EXHIBIT 2
IntercontinentalExchange, Inc.
Common Stock
--------------
Underwriting Agreement
November 15, 2005
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
As representatives of the several Underwriters
named in Schedule I hereto (the "Representatives"),
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Sandler X'Xxxxx & Partners, L.P.
000 0xx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
IntercontinentalExchange, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 2,497,500 shares of common stock, par value $0.01 per share, of the Company
("Common Stock"). The shareholders of the Company named in Schedule II hereto
(the "Selling Shareholders") propose, subject to the terms and conditions stated
herein, severally and not jointly, to sell to the Underwriters an aggregate of
13,500,000 shares of Common Stock and, at the election of the Underwriters, up
to 2,400,000 additional shares of Common Stock. The aggregate of 15,997,500
shares to be sold by the Company and the Selling Shareholders is herein called
the "Firm Shares" and the aggregate of 2,400,000 additional shares to be sold by
the Selling Shareholders is herein called the "Optional Shares". The Firm Shares
and the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 of this Agreement are herein collectively called the "Shares".
Pursuant to the filing of the Fourth Amended and Restated Certificate
of Incorporation of the Company (the "Fourth Amended Certificate") with the
Secretary of State of the State of Delaware (the "Secretary of State"), the
Company will effect a recapitalization of its outstanding equity (the
"Recapitalization"), pursuant to which each share of the Company's outstanding
Class A Common Stock, Series 1 and Class A
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Common Stock, Series 2 will be convertible into undifferentiated Common Stock,
subject to the terms and conditions of the Fourth Amended Certificate.
It is understood and agreed that Xxxxxx Xxxxxxx & Co. Incorporated and
Xxxxxxx, Sachs & Co. are joint book runners for the offering and any
determination or other actions to be made under this Agreement by the
Representatives shall require the concurrence of both Xxxxxx Xxxxxxx & Co.
Incorporated and Xxxxxxx, Sachs & Co.
The Underwriters have agreed to reserve a portion of the Shares to be
purchased by them under this Agreement for sale to the Company's directors,
officers, employees, certain designees of such directors, officers and
employees, and other parties related to the Company (collectively,
"Participants"), as set forth in the Prospectus under the heading "Underwriting"
(the "Directed Share Program"). The Shares to be sold pursuant to the Directed
Share Program are referred to hereinafter as the "Directed Shares." Xxxxxx
Xxxxxxx & Co. Incorporated and its affiliates have agreed to make offers and
sales pursuant to the Directed Share Program. Any Directed Shares not confirmed
for purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by the Underwriters as set
forth in the Prospectus.
The Company and the Underwriters, in accordance with the requirements
of Rule 2720 ("Rule 2720") of the NASD, Inc. (the "NASD") and subject to the
terms and conditions stated herein, also hereby confirm the engagement of the
services of Sandler X'Xxxxx & Partners, L.P. (the "Independent Underwriter") as
a "qualified independent underwriter" within the meaning of Rule 2720(b)(15) in
connection with the offering and sale of the Shares. The "Independent
Underwriter" is also an "Underwriter" for purposes of this Agreement.
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters and the Independent Underwriter that:
(i) A registration statement on Form S-1 (File No. 333-123500) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by the
Commission in such form; 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 Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial 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 (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the
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Commission under the Act is hereinafter called a "Preliminary Prospectus";
the various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 6(a) of this Agreement and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at the time it was
declared effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of the Preliminary
Prospectus, dated October 27, 2005, or any Preliminary Prospectus dated
subsequent thereto, has been issued by the Commission, and each such
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, 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 through
Xxxxxxx, Sachs & Co. and Xxxxxx Xxxxxxx & Co. Incorporated expressly for
use therein or by a Selling Shareholder expressly for use therein;
(iii) The Registration Statement conforms, and any further amendment
to the Registration Statement will conform, as of the applicable effective
date, 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, 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; the Prospectus
conforms, and any further amendments or supplements to the Prospectus will
conform, as of the applicable filing date, 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 filing date,
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, 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 through
Xxxxxxx, Sachs & Co. and Xxxxxx Xxxxxxx & Co. Incorporated expressly for
use therein or by a Selling Shareholder expressly for use therein;
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(iv) Otherwise than as set forth or contemplated in the Prospectus,
(A) neither the Company nor any of its subsidiaries has, since the date of
the latest audited financial statements included in the Prospectus,
sustained 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; or
incurred any material liability or obligation, direct or contingent, or
entered into any material transaction not in the ordinary course of
business; and (B) 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, short-term debt or long-term debt of the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, management, business, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(v) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property owned or leased by them, in each case
free and clear of all liens, encumbrances, equities, claims and title
defects (collectively, "Liens") that would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the current
or future consolidated financial position, business, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole (a "Material Adverse Effect"), except as set forth or contemplated in
the Prospectus; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as would not reasonably be expected
to have, singularly or in the aggregate, a Material Adverse Effect and do
not materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business 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 it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to so qualify would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect; and each significant subsidiary of the Company as defined in Rule
1-02 of Regulation S-X (the "Significant Subsidiaries") has been duly
incorporated or organized and is validly existing in good standing (if
applicable) under the laws of its jurisdiction of incorporation or
organization;
(vii) Prior to the First Time of Delivery (as hereinafter defined),
upon effectiveness of the Company's Fourth Amended Certificate, the Company
will have an authorized capitalization as set forth in the Prospectus, and
all of the
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issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to the
description of the capital stock contained in the Prospectus; and all of
the issued shares of capital stock of each subsidiary of the Company except
ICE Futures Holdings Plc ("ICE Futures") 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 except as set forth in the Prospectus;
all of the issued shares of capital stock of ICE Futures (the "ICE Futures
Stock") have been duly and validly authorized and issued and are fully paid
and non-assessable, and, except as set forth in the Prospectus, the Company
owns its shares of the ICE Futures Stock free and clear of all Liens; the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to acquire from the Company the
Shares or any other shares of capital stock of the Company, except as part
of the Recapitalization as set forth in the Prospectus; and there are no
outstanding securities convertible into or exchangeable for, or warrants,
rights or options to purchase from the Company, or obligations of the
Company to issue, shares of Common Stock or any other class of shares or
other equity or ownership interest of the Company, except as set forth or
contemplated in the Prospectus;
(viii) The Shares have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform
in all material respects to the description of the Common Stock contained
in the Prospectus;
(ix) This Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws
affecting creditors' rights and remedies generally and by general equitable
principles (whether considered in a proceeding in equity or at law), and
except to the extent that rights to indemnity or contribution under this
Agreement may be limited by applicable law;
(x) The issue and sale of the Shares to be sold by the Company and the
compliance by the Company with all of the provisions of this Agreement and
the consummation by the Company of the transactions herein contemplated,
including the Recapitalization, will not (A) 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 or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, (B) result in any violation of the provisions
of the certificate of incorporation or by-laws of the Company as in effect
on the date hereof or, with respect to the issue and sale of the Shares and
the Recapitalization, the Fourth Amended Certificate, which will become
5
effective on the First Time of Delivery, or (C) result in any violation of
