Exhibit 1.1
2,121,969 Shares
FTI Consulting, Inc.
Common Stock
UNDERWRITING AGREEMENT
______, 2003
Xxxxxx Brothers Inc.
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, INC.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
SunTrust Capital Markets, Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FTI Consulting, Inc., a Maryland corporation (the "Company"), and
certain stockholders of the Company named in Schedule II hereto and identified
therein as selling stockholders (the "Selling Stockholders"), propose to sell an
aggregate of 2,121,969 shares (the "Firm Securities") of the Company's common
stock, par value $0.01 per share (the "Common Stock"). Of the Firm Securities,
2,100,000 are being sold by the Company and 21,969 by the Selling Stockholders.
The Company also proposes to grant to the Underwriters named in Schedule I
hereto (the "Underwriters") an option to purchase up to an additional 318,295
shares of the Common Stock on the terms and for the purposes set forth in
Section 3 (the "Option Securities"). The Firm Securities and the Option
Securities, if purchased, are hereinafter collectively called the "Securities".
This is to confirm the agreement concerning the purchase of the Securities from
the Company and the Selling Stockholders by the Underwriters, as of the date
first written above.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to and agrees with the Underwriters that:
(a) A registration statement on Form S-3 setting forth
information with respect to the Company, the Selling Stockholders and the
Securities has (i) been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder (collectively, the "Securities Act"), (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement (and any amendments
thereto) and all exhibits thereto have been delivered by the Company to you
as the representatives of the Underwriters (the "Representatives"). As used
in this Agreement, "Effective Time" means the date and the time as of which
such registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the
2
Commission; "Effective Date" means the date of the Effective Time;
"Preliminary Prospectus" means each preliminary prospectus contained in
such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Securities Act; "Registration Statement" means such
registration statement, as amended as of the Effective Time, including any
documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Securities Act and deemed to be a part of
the registration statement as of the Effective Time pursuant to Rule 430A
of the Securities Act; and "Prospectus" means the prospectus in the form
first used to confirm sales of the Securities. If the Company has filed an
abbreviated registration statement to register additional Securities
pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462
Registration Statement. Reference made herein to any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any document filed under the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any annual report of the Company filed
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order preventing
or suspending the use of the Registration Statement, the Preliminary
Prospectus or the Prospectus.
(b) The conditions for use of Form S-3, as set forth in the
General Instructions thereto, have been satisfied.
(c) The Registration Statement, as of the Effective Date,
conformed in all material respects with the requirements of the Securities
Act and did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectus and any amendment
or supplement thereto, as of their respective dates and as of the
applicable Delivery Date (as defined in Section 5 below), conformed and
will conform in all material respects with the requirements of the
Securities Act and did not and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that,
the Company makes no representation or warranty as to information contained
in or omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written
3
information furnished to the Company by the Underwriters specifically for
inclusion therein (which information is set forth in Section 10(f)).
(d) The documents incorporated by reference in the Prospectus
(the "Incorporated Documents"), when they became effective or were filed
with the Commission, as the case may be, conformed in all material respects
to the requirements of the Securities Act and the Exchange Act, as
applicable, and none of such documents contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Prospectus,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and 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 light of the circumstances in which they were made,
not misleading.
(e) The Company and each of its subsidiaries has been duly
formed and is validly existing as a corporation or limited liability
company in good standing under the laws of its jurisdiction of formation,
is duly qualified to do business and is in good standing as a foreign
corporation or limited liability company in each jurisdiction in which its
ownership or lease of property or the conduct of its businesses requires
such qualification, other than such jurisdictions where the failure to be
so qualified or otherwise authorized to transact business would not have a
material adverse effect on the business, prospects, financial condition,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), and has all
power and authority necessary to own, lease or hold its properties and to
conduct the businesses in which it is engaged.
(f) The Company has an authorized and issued capitalization as
set forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof contained in
the Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities, claims
or adverse interests (collectively, "Liens") of any nature except the Liens
under the Credit Facility dated as of August 30, 2002, among the Company,
the lenders and other parties named therein, as amended on September 20,
2002 (the "Credit Facility"). There has been no change in the authorized or
issued capitalization of the Company or any of its subsidiaries since the
date indicated in the Prospectus except with respect to (i) changes
occurring in the ordinary course of business, (ii) changes in outstanding
Common Stock resulting from transactions relating to employee benefit plans
or dividend reinvestment and employee stock purchase plans and (iii)
changes described in the Prospectus.
(g) Except as set forth in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of
4
the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant
to employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
(h) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be set forth in the Prospectus under the rules and regulations of the
Commission which is not so set forth.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company
or any of its subsidiaries is subject which, if determined adversely to the
Company or any of its subsidiaries, could reasonably be expected to have a
Material Adverse Effect; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental authorities
or threatened by others.
(j) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned, directly or
indirectly, by such person, or to include any such securities in any
registration statement filed by the Company, except as have been exercised
or waived in connection with the offering of securities contemplated by
this Agreement.
(k) There are no contracts, agreements or other documents which
are required to be set forth in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act which have not been set forth
in the Prospectus or filed as exhibits to the Registration Statement.
(l) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject or
(iii) is in violation of any law, ordinance, governmental rule, regulation
or court decree to which it or its property or assets may be subject or has
failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business, except, in the case of (ii)
and (iii), such defaults, events, violations or failures which,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
(m) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other
5
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree (a "Material Loss"); and,
since such date, there has not been any change in the capital stock,
short-term debt or long-term debt of the Company or any of its subsidiaries
(except as disclosed in the Prospectus) or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole (a "Material Adverse
Change").
(n) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition, the results of operations and the changes in financial
position of the entities purported to be shown thereby on the basis stated
therein at the respective dates or for the respective periods indicated;
such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved; the supporting schedules, if any,
included or incorporated by reference in the Prospectus present fairly in
accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
have been prepared on a basis consistent with such financial statements and
the books and records of such entities.
