EXECUTION COPY
XxXxxxxxx & Co Inc.
$250,000,000
12% Series A Senior Subordinated Notes
Purchase Agreement
February 24, 2000
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX BARNEY INC.
ABN AMRO INCORPORATED
$250,000,000
12% Series A Senior Subordinated Notes
of
XxXxxxxxx & Co Inc.
PURCHASE AGREEMENT
February 24, 2000
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX BARNEY INC.
ABN AMRO INCORPORATED
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
XxXxxxxxx & Co Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, ABN AMRO Incorporated and Xxxxxxx Xxxxx Barney Inc. (each, an
"Initial Purchaser" and, collectively, the "Initial Purchasers") an aggregate of
$250,000,000 in principal amount of its 12% Series A Senior Subordinated Notes
(the "Series A Notes"), subject to the terms and conditions set forth herein.
The Series A Notes are to be issued pursuant to the provisions of an indenture
(the "Indenture"), to be dated as of the Closing Date (as defined below), among
the Company and Firstar Bank, N.A., as trustee (the "Trustee"). The Series A
Notes and the Series B Notes (as defined below) issuable in exchange therefor
are collectively referred to herein as the "Notes." Capitalized terms used but
not defined herein shall have the meanings given to such terms in the Indenture.
Pursuant to a Stock Purchase Agreement, dated as of December 23,
1999 and as amended as of February 1, 2000, by and among Xxxxxxxxx Brothers
Holdings, Inc. ("Xxxxxxxxx Brothers"), certain stockholders of Xxxxxxxxx
Brothers and the Company (the "Xxxxxxxxx Acquisition Agreement"), the Company
shall acquire all of the outstanding capital stock of Xxxxxxxxx Brothers for
approximately $230.0 million in cash. An aggregate of $25.5 million of the
purchase price will be placed in escrow to secure various obligations of the
stockholders of Xxxxxxxxx Brothers to the Company under the Xxxxxxxxx
Acquisition Agreement. The Series A Notes are being offered in connection with
the financing of the acquisition of Xxxxxxxxx Brothers (the "Xxxxxxxxx
Acquisition Transaction").
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Pursuant to an Agreement and Plan of Merger, dated as of January 26,
2000, by and among Webco Securities, Inc. ("Webco"), the stockholders of Webco
and the Company (the "Webco Acquisition Agreement", and together with the
Xxxxxxxxx Acquisition Agreement, the "Acquisition Agreements"), the Company has
agreed to acquire Webco for (i) 2.8 million shares of the Company's common
stock, (ii) $9.2 million in cash and (iii) senior promissory notes in the
aggregate principal amount of $3.0 million, each bearing an interest rate of 10%
per annum. The Company's acquisition of Webco (the "Webco Acquisition
Transaction", and together with the Xxxxxxxxx Acquisition Transaction, the
"Acquisition Transactions") will be financed using a portion of the proceeds of
the offering of the Series A Notes.
1. Offering Memorandum. The Series A Notes will be offered and sold
to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"Act"). The Company has prepared a preliminary offering memorandum, dated
February 8, 2000 (the "Preliminary Offering Memorandum"), and a final offering
memorandum, dated February 24, 2000 (the "Offering Memorandum"), relating to the
Series A Notes.
Upon original issuance thereof, and until such time as the same is
no longer required pursuant to the Indenture, the Series A Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (the "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (i) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (as
defined in Rule 144A under the Act) (a "QIB") or (ii) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
ACT,
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (iii) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE ACT, (iv) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE ACT, (v) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (vi) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE
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WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees to
purchase from the Company, the principal amounts of Series A Notes set forth
opposite the name of such Initial Purchaser on Schedule A hereto at a purchase
price equal to 95.777% of the principal amount thereof (the "Purchase Price").
3. Terms of Offering. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "Exempt Resales") of
the Series A Notes purchased hereunder on the terms set forth in the Offering
Memorandum, as amended or supplemented, solely to (i) persons whom the Initial
Purchasers reasonably believe to be "qualified institutional buyers" as defined
in Rule 144A under the Act ("QIBs") and (ii) persons permitted to purchase the
Series A Notes in offshore transactions in reliance upon Regulation S under the
Act (each, a "Regulation S Purchaser") (such persons specified in clauses (i)
and (ii) being referred to herein as the "Eligible Purchasers"). The Initial
Purchasers will offer the Series A Notes to Eligible Purchasers initially at a
price equal to 98.277% of the principal amount thereof. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Series A Notes
will have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Series A Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's 12% Series B Senior Subordinated Notes (the "Series B Notes"),
to be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "Exchange Offer") and (ii) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Series A Notes and
to use its best efforts to cause such Registration Statements to be declared and
remain effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes and the Registration
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Rights Agreement are hereinafter sometimes referred to collectively as the
"Operative Documents."
4. Delivery and Payment.
(a) Delivery of, and payment of the Purchase Price for, the Series A
Notes shall be made at the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx or such
other location as may be mutually acceptable. Such delivery and payment shall be
made at 9:00 a.m. New York City time, on March 2, 2000 or at such other time on
the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Series A Notes are herein called the "Closing Date."
(b) One or more of the Series A Notes in definitive global form,
registered in the name of Cede & Co., as nominee of the Depository Trust Company
("DTC"), having an aggregate principal amount corresponding to the aggregate
principal amount of the Series A Notes (collectively, the "Global Note"), shall
be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Company. The Global Note
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. Agreements of the Company. The Company hereby agrees with the
Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Series A Notes for offering
or sale in any jurisdiction designated by the Initial Purchasers pursuant to
Section 5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Offering
Memorandum untrue or that requires any additions to or changes in the Offering
Memorandum in order to make the statements therein not misleading. The Company
shall use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other federal or state regulatory authority shall issue an order suspending
the qualification or exemption of any Series A Notes under any state securities
or Blue Sky laws, the Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Offering Memorandum, and any amendments or supplements thereto, as the Initial
Purchasers may reasonably request for the time period specified in Section 5(c).