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
subsidiaries or any of their properties, except, in the case of clause (A)
or (C), as would not, individually or in the aggregate, have a Material
Adverse Effect; 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 Shares to be sold by the Company or
the consummation by the Company of the transactions contemplated by this
Agreement, except the registration under the Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), of the Shares and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws or by the rules
and regulations of the NASD in connection with the purchase and
distribution of the Shares by the Underwriters; and, other than the filing
of the Fourth Amended Certificate with the Secretary of State, no consent,
approval, authorization, order, registration or qualification of or with
any such court or governmental agency or body is required for the Company
to effect the Recapitalization, except as would not, individually or in the
aggregate, have a Material Adverse Effect or adversely affect the validity,
or materially affect the performance, of the transactions contemplated
herein;
(xi) Neither the Company nor any of its Significant Subsidiaries (A)
is in violation of its charter or by-laws (or other organizational
document), (B) is in default in any respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets are subject
or (C) is in violation in any respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its properties or assets is
subject, except in the case of clause (B) or (C) as may be set forth or
contemplated in the Prospectus or as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect;
(xii) Except as set forth or contemplated in the Prospectus, there are
no contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company to register any securities with the
Shares pursuant to the Registration Statement;
(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 Common Stock, under the caption "Underwriting",
insofar as they purport to describe the provisions of this Agreement and
the lockup agreements described in Annex IV hereto, and under the caption
"Certain United States Tax Consequences to Non-U.S. Holders of Common
Stock", insofar as
6
they purport to describe the provisions of the laws and tax consequences
referred to therein, are accurate, complete and fair in all material
respects;
(xiv) Other than as set forth or contemplated 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 of the properties or
assets of the Company or any of its subsidiaries is the subject which would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened by governmental authorities or by others other
than as set forth or contemplated in the Prospectus;
(xv) None of the Company or any of its subsidiaries is or, upon
consummation of the issuance and sale of the Shares and the application of
the proceeds therefrom will be, required to register as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations of
the Commission thereunder;
(xvi) Ernst & Young LLP, who have certified certain consolidated
financial statements of the Company and its subsidiaries, are independent
public accountants with respect to the Company and its subsidiaries, as
required by the Act and the rules and regulations thereunder. The
consolidated financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement and the Prospectus have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby, and together
with the related schedules and notes, present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries at the respective dates indicated and the results of the
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the respective periods specified; the
selected financial data and the summary financial information included in
the Prospectus present fairly in all material respects the information
shown therein and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement;
(xvii) Except as set forth or contemplated in the Prospectus, (A) the
Company and its subsidiaries own or possess adequate rights to use all
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses
and know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses as
presently conducted ("Intellectual Property"), except where the failure to
own or possess any such Intellectual Property would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect, (B) neither the Company nor any of its subsidiaries has received
any notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing that is still outstanding which, if
the subject of an unfavorable decision, ruling or finding, would reasonably
be expected to have,
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individually or in the aggregate, a Material Adverse Effect, and (C) the
Company owns or has obtained licenses for all Intellectual Property
described in the Prospectus as being owned or licensed to the Company,
except to the extent that the failure to own any such Intellectual Property
or obtain any such license would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;
(xviii) Except as set forth or contemplated in the Prospectus, there
is no claim pending or, to the knowledge of the Company, threatened under
any Environmental Law (as defined below) against the Company or any of its
subsidiaries that would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, and there are no past or present
actions or conditions which are, individually or in the aggregate,
reasonably likely to form the basis of any such claim under existing
Environmental Law against the Company or any of its subsidiaries that
would, singularly or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The term "Environmental Law" means any federal,
local or foreign law, regulation, ordinance, order, judgment, decree,
permit or rule (including rule of common law) now in effect governing
pollution, protection of the environment or injury or property damage
arising from the presence of, or actual or alleged exposure to, hazardous
or toxic materials, substances or wastes, including but not limited to,
asbestos or asbestos-containing materials;
(xix) The Company and its subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks, in each
case as in accordance with customary industry practice, except where the
failure to maintain such insurance would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect;
(xx) Except as otherwise set forth or contemplated in the Prospectus,
each of the Company and its subsidiaries possesses all material licenses,
certificates, authorizations and permits issued by, and has made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies which are necessary for the ownership of its
properties or the conduct of its businesses as presently conducted and as
described in the Prospectus, except where the failure to possess or make
the same would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and none of the Company or its
subsidiaries have received notification of any revocation or modification
of any such license, certificate, authorization or permit that would
reasonably be expected to have, singularly or in the aggregate, a Material
Adverse Effect or have any reason to believe that any such license,
certificate, authorization or permit will not be renewed;
(xxi) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that in all material respects
(A) transactions are executed in accordance with management's general or
specific authorizations, (B) transactions are recorded as necessary to
permit preparation of
8
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability, (C) access to assets is
permitted only in accordance with management's general or specific
authorization, and (D) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxii) The Company is in compliance in all material respects with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 that are effective and
applicable to the Company as of the date hereof and expects to be in
compliance with all additional provisions of the Xxxxxxxx-Xxxxx Act of 2002
that will become applicable to it, including those provisions relating to
internal control over financial reporting, when such provisions become
applicable to the Company.
(xxiii) Prior to the date of this Agreement, there are no securities
of the Company or any of its subsidiaries registered under the Exchange
Act, or listed on a national securities exchange or quoted in a U.S.
automated inter-dealer quotation system;
(xxiv) None of the Company or its subsidiaries has taken, and to the
best knowledge of the Company, none of its directors or officers has taken,
directly or indirectly, any action in connection with the distribution of
the Shares contemplated hereby which is designed to or which constitutes or
which might reasonably be expected to cause or result in unlawful
stabilization or manipulation of the price of any security of the Company
or its subsidiaries in order to facilitate the sale or resale of the
Shares;
(xxv) The ICE Futures Entities (as defined in 8(e) of this Agreement)
are the only Significant Subsidiaries of the Company;
(xxvi) The Registration Statement, the Prospectus and any Preliminary
Prospectus referenced in paragraph (ii) of this Section 1 comply, and any
amendments or supplements thereto will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus or any
Preliminary Prospectus are distributed in connection with the Directed
Share Program;
(xxvii) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those
obtained, is required in connection with the offering of the Directed
Shares in any jurisdiction where the Directed Shares are being offered; and
(xxviii) The Company has not offered, or caused Xxxxxx Xxxxxxx & Co.
Incorporated or its affiliates to offer, Shares to any person pursuant to
the Directed Share Program with the intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's
level or type of business with the Company, or (ii) a trade journalist or
publication to write or publish favorable information about the Company or
its products or services.
