)
------------------------------------
21
ANNEX I
Pricing Agreement
-----------------
Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
As Representatives of the
Underwriter named in Schedule I hereto,
World Financial Center - North Tower,
000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
May 30, 2001
Ladies and Gentlemen:
Xxxxxx Corporation, a Virginia corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated May 30, 2001 (the "Underwriting Agreement"), between the
Company and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, to issue and sell to the Underwriter named in Schedule I hereto
(the "Underwriter") the Securities specified in Schedule II hereto (the
"Designated Securities," consisting of Firm Securities and any Optional
Securities the Underwriter may elect to purchase). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of the representations
and warranties set forth therein shall be deemed to have been made at and as of
the date of this Pricing Agreement, except that each representation and warranty
which refers to the Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in relation
to the Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing Agreement. Each reference to
the Representatives herein and in the provisions of the Underwriting Agreement
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the address
of the Representatives referred to in such Section 12 are set forth in Schedule
II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to the Underwriter, and the Underwriter agrees to purchase
from the Company, at the time and place and at the purchase price to the
Underwriter set forth in Schedule II hereto, the aggregate
1
principal amount of Firm Securities set forth opposite the name of the
Underwriter in Schedule I hereto and, (b) in the event and to the extent that
the Underwriter shall exercise the election to purchase Optional Securities, as
provided below, the Company agrees to issue and sell to the Underwriter, and the
Underwriter agrees to purchase from the Company at the purchase price to the
Underwriter set forth in Schedule II hereto that portion of the aggregate
principal amount at maturity of Optional Securities as to which such election
shall have been exercised.
The Company hereby grants to the Underwriter the right to purchase at
its election up to the aggregate principal amount at maturity of Optional
Securities set forth opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of Firm Securities. Any such election to purchase
Optional Securities may be exercised by written notice from the Representatives
to the Company given within a period of 30 calendar days after the date of this
Pricing Agreement, setting forth the aggregate principal amount at maturity of
Optional Securities to be purchased and the date on which such Optional
Securities are to be delivered, as determined by the Representatives, but in no
event earlier than the First Time of Delivery or, unless the Representatives and
the Company otherwise agree in writing, no earlier than two or later than ten
business days after the date of such notice.
Each of Xxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxx shall execute a "lock-up" agreement substantially in the form
attached hereto as Schedule III, such execution by each person being a condition
to the Underwriter's obligations hereunder, as though fully set forth in the
Section 7 of the Underwriting Agreement incorporated by reference herein.
2
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
this letter and such acceptance hereof, including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement between the Underwriter and the Company.
Very truly yours,
Xxxxxx Corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice Chairman
CONFIRMED AND ACCEPTED
as of the date hereof:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ (SIGNATURE ILLEGIBLE)
---------------------------
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SCHEDULE I
Aggregate Principal
Aggregate Amount at Maturity
Principal Amount of Optional
at Maturity of Securities
Securities Which
to be May be
Underwriter Purchased Purchased
----------- ---------------- -------------------
Xxxxxxx Xxxxx, Xxxxxx & Xxxxxx & Xxxxx Incorporated $355,000,000 $53,000,000
Total
---------------- -------------------
$355,000,000 $53,000,000
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SCHEDULE II - DESIGNATED SECURITIES
XXXXXX CORPORATION
$355,000,000 Liquid Yield Option(TM) Notes due 2031
1. The initial offering price per $1,000 principal amount at maturity of the
Designated Securities shall be $283.19, which represents a yield to maturity of
4.25% per annum (computed on a semiannual bond equivalent basis).
2. The Designated Securities shall be convertible into shares of common stock,
no par value, of the Company (the "Common Stock") at a rate of 1.1629 shares of
Common Stock per $1,000 principal amount at maturity of Designated Securities.
3. The purchase price to be paid by the Underwriter for the Designated
Securities shall be $276.82, being an amount equal to the initial offering price
set forth above, less $6.37 per $1,000 principal amount at maturity of
Designated Securities.
4. The Designated Securities will be delivered on June 5, 2001 at 10:00 am.
The Designated Securities issued in book-entry form will be issued to Cede & Co.
as nominee of the Depository Trust Company ("DTC"). Certificates for the
Designated Securities shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the account specified by the Company and the
Custodian to the Representatives.
5. Prior to June 5, 2006, the Securities will not be redeemable.
6. The redemption price shall be $283.19 plus accrued original issue discount,
contingent cash interest, if any, and contingent additional principal, if any,
as of the applicable redemption date.
7. The Purchase Dates and the Purchase Prices included in the Prospectus and
correspondingly in the Indenture shall be:
Purchase Date Purchase Price
------------- --------------
June 5, 2002 $295.35
June 5, 2004 $321.27
June 5, 2006 $349.46
June 5, 2011 $431.24
June 5, 2016 $532.16
June 5, 2021 $656.69
June 5, 2026 $810.36
8. The Company will pay contingent cash interest to the holders of XXXXx
during any six-month period commencing after June 5, 2006 if the average market
price of a LYON for
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a measurement period preceding such six-month period equals 120% or more of the
sum of the issue price and accrued original issue discount for such LYON. The
contingent cash interest payable per LYON in respect of any quarterly period
will equal the greater of .0625% of the average market price of a LYON for the
measurement period or any regular cash dividends paid by us per share on the
Company's common stock during that quarterly period multiplied by the conversion
rate.