Subject to the Initial Purchasers' compliance with its representations and
warranties and agreements set forth in Section 7 hereof, the Company consents
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to the use of the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Series A
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering Memorandum of which the Initial Purchasers shall not previously have
been advised or to which the Initial Purchasers shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales or such
market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Series A Notes for offer and sale to the Initial Purchasers
and pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that the Company shall not be required in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it is not now so
qualified or to take any action that would subject it to general consent to
service of process or taxation other than as to matters and transactions
relating to the Preliminary Offering Memorandum, the Offering Memorandum or
Exempt Resales, in any jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and its
Subsidiaries (as defined below) on a consolidated basis (and a similar financial
report of all unconsolidated Subsidiaries, if any), all such financial reports
to include a consolidated balance sheet, a consolidated statement of operations,
a consolidated statement of cash flows and a consolidated statement of
shareholders' equity as of the end of and for such fiscal year, together with
comparable information as of the end of and for the preceding year,
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certified by the Company's independent public accountants and (ii) to mail and
make generally available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to such
holders, a consolidated balance sheet, a consolidated statement of operations
and a consolidated statement of cash flows (and similar financial reports of all
unconsolidated Subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Company to its security holders or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and/or its Subsidiaries (as defined below) as
the Initial Purchasers may reasonably request.
(h) So long as any of the Series A Notes remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any holder of Series A Notes in connection with any sale thereof
and any prospective purchaser of such Series A Notes from such holder the
information ("Rule 144A Information") required by Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Company
under this Agreement, including: (i) the fees, disbursements and expenses of
counsel to the Company and accountants of the Company in connection with the
sale and delivery of the Series A Notes to the Initial Purchasers and pursuant
to Exempt Resales, and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum, the Offering Memorandum and all amendments and supplements to any of
the foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchasers and persons designated by
it in the quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Series A Notes to the Initial Purchasers and
pursuant to Exempt Resales, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement, the other
Operative Documents and any other agreements or documents in connection with the
offering, purchase, sale or delivery of the Series A Notes, (iv) all expenses in
connection with the registration or qualification of the Series A Notes for
offer and sale under the securities or Blue Sky laws of the several states and
all costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Series A Notes, (vi) all expenses and
listing fees in connection with the application for designation for trading of
the Series A Notes in the PORTAL Market ("PORTAL"), (vii) the fees and expenses
of the Trustee and the Trustee's counsel in connection with the Indenture and
the Notes, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement, and
(xi)
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and all other costs and expenses incident to the performance of the obligations
of the Company hereunder for which provision is not otherwise made in this
Section.
(j) To use its best efforts to effect the inclusion of the
Series A Notes in PORTAL and to maintain the listing of the Series A Notes on
PORTAL for so long as the Series A Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company or
any warrants, rights or options to purchase or otherwise acquire debt securities
of the Company substantially similar to the Notes (other than (i) the Notes and
(ii) as contemplated in the Acquisition Agreements), without the prior written
consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(o) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Series A Notes.
6. Representations, Warranties and Agreements of the Company. As of
the date hereof, the Company represents and warrants to, and agrees with, the
Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers through Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation expressly for use therein. No stop order or decree
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been
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issued and no proceeding for any such purpose has been commenced or is pending
or, to the knowledge of the Company, is threatened.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation and has full corporate power and authority to carry on its
business as described in the Preliminary Offering Memorandum and the Offering
Memorandum and to own, lease and operate its properties, and is duly qualified
and is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to be
so qualified in a foreign jurisdiction would not have a material adverse effect
on the business, prospects, condition (financial or other), properties, net
worth, management, earnings or results of operations of the Company and its
Subsidiaries, taken as a whole, or draw into question the validity of this
Agreement or the other Operative Documents (a "Material Adverse Effect").
(c) The Company has an authorized capitalization as set forth
in the Offering Memorandum," and all currently outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are fully
paid, non-assessable and not subject to any preemptive or similar rights.
(d) The direct or indirect subsidiaries (the "Subsidiaries) of
the Company are: (x) as of the date hereof and as of the Closing Date, XxXxxxxxx
& Co. ("LaBCo.") and LaB Investing Co.L.L.C. ("LaBLLC") and (y) as of the
Closing Date, as a result of the consummation of the Xxxxxxxxx Acquisition
Transaction, Xxxxxxxxx Brothers and its subsidiaries, Xxxxxxxxx Brothers, Inc.
("HBInc.") and Xxxxxxxxx Brothers Futures Corporation ("HBFC"). Immediately
following the consummation of the Xxxxxxxxx Acquisition Transaction, the Company
will cause the NYSE specialist business and related assets and operations of
HBInc. (the "HBInc. Specialist Business") to be transferred to LaBCo. by (i)
causing HBInc. to declare and pay to Xxxxxxxxx Brothers a dividend consisting of
the HBInc. Specialist Business, (ii) then causing Xxxxxxxxx Brothers to declare
and pay to the Company a dividend consisting of the HBInc. Specialist Business
and (iii) then transferring the HBInc. Specialist Business as a capital
contribution by the Company to LaBCo. Immediately following the consummation of
the Webco Acquisition Transaction, the Company will cause the NYSE specialist
business of Webco (the "Webco Specialist Business") to be transferred as a
capital contribution from the Company to LaBCo. For purposes of this Agreement,
LaBCo. shall be deemed to include (x) as of the Closing Date, the HBInc.
Specialist Business and (y) only in the event that the Webco Acquisition
Transaction has been consummated, the Webco Specialist Business. Each of the
Subsidiaries has been duly organized and is validly existing as a limited
partnership, a limited liability company or a corporation, as the case may be,
in good standing under the laws of the jurisdiction in which it is organized or
incorporated, as the case may be, with the power and authority to own, lease and
operate its properties and conduct its business as described in the Offering
Memorandum, and is duly qualified and is in good standing and authorized to do
business in each foreign jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except to the
extent that a failure to be so qualified in a foreign jurisdiction would not
have a Material Adverse Effect. All of the outstanding shares of capital stock,
membership interests or partnership interests, as the case may be, of each of
the Company's Subsidiaries have been duly
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authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more Subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature (each, a "Lien").