9
(b) Each of the Selling Shareholders, severally and not jointly,
represents and warrants to, and agrees with, each of the Underwriters, the
Independent Underwriter and the Company that:
(i) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required to be obtained by such Selling Shareholder for the sale of the
Shares by such Selling Shareholder, or the execution and delivery by such
Selling Shareholder of this Agreement, the Power of Attorney (as defined
below) and the Custody Agreement hereinafter referred to, other than the
Commission declaring the Registration Statement effective (and no
representation is made with respect to state securities or Blue Sky laws or
NASD review of the offering); such Selling Shareholder has full right,
power and authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Shareholder hereunder; and each of this Agreement, the
Power of Attorney and the Custody Agreement have been duly authorized,
executed and delivered by such Selling Shareholder and constitutes a valid
and legally binding agreement of such Selling Shareholder, enforceable
against such Selling Shareholder in accordance with its terms, except as
the same may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws affecting
creditors' rights and remedies generally and by general equitable
principles (whether considered in a proceeding in equity or at law), and
except to the extent that rights to indemnity or contribution under this
Agreement may be limited by applicable law;
(ii) The sale of the Shares by such Selling Shareholder hereunder and
such Selling Shareholder's compliance with all of the provisions of this
Agreement, the Power of Attorney and the Custody Agreement and the
consummation of the transactions herein and therein contemplated for such
Selling Shareholder 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 such Selling Shareholder is a party or by
which such Selling Shareholder is bound or to which any of the property or
assets of such Selling Shareholder is subject, except for breaches,
violations or defaults that would not adversely affect such Selling
Shareholder's ability to fulfill its obligations under this Agreement, the
Power of Attorney or the Custody Agreement in any material respect, nor
will such action result in any violation of the provisions of the
organizational documents of such Selling Shareholder if such Selling
Shareholder is not an individual or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Shareholder or any of such Selling Shareholder's
properties;
(iii) Immediately prior to each Time of Delivery (as defined in
Section 5 of this Agreement), the Selling Shareholder will be the
registered owner of the Shares to be sold by such Selling Shareholder
hereunder, free and clear of all Liens, and upon payment for the Shares to
be sold by such Selling Shareholders as provided in this Agreement,
delivery of such Shares, as directed by the
10
Underwriters, to Cede & Co. ("Cede") or such other nominee as may be
designated by DTC, registration of such shares in the name of Cede or such
other nominee and the crediting of such Shares on the records of DTC to
securities accounts of the Underwriters, (i) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303 of the UCC,
(ii) under Section 8-501 of the UCC, the Underwriters will acquire a valid
security entitlement in respect of such Shares and (iii) assuming that each
Underwriter does not have "notice of an adverse claim" (within the meaning
of Section 8-105 of the UCC) to such Shares, no action based on any
"adverse claim" (within the meaning of Section 8-102 of the UCC) to such
Shares may be asserted against the Underwriters with respect to such
security entitlement.
(iv) Such Selling Shareholder, in its capacity as a Selling
Shareholder, has not taken and will not take, directly or indirectly, any
action which is designed to or which constitutes or which might reasonably
be expected to cause or result in stabilization or manipulation of the
price of any security of the Company in order to facilitate the sale or
resale of the Shares;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling
Shareholder expressly for use therein, which information consists solely of
the information which relates to such Selling Shareholder set forth in the
Registration Statement and Prospectus under the caption "Principal and
Selling Shareholders", such Registration Statement, Preliminary Prospectus,
the Prospectus and any further amendments or supplements thereto, in each
case as of the effective date or date of filing with the Commission, as the
case may be, conformed or will conform, as the case may be, in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder and did not or will not, as the case may be,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(vi) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Shareholder will deliver to you prior to or at
the First Time of Delivery (as defined in Section 5(a) of the Agreement) a
properly completed and executed United States Treasury Department Form W-9
(or other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(vii) Such Selling Shareholder has duly executed and delivered a Power
of Attorney, in the form heretofore furnished to you (the "Power of
Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Shareholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Shareholder, to determine the purchase price to
be paid by the Underwriters to the Selling
11
Shareholders as provided in Section 2 of this Agreement, to authorize the
delivery of the Shares to be sold by such Selling Shareholder hereunder and
otherwise to act on behalf of such Selling Shareholder in connection with
the transactions contemplated by this Agreement and the Custody Agreement;
and
(viii) The appointment by such Selling Shareholder of the
Attorneys-in-Fact by the Power of Attorney, are to the extent stated
therein irrevocable; the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any Selling Shareholder or, in the case of an estate or
trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by
the occurrence of any other event; if any Selling Shareholder or any such
executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should occur,
before the delivery of the Shares hereunder, the Shares shall be delivered
by or on behalf of the Selling Shareholders in accordance with the terms
and conditions of this Agreement and of the Custody Agreement; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be
as valid as if such death, incapacity, termination, dissolution or other
event had not occurred, regardless of whether or not the Custodian (as
defined in the Custody Agreement) or any Attorney-in-Fact or any of them
shall have received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Selling Shareholders agree, severally and not jointly,
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company and each of the
Selling Shareholders, at a purchase price per share of $24.31, the number of
Firm Shares (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying the aggregate number of Firm Shares to be sold by the
Company or such Selling Shareholder, as the case may be, as set forth opposite
its names in Schedule II hereto by a fraction, the numerator of which is the
aggregate number of Firm Shares to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the aggregate number of Firm Shares to be purchased by all of the
Underwriters from the Company and all of the Selling Shareholders hereunder and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, each of the Selling
Shareholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Shareholders, at the purchase price per share
set forth in clause (a) of this Section 2, that portion of the number of
Optional Shares set forth opposite such Selling Shareholder's name in Schedule
II hereto as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I
12
hereto and the denominator of which is the maximum number of Optional Shares
that all of the Underwriters are entitled to purchase hereunder.
The Selling Shareholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 2,400,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the number
of Optional Shares to be sold by each Selling Shareholder as set forth in
Schedule II hereto. Any such election to purchase Optional Shares may be
exercised only by written notice from you to the Attorneys-in-Fact, given within
a period of 30 calendar days after the date of this Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 5 of this
Agreement) or, unless you and the Attorneys-in-Fact otherwise agree in writing,
earlier than two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Company hereby confirms its engagement of the services of
the Independent Underwriter as, and the Independent Underwriter hereby confirms
its agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Rule 2720(b)(15) with respect to the offering
and sale of the Shares.
(b) As compensation for the services of the Independent Underwriter
hereunder, the Company agrees to pay the Independent Underwriter $175,000 at the
Time of Delivery. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for reasonable documented out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with this Agreement and the services to be rendered hereunder.