9. Contingent Conversion Triggers:
(a) 120% (initial trigger) of accreted conversion price per share declining
to 110% in 2031.
(b) The credit rating assigned to the XXXXx by either Xxxxx'x Investor
Service, Inc. or Standard & Poor's Rating Services is Ba3/BB-.
10. On June 5, 2002 and June 5, 2004, if the price of our common stock is at or
below the stock price thresholds set out below, then contingent additional
principal on the XXXXx will accrue beginning on such date at a rate of either
0.50% or 1.00% per annum for a period of two years, in accordance with the
schedule set forth below.
June 5, 2002
Stock Price Threshold
(expressed as a percentage of the Contingent
accreted conversion price of the Additional
XXXXx) Principal Adjusted Yield
74% or less .50% 4.75%
72% or less 1.00% 5.25%
June 5, 2004
Stock Price Threshold
(expressed as a percentage of the Contingent
accreted conversion price of the Additional
XXXXx) Principal Adjusted Yield
78% or less .50% 4.75%
76% or less 1.00% 5.25%
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SCHEDULE III - LOCK-UP AGREEMENT
June [ ], 2001
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center - North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Xxxxxx Corporation - Lock-Up Agreement
--------------------------------------
Ladies and Gentlemen:
The undersigned understands that you have entered into an Underwriting
Agreement and Pricing Agreement constituting a part thereof (together, the
"Underwriting Agreement") on behalf of the Underwriter named in Schedule I to
the Pricing Agreement (the "Underwriter"), with Xxxxxx Corporation, a Virginia
corporation (the "Company"), providing for a public offering of Liquid Yield
Option(TM) Notes of the Company (the "XXXXx"), convertible into common stock of
the Company, no par value (the "Common Shares") pursuant to a Registration
Statement on Form S-3 (File No. 333-52544) filed with the Securities and
Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriter to offer and sell
the XXXXx, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date of the Prospectus Supplement covering the
public offering of the XXXXx and continuing to and including the date 90 days
after the date of such final Prospectus Supplement, the undersigned will not
offer, sell, contract to sell, pledge, grant any option to purchase, make any
short sale or otherwise dispose of any of the Common Shares of the Company, or
any options or warrants to purchase any of the Common Shares of the Company, or
any securities convertible into, exchangeable for or that represent the right to
receive Common Shares of the Company, whether now owned or hereinafter acquired,
owned directly by the undersigned (including holding as a custodian) or with
respect to which the undersigned has pecuniary interest and investment control
within the rules and regulations of the SEC (collectively the "Undersigned's
Shares").
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The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Undersigned's Shares would
be disposed of by someone other than the undersigned. Such prohibited hedging
or other transactions would include without limitation any short sale or any
purchase, sale or grant of any right (including without limitation any put or
call option) with respect to any of the Undersigned's Shares or with respect to
any security that includes, relates to, or derives any significant part of its
value from such Undersigned's Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
---- ----
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, or (iii) with the prior written consent of the Underwriter, pledge the
shares to the Company. In addition, notwithstanding any other provision of this
Lock-Up Agreement, Xxxx X. Xxxxxxxx may transfer his Undersigned's Shares to any
charitable trust (as such term is defined in the Internal Revenue Code) and
Xxxxxx X. Xxxxxx may transfer his Undersigned's Shares, including any transfers
effected prior to the date of the Prospectus Supplement covering the public
offering of the XXXXx, to any charitable trust (as such term is defined in the
Internal Revenue Code) and no such charitable trusts shall be subject to the
terms and restrictions of this Lock-Up Agreement. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, if the undersigned is a corporation, the corporation may transfer the
Common Shares of the Company to any wholly-owned subsidiary of such corporation;
provided, however, that in any such case, it shall be a condition to the
-------- -------
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such Common Shares subject to the provisions of this
Agreement and there shall be no further transfer of such Common Shares except in
accordance with this Agreement, and provided further that any such transfer
shall not involve a disposition for value. Except for encumbrances in effect as
of the date of this letter, the undersigned now has, and, except as contemplated
by clause (i), (ii), or (iii) above, for the duration of this Lock-Up Agreement
will have, good and marketable title to the Undersigned's Shares, free and clear
of all liens, encumbrances, and claims whatsoever. The undersigned also agrees
and consents to the entry of stop transfer instructions with the Company's
transfer agent and registrar against the transfer of the Undersigned's Shares
except in compliance with the foregoing restrictions.
8
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
--------------------------------
Name:
9
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly reports on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
1
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
and
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other
2
than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or
any stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in clause (E) there were any decreases
in earned premiums or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference), or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
3