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly authorized by the Company and,
on the Closing Date, will have been validly executed and delivered by the
Company. When the Indenture has been duly executed and delivered by the Company,
the Indenture will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. On the Closing Date, the Indenture will conform in all
material respects to the description thereof in the Offering Memorandum and to
the requirements of the Trust Indenture Act of 1939, as amended (the "TIA" or
"Trust Indenture Act"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(g) The Series A Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Series A Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the Series A
Notes will be entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the Series A
Notes will conform in all material respects as to legal matters to the
description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Series B Notes will have been
duly authorized by the Company. When the Series B Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The Registration Rights Agreement has been duly authorized
by the Company and, on the Closing Date, will have been duly executed and
delivered by the Company. When the Registration Rights Agreement has been duly
executed and delivered, the Registration Rights Agreement will be a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of
9
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Registration Rights Agreement will conform in all material respects as to legal
matters to the description thereof in the Offering Memorandum.
(j) Neither the Company nor any of its Subsidiaries is in
violation of its respective charter, by-laws or other organizational documents
or in default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease 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 or their respective
property is bound, except any such violation or default that individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
(k) The execution, delivery and performance of this Agreement,
the other Operative Documents and the Acquisition Agreements by the Company,
compliance by the Company with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order of, or filing with,
or qualification with, any court or governmental or self regulatory body or
agency (except such as may be required under federal securities laws, the
securities or Blue Sky laws of the various states or the TIA, by the New York
Stock Exchange (the "NYSE") or in connection with the Acquisition Transactions),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
Subsidiaries or any indenture, loan agreement, mortgage, lease 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 or their respective
property is bound, except any such conflict, breach or default that individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iii) violate or conflict with any applicable statute, law, ordinance,
administrative, governmental or self regulatory organizational rule or
regulation, or judgment, order or decree of any court or any governmental body
or agency having jurisdiction over the Company, any of its Subsidiaries or their
respective property, except any such violation or conflict that individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect, (iv) result in the imposition or creation of (or the obligation to
create or impose) a material Lien under, any 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 or their respective property is bound, or (v) result in the
termination, suspension or revocation of any Authorization (as defined below) of
the Company or any of its Subsidiaries or result in any other impairment of the
rights of the holder of any such Authorization.
(l) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any of its
Subsidiaries is or could be a party or to which any of their respective property
is or could be subject, which might result, singly or in the aggregate, in a
Material Adverse Effect or materially adversely affect the issuance of the
Series A Notes or the consummation of the Xxxxxxxxx Acquisition Transaction or
of any of the transactions contemplated by the Operative Documents. Except as
disclosed in the Offering Memorandum, neither the Company nor any of its
Subsidiaries is involved in any strike, job action or labor dispute with any
group of its employees that would reasonably be expected to have a Material
Adverse Effect, and, to the knowledge of the Company, no such action or dispute
is threatened.
10
(m) Neither the Company nor any of its Subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and its Subsidiaries (i) has such
concessions, permits, licenses, consents, exemptions, franchises,
authorizations, orders, registrations, qualifications and other approvals (each,
an "Authorization") of, and has made all filings with and notices to, all
federal, state and foreign governments, governmental or regulatory authorities
and self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws and (ii) is a member
in good standing of each federal, state or foreign exchange, board of trade,
clearing house or association and self-regulatory or similar organization, in
each case, as are necessary to own, lease, license and operate its respective
properties, to conduct its business and to consummate the Xxxxxxxxx Acquisition
Transaction, except where the failure to have any such Authorization or to make
any such filing or notice would not, singly or in the aggregate, have a Material
Adverse Effect. Each such Authorization is valid and in full force and effect
and each of the Company and its Subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and other than as described in the Offering Memorandum, such Authorizations
contain no restrictions, including, without limitation, net capital
requirements, that are burdensome to the Company or any of its Subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(p) (i) The accountants, Xxxxxx Xxxxxxxx LLP, that have
certified the financial statements and supporting schedules included in the
Preliminary Offering Memorandum and the Offering Memorandum are independent
public accountants with respect to the Company, as required by the Act and the
Exchange Act. The historical financial statements, together with related
schedules and notes, set forth in the Preliminary Offering Memorandum and the
Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
11
(ii) The accountants, Deloitte & Touche LLP, that have
certified certain financial statements of Xxxxxxxxx Brothers and HBInc. and
delivered their report with respect to the audited financial statements included
in the Offering Memorandum, are independent public accountants with respect to
Xxxxxxxxx Brothers within the meaning of the Act and the applicable published
rules and regulations thereunder.
(iii) The accountants, Xxxxxxxxx Xxxxx Xxxxxxx & Company, that
have certified certain financial statements of Xxxxxxxxx Brothers and HBInc. and
delivered their report with respect to the audited financial statements included
in the Offering Memorandum, are independent public accountants with respect to
Xxxxxxxxx Brothers within the meaning of the Act and the applicable published
rules and regulations thereunder.
(iv) The accountants, Xxxxxxx & Xxxxx, P.C., that have
certified certain financial statements of Webco and delivered their report with
respect to the audited financial statements included in the Offering Memorandum,
are independent public accountants with respect to Webco within the meaning of
the Act and the applicable published rules and regulations thereunder.
(q) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto) present fairly in all material respects the consolidated
financial position, results of operations and changes in financial position of
the Company and its Subsidiaries on the basis stated in the Offering Memorandum
at the respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Offering Memorandum (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of the Company or its Subsidiaries, as applicable.
(r) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been prepared
on a basis consistent with the historical financial statements of the Company
and its Subsidiaries and give effect to assumptions used in the preparation
thereof on a reasonable basis and in good faith and present fairly in all
material respects the historical and proposed transactions contemplated by the
Preliminary Offering Memorandum and the Offering Memorandum; and such pro forma
financial statements comply as to form in all material respects with the
requirements applicable to pro forma financial statements included in
registration statements on Form S-1 under the Act. The other pro forma financial
and statistical information and data included in the Offering Memorandum are, in
all material respects, accurately presented and prepared on a basis consistent
with the pro forma financial statements.
(s) The Company is not and, after giving effect to the
offering and sale of the Series A Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, will not be an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
12
(t) 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 (other than the Series A Notes) or to require the
Company to include such securities with the Notes registered pursuant to any
Registration Statement.
(u) Neither the Company nor any of its Subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Series A Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12
C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R.