5. (a) The Shares to be purchased by each Underwriter hereunder 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 and the
Selling Shareholders shall be delivered by or on behalf of the Company and the
Selling Shareholders to the Representatives, through the facilities of the
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company and each of the Selling Shareholders, as their interest may appear, to
the Representatives at least forty-eight hours in advance. The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m.,
New York City time, on November 21, 2005 or such other time and date as the
Representatives and the Company may agree upon in writing, and, with respect to
the Optional Shares, 9:30 a.m., New York time, on the date specified by the
Representatives
13
in the written notice given by them of the Underwriters' election to purchase
such Optional Shares, or such other time and date as they and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 8 of this Agreement, including
the cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(m) of this Agreement, will be delivered at
the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Shares will be delivered at such Time of
Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New York
time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 5, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
6. The Company agrees with each of the Underwriters and with the
Independent Underwriter:
(a) To prepare the Prospectus in a form approved by you 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 this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to provide you and the
Independent Underwriter with as many signed copies of the Registration Statement
and each amendment thereto as you may request; to make no further amendment or
any supplement to the Registration Statement or Prospectus prior to the last
Time of Delivery which shall be disapproved by you or the Independent
Underwriter promptly after reasonable notice thereof; to advise you and the
Independent Underwriter, 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 and to furnish you with copies thereof; to advise you and the Independent
Underwriter, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or prospectus, of the suspension of the qualification
of the Shares 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 stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such order;
14
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you 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
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation, to subject itself to taxation or
to file a general consent to service of process in any jurisdiction;
(c) As soon as practicable on the New York Business Day next succeeding
the date of this Agreement and from time to time, to furnish the Underwriters
and the Independent Underwriter with written and electronic copies of the
Prospectus in New York City in such quantities as you and the Independent
Underwriter may reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the time of
issue of the Prospectus in connection with the offering or sale of the Shares
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 period to amend or supplement the
Prospectus in order to comply with the Act, to notify you and upon your request
to prepare, file with the Commission and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic
copies as you 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, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders 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
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of this Agreement and
continuing to and including the date that is 180 days after the date of the
Prospectus (the initial "Lock-Up Period"), not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly any shares of Common
Stock of the Company, any securities that are convertible into or exchangeable
for shares of Common Stock, or that represent the right to receive, Common Stock
or any other securities that are substantially similar to the Shares or (ii)
15
enter into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the shares of Common
Stock of the Company, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock of the Company or such
other securities, in cash or otherwise, without the prior written consent of the
Representatives; provided, however, that if (1) during the last 17 days of the
initial Lock-Up Period, the Company releases earnings results or announces
material news or a material event or (2) prior to the expiration of the initial
Lock-Up Period, the Company announces that it will release earnings results
during the 15-day period following the last day of the initial Lock-Up Period,
then in each case the Lock-Up Period will be automatically extended until the
expiration of the 18-day period beginning on the date of release of the earnings
results or the announcement of the material news or material event, as
applicable, unless the Representatives waive, in writing, such extension. The
Company will provide the Representatives and each shareholder subject to the
Lock-Up Period pursuant to the lockup letters described in Section 8(k) with
prior notice of any such announcement that gives rise to an extension of the
Lock-Up Period. The foregoing shall not apply to (A) the Firm Shares and the
Optional Shares; (B) the issuance by the Company of shares of, options for, or
rights convertible into, Common Stock pursuant to any of the Company's stock
option plans, equity incentive plans or restricted stock plans, each as in
effect on the date of this Agreement; (C) the issuance by the Company of shares
of Common Stock pursuant to the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement; (D) the
issuance by the Company of shares of Common Stock pursuant to the exercise of
options or warrants or the conversion of restricted stock unit awards
outstanding as of the date of this Agreement; or (E) the ability of the Company
to (i) provide holders of its Class A Common Stock, Series 1 and Class A Common
Stock, Series 2 with a right to convert such shares into shares of Common Stock,
and (ii) issue shares of Common Stock to such holders upon the exercise of the
conversion right, in each case, pursuant to the Recapitalization as described in
the Prospectus;
(f) To make generally available to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to
its stockholders consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(g) During a period of two years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, except that any
reports or communications filed with the Commission and available through the
Commission's Electronic Data Gathering, Analysis and Retrieval (XXXXX) system
need not be provided, and to deliver to you as soon as they are available,
copies of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed;
16
(h) To use the net proceeds received by it from the sale by the Company
of the Shares pursuant to this Agreement as contemplated in the Prospectus under
the caption "Use of Proceeds", provided that the Company may change its plans
regarding the use of proceeds as contemplated in the Prospectus;
(i) Not to (and to use its best efforts to cause its affiliates not to)
take, directly or indirectly, any action in connection with the distribution of
the Shares contemplated hereby which is designed to or which constitutes or
which might reasonably be expected to cause or result in unlawful stabilization
or manipulation of the price of any security of the Company or its subsidiaries
in order to facilitate the sale or resale of the Shares;
(j) To use its best efforts to list, subject to notice of issuance, the
Shares on the New York Stock Exchange (the "Exchange");
(k) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), to 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 at the
time of filing, to either pay to 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; and
(m) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks 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 Shares in accordance with applicable law (the "License");
provided, however, that the License shall be used solely for the purpose
described above, is granted without any fee and may not be assigned or
transferred.
7. Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company and each of the Selling
Shareholders covenant and agree with one another and with the several
Underwriters that:
(a) 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 Shares under the Act and all other
expenses of the Company 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, the Independent Underwriter and dealers; (ii) the
cost of printing or producing any Agreement among Underwriters, this Agreement,
any Blue Sky Memorandum, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares for offering and sale under state securities laws as provided
17
in Section 6(b) of this Agreement, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with any Blue Sky survey (not to exceed
$10,000); (iv) all fees and expenses in connection with listing the Shares on
the Exchange; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the NASD of the terms of the sale of the Shares; (vi) the
cost of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar; (viii) all fees and disbursements of counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp duties,
similar taxes or duties or other taxes, if any, incurred by the Underwriters in
connection with the Directed Share Program; (ix) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged by the Company in
connection with the road show presentations, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show; (x) the Selling
Shareholder's share of the fees and expenses of the Attorneys-in-Fact and the
Custodian, up to an aggregate amount not to exceed $10,000; and all other costs
and expenses incident to the performance of its obligations hereunder which are
not otherwise specifically provided for in this Section;
(b) Such Selling Shareholder will pay or cause to be paid all costs and
expenses incident to the performance of such Selling Shareholder's obligations
hereunder which are not otherwise specifically provided for in this Section,
including (i) any fees and expenses of counsel for such Selling Shareholder,
(ii) such Selling Shareholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian to the extent such fees in the aggregate
exceed $10,000, and (iii) all expenses and taxes incident to the sale and
delivery of the Shares to be sold by such Selling Shareholder to the
Underwriters hereunder. In connection with clause (b)(iii) of the preceding
sentence, the Representatives agree to pay New York State stock transfer tax,
and the Selling Shareholder agrees to reimburse the Representatives for
associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that the Company shall bear, and the Selling Shareholders shall not be
required to pay or to reimburse the Company for, the cost of any other matters
not directly relating to the sale and purchase of the Shares pursuant to this
Agreement; and
(c) The Company will comply with all applicable securities and other
applicable laws, rules and regulations in each jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
(d) Except as provided in subsections (a) and (b) above, and Sections
10, 11 and 14 of this Agreement, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
18
8. The respective obligations of the Underwriters, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and the Selling Shareholders herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and the Selling
Shareholders shall have performed all of its and their respective obligations
hereunder to be performed prior to the Time of Delivery and the following
additional conditions:
(a) The Prospectus 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 6(a) of
this Agreement; 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 your reasonable
satisfaction;
(b) Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
shall have furnished to you their written opinion or opinions, dated such Time
of Delivery, with respect to such matters as you may reasonably request, in form
and substance reasonably satisfactory to you, and such counsel shall have
received such papers and information as they may request to enable them to pass
upon such matters;
(c) Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex III (a) hereto), dated such Time of Delivery, in form and substance
reasonably satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
all requisite corporate power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company's Fourth Amended Certificate authorizes the issuance
of up to three hundred million shares of capital stock. All outstanding
shares of the Company's Common Stock, including the Shares, have been duly
authorized and validly issued and are fully paid and nonassessable and the
sale of the Shares hereunder does not give rise under the Company's
certificate of incorporation or the Delaware General Corporation Law to any
preemptive or similar right to acquire shares of capital stock of the
Company on the part of any holder of outstanding capital stock of the
Company;
(iii) This Agreement has been duly authorized, executed and delivered
by the Company;
19
(iv) The issuance of the Shares and the sale of the Shares by the
Company to the Underwriters pursuant to this Agreement and the performance
by the Company of its obligations under this Agreement will not (A) violate
the Fourth Amended Certificate or Bylaws of the Company, (B) result in a
default under or breach of the agreements listed on Annex A to such opinion
filed as exhibits to the Company's Registration Statement (File No.