(o) The pro forma financial statements of the Company and its
subsidiaries and the related notes thereto set forth in the Prospectus (and
any supplement or amendment thereto), if any, have been prepared on a basis
consistent with the historical financial statements of the Company and its
subsidiaries, give effect to the assumptions used in the preparation
thereof on a reasonable basis and in good faith and present fairly the
historical and proposed transactions contemplated by the Prospectus. Such
pro forma financial statements have been prepared in accordance with the
applicable requirements of Rule 11-02 of Regulation S-X promulgated by the
Commission. The other pro forma financial and statistical information and
data set forth in the Prospectus (and any supplement or amendment thereto)
are, in all material respects, accurately presented and prepared on a basis
consistent with the pro forma financial statements.
(p) Ernst & Young LLP, who have certified the financial
statements of the Company, whose report appears in the Prospectus and who
have delivered one of the initial letters referred to in Section 9(g)
hereof, are independent public accountants as required by the Securities
Act; Deloitte & Touche LLP, who have certified certain financial statements
relating to the Business Recovery Services business (the "BRS Business")
acquired by the Company from PricewaterhouseCoopers LLP, a Delaware limited
liability partnership, pursuant to an Agreement for the Purchase and Sale
of Assets dated as of July 24, 2002, whose report appears in the Prospectus
and who have delivered one of the initial letters referred to in Section
9(g) hereof, are independent
6
public accountants as required by the Securities Act; and both Ernst &
Young and Deloitte & Touche were independent accountants as required by the
Securities Act during the periods covered by the financial statements on
which they reported.
(q) The Company and its subsidiaries own no real property. The
Company and each of its subsidiaries have good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as do not materially affect the value
of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries
and except for Liens arising under the Credit Facility; and all material
assets held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its subsidiaries.
(r) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value of
their respective properties from insurers of recognized financial
responsibility and as is customary for companies engaged in similar
businesses in similar industries. Neither the Company nor any of its
subsidiaries (i) has received notice from any insurer or agent of such
insurer that substantial capital improvements or other material
expenditures will have to be made in order to continue such insurance or
(ii) 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 at a cost that would not have a
Material Adverse Effect.
(s) The Company and each of its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "Authorization") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including, without
limitation, under any applicable environmental law, ordinance, rule,
regulation, order, judgment, decree or permit, 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 have a Material Adverse Effect.
Each such Authorization is valid and in full force and effect and the
Company and each of its subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the
governmental authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation,
the receipt of any notice from any governmental 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 such
Authorizations contain no restrictions that are unduly 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
7
event or the presence of any such restriction would not, individually or in
the aggregate, have a Material Adverse Effect.
(t) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent rights, patent
applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, inventions, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary of confidential information, systems or procedures) and
licenses necessary for the conduct of their respective businesses and have
no reason to believe that the conduct of their respective businesses will
conflict with, and neither the Company nor any of its subsidiaries has
received any notice of infringement of asserted rights of others with
respect to any of such intellectual property which, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a Material Adverse Effect.
(u) None of the Company and its subsidiaries is involved in any
strike, job action or labor dispute with any group of employees that might
be expected to have a Material Adverse Effect, and, to the Company's
knowledge, no such action or dispute is threatened.
(v) The Company and each of its subsidiaries is in compliance in
all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively,
"ERISA"); no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect
to incur liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (collectively, the "Internal
Revenue Code"); and each "pension plan" for which the Company would have
any liability that is intended to be qualified under Section 401(a) of the
Internal Revenue Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would cause the
loss of such qualification.
(w) The Company and each of its subsidiaries has filed all
federal, state, local and foreign income and franchise tax returns required
to be filed through the date hereof and has paid all taxes (including
withholding taxes, penalties and interest, assessments, fees and other
charges) due thereon; and no tax deficiency has been determined adversely
to the Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a Material
Adverse Effect.
(x) Since the date as of which information is given in the
Prospectus through the date hereof, and except as described in the
Prospectus, the Company has not (i) issued or granted any securities, other
than pursuant to the Company's stock option and employee stock purchase
plans, (ii) incurred any liability or obligation, direct or
8
contingent, other than liabilities and obligations which were incurred in
the ordinary course of business and which are not material, (iii) entered
into any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on any of its capital stock.
(y) The Company (i) makes and keeps accurate books and records
and (ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded and reported to
the Company's management as necessary to permit preparation of its
financial statements in conformity with United States generally accepted
accounting principles and to maintain accountability for its assets, (C)
access to its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(z) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision
of the Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(aa) There has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of toxic
wastes, medical wastes, hazardous wastes or hazardous substances by the
Company or any of its subsidiaries (or, to the knowledge of the Company,
any of their predecessors in interest) at, upon or from any of the property
now or previously owned or leased by the Company or its subsidiaries in
violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not be reasonably likely to have, a Material Adverse Effect; there
has been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of its subsidiaries or with respect to which the Company or
any of its subsidiaries have knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which
would not have or would not be reasonably likely to have a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(bb) This Agreement has been duly authorized, executed and
delivered by the Company.
9
(cc) The Company has all necessary power and authority to
issue and deliver the Securities to be sold by the Company to the
Underwriters hereunder, such Securities have been duly authorized by
the Company and when such Securities are issued and delivered to and
paid for by the Underwriters pursuant to this Agreement on the
applicable Delivery Date, such Securities will be duly and validly
issued, fully paid and non-assessable; the Securities to be sold by the
Selling Stockholders to the Underwriters hereunder have been duly and
validly issued and are fully paid and non-assessable; and the
Securities will conform, when issued, in all material respects to the
description thereof contained in the Prospectus.
(dd) The execution, delivery and performance by the Company of
this Agreement, the issuance of the Securities to be sold by the
Company to the Underwriters hereunder, the compliance by the Company
with all the provisions hereof and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any material indenture, mortgage, deed of trust, loan agreement,
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 is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or
assets, (iii) result in the imposition or creation of (or the
obligation to create or impose) a 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
properties or assets is bound or (iv) result in the suspension,
termination or revocation of any Authorization of the Company or any of
its subsidiaries or any other impairment of the rights of the holder of
any such Authorization.
(ee) Except (i) with respect to the registration of the
Securities under the Securities Act, (ii) as required by applicable
state securities or "blue sky" and foreign laws, (iii) approval by the
National Association of Securities Dealers, Inc. and (iv) for such
consents, approvals, authorizations, orders, filings or registrations
which have been obtained or made, no consent, approval, authorization
or order of, or filing or registration with, any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets is required for the
execution, delivery and performance of this Agreement by the Company,
the issuance of the Securities to be sold by the Company and the
consummation of the transactions contemplated hereby.