Part 224) of the Board of Governors of the Federal Reserve System.
(v) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company that it is considering imposing) any
condition (financial or otherwise) on the Company's retaining any rating
assigned to the Company, any securities of the Company or (ii) has indicated to
the Company that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company or any securities of the Company.
(w) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in or contemplated by
the Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
material adverse change or any development which could reasonably be expected to
result in a material adverse change in the condition, financial or otherwise, or
the earnings, business, management or operations of the Company and its
Subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development which could reasonably be expected to result in a
material adverse change in the capital stock or in the long-term debt of the
Company or any of its Subsidiaries, (iii) neither the Company nor any of its
Subsidiaries has incurred any material liability or obligation, direct or
contingent and (iv) there has not occurred any material adverse change or any
development which could reasonably be expected to result in a material adverse
change that may prevent, impair or delay the consummation of the Xxxxxxxxx
Acquisition Transaction.
(x) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Act.
(y) When the Series A Notes are issued and delivered pursuant
to this Agreement, the Series A Notes will not be of the same class (within the
meaning of Rule 144A under the Act) as any security of the Company that is
listed on a national securities exchange registered under Section 6 of the
Exchange Act or that is quoted in a United States automated inter-dealer
quotation system.
13
(z) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company or any of its
respective representatives (other than each of the Initial Purchasers, as to
whom the Company makes no representation) in connection with the offer and sale
of the Series A Notes contemplated hereby, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. No securities of the same class as the Series A Notes have been
issued and sold by the Company within the six-month period immediately prior to
the date hereof.
(aa) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(bb) Neither the Company nor any of its respective affiliates
or any person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation) has engaged or will engage in
any directed selling efforts within the meaning of Regulation S under the Act
("Regulation S") with respect to the Series A Notes.
(cc) The Company has not taken and will not take any action to
cause the Series A Notes offered and sold in reliance on Regulation S to be
offered and sold other than in offshore transactions.
(dd) The Company and its respective affiliates and all persons
acting on their behalf (other than the Initial Purchasers, as to whom the
Company makes no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with the
offering of the Series A Notes outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required by Rule
902(h).
(ee) The Company is a "reporting issuer," as defined in Rule
902 under the Act.
(ff) The sale of the Series A Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
(gg) No registration under the Act of the Series A Notes is
required for the sale of the Series A Notes to the Initial Purchasers as
contemplated hereby or for the Exempt Resales assuming (i) the accuracy of the
Initial Purchasers' representations and warranties and compliance with the
agreements set forth in Section 7 hereof, (ii) compliance by each Initial
Purchaser with the offering and transfer procedures and restrictions described
in the Offering Memorandum, (iii) the accuracy of the representations and
warranties deemed to be made in the Offering Memorandum by purchasers to whom
the Initial Purchasers initially resell the Series A Notes and (iv) purchasers
to whom the Initial Purchasers initially resell the Series A Notes receive a
copy of the Offering Memorandum prior to such sale.
(hh) Each certificate signed by any officer of the Company or
any of its Subsidiaries and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be
14
deemed to be a representation and warranty by the Company to the Initial
Purchasers as to the matters covered thereby.
(ii) No approval of the stockholders of the Company is
necessary in connection with the consummation of the Xxxxxxxxx Acquisition
Transaction.
(jj) The Company's authorized equity capitalization is as set
forth in the Offering Memorandum under the heading "Capitalization."
(kk) Neither the Company nor its Subsidiaries nor, to the
knowledge of the Company, any employee or agent of the Company or its
Subsidiaries has made any payment of funds or received or retained any funds in
violation of any law, rule or regulation, which violation could reasonably be
expected to have a Material Adverse Effect.
(ll) Each of the Company and its Subsidiaries and ERISA
Affiliates (as defined below) has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of ERISA and Section 412 of the
Internal Revenue Code of 1986, as amended (the "Code") and the regulations and
published interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA) for which the Company or any of its Subsidiaries or ERISA
Affiliates have or may have any liability (contingent or otherwise) and each
such plan is in compliance in all material respects with the applicable
provisions of ERISA and such regulations and published interpretations
thereunder. Neither the Company nor any of its Subsidiaries or ERISA Affiliates
have incurred any unpaid liability to the Pension Benefit Guaranty Corporation
(other than for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA. Neither the Company nor any of its Subsidiaries
has engaged in any non-exempt "prohibited transactions" under ERISA or the Code.
The term "ERISA Affiliate" means each trade or business (whether or not
incorporated) that would be treated as a single employer with the Company under
Title IV of ERISA or Section 412 of the Code.
(mm) Immediately after the consummation of the purchase and
sale of the Series A Notes, the fair value and present fair saleable value of
the assets of the Company will exceed the sum of its stated liabilities and
identified contingent liabilities; the Company is not, nor will it be, after
giving effect to the consummation of such transactions, (i) left with
unreasonably small capital with which to carry on its business as it is proposed
to be conducted, (ii) unable to pay its debts (contingent or otherwise) as they
mature or (iii) otherwise insolvent.
(nn) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Company
believes to be reliable and accurate.
(oo) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the
15
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(pp) The Company and its Subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual Property") necessary for
the conduct of the Company's business as now conducted or as proposed in the
Offering Memorandum to be conducted, except to the extent a failure to so own,
possess, license or have rights to use Intellectual Property could not
reasonably be expected to have a Material Adverse Effect.
(qq) LaBCo. is registered as a broker-dealer with the
Commission under the Exchange Act, is a member organization in good standing
with the NYSE and is not required to be registered with the securities authority
of any state. As of the Closing Date, HBInc. will be registered as a
broker-dealer with the Commission under the Exchange Act, will be a member
organization in good standing with the NYSE and will not be required to be
registered with the securities authority of any state.
(rr) LaBCo. is, and, as of the Closing Date HBInc. will be, a
broker-dealer subject to the provisions of Regulation T (12 C.F.R.ss.220) of the
Board of Governors of the Federal Reserve System. LaBCo. maintains and, as of
the Closing Date, HBInc. will maintain procedures and internal controls designed
to ensure that it does not extend or maintain credit to or for its customers
other than in accordance with the provisions of Regulation T, and management
officials of the Company regularly supervise the activities of LaBCo. and will
regularly supervise the activities of HBInc. and the activities of their
respective employees to ensure that neither LaBCo. nor HBInc. will extend or
maintain credit to or for its customers other than in accordance with the
provisions of said Regulation T.