333-123500), or (C) violate any Federal law of the United States or law of
the State of New York, or the General Corporation Law of the State of
Delaware, in each case applicable to the Company; provided, however, that
for purposes of this paragraph (iv), such counsel need not express any
opinion with respect to Federal or state securities laws, other antifraud
laws, fraudulent transfer laws, antitrust and commodities laws or the
Employee Retirement Income Security Act of 1974 and related laws, or as to
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights or to
general equity principles, or as to validity or enforceability of this
Agreement;
(v) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Company under the Federal laws of
the United States, the laws of the State of New York and the General
Corporation Law of the State of Delaware for the issuance, sale and
delivery of Shares of the Company to the Underwriters have been obtained or
made;
(vi) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of proceeds therefrom will not be,
an "investment company," as such term is defined in the Investment Company
Act of 1940; and
(vii) In rendering the opinions, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
Federal laws of the United States, the laws of the State of New York and
the General Corporation Law of the State of Delaware. Such counsel may also
state that they have relied as to certain matters upon information obtained
from officers of the Company and its subsidiaries, public officials and
other sources believed by such counsel to be responsible.
Such counsel shall also furnish you with a letter to the effect that,
as counsel to the Company, they have reviewed the Registration Statement
and the Prospectus, participated in discussions with your representatives
and those of the Company and its accountants and advised the Company as to
the requirements of the Act and the applicable rules and regulations
thereunder; between the date of the Prospectus and such Time of Delivery,
such counsel participated in further discussions with your representatives
and those of the Company and its accountants in which the contents of
certain portions of the Prospectus and related matters were discussed and
reviewed certificates of certain officers of the Company, an opinion
addressed to you from Xxxxxxxxx X. Short, Esq. and Xxxxxxx Xxxxx and
letters addressed to you from the Company's independent accountants; on the
basis of the information that such counsel gained in the course of the
performance of the services referred to above, considered in the light of
such counsel's understanding of the applicable law and the experience such
counsel
20
have gained through their practice under the Act, they will confirm to you
that, in such counsel's opinion, the Registration Statement, and the
Prospectus, as of the effective date of the Registration Statement,
appeared on their face to be appropriately responsive in all material
respects to the requirements of the Act and the applicable rules and
regulations of the Commission thereunder; nothing that came to such
counsel's attention in the course of such review has caused such counsel to
believe that the Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
nothing that came to the attention of such counsel in the course of the
procedures described in the second clause of this paragraph has caused such
counsel to believe that the Prospectus, as it may be amended or
supplemented, as of such Time of Delivery, contained any untrue statement
of a material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; such counsel may state that the
limitations inherent in the independent verification of factual matters and
the character of determinations involved in the registration process are
such that such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus except for those made under the captions
"Description of Capital Stock" and "Underwriting" in the Prospectus insofar
as they purport to describe the provisions of the documents therein
described and those made under the caption "Certain United States Tax
Consequences to Non-U.S. Holders of Common Stock" in the Prospectus insofar
as they relate to provisions of U.S. Federal tax law therein described;
and, such counsel need express no opinion or belief as to the financial
statements or other financial data derived from accounting records
contained in the Registration Statement or the Prospectus.
(d) Xxxxxxxxx X. Short, Esq., Senior Vice President and General
Counsel, of the Company, shall have furnished to you his written opinion, dated
such Time of Delivery, in the form of Annex III (b) hereto that, to the best of
such counsel's knowledge and other than as set forth or contemplated 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 of the properties
or assets of the Company or any of its subsidiaries is the subject which would
reasonably be expected to have, singularly or in the aggregate, a Material
Adverse Effect; and, to the best of such counsel's knowledge and other than as
set forth or contemplated in the Prospectus, no such proceedings are threatened
by governmental authorities or by others.
(e) Xxxxxxx Xxxxx, counsel for ICE Futures, shall have furnished to you
his written opinion (a draft of such opinion is attached as Annex III(c)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that, (i) IntercontinentalExchange Holdings and ICE Futures (each,
an "ICE Futures Entity") are
21
duly incorporated in accordance with the laws of England and Wales, (ii) ICE
Futures is currently an unlimited company without a share capital with its sole
member being ICE Futures Holdings Plc, (iii) ICE Futures Holdings Plc has an
authorized share capital of GBP(pound)100,050,000.00, divided into 500,000,000
ordinary shares of GBP(pound)0.20, and 50,000 redeemable shares of
GBP(pound)1.00 each and has validly issued 11,450,319 ordinary shares of
GBP(pound)0.20 each, which are held by IntercontinentalExchange Holdings and no
other shares have been issued or are outstanding, and (iv)
IntercontinentalExchange Holdings has a nominal share capital of
GBP(pound)50,003.00, divided into 50,003 shares of GBP(pound)1.00 each and has
validly issued all of these shares, which are held by IntercontinentalExchange
International Inc. and no other shares have been issued or are outstanding.