(ff) Neither the Company nor any subsidiary is or, as of the
applicable Delivery Date after giving effect to the issuance of the
Securities and the application of the net proceeds therefrom as set
forth in the Prospectus, will be an "investment company" as defined,
and subject to regulation, under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Investment Company Act").
10
(gg) Neither the Company, nor to its knowledge, any of its
Affiliates (as defined in Rule 501(b) of Regulation D, an "Affiliate"),
has taken, directly or indirectly, any action (A) designed to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price
of the Securities to facilitate the sale or resale of such securities
or (B) prohibited by Regulation M under the Securities Act.
(hh) All indebtedness of the Company that will be repaid with
the proceeds of the issuance and sale of the Securities was incurred
for proper purposes and in good faith and the Company was, at the time
of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Securities, and will be on the
Delivery Date (after giving effect to the application of the proceeds
from the issuance of the Securities) solvent, and had at the time of
the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Securities and will have on
the applicable Delivery Date (after giving effect to the application of
the proceeds from the issuance of the Securities) sufficient capital
for carrying on its business and was, at the time of the incurrence of
such indebtedness that will be repaid with the proceeds of the issuance
and sale of the Securities, and will be on the applicable Delivery Date
(after giving effect to the application of the proceeds from the
issuance of the Securities) able to pay its debts as they mature.
Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel to the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2. Representations, Warranties and Agreements of the Selling
Stockholders. (a) Each Selling Stockholder, severally and not jointly,
represents and warrants to, and agrees with the Underwriters that:
(a) The Selling Stockholder has, and immediately prior to the
applicable Delivery Date (as defined in Section 5 below) the Selling
Stockholder will have, good and valid title to the Securities to be
sold by the Selling Stockholder hereunder on such date, free and clear
of all Liens; and upon delivery of such shares and payment therefor
pursuant hereto, good and valid title to such shares, free and clear of
all Liens, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with American Stock
Transfer & Trust Company, as custodian (the "Custodian"), for delivery,
in accordance with the Custody Agreement, under this Agreement,
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York or American Stock
Exchanges) representing the Securities to be sold by the Selling
Stockholder hereunder.
(c) The Selling Stockholder has duly and irrevocably executed
and delivered a power of attorney (the "Power of Attorney" and,
together with all other similar instruments executed by the other
Selling Stockholders, the "Powers of
11
Attorney") appointing the persons named therein as attorneys-in-fact,
with full power of substitution, and with full authority (exercisable
by any one or more of them) to execute and deliver this Agreement on
such Selling Stockholder's behalf and to take such other action as may
be necessary or desirable to carry out the provisions hereof on behalf
of the Selling Stockholder, in accordance with the Custody Agreement
and the applicable Power of Attorney.
(d) The Selling Stockholder has all necessary right, power and
authority to enter into this Agreement, the Power of Attorney and the
Custody Agreement and the execution, delivery and performance of this
Agreement, the Power of Attorney and the Custody Agreement by, or on
behalf of, the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby will
not (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease, pledge or other
agreement or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of the
property or assets of the Selling Stockholder is subject that could
reasonably be expected to impair the Selling Stockholder's ability to
perform its obligations hereunder, or (B) result in any violation of
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property or assets of the Selling Stockholder.
(e) Except (i) with respect to the registration of the
Securities under the Securities Act, (ii) as required by applicable
state securities or "blue sky" laws and (iii) for such consents,
approvals, authorizations, orders, filings or registrations which have
been obtained or made, no consent, approval, authorization or order of,
or filing or registration with, any court or governmental agency or
body having jurisdiction over the Selling Stockholder or any of its
properties or assets is required for the execution, delivery and
performance of this Agreement, the Power of Attorney or the Custody
Agreement by the Selling Stockholder and the consummation by the
Selling Stockholder of the transactions contemplated hereby and
thereby.
(f) The Registration Statement, as of the Effective Date, did
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus and any amendment
or supplement thereto, as of their respective dates and as of the
applicable Delivery Date (as defined in Section 5 below) did not and do
not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided that
the Selling Stockholder makes no representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
specifically for inclusion therein (which information is described in
Section 10(f)); and provided further that this paragraph (d) shall
apply to such Selling Stockholder only to the extent that the
statements or omissions from the Registration Statement or the
Prospectus were based on written information provided by
12
such Selling Stockholder specifically for inclusion therein (which
information is described in Section 10(g)).
(g) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action (A) designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities or (B)
prohibited by Regulation M under the Securities Act.
(h) Each Selling Stockholder is not prompted to sell shares of
Common Stock by any material, non-public information concerning the
Company that is not set forth or incorporated by reference in the
Registration Statement and the Prospectus.
Each certificate signed by or on behalf of a Selling Stockholder
and delivered to the Underwriters or counsel to the Underwriters shall be deemed
to be a representation and warranty by such Selling Stockholder to the
Underwriters as to the matters covered thereby.
3. Purchase of the Securities by the Underwriters. On the basis
of the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to issue and sell 2,100,000
shares of the Firm Securities and each Selling Stockholder hereby agrees to sell
the number of shares of the Firm Securities set forth opposite its name in
Schedule II hereto, severally and not jointly, to the several Underwriters and
each of the Underwriters, severally and not jointly, agrees to purchase the
number of shares of the Firm Securities set forth opposite that Underwriter's
name in Schedule I hereto. Each Underwriter shall be obligated to purchase from
the Company, and from each Selling Stockholder, that number of shares of the
Firm Securities which represents the same proportion of the number of shares of
the Firm Securities to be sold by the Company, and by each Selling Stockholder,
as the number of shares of the Firm Securities set forth opposite the name of
such Underwriter in Schedule I represents of the total number of shares of the
Firm Securities to be purchased by all of the Underwriters pursuant to this
Agreement. The respective purchase obligations of the Underwriters with respect
to the Firm Securities shall be rounded among the Underwriters to avoid
fractional shares, as the Representatives may determine.