(ss) There is no franchise, contract or other document of a
character that would be required to be described in a prospectus under the Act,
which is not described in the Offering Memorandum; and the statements set forth
in the Offering Memorandum under the headings "Business--Pending Acquisitions,
--Operations--NYSE Rules Governing Our Specialist Activities and --Regulatory
Matters," "Employment Agreements and Noncompetition Agreements," "Incentive
Awards to Our Employees," "Description of Senior Subordinated Notes,"
"Description of Other Indebtedness," "Certain United States Federal Income Tax
Consequences" and "Plan of Distribution" fairly summarize in all material
respects the matters described therein.
(tt) The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of insurance and fidelity or surety bonds insuring the
Company or any of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
its Subsidiaries are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause;
16
neither the Company nor any such Subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any such Subsidiary
has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Offering Memorandum.
(uu) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from making any distribution in respect of its capital
stock, membership interests or partnership interests, as the case may be, from
repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary's property or assets to the
Company or any other Subsidiary of the Company, except as described in or
contemplated by the Offering Memorandum.
(vv) The Company had full right, power and authority to
execute and deliver the Xxxxxxxxx Acquisition Agreement and to perform its
obligations thereunder. The Xxxxxxxxx Acquisition Agreement has been duly
executed and delivered by the Company and each Acquisition Agreement is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. The
Company is in compliance with all of the terms and conditions of the Xxxxxxxxx
Acquisition Agreement, and no event has occurred, including without limitation,
the receipt of any notice, which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of the Xxxxxxxxx
Acquisition Agreement or would result in any other impairment in the
consummation of the Xxxxxxxxx Acquisition Agreement.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchasers
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the
Initial Purchasers, severally and jointly, represents and warrants to, and
agrees with, the Company that:
(a) Such Initial Purchaser is a QIB with such knowledge and
experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the Series A
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Series A Notes in a transaction that would
violate the Act or the securities laws of any state of the United States or any
other applicable jurisdiction and (B) will be reoffering and reselling the
Series A Notes only to (x) QIBs in reliance on the exemption from the
registration requirements of the Act provided by Rule 144A and (y) in offshore
transactions in reliance upon Regulation S under the Act.
17
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Series A Notes only to, and will solicit offers to buy the Series A Notes only
from (A) Eligible Purchasers that such Initial Purchaser reasonably believes are
QIBs and (B) Regulation S Purchasers, in each case, that agree that (x) the
Series A Notes purchased by them may be resold, pledged or otherwise transferred
within the time period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the Act, as in
effect on the date of the transfer of such Series A Notes, only (I) to the
Company or any of its Subsidiaries, (II) to a person whom the seller reasonably
believes is a QIB purchasing for its own account or for the account of a QIB in
a transaction meeting the requirements of Rule 144A under the Act, (III) in an
offshore transaction (as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) in accordance with another exemption
from the registration requirements of the Act (and based upon an opinion of
counsel acceptable to the Company) or (VI) pursuant to an effective registration
statement and, in each case, in accordance with the applicable securities laws
of any state of the United States or any other applicable jurisdiction and (y)
they will deliver to each person to whom such Series A Notes or an interest
therein is transferred a notice substantially to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Series A Notes.
(f) The Series A Notes offered and sold by such Initial
Purchaser pursuant hereto in reliance on Regulation S have been and will be
offered and sold only in offshore transactions.
(g) The sale of the Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
Such Initial Purchaser acknowledges that the Company and, for
purposes of the opinions to be delivered to each Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to such Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and each
Initial Purchaser hereby consents to such reliance.
18
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Initial Purchaser, its directors, its officers and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Offering Memorandum (or any
amendment or supplement thereto), the Preliminary Offering Memorandum or any
Rule 144A Information provided by the Company to any holder or prospective
purchaser of Series A Notes pursuant to Section 5(h) or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to such Initial Purchaser furnished in writing
to the Company by such Initial Purchaser through Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation provided, however, that the foregoing indemnity agreement
with respect to any Preliminary Offering Memorandum shall not inure to the
benefit of any Initial Purchaser who failed to deliver an Offering Memorandum,
as then amended or supplemented, (so long as the Offering Memorandum and any
amendment or supplement thereto was provided by the Company to the several
Initial Purchasers in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person asserting any
losses, claims, damages, liabilities or judgements caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Offering Memorandum, 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, if such material misstatement or
omission or alleged material misstatement or omission was cured in the Offering
Memorandum, as so amended or supplemented.
(b) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company, to the same extent as
the foregoing indemnity from the Company to each Initial Purchaser but only with
reference to information relating to such Initial Purchaser furnished in writing
to the Company by such Initial Purchaser through Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation (and not with respect to the information furnished to the
Company by and relating to any of the other Initial Purchasers) expressly for
use in the Preliminary Offering Memorandum or the Offering Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both
19
Sections 8(a) and 8(b), none of the Initial Purchasers shall be required to
assume the defense of such action pursuant to this Section 8(c), but each
Initial Purchaser may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below,
shall be at the expense of such Initial Purchaser). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such reasonable fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, in the case of the parties indemnified pursuant
to Section 8(a), and by the Company, in the case of parties indemnified pursuant
to Section 8(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the reasonable fees and expenses of counsel (in any case where such
reasonable fees and expenses are at the expense of the indemnifying party) and,
prior to the date of such settlement, the indemnifying party shall have failed
to comply with such reimbursement request. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action 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 the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and each of the Initial Purchasers on the other hand
from the offering of the Series A Notes or (ii) if the allocation provided by
clause 8(d)(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
8(d)(i) above but also the
20
relative fault of the Company, on the one hand, and each of the Initial
Purchasers, on the other hand, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or judgments, as
well as any other relevant equitable considerations. The relative benefits
received by the Company, on the one hand and each of the Initial Purchasers, on
the other hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Series A Notes (after underwriting discounts
and commissions, but before deducting expenses) received by the Company, and the
total discounts and commissions received by each of the Initial Purchasers bear
to the total price to investors of the Series A Notes. The relative fault of the
Company, on the one hand, and each of the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company, on the
one hand, or any of the Initial Purchasers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and each of the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Initial Purchasers 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 in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, each Initial Purchaser shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchaser exceeds the amount of any damages which such Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute pursuant to
this Section 8(d) are several in proportion to the respective principal amount
of Series A Notes purchased by each of the Initial Purchasers hereunder and not
joint.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
21
9. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase the Series A Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any securities of the Company (including, without
limitation, the placing of any of the foregoing ratings on credit watch with
negative or developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such term is
defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have
occurred any change, nor shall any notice have been given of any potential or
intended change, in the outlook for any rating of the Company or any securities
of the Company by any such rating organization and (iii) no such rating
organization shall have given notice that it has assigned (or is considering
assigning) a lower rating to the Notes than that on which the Notes were
marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in or contemplated by
the Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
change or any development which could reasonably be expected to result in a
change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its Subsidiaries, taken as a whole,
(ii) there shall not have been any change or any development which could
reasonably be expected to result in a change in the capital stock or in the
long-term debt of the Company or any of its Subsidiaries and (iii) neither the
Company nor any of its Subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your reasonable judgment,
is material and adverse and, in your reasonable judgment, makes it impracticable
to market the Series A Notes on the terms and in the manner contemplated in the
Offering Memorandum.