(f) The respective counsel for each of the Selling Shareholders, as
indicated in Schedule II hereto, each shall have furnished to you their written
opinion with respect to each of the Selling Shareholders for whom they are
acting as counsel (a draft of each such opinion is attached as Annex III(d)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) A Power of Attorney and a Custody Agreement have been duly
authorized, executed and delivered by such Selling Shareholder and
constitute valid and legally binding agreements of such Selling
Shareholder;
(ii) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Shareholder; and the sale of the Shares to
be sold by such Selling Shareholder hereunder and the compliance by such
Selling Shareholder with all of the provisions of this Agreement, the Power
of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to such
counsel to which such Selling Shareholder is a party or by which such
Selling Shareholder is bound or to which any of the property or assets of
such Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the organizational documents of such Selling
Shareholder if such Selling Shareholder is not an individual or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Shareholder or any of
such Selling Shareholder's properties;
(iii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Shares to be sold by such Selling Shareholder,
the execution and delivery of this Agreement, the Power of Attorney, the
Custody Agreement hereinafter referred to, such Selling Shareholder has
full right, power and authority to sell, assign, transfer and deliver the
Shares to be sold by such Selling Shareholder hereunder, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws or by the rules and
22
regulations of the NASD in connection with the purchase and distribution of
the Shares by the Underwriters;
(iv) Immediately prior to the First Time of Delivery such Selling
Shareholder has good and valid title to the Shares to be sold at the First
Time of Delivery by such Selling Shareholder under this Agreement, free and
clear of all Liens (such counsel may rely upon a certificate of such
Selling Shareholder in respect of matters of fact as to ownership of, and
liens, encumbrances, equities or claims on, the Shares sold by such Selling
Shareholder); and
(v) Immediately prior to each Time of Delivery (as defined in Section
5 of this Agreement), the Selling Shareholder will be the registered owner
of the Shares to be sold by such Selling Shareholder hereunder, free and
clear of all Liens, and upon payment for the Shares to be sold by such
Selling Shareholders as provided in this Agreement, delivery of such
Shares, as directed by the Underwriters, to Cede & Co. ("Cede") or such
other nominee as may be designated by DTC, registration of such shares in
the name of Cede or such other nominee and the crediting of such Shares on
the records of DTC to securities accounts of the Underwriters, (i) DTC
shall be a "protected purchaser" of such Shares within the meaning of
Section 8-303 of the UCC, (ii) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such
Shares and (iii) assuming that each Underwriter does not have "notice of an
adverse claim" (within the meaning of Section 8-105 of the UCC) to such
Shares, no action based on any "adverse claim" (within the meaning of
Section 8-102 of the UCC) to such Shares may be asserted against the
Underwriters with respect to such security entitlement.
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, Ernst & Young LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex II hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(h) Otherwise than as set forth or contemplated in the Prospectus, (i)
neither the Company nor any of its subsidiaries shall have, since the date of
the latest audited financial statements included in the Prospectus, sustained
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; or incurred any
material liability or obligation, direct or contingent, or entered into any
material transaction not in the ordinary course of business; and (ii) since the
respective dates as of which information is given in the Prospectus, there shall
not have been any change in the capital stock, short-term debt or long-term debt
of the Company or any of its subsidiaries or any change, or any development
involving a prospective
23
change, in or affecting the general affairs, management, business, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; 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 the Shares being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(i) On or after the date of this Agreement, there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial banking or
securities settlement, payment or clearance services in the United States; (iv)
any outbreak or escalation of hostilities or any declaration by the United
States of a national emergency or war; (v) no downgrading shall have occurred in
the rating accorded the Company's preferred stock 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; (vi) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Company's preferred stock; or (vii) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (vii), singularly or together with any
other such event, in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(j) The Shares to be sold at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
(k) The "lockup" agreements, each substantially in the form of Annex IV
hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date of
this Agreement, shall be in full force and effect on the Closing Date;
(l) The Company shall have complied with the provisions of Section 6(c)
of this Agreement with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(m) The Company and the Selling Shareholders shall have furnished or
caused to be furnished to you at such Time of Delivery (i) certificates of
officers of the Company and the Selling Shareholders, respectively, reasonably
satisfactory to you as to the accuracy of the representations and warranties of
the Company and the Selling Shareholders, respectively, herein at and as of such
Time of Delivery, as to the incumbency of such officers, as to the performance
by the Company and the Selling Shareholders of all of their respective
obligations hereunder to be performed at or prior to
24
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (h) and (i) of this
Section and as to such other matters as you may reasonably request and (ii) such
documents as you may reasonably request with respect to the due incorporation or
formation and good standing of the Company and its subsidiaries and the due
authorization and issuance of the Firm Shares and the Optional Shares; and
(n) The Fourth Amended Certificate, substantially in the form in which
it was included in Part II, Item 16(a), as Exhibit 3.1 of the Registration
Statement, shall have been filed with the Secretary of State and shall be in
effect; and
(o) The Underwriters shall have received a certificate of good standing
dated within one month of the Closing Date from the Financial Services Authority
relating to the organization, existence and good standing of ICE Futures.
9. The Independent Underwriter hereby consents to the references to it
as set forth under the caption "Underwriting" in the Prospectus and in any
amendment or supplement thereto made in accordance with Section 6(a) of this
Agreement.
10. (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 any Preliminary Prospectus, the Registration
Statement or the Prospectus, 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, 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 any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through the Representatives expressly for use therein.
(b) Each of the Selling Shareholders severally and not jointly will
indemnify and hold harmless the Company and each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such indemnified
party 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 any Preliminary Prospectus, the Registration Statement or the
Prospectus, 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 any
Preliminary
25
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Selling Shareholder expressly for use therein;
and will reimburse the Company and each Underwriter for any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the liability of such Selling Shareholder
pursuant to this Section 10 shall not exceed the product of the number of Shares
sold by such Selling Shareholder and the initial public offering price of the
Shares as set forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company, each
Selling Shareholder and the Independent Underwriter, as the case may be, against
any losses, claims, damages or liabilities to which such indemnified party, 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 any Preliminary Prospectus, the Registration Statement or the
Prospectus, 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 any
Preliminary Prospectus, the Registration Statement or the Prospectus 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, each
Selling Shareholder and the Independent Underwriter, as the case may be, for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) In addition to and without limitation of the Company's obligation
to indemnify the Independent Underwriter as an Underwriter, the Company also
agrees to indemnify and hold harmless the Independent Underwriter, and each
person, if any, who controls the Independent Underwriter within the meaning of
the Act, or who is an affiliate or partner of the Independent Underwriter, from
and against any and all loss, liability, claim, damage and expense whatsoever,
as incurred, incurred as a result of the Independent Underwriter's participation
as a "qualified independent underwriter" within the meaning of Rule 2720 of the
Conduct Rules of the NASD in connection with the offering of the Shares, except
for any losses, claims, damages, liabilities and judgments resulting from the
Independent Underwriter's, or such controlling person's gross negligence or
willful misconduct.
(e) Promptly after receipt by an indemnified party under subsection
(a), (b), (c) or (d) 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
26
subsection (except to the extent that the indemnifying party is materially
prejudiced or otherwise forfeits rights or defenses by reason of such failure).