In addition, the Company hereby grants to the Underwriters an
option to purchase up to 318,295 shares of Option Securities. Such option is
granted for the purpose of covering over-allotments in the sale of Firm
Securities and is exercisable as provided in Section 5 hereof. Shares of Option
Securities shall be purchased severally for the account of the Underwriters in
proportion to the number of shares of Firm Securities set forth opposite the
name of such Underwriters in Schedule I hereto. The respective purchase
obligations of each Underwriter with respect to the Option Securities shall be
adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Securities other than in 100 share amounts.
The price of both the Firm Securities and any Option Securities
shall be $____ per share.
13
Neither the Company nor any Selling Stockholder shall be
obligated to deliver any of the Securities to be delivered on any Delivery Date
(as defined in Section 5 below), except upon payment for all the Securities to
be purchased on such Delivery Date as provided herein.
4. Offering of Securities by the Underwriters. Upon
authorization by the Representatives of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
5. Delivery of and Payment for the Securities. Delivery of
and payment for the Firm Securities shall be made at the offices of Xxxxx
Xxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 at 10:00 a.m., New
York City time, on the third full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are referred to
herein as the "First Delivery Date." On the First Delivery Date, the Company and
each Selling Stockholder shall deliver or cause to be delivered certificates
representing the Firm Securities to the Representatives or to the Custodian for
the account of each Underwriter against payment to or upon the order of the
Company and the Selling Stockholders of the purchase price by wire transfer in
immediately available funds. Upon delivery, the Firm Securities shall be
registered in such names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to the First
Delivery Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Securities, the Company and each Selling Stockholder
shall make the certificates representing the Firm Securities available for
inspection by the Representatives in New York, New York, not later than 2:00
p.m., New York City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Securities as to
which the option is being exercised, the names in which the shares of Option
Securities are to be registered, the denominations in which the shares of Option
Securities are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Securities are to be delivered;
provided, however, that this date and time shall not be earlier than the First
Delivery Date nor earlier than the second business day after the date on which
the option shall have been exercised nor later than the fifth business day after
the date on which the option shall have been exercised. The date and time the
shares of Option Securities are delivered are sometimes referred to as an
"Option Delivery Date" and the First Delivery Date and any Option Delivery Date
are sometimes each referred to as a "Delivery Date".
Delivery of and payment for the Option Securities shall be
made at the place specified in the first sentence of the first paragraph of this
Section 5 (or at such other place as shall be determined by agreement between
the Representatives and the Company) at 10:00 a.m., New York City time, on such
Option Delivery Date. On such Option Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Securities to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Upon delivery, the Option Securities shall be registered in
such names and in such denominations as
14
the Representatives shall request in the aforesaid written notice. For the
purpose of expediting the checking and packaging of the certificates for the
Option Securities, the Company shall make the certificates representing the
Option Securities available for inspection by the Representatives in New York,
New York, not later than 2:00 p.m., New York City time, on the business day
prior to such Option Delivery Date.
Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder.
6. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than Commission's close of business
on the second business day following the execution and delivery of this
Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment
or any supplement to the Registration Statement or to the Prospectus
prior to the last Delivery Date except as permitted herein; to advise
the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) To furnish promptly to each of the Representatives
and to counsel to the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such
number of the following documents as the Representatives shall
reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission and each amendment thereto
(excluding exhibits), (ii) each Preliminary Prospectus, the Prospectus
and any amended or supplemented Prospectus and (iii) any documents
incorporated by reference in the Prospectus (excluding exhibits
thereto); and, if the delivery of a
15
prospectus is required at any time after the Effective Time in
connection with the offering or sale of the Securities or any other
securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act, to notify the Representatives and, upon their request, to file
such documents and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, or any document
incorporated by reference in the Prospectus, pursuant to Rule 424 of
the Securities Act, to furnish a copy thereof to the Representatives
and counsel to the Underwriters and obtain the consent of the
Representatives to the filing, such consent not to be unreasonably
withheld or delayed;
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver to
the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act (including, at the option of the Company, Rule
158 of the Securities Act);
(g) Promptly from time to time, to take such action as the
Representatives may reasonably request to qualify the Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Securities; provided that, in connection therewith,
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction
in which the Company is not already so qualified or has not so
consented;
(h) For a period of two years following the First Delivery
Date, to furnish to the Underwriters copies of all written materials
furnished by the Company to its shareholders and all public reports and
all reports and financial statements furnished by the Company to the
principal national securities exchange upon which the Common Stock may
be listed pursuant to requirements of or agreements with such exchange
or to the Commission pursuant to the Exchange Act; provided, however,
that the Company
16
shall not be required to provide the Underwriters with any such reports
or similar forms that have been filed with the Commission by electronic
transmission pursuant to XXXXX;
(i) For a period of 90 days from the date hereof, not to,
directly or indirectly, (1) announce an offering of, or file any
registration statement with the Commission relating to, equity
securities of the Company (other than the offering contemplated by this
Agreement) or offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be
expected to, result in the disposition or purchase by any person at any
time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than the
Securities and shares of Common Stock to be issued in the ordinary
course under the Company's employee benefit plans, stock option plans,
employee stock purchase plan or other employee compensation plans
existing on the date hereof or pursuant to currently outstanding
options, warrants or rights) or sell or grant options, warrants or
rights with respect to any shares of Common Stock, securities
convertible into or exchangeable for Common Stock or substantially
similar securities (other than the grant of options, warrants or rights
pursuant to option or other employee compensation plans existing on the
date hereof), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the
economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, without the prior written consent of Xxxxxx Brothers Inc. on
behalf of the Underwriters; and to cause each of the persons specified
on Schedule III hereto to furnish to the Representatives, on or prior
to the date hereof, a letter or letters, substantially in the form of
Annex A hereto;
(j) To cause the Securities to be approved by the New York
Stock Exchange ("NYSE") for listing prior to the First Delivery Date;
(k) Not to take, directly or indirectly, any action which is
designed to stabilize or manipulate, or which constitutes or which
might reasonably be expected to cause or result in stabilization or
manipulation, of the price of any security of the Company in connection
with the offering of the Securities;
(l) To apply the net proceeds from the issuance and sale of
the Securities as set forth under "Use of Proceeds" in the Prospectus;
and
(m) To take such steps as shall be necessary to ensure that
neither the Company nor any of its subsidiaries shall become an
"investment company" as defined, and subject to regulation, under the
Investment Company Act.