(d) You shall have received on the Closing Date (x) a
certificate dated the Closing Date, signed by the Chairman, Chief Executive
Officer and President and by the Executive Vice President, Finance of the
Company, confirming the matters set forth in Sections 6(w)(i)-(iii), 9(a) and
9(b) and stating that each of the Company has complied in all material respects
with all the agreements and satisfied in all material respects all of the
conditions herein contained and required to be complied with or satisfied on or
prior to the Closing Date and (y) a certificate of the Chief Compliance Officer
of the Company or another officer of the Company satisfactory to Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation confirming the following:
22
(i) neither the Company nor any of its Subsidiaries has
violated any provisions of ERISA or the rules and regulations
promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect; and
(ii) each of the Company and its Subsidiaries (i) has such
Authorizations of, and has made all filings with and notices to, all
federal, state and foreign governments, governmental or regulatory
authorities and self-regulatory organizations and all courts and
other tribunals, including without limitation, under any applicable
Environmental Laws and (ii) is a member in good standing of each
federal, state or foreign exchange, board of trade, clearing house
or association and self-regulatory or similar organization, in each
case, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material
Adverse Effect; each such Authorization is valid and in full force
and effect and each of the Company and its Subsidiaries is in
compliance with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred
(including the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both,
would result in any other impairment of the rights of the holder of
any such Authorization; and other than as described in the Offering
Memorandum, such Authorizations contain no restrictions, including,
without limitation, net capital requirements, that are burdensome to
the Company or any of its Subsidiaries; except where such failure to
be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse
Effect.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchasers), dated the Closing
Date, of Fulbright & Xxxxxxxx L.L.P., counsel for the Company, to the effect
that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and has the corporate power
and authority to carry on its business as described in the
Offering Memorandum and to own, lease and operate its
properties; each of its Subsidiaries has been duly organized
or incorporated, as the case may be, and is validly existing
as a limited partnership, a limited liability company or a
corporation, as the case may be, in good standing under the
laws of the jurisdiction in which it is organized or
incorporated, as the case may be, and has the power and
authority to carry on its business as described in the
Offering Memorandum and to own, lease and operate its
properties;
23
(ii) the Company is duly qualified and is in good
standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification
except where the failure to be so qualified would not have a
Material Adverse Effect, and each of its Subsidiaries is duly
qualified and is in good standing and authorized to do
business in each foreign jurisdiction in which the nature of
its business or its ownership or leasing of property requires
such qualification;
(iii) all the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are
fully paid, non-assessable and, to the knowledge of such
counsel, not subject to any preemptive or similar rights;
(iv) all of the outstanding shares of capital stock,
membership interests or partnership interests, as the case may
be, of each of the Company's Subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable, and are owned, directly or indirectly, by the
Company, to the knowledge of such counsel, free and clear of
any Lien;
(v) the Series A Notes have been duly authorized and,
when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(vi) the Company had the corporate right, power and
authority to execute and deliver the Xxxxxxxxx Acquisition
Agreement and to perform its obligations thereunder; the
Xxxxxxxxx Acquisition Agreement is a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally, and (b) rights of
acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability;
(vii) the Indenture has been duly authorized, executed
and delivered by the Company and is a valid and binding
agreement of the Company, enforceable against the Company and
in accordance with its terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (y) rights
24
of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability;
(viii) this Agreement has been duly authorized, executed
and delivered by the Company;
(ix) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(x) the Series B Notes have been duly authorized;
(xi) the statements under the captions
"Business--Pending Acquisitions," "--Operations--NYSE Rules
Governing Our Specialist Activities," "Business--Regulatory
Matters," "Employment Agreements and Noncompetition
Agreements," "Incentive Awards to Our Employees," "Description
of Senior Subordinated Notes," "Description of Other
Indebtedness," "Certain United States Federal Income Tax
Consequences" and "Plan of Distribution" (other than
statements in the "Plan of Distribution" furnished to the
Company by the Initial Purchasers, as to which no opinion is
rendered) in the Offering Memorandum, insofar as such
statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present
in all material respects such legal matters, documents and
proceedings;
(xii) The Company's authorized equity capitalization is
set forth in the Offering Memorandum under the heading
"Capitalization";
(xiii) to the knowledge of such counsel, neither the
Company nor any of its Subsidiaries is in violation of its
respective charter, by-laws or other organizational documents
and, to the best of such counsel's knowledge after due
inquiry, neither the Company nor any of its Subsidiaries is in
default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its Subsidiaries, taken as
a whole, to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or
their respective property is bound that (A) is described in
the Offering Memorandum under the headings "Business - Pending
Acquisitions," "Employment Agreements and Noncompetition
Agreements," "Incentive Awards to Our Employees," "Certain
Transactions - Reorganization and Related Transactions and
--Interest on Indebtedness" and "Description of
25
Other Indebtedness" or (B) has been filed as an exhibit to any
of the Company's filings with the Commission pursuant to the
Act or the Exchange Act (collectively, the "Material
Contracts");
(xiv) the execution, delivery and performance of this
Agreement, the other Operative Documents by the Company, the
compliance by the Company with all provisions hereof and
thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or filing with, or
qualification with, any court or governmental or self
regulatory body or agency known to such counsel to be
applicable to the Company (except such as may be required
under federal securities laws, the securities or Blue Sky laws
of the various states or the TIA, by the NYSE or in connection
with the Acquisition Transactions), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of
its Subsidiaries or any Material Contract, except any such
conflict, breach or default that individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect, (iii) violate or conflict with any applicable
statute, law, ordinance, administrative, governmental or
self-regulatory organization rule or regulation, or judgment,
order or decree of any court or any governmental body or
agency known to us to have jurisdiction over the Company, any
of its Subsidiaries or their respective property, except any
such violation or conflict that individually or in the
aggregate could not reasonably be expected to have a Material
Adverse Effect, (iv) result in the imposition or creation of
(or the obligation to create or impose) a Lien under any
Material Contract, or (v) result in the termination,
suspension or revocation of any material Authorization of the
Company or any of its Subsidiaries or result in any other
impairment of the rights of the holder of any such material
Authorization.