In case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (i) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act or who are affiliates of any Underwriter within the meaning of Rule 405
under the Securities Act, (ii) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section and (iii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Selling Shareholders and all persons, if any, who control any
Selling Shareholder within the meaning of either such Section, and that all such
fees and expenses shall be reimbursed as they are incurred. In the case of any
such separate firm for the Underwriters and such control persons and affiliates
of any Underwriters, such firm shall be designated in writing by the
Representatives. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate firm for
the Selling Shareholders and such control persons of any Selling Shareholders,
such firm shall be designated in writing by the persons named as
attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, which shall not be unreasonably withheld,
but if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. 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 action or claim) unless such settlement, compromise or
27
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 a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(f) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b), (c) or (d) 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 and the Selling Shareholders on the
one hand and the Underwriters on the other from the offering of the Shares. 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 (e) 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 and the Selling Shareholders on the one hand
and the Underwriters 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 each of the Company, the Selling Shareholders, the
Underwriters and the Independent Underwriter shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Shareholders, the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus and the fee
payable to the Independent Underwriter pursuant to the first sentence of Section
4(b) of this Agreement, respectively, bear to the sum of the total proceeds from
the sale of the Shares (before deducting expenses) in the offering and the fee
payable to the Independent Underwriter pursuant to the first sentence of Section
4(b) of this Agreement. 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 and the Selling Shareholders on the one hand
or either the Underwriters or the Independent Underwriter on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Shareholders, the Underwriters and the Independent Underwriter agree that it
would not be just and equitable if contributions pursuant to this subsection (f)
were determined by pro rata allocation (even if the Underwriters and the
Independent Underwriter 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 (f). 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
(f) 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 (f), no
Underwriter nor the Independent Underwriter shall be required to contribute any
amount
28
in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public,
exceeds the amount of any damages which such Underwriter or the Independent
Underwriter, as the case may be, have 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 Underwriters' obligations in
this subsection (f) to contribute are several in proportion to their respective
underwriting obligations and not joint. The Selling Shareholder's obligations in
this Section 10(f) to contribute are several in proportion to the amount being
sold and not joint and no Selling Shareholder shall be required to contribute an
amount greater than it would have been required to indemnify under this
Agreement.
(g) The obligations of the Company and the Selling Shareholders under
this Section 10 shall be in addition to any liability which the Company and the
Selling Shareholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter or the
Independent Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 10 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
(including any and each person, if any, who, with his or her consent, is named
in the Registration Statement as about to become a director of the Company) and
to each person, if any, who controls the Company, any Selling Shareholder or the
Independent Underwriter within the meaning of the Act.
11. (a) The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxxx & Co. Incorporated and its affiliates, within the meaning of Rule 405
under the Securities Act, and each person, if any, who controls Xxxxxx Xxxxxxx &
Co. Incorporated or its affiliates within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act ("Xxxxxx Xxxxxxx
Entities"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that the Participant has agreed to purchase; or
(iii) related to, arising out of, or in connection with the Directed Share
Program other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of Xxxxxx Xxxxxxx Entities.
(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any Xxxxxx Xxxxxxx Entity in respect of which
indemnity may be sought pursuant to Section 11(a), the Xxxxxx Xxxxxxx Entity
seeking indemnity shall promptly notify the Company in writing and the Company,
upon request of the
29
Xxxxxx Xxxxxxx Entity, shall retain counsel reasonably satisfactory to the
Xxxxxx Xxxxxxx Entity to represent the Xxxxxx Xxxxxxx Entity and any others the
Company may designate in such proceeding and shall pay the reasonable fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any Xxxxxx Xxxxxxx Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Xxxxxx Xxxxxxx Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the Xxxxxx
Xxxxxxx Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the Xxxxxx Xxxxxxx
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all Xxxxxx Xxxxxxx
Entities. Any such separate firm for the Xxxxxx Xxxxxxx Entities shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. The Company shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Company agrees to indemnify the Xxxxxx Xxxxxxx Entities from
and against any loss or liability by reason of such settlement or judgment. The
Company shall not, without the prior written consent of Xxxxxx Xxxxxxx & Co.
Incorporated, effect any settlement of any pending or threatened proceeding in
respect of which any Xxxxxx Xxxxxxx Entity is or could have been a party and
indemnity could have been sought hereunder by such Xxxxxx Xxxxxxx Entity, unless
such settlement includes an unconditional release of the Xxxxxx Xxxxxxx Entities
from all liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 11(a) is
unavailable to a Xxxxxx Xxxxxxx Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company, in lieu of
indemnifying the Xxxxxx Xxxxxxx Entity thereunder, shall contribute to the
amount paid or payable by the Xxxxxx Xxxxxxx Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Xxxxxx Xxxxxxx Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 11(c)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 11(c)(i) above but also the
relative fault of the Company on the one hand and of the Xxxxxx Xxxxxxx Entities
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and of the Xxxxxx Xxxxxxx Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the Xxxxxx Xxxxxxx Entities for the Directed Shares, bear to the
aggregate initial public offering price of the Shares. If the loss, claim,
damage or liability is caused by an untrue or alleged untrue statement of a
material fact, the relative fault of the Company on the one hand and the Xxxxxx
Xxxxxxx Entities on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue
30
statement or the omission or alleged omission relates to information supplied by
the Company or by the Xxxxxx Xxxxxxx Entities and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(d) The Company and the Xxxxxx Xxxxxxx Entities agree that it would not
be just or equitable if contribution pursuant to this Section 11 were determined
by pro rata allocation (even if the Xxxxxx Xxxxxxx Entities were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 11(c). The amount
paid or payable by the Xxxxxx Xxxxxxx Entities as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the Xxxxxx Xxxxxxx
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 11, no Xxxxxx Xxxxxxx Entity
shall be required to contribute any amount in excess of the amount by which the
total price at which the Directed Shares distributed to the public were offered
to the public exceeds the amount of any damages that such Xxxxxx Xxxxxxx Entity
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The remedies provided for in this
Section 11 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any Xxxxxx Xxxxxxx Entity at law or in equity.
(e) The indemnity and contribution provisions contained in this Section
11 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Xxxxxx Xxxxxxx Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
12. (a) If any Underwriter shall default in its obligation to purchase
the Shares that it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company and the Selling Shareholders shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Shareholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Shareholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Shareholders shall have the right to postpone such Time of Delivery 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, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
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 this Agreement with respect to such
Shares.
31
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Shareholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares 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
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Shareholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, or
if the Company and the Selling Shareholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and the Selling Shareholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Shareholders, except
for the expenses to be borne by the Company and the Selling Shareholders and the
Underwriters as provided in Section 7 of this Agreement and the indemnity and
contribution agreements in Section 10 of this Agreement; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
13. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Shareholders, the several
Underwriters and the Independent Underwriter, 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,
the Independent Underwriter or any controlling person of any Underwriter, the
Independent Underwriter or the Company or any of the Selling Shareholders, or
any officer or director or controlling person of the Company, or any controlling
person of any Selling Shareholder and shall survive delivery of and payment for
the Shares.