7. Further Agreements of the Selling Stockholders. Each Selling
Stockholder, severally and not jointly, agrees:
(a) [reserved];
17
(b) That the Securities to be sold by the Selling Stockholder
hereunder, which is represented by the certificates held in custody for the
Selling Stockholder, is subject to the interest of the Underwriters and the
other Selling Stockholders thereunder, that the arrangements made by the
Selling Stockholder for such custody are to that extent irrevocable, and
that the obligations of the Selling Stockholder hereunder shall not be
terminated by any act of the Selling Stockholder, by operation of law, by
the death or incapacity of any individual Selling Stockholder or, in the
case of a trust, by the death or incapacity of any executor or trustee or
the termination of such trust, or the occurrence of any other event, except
as may be provided herein;
(c) To deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury Department
Form W-8 (if the Selling Stockholder is a non-United States person) or Form
W-9 (if the Selling Stockholder is a United States person); and
(d) To cooperate with the Company and the Underwriters and to
execute and deliver, or use its best efforts to cause to be executed and
delivered, all such other instruments, and take all such other actions as
such party may reasonably be requested to take by the Company and the
Underwriters from time to time, in order to effectuate the sale of the
Securities in the offering contemplated hereby.
8. Expenses. The Company agrees to pay the following expenses,
whether or not the transactions contemplated by this Agreement are consummated
or this Agreement is terminated:
(a) the costs incident to the authorization, issuance, sale and
delivery of the Securities and any taxes payable in that connection;
(b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the Prospectus and
any amendments and exhibits thereto;
(c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective
amendments thereto (including, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus or any
document incorporated by reference therein, all as provided in this
Agreement;
(d) the costs of producing and distributing this Agreement;
(e) the cost of delivering and distributing the Custody Agreement
and the Powers of Attorney;
(f) the filing fees incident to securing the review by the NYSE
and the National Association of Securities Dealers, Inc. of the terms of
sale of the Securities and any applicable listing or other fees;
18
(g) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 6(g)
and of preparing, printing and distributing a Canadian wrapper (including
related fees and expenses of counsel to the Underwriters);
(h) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Securities, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show; and
(i) all other costs and expenses incident to the performance of
the obligations of the Company and Selling Stockholders under this
Agreement
provided that, except as provided in this Section 8 and in Section 13 the
Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, and the Selling Stockholders shall pay the fees and
expenses of their counsel and their attorneys-in-fact and any transfer taxes
payable in connection with their respective sales of Stock to the Underwriters
and reimburse the Company for their pro rata share of the fees and expenses paid
by the Company in connection with the offering of the Stock, unless any such
Selling Stockholder shall have agreed otherwise with the Company in which case
the Company shall pay such Selling Shareholder's fees and expenses.
9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company prior to or on such Delivery Date that the Registration Statement,
the Prospectus or any amendment or supplement thereto, in the opinion of
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the Underwriters, contains any
untrue statement of any material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading.
19
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Custody
Agreement, the Powers of Attorney, the Registration Statement, the
Prospectus, the Securities, and all other legal matters relating to the
offering, issuance and sale of the Securities and the transactions
contemplated hereby and thereby shall be reasonably satisfactory in all
material respects to counsel to the Underwriters; and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) Xxxxx Xxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company and each of its subsidiaries have been duly
formed and are validly existing as corporations or limited liability
companies in good standing under the laws of their respective
jurisdictions of formation, are duly qualified to do business and are
in good standing as foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses requires such qualification (other than
such jurisdictions where the failure to be so qualified or otherwise
authorized to transact business would not reasonably be expected to
have a Material Adverse Effect) and have all corporate power and
authority necessary to own or hold their respective properties and
conduct the businesses in which they are engaged.
(ii) The Company has an authorized and issued capitalization as
set forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Securities being delivered on such
Delivery Date) have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid, non-assessable and are owned
directly or indirectly by the Company, free and clear of all Liens
other than those arising pursuant to the Credit Facility.
(iii) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
Securities pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel.
(iv) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Securities Act specified in such opinion on the
date specified therein; and no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the knowledge of
such counsel, no proceeding for that purpose is pending or threatened
by the Commission.
20
(v) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to
such Delivery Date, the Incorporated Documents and any further
amendment or supplement to any such incorporated document made by the
Company prior to such Delivery Date (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Securities Act and the
Exchange Act, as applicable.
(vi) To such counsel's knowledge, there are no contracts or
other documents which are required to be set forth in the Prospectus
or filed as exhibits to the Registration Statement by the Securities
Act which have not been set forth or filed as exhibits to the
Registration Statement or incorporated therein by reference.
(vii) The Company has all necessary corporate right, power and
authority to execute and deliver this Agreement and to perform its
obligations thereunder and to issue, sell and deliver the Securities
to the Underwriters.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Securities have been duly authorized by the Company
and when the Securities are issued and delivered to and paid for by
the Underwriters pursuant to this Agreement on the applicable Delivery
Date, such Securities will be duly and validly issued, fully paid and
non-assessable; the Securities will conform, when issued, in all
material respects to the description thereof contained in the
Prospectus.
(x) The statements made in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute
summaries of the terms of the Company's capital stock, constitute
accurate summaries of the terms of such capital stock in all material
respects.
(xi) The statements made in the Prospectus under the caption
"Description of Capital Stock - General, - Common Stock and -
Anti-Takeover Provisions of the Maryland General Corporation Law",
insofar as they purport to constitute summaries of the terms of the
Company's charter or bylaws, the Maryland General Corporation Law,
rules and regulations thereunder or contracts and other documents,
constitute accurate summaries of the terms of such statutes, rules and
regulations or contracts and other documents in all material respects.
(xii) The statements made in the Prospectus under the caption
"Certain United States Tax Considerations to Non-U.S. Holders" to
Non-U.S. Holders, insofar as they purport to constitute summaries of
matters of United States federal income tax law and regulations or
legal conclusions with respect thereto,
21
constitute accurate summaries of the matters set forth therein in all
material respects.