(xv) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its Subsidiaries is or could be a
party or to which any of their respective property is or could
be subject, which might result, singly or in the aggregate, in
a Material Adverse Effect or which would be required to be
described in a prospectus pursuant to the Act which is not
described in the Offering Memorandum, and to the knowledge of
such counsel, there is no franchise, contract or other
document of a character which would be required to be
described in a prospectus pursuant to the Act which is not
described in the Offering Memorandum.
(xvi) each of the Company and its Subsidiaries (i) has
such Authorizations of, and has made all filings with and
notices to, all federal, state and foreign governments,
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including
without limitation, under any applicable Environmental Laws
and (ii) is a
26
member in good standing of each federal, state or foreign
exchange, board of trade, clearing house or association and
self-regulatory or similar organization, in each case, to
consummate the transactions contemplated by this Agreement and
the Xxxxxxxxx Acquisition Transaction, except where the
failure to have any such Authorization or to make any such
filing or notice would not, singly or in the aggregate, have a
Material Adverse Effect; to the knowledge of such counsel,
each such Authorization is valid and in full force and effect
and each of the Company and its Subsidiaries is in compliance
in all material respects with all the terms and conditions
thereof and with the rules and regulations of the authorities
and governing bodies known to us to have jurisdiction with
respect thereto; and, to the knowledge of such counsel, no
event has occurred (including the receipt of any notice from
any authority or governing body) which allows or, after notice
or lapse of time or both, would allow, revocation, suspension
or termination of any such Authorization or results or, after
notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such
Authorization; and other than as described in the Offering
Memorandum, such Authorizations contain no restrictions,
including, without limitation, net capital requirements, that
are burdensome to the Company or any of its Subsidiaries;
except where such failure to be valid and in full force and
effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect;
(xvii) the Company is not and, immediately after the
offering and sale of the Series A Notes and the application of
the net proceeds thereof as described in the Offering
Memorandum, will not be an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xviii) to the best of such counsel's knowledge after
due inquiry, other than the Registration Rights Agreement,
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 include such securities with the Notes
registered pursuant to any Registration Statement;
(xix) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission applicable to an indenture which
is qualified thereunder. It is not necessary in connection
with the offer, sale and delivery of the Series A Notes to the
Initial Purchasers in the manner contemplated by this
Agreement or in connection with the Exempt Resales to qualify
the Indenture under the TIA;
27
(xx) no registration under the Act of the Series A Notes
is required for the sale of the Series A Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming that (i) each Initial Purchaser is a QIB or a
Regulation S Purchaser, (ii) the accuracy of, and compliance
with, the Initial Purchasers' representations and agreements
contained in Section 7 of this Agreement, (iii) the accuracy
of the representations of the Company set forth in Sections
6(z), (bb), (cc), (dd) and (ff) of this Agreement, (iv)
compliance by each Initial Purchaser with the offering and
transfer procedures and restrictions described in the Offering
Memorandum, (v) the accuracy of the representations and
warranties deemed to be made in the Offering Memorandum by
purchasers to whom the Initial Purchasers initially resell the
Series A Notes and (vi) purchasers to whom the Initial
Purchasers initially sell the Series A Notes receive a copy of
the Offering Memorandum prior to such sale;
(xxi) the approval of the Company's stockholders is not
required in connection with the consummation of the Xxxxxxxxx
Acquisition Transaction;
(xxii) the Indenture, the Notes and the Registration
Rights Agreement conform in all material respects to the
descriptions thereof contained in the Offering Memorandum;
(xxiii) no Material Contract contains any provisions
that prohibit any Subsidiary of the Company, directly or
indirectly, from making any distribution in respect of its
capital stock, membership interests or partnership interests,
as the case may be, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from
transferring any of such Subsidiary's property or assets to
the Company or any other Subsidiary of the Company, except as
described in or contemplated by the Offering Memorandum;
(xxiv) each of LaBCo. and HBInc. is registered as a
broker-dealer with the Commission under the Exchange Act and
is a member organization in good standing with the NYSE, and
neither LaBCo. nor HBInc. is required to be registered with
the securities authority of any state; and
(xxv) neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance,
execution or delivery of the Notes will violate Regulation T,
U or X of the Board of Governors of the Federal Reserve
system.
With respect to matters relating to Xxxxxxxxx Brothers,
HBInc., HBFC or the Xxxxxxxxx Acquisition Transaction, (i) Fulbright
& Xxxxxxxx L.L.P. may rely on an opinion of Cravath, Swaine & Xxxxx,
dated the Closing Date, provided that such opinion expressly states
that such opinion may be delivered to,
28
and relied upon by, the Initial Purchasers in connection with the
transactions contemplated hereby or (ii) the Company may deliver to
the Initial Purchasers an opinion of Cravath, Swaine & Xxxxx, dated
the Closing Date and addressed to the Initial Purchasers.