14. If this Agreement shall be terminated pursuant to Section 12 of
this Agreement, neither the Company nor the Selling Shareholders shall then be
under any liability to any Underwriter or the Independent Underwriter except as
provided in the second sentence of Section 4(b) of this Agreement and Sections
7, 10 and 11 of this Agreement; but, if for any other reason, any Shares are not
delivered by or on behalf of
32
the Company and the Selling Shareholders as provided herein, the Company and
each of the Selling Shareholders pro rata (based on the number of Shares to be
sold by the Company and the Selling Shareholders hereunder), will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and the Selling Shareholders shall then
be under no further liability to any Underwriter or the Independent Underwriter
in respect of the Shares not so delivered except as provided in the second
sentence of Section 4(b) of this Agreement and Sections 7, 10 and 11 of this
Agreement.
15. (a) In all dealings hereunder, you shall act on behalf of each of
the Underwriters (including the Independent Underwriter), and the parties hereto
shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter (including the Independent Underwriter)
made or given by you jointly as the Representatives; and in all dealings with
any Selling Shareholder hereunder, you and the Company shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of such
Selling Shareholder made or given by any or all of the Attorneys-in-Fact for
such Selling Shareholder.
(b) All statements, requests, notices and agreements hereunder shall be
in writing and effective only upon receipt, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to you as the
Representatives in care of (i) Xxxxxx Xxxxxxx & Co Incorporated, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Capital Markets Syndicate Desk and
(ii) Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; if to the Independent Underwriter shall be delivered or
sent by mail, telex or facsimile transmission to Sandler X'Xxxxx & Partners,
L.P., 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; if to any Selling Shareholder shall be delivered or sent by
mail, telex or facsimile transmission to counsel for such Selling Shareholders
at its address set forth in Schedule II hereto and if to the Company shall be
delivered or sent by mail to the address of the Company set forth in the
Registration Statement, Attention: General Counsel; provided, however, that any
notice to an Underwriter pursuant to Section 10(e) of this Agreement 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 Company
or the Selling Shareholder by you upon request; provided, however, that notices
under subsection 6(e) shall be in writing and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to you as the
Representatives at Xxxxxx Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Global Capital Markets Syndicate Desk and Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Attention: Control Room
and to the persons listed on Schedule III. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
16. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Independent Underwriter, the Company and the
Selling
33
Shareholders and, to the extent provided in Sections 10 and 13 of this
Agreement, the officers and directors of the Company (including any and each
person, if any, who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company) and each person who
controls the Company, any Selling Shareholder, the Independent Underwriter, 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. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
17. (a) This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by
this Agreement) that relate to the offering of the Shares, represents the entire
agreement between the Company and the Underwriters with respect to the
preparation of the Prospectus, the conduct of the offering, and the purchase and
sale of the Shares.
(b) The Company acknowledges that in connection with the offering of
the Shares: (i) the Underwriters have acted at arms length, are not agents of,
and owe no fiduciary duties to, the Company or any other person, (ii) the
Underwriters owe the Company only those duties and obligations set forth in this
Agreement and (iii) the Underwriters may have interests that differ from those
of the Company. The Company waives to the full extent permitted by applicable
law any claims it may have against the Underwriters arising from an alleged
breach of fiduciary duty in connection with the offering of the Shares
18. Time shall be of the essence of this 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.
19. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
20. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts of this Agreement, and upon the acceptance
of this Agreement by you, on behalf of each of the Underwriters including the
Independent Underwriter, this letter and such acceptance of this Agreement shall
constitute a binding agreement among each of the Underwriters, the Independent
Underwriter, the Company and each of the Selling Shareholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Shareholders
for examination upon request, but without warranty on your part as to the
authority of the signers thereof.
34
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Shareholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
IntercontinentalExchange, Inc.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
The Selling Shareholders set forth in
Schedule II to this Agreement.
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
As Attorney-in-Fact acting
on behalf of each of the
Selling Shareholders named
in Schedule II to this
Agreement.
Accepted as of the date of this Agreement:
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx, Sachs & Co.
By: /s/ XXXX XXXXX
---------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated
By: /s/ XXXXXXX, SACHS & CO.
---------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
35
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter To be Purchased Exercised
----------- --------------- -----------------
Xxxxxx Xxxxxxx & Co. Incorporated.................... 6,035,857 905,520
Xxxxxxx, Sachs & Co.................................. 6,035,857 905,520
Xxxxxxx Xxxxx & Company, L.L.C. ..................... 1,567,756 235,200
SG Corporate & Investment Banking.................... 470,326 70,560
Sandler X'Xxxxx & Partners, L.P. .................... 1,567,756 235,200
Susquehanna Financial Group, LLP .................... 79,987 12,000
Xxxxxxxx & Company, Inc. ............................ 79,987 12,000
Chatsworth Securities LLC ........................... 79,987 12,000
E*TRADE Securities, Inc. ............................ 79,987 12,000
---------- ---------
Total..................................... 15,997,500 2,400,000
========== =========
36
SCHEDULE II
NUMBER OF
OPTIONAL SHARES
TOTAL NUMBER TO BE SOLD IF
OF FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
-------------- ---------------
IntercontinentalExchange Inc................................... 2,497,500 0
The Selling Shareholders:
Xxxxxx Xxxxxxx Capital Group Inc............................... 1,395,395 0
The Xxxxxxx Sachs Group, Inc................................... 1,100,000 0
Total Investments USA Inc. .................................... 487,445 0
BP Products North America Inc. ................................ 463,783 0
Societe Generale Financial Corporation......................... 1,500,000 0
S T Exchange Inc. ............................................. 1,781,538 0
Continental Power Exchange, Inc................................ 209,122 0
AEP Investments, Inc........................................... 1,494,704 599,850
Mirant Americas Energy Marketing, LP .......................... 1,406,243 564,349
Duke Energy Trading Exchange, LLC ............................. 1,343,766 000,000
Xx Xxxx Xxxxxxxx Xxxxxx Xxxxx Xxxxxxx Company.................. 1,235,617 495,874
TA Associates Funds ........................................... 442,712 0
DB Structured Products, Inc. .................................. 500,307 200,652
MHC Investment Company......................................... 139,368 0
----------- ---------
Total.................................................... 15,997,500 2,400,000
=========== =========
37
SCHEDULE III
[signatures of lock-up agreements]
Xxxxxx Xxxxxxx Capital Group Inc.
The Xxxxxxx Sachs Group, Inc.
Total Investments USA Inc.
BP Products North America Inc.
Societe Generale Financial Corporation
S T Exchange Inc.
Continental Power Exchange, Inc.
AEP Investments, Inc.
Mirant Americas Energy Marketing, XX
Xxxx Energy Trading Exchange, LLC
El Paso Merchant Energy North America Company
TA IX L.P.
TA / Atlantic and Pacific IV L.P.
TA Strategic Partners Fund A L.P.
TA Strategic Partners Fund B L.P.
TA Investors II L.P.
DB Structured Products, Inc.
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Vice
Xxxxxxx X. Xxxxxxx
Xxxxx X. Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx Xxxx
Xxxxx X. Xxxxxxx
Xxxxxxxxx X. Short
Xxxxxxx Xxxx
Xxxx-Xxxx Forneri
Xxxxxx X. Xxxx
Xxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxx
38