(xiii) The execution, delivery and performance by the Company of
the this Agreement, the issuance of the Securities to be sold by the
Company, the compliance by the Company with all the provisions hereof
and the consummation of the transactions contemplated hereby will not
(A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement, 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 is bound or to which any of the material property or
assets of the Company or any of its subsidiaries is subject or (B)
result in any violation of the provisions of the charter or by-laws of
the Company or any of its subsidiaries or any statute or any order,
rule or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets.
(xiv) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) to such counsel's knowledge
is in default in any material respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it is
a party or by which it is bound or to which any of its properties or
assets is subject or (iii) is in violation in any material respect of
any law, ordinance, governmental rule, regulation or court decree to
which it or its property or assets may be subject or has failed to
obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business.
(xv) No consent, approval, authorization or order of, or filing
or registration with, any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets is required for the execution, delivery and
performance of the Agreement or any of the other documents to be
entered into in connection with the issuance of the Securities by the
Company and the consummation of the transactions contemplated hereby
and thereby, except (A) for the registration of the Securities under
the Securities Act, (B) such consents, approvals, authorizations,
registrations or qualifications as may be required under applicable
state securities laws in connection with the purchase and distribution
of the Securities by the Underwriters and (C) for such consents,
approvals, authorizations, orders, filings or registrations as have
been obtained or made.
(xvi) To the knowledge of such counsel, 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
22
the Securities Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include
such securities in the Securities registered pursuant to the
Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Company under the
Securities Act, except for such rights as have been exercised or
waived in connection with the offering and sale of the Securities.
(xvii) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or of which any property or assets
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company, might have a Material Adverse
Effect.
(xviii) The Company is not, and assuming the application of the
net proceeds from the sale of the Securities as set forth in the
Prospectus, will not be, an "investment company" as defined, and
subject to regulation, under the Investment Company Act.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the federal laws of the United States of
America and the laws of the State of Maryland. In rendering such opinion,
such counsel may rely upon a certificate of the Company in respect of
matters of fact, provided that such counsel shall furnish a copy thereof to
the Representatives and state that it believes that both the Underwriters
and it are justified in relying upon such certificate. Such opinion shall
also include a statement to the effect that (x) such counsel has acted as
counsel to the Company in connection with the preparation of the
Registration Statement, such counsel participated in conferences with
officers and other representatives of the Company, the Company's
independent accountants and the Underwriters and their counsel, at which
the contents of the Registration Statement were discussed, and (y) based on
the foregoing, no facts have come to the attention of such counsel which
lead such counsel to believe that (I) the Registration Statement (except
for the financial statements and financial and statistical data included or
incorporated by reference therein, as to which such counsel need express no
belief), as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (except as stated above), as of its date
and the applicable Delivery Date, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (II) any documents incorporated by reference in the
Prospectus, when they were filed with the Commission contained an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The opinion of Xxxxx Xxxxxxx
LLP described in this Section 9(d) shall be rendered to the Representatives
at the request of the Company and shall so state therein.
(e) The respective counsel for each of the Selling
Stockholders set forth on Schedule II hereto each shall have furnished to
the Representatives their written
23
opinion, as counsel to each of the Selling Stockholders for whom they are
acting as counsel, addressed to the Underwriters in form and substance
reasonably satisfactory to the Representatives dated such Delivery Date, to
the effect that:
(i) Immediately prior to the time of delivery of the Securities
to the Underwriters, the Selling Stockholder is the sole registered
owner of the Securities to be sold by it, has all necessary power and
authority to sell such Securities and, upon payment for and delivery
of such Securities in accordance with this Agreement, the Underwriters
will acquire all of the rights of the Selling Stockholder in such
Securities and will also acquire their interest in such Securities
free of any adverse claim;
(ii) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder;
(iii) A Power of Attorney and a Custody Agreement have been duly
executed and delivered by the Selling Stockholder and constitute valid
and binding agreements of such Selling Stockholder in accordance with
their terms;
(iv) The execution, delivery and performance by the Selling
Stockholder of the this Agreement, the Power of Attorney and the
Custody Agreement, the compliance by the Selling Stockholder with all
the provisions hereof and thereof and the consummation by the Selling
Stockholder of the transactions contemplated hereby and thereby will
not (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound or to which any of the property or assets
of the Selling Stockholder is subject that could reasonably be
expected to impair the Selling Stockholder's ability to perform its
obligations hereunder or (B) result in any violation of any statute or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or any of its properties or assets; and
(v) No consent, approval, authorization or order of, or filing
or registration with, or qualification of or with, any governmental
agency or body or any court or agency acting pursuant to any statute
or law is required for the issue and sale of the Securities by the
Selling Stockholder and the compliance by the Selling Stockholder with
all of the provisions of this Agreement, except for (A) the
registration of the Securities under the Securities Act, (B) such
consents, approvals, authorizations, registrations or qualifications
as may be required under the Exchange Act and applicable state
securities or blue sky laws in connection with the purchase and
distribution of the Securities by the Underwriters and (C) for such
consents, approvals, authorizations, orders, filings or registrations
as have been obtained or made.
24
In rendering the opinions in Section 9(e)(i) above, counsel to each
Selling Stockholder may rely upon a certificate of such Selling Stockholder
in respect of matters of fact as to ownership of and the absence of adverse
claims regarding the Securities sold by such Selling Stockholder. The
opinion of counsel to each Selling Stockholder described in this Section
9(e) shall be rendered to the Representatives at the request of such
Selling Stockholder and shall so state therein.
(f) Xxxxxxx Xxxxxxx & Xxxxxxxx shall have furnished to the
Underwriters its written opinion, as counsel to the Underwriters, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriters. In rendering such opinion, as
to matters of Maryland law, Xxxxxxx Xxxxxxx & Xxxxxxxx shall be entitled to
rely on the opinion of Xxxxx Xxxxxxx LLP described in Section 9(d) above.
(g) At the time of execution of this Agreement, the
Representatives shall have received from each of (i) Ernst & Young and (ii)
Deloitte & Touche LLP (collectively, the "Accountants") a letter or
letters, in form and substance reasonably satisfactory to the
Representatives, addressed to the Underwriters and dated the date hereof
(i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and (ii) stating, as of the date hereof
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information (including without limitation pro forma financial
information) and other matters ordinarily covered by accountants' "comfort
letters" to underwriters in connection with registered public offerings.