The opinion of Fulbright & Xxxxxxxx L.L.P shall also
contain the following paragraph:
We have participated in conferences with officers and
other representatives of the Company, representatives of the
independent public accountants for the Company, representatives of
the Initial Purchasers and counsel for the Initial Purchasers at
which conferences the contents of the Offering Memorandum and
related matters were discussed, and, although we have not
independently verified and are not passing upon and assume no
responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum (except to the
extent specified in Section 9(e)(xi)), and that our judgment as to
materiality is, to the extent we deem proper, based in part upon the
views of appropriate officers and other representatives of the
Company, nothing has come to our attention that leads us to believe
that the Offering Memorandum, as of its date or as of the date
hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements contained therein, in
the light of the circumstances under which they were made, not
misleading (it being understood that we express no opinion with
respect to the financial statements and related notes thereto and
the other financial, statistical and accounting data included in the
Offering Memorandum).
The opinion of Fulbright & Xxxxxxxx L.L.P. (and, to the extent
applicable, the opinion of Cravath, Swaine & Xxxxx) described in Section 9(e)
above shall be rendered to you at the request of the Company and shall so state
therein.
(f) The Initial Purchasers shall have received on the Closing Date
an opinion, dated the Closing Date, of Cleary, Gottlieb, Xxxxx & Xxxxxxxx,
counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time this
Agreement is executed and at the Closing Date, letters dated the date hereof and
the Closing Date, in form and substance satisfactory to the Initial Purchasers
from each of Xxxxxx Xxxxxxxx LLP, Deloitte & Touche LLP, Xxxxxxxxx Xxxxx Xxxxxxx
& Company and Xxxxxxx & Xxxxx, P.C., all of which are independent public
accountants with respect to the entities audited by them, containing the
information and statements of the type ordinarily included in accountants'
"comfort letters" to the Initial Purchasers with respect to the financial
statements and certain financial information (and, in the case of Xxxxxx
Xxxxxxxx LLP, the pro forma financial statements and pro forma financial
information) contained in the Offering Memorandum.
(h) The Series A Notes shall have been duly listed in PORTAL.
29
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company and the Trustee.
(j) The Company shall have executed the Registration Rights
Agreement and the Initial Purchasers shall have received an original copy
thereof, duly executed by the Company.
(k) At or prior to the Closing Date, the Company shall have
performed or complied in all material respects with the agreements herein
contained and required to be performed or complied with by the Company at or
prior to the Closing Date.
(l) At the Closing Date, the Xxxxxxxxx Acquisition Transaction shall
have been consummated subject to the funding to be provided hereby and the
Company shall have provided to the Initial Purchasers or counsel for the Initial
Purchasers copies of all closing documents delivered to the parties to the
Xxxxxxxxx Acquisition Transaction.
(m) At the time of execution of this Agreement and on the Closing
Date, no order or decree preventing the use of the Offering Memorandum or any
amendment or supplement thereto, or any order asserting that the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, shall have been issued and no proceedings for those purposes shall have
been commenced or shall be pending or, to the knowledge of the Company,
threatened. No order suspending the sale of the Series A Notes in any
jurisdiction shall have been issued and no proceedings for that purpose shall
have been commenced or shall be pending or, to the knowledge of the Company,
threatened.
30
10. Effectiveness of Agreement and Termination. This Agreement shall
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Series A Notes on the
terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Series A Notes which it or they have agreed
to purchase hereunder on such date and the aggregate principal amount of the
Series A Notes which such defaulting Initial Purchaser or Initial Purchasers, as
the case may be, agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Series A Notes to be
purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Series A Notes set forth opposite its name in Schedule A bears to
the aggregate principal amount of the Series A Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as you may specify, to purchase the Series A Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase on such date; provided that in no
event shall the aggregate principal amount of the Series A Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Series A Notes without the written consent of such
Initial Purchaser. If on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase the Series A Notes and the aggregate
principal amount of the Series A Notes with respect to which such default occurs
is more than one-tenth of the aggregate principal amount of the Series A Notes
to be purchased by all Initial Purchasers and arrangements satisfactory to the
Initial Purchasers and the Company for purchase of such the Series A Notes are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Initial Purchaser and the
Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Offering
31
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to XxXxxxxxx &
Co Inc., Xxx Xxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. X.
XxXxxxxxx, XX and (ii) if to the Initial Purchasers, Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, Xxxxxxx Xxxxx Barney Inc. and ABN AMRO
Incorporated, c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Series A Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, the officers or directors of the Company, or
any person controlling the Company, (ii) acceptance of the Series A Notes and
payment for them hereunder and (iii) termination of this Agreement.
If for any reason the Series A Notes are not delivered by or on
behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company agrees to
reimburse the Initial Purchasers for all reasonable out-of-pocket expenses
(including the reasonable fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be liable
for all expenses which it has agreed to pay pursuant to Section 5(i) hereof. The
Company also agrees to reimburse the Initial Purchasers and its officers,
directors and each person, if any, who controls such Initial Purchasers within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act for any
and all reasonable fees and expenses (including without limitation the
reasonable fees and expenses of counsel) incurred by them in connection with
enforcing their rights under this Agreement (including without limitation its
rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchasers, the Initial Purchasers' directors and officers, any controlling
persons referred to herein, the directors of the Company and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Series A Notes from any of the Initial Purchasers merely because of
such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
32
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Initial Purchasers.
Very truly yours,
XxXxxxxxx & Co Inc.
By: /s/ G.M.L. XxXxxxxxx
------------------------------------
Name: G.M.L. XxXxxxxxx, IV
Title: Chairman, Chief Executive
Officer and President
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX XXXXX BARNEY INC.
ABN AMRO INCORPORATED
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ Xxxxxxxx Xxx
----------------------------------
Name: Xxxxxxxx Xxx
Title: Vice President
33
SCHEDULE A
Initial Purchasers Principal Amount of Notes
------------------ -------------------------
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation .......................... $218,750,000
Xxxxxxx Xxxxx Barney Inc. .......................... 25,000,000
ABN AMRO Incorporated .............................. 6,250,000
============
Total .............................................. $250,000,000
1
EXHIBIT A
Form of Registration Rights Agreement
2