(h) With respect to the letters of the Accountants referred to in
the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (each an "initial comfort letter"),
the Company shall have furnished to the Representatives a letter (each a
"bring-down comfort letter") of each of such Accountants, addressed to the
Underwriters and dated such Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date of the bring-down letter (or, with
respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of the
bring-down letter), the conclusions and findings of such firm with respect
to the financial information and other matters covered by the initial
letters and (iii) confirming in all material respects the conclusions and
findings set forth in the initial comfort letters.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its chief executive officer and
its chief financial officer, in form and substance reasonably satisfactory
to the Underwriters, stating that:
25
(i) the representations, warranties and agreements of the
Company in Section 1 of this Agreement are true and correct as of such
Delivery Date; and the Company has complied in all material respects
with all its agreements contained herein to be performed prior to or
on such Delivery Date; and the conditions set forth in Sections 9(a)
and 9(k) have been fulfilled;
(ii) since the respective dates as of which information is given
in the Prospectus, other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement filed in accordance with the terms of this
Agreement), (A) there has not occurred any change or any development
that could reasonably be expected to have a Material Adverse Effect,
(B) there has not been any change in the capital stock, the short-term
debt, or the long-term debt of the Company or any of its subsidiaries
that could reasonably be expected to have a Material Adverse Effect,
(C) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent, (D) a Material
Loss has not occurred, (E) the Company has not declared or paid any
dividend on its capital stock, except for dividends declared in the
ordinary course of business and consistent with past practice, and (F)
except as set forth in the Prospectus, neither the Company nor any of
its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the
Company and its subsidiaries taken as a whole; and
(iii) they have carefully examined the Registration Statement and
the Prospectus and, in their opinion, (A) the Registration Statement,
as of the Effective Date, conformed in all material respects with the
requirements of the Securities Act and did not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (B) the Prospectus, as of its date and as of the
applicable Delivery Date, conformed and conforms in all material
respects with the requirements of the Securities Act and did not and
does not contain any untrue statement of a material fact and did not
and does not omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and (C) since
the Effective Date no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or
the Prospectus.
(j) Each Selling Stockholder (or one or more attorneys-in-fact
on behalf of such Selling Stockholder) shall have furnished to the
Representatives on the Initial Delivery Date, a certificate, dated such
Delivery Date, signed by, or on behalf of, such Selling Stockholder stating
that the representations, warranties and agreements of such Selling
Stockholder contained herein are true and correct as of such Delivery Date
and that such Selling Stockholder has complied in all material respects
with all agreements contained herein to be performed by such Selling
Stockholder at or prior to such Delivery Date.
26
(k) The NYSE shall have approved the Securities for listing,
subject only to official notice of issuance.
(l) The Representatives shall have received from each of the
persons specified on Schedule III hereto an executed lock-up letter
agreement contemplated by Section 6(i) hereof.
(m) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus (A) any Material Loss, otherwise than as
described or contemplated in the Prospectus, or (B) since such date there
shall not have been any change in the capital stock, short-term debt or
long-term debt of the Company or any of its subsidiaries or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, prospects, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as described or contemplated in the Prospectus, the effect of which, in any
such case described in clause (A) or (B), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered on the applicable Delivery Date on the terms and
in the manner contemplated in the Prospectus and this Agreement.
(n) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or the NASDAQ or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall have
been established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities of the United States, (iii) the United States
shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have
been a declaration of a national emergency or war by the United States or
there shall have occurred any other substantial, national or international,
calamity or crisis (iv) there shall have occurred such a material adverse
change in general domestic or international economic, political or
financial conditions, including without limitation as a result of terrorist
activities, or the effect of international conditions on the financial
markets in the United States shall be such, as to make it, in the judgment
of the Representatives, impracticable or inadvisable to proceed with the
public offering or delivery of the Securities being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
The Company and the Selling Stockholders shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives may reasonably request to evidence compliance with the
conditions set forth in this Section 9. All opinions, letters, evidence and
certificates mentioned above or elsewhere in this Agreement shall
27
be deemed to be in compliance with the provisions hereof only if they are in
form and substance reasonably satisfactory to counsel for the Underwriters.
10. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its respective directors, officers and employees and each
person, if any, who controls any Underwriter within the meaning of the
Securities Act, and each Selling Stockholder from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability
or action relating to purchases and sales of the Securities), to which that
Underwriter, director, officer, employee or controlling person or Selling
Stockholder may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or
is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any (A) Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, (B)
any blue sky application or other document prepared or executed by the
Company (or based upon any written information furnished by the Company for
such purpose) filed in any jurisdiction specifically for the purpose of
qualifying any or all of the Securities under the securities laws of any
state or other jurisdiction (such application, document or information
being hereinafter called a "Blue Sky Application"), or (C) in any materials
or information provided to investors by, or with the approval of, the
Company in connection with the marketing of the offering of the Securities
("Marketing Materials"), including any roadshow or investor presentations
made to investors by the Company (whether in person or electronically),
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement, the Prospectus, or in any amendment
or supplement thereto, in any Blue Sky Application or in any Marketing
Materials any material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or failure to
act or any alleged act or failure to act by any Underwriter or Selling
Stockholder in connection with, or relating in any manner to, the
Securities or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that, the Company shall not be liable under this clause (iii) to
the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter or such Selling Stockholder through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter, each such director, officer, employee or controlling person
and each Selling Stockholder promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, director, officer,
employee or controlling person or Selling Stockholder in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable to any Underwriter in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration
28
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with the written information concerning
such Underwriter furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section 10(f);
provided, further, that the Company shall not be liable in any such case to
a Selling Stockholder to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement
or alleged untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any such amendment or supplement, in reliance upon and in conformity with
the written information furnished to the Company by such Selling
Stockholder specifically for inclusion therein, which information consists
solely of the information specified in Section 10(g). The foregoing
indemnity agreement is in addition to any liability which the Company may
otherwise have to any Underwriter, any director, officer, employee or
controlling person of any Underwriter or any Selling Stockholder.
(b) Each of the Selling Stockholders, severally in proportion
to the number of shares of Securities to be sold by each of them hereunder,
shall indemnify and hold harmless each Underwriter, its directors, officers
and employees, and each person, if any, who controls any Underwriter within
the meaning of the Securities Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of the Securities), to which that
Underwriter, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company by such Selling Stockholder specifically for inclusion
therein, which information is limited to the information set forth in
Section 10(g), and shall reimburse each Underwriter and any such director,
officer, employee or controlling person for any legal or other expenses
reasonably incurred by such Underwriter or any such director, officer,
employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Selling Stockholders shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in
29
Section 10(f). Notwithstanding any other provisions of this Agreement, the
liability of each Selling Stockholder pursuant to the provisions of this
Section 10 shall be limited to an amount equal to the aggregate purchase
price, less underwriting discounts and commissions, received by such
Selling Stockholder from the sale of Securities hereunder by such Selling
Stockholder. The foregoing indemnity agreement is in addition to any
liability that the Selling Stockholders may otherwise have to any
Underwriter or to any director, officer, employee or controlling person of
that Underwriter.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each Selling Stockholder, each of
their respective directors, officers and employees, and each person, if
any, who controls the Company or such Selling Stockholder within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company, such Selling Stockholder or any such director, officer, employee
or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto or in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto or in any Blue
Sky Application, any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with the written information concerning such Underwriter furnished to the
Company and the Selling Stockholders through the Representatives by or on
behalf of that Underwriter specifically for inclusion therein and set forth
in Section 10(f), and shall reimburse the Company, each Selling Stockholder
and any such director, officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by the
Company or such Selling Stockholder or any such director, officer, employee
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to
the Company, any Selling Stockholder or any such director, officer,
employee or controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 10 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 10 except to the extent it has been materially prejudiced by such
failure; and provided, further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 10. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party
30
thereof, the indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, that the Representatives shall have the right to employ separate
counsel to represent jointly the Representatives and those other
Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Underwriters against the Company or
any Selling Stockholder under this Section 10 if, in the reasonable
judgment of the Representatives, it is advisable for the Representatives
and such Underwriters, officers, employees and controlling persons to be
jointly represented by separate counsel, and in that event the fees and
expenses of such separate counsel shall be paid by the Company. No
indemnifying party shall, (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(e) If the indemnification provided for in this Section 10
shall for any reason be unavailable or insufficient to hold harmless an
indemnified party under Section 10(a), 10(b) or 10(c) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage
or liability, or action in respect thereof, (i) in such proportion as shall
be appropriate to reflect the relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other with respect
to the statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Stockholders on the one hand and the Underwriters on the other
with respect to such offering shall be deemed to be in the same proportion
as the total net proceeds from
31
the offering of the Securities purchased under this Agreement (before
deducting expenses) received by the Company and the Selling Stockholders,
on the one hand, and the total underwriting discounts and commissions
received by the Underwriters with respect to the Securities purchased under
this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Securities under this Agreement, as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company, the Selling Stockholders or
the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company, each Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contributions pursuant to
this Section 10(e) were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be
deemed to include, for purposes of this Section 10(e), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 10(e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 10(e)
are several in proportion to their respective underwriting obligations and
not joint.
(f) The Underwriters severally confirm, and the Company and
each Selling Stockholder each acknowledges, that the statements with
respect to the delivery of the Securities by the Underwriters in connection
with the public offering of the Securities set forth on the cover page of
the Prospectus, and the concession and reallowance figures and the
information concerning overallotment transactions, stabilization, short
positions and penalty bids and electronic distribution appearing under the
caption "Underwriting" in the Prospectus are correct and constitute the
only information concerning such Underwriters furnished in writing to the
Company through the Representatives by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the
Prospectus.
(g) Each of the Selling Stockholders severally confirms and
each of the Underwriters acknowledges that the information set forth under
the caption "Principal and Selling Stockholders" in the Prospectus
regarding such Selling Stockholder are correct and constitute the only
information concerning such Selling Stockholder
32
furnished in writing to the Company by or on behalf of such Selling
Stockholder specifically for inclusion in the Registration Statement and
the Prospectus.
11. Defaulting Underwriters. If, on any Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Securities which the defaulting Underwriter agreed but failed to purchase on
such Delivery Date in the respective proportions which the number of Firm
Securities set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the number of Firm Securities set
forth opposite the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Securities on such
Delivery Date if the aggregate number of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such date exceeds
9.09% of the aggregate number of the Securities to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the aggregate number of Securities which it agreed to
purchase on such Delivery Date pursuant to the terms of Section 3. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representatives who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, the total number of Securities to be purchased on
such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase on such Delivery
Date the number of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 8 and 13. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this Agreement
unless the context requires otherwise, any party not listed in Schedule I hereto
who, pursuant to this Section 11, purchases which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company or the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Securities of a defaulting or withdrawing Underwriter, either the
Representatives or the Company may postpone the Delivery Date for up to seven
full business days in order to effect any changes that in the opinion of counsel
to the Company or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Securities if, prior to that time,
any of the events described in Sections 9(m) or 9(n) shall have occurred or if
the Underwriters shall decline to purchase the Securities for any reason
permitted under this Agreement.
13. Reimbursement of Underwriters' Expenses. If (a) the Company or
any Selling Stockholder fails to tender the Securities for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or any Selling Stockholder to perform
33
any agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company or
the Selling Stockholders is not fulfilled or (b) the Underwriters decline to
purchase the Securities for any reason permitted under this Agreement (including
the termination of this Agreement pursuant to Section 12), the Company shall
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Securities, and upon demand
the Company shall pay the full amount thereof to the Representatives. If this
Agreement is terminated pursuant to Section 11 by reason of the default of one
or more Underwriters, neither the Company nor the Selling Stockholders shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
14. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Brothers Inc., 1285 Avenue of the
Americas, 00/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Registration Department (Fax: (000) 000-0000), with a copy, in the case of
any notice pursuant to Section 10(d), to the Director of Litigation, Office
of the General Counsel, Xxxxxx Brothers Inc., 000 Xxxx Xxxxxx, 00/xx/
Xxxxx, Xxx Xxxx, XX 00000; and
with a copy to Xxxxxxx Xxxxxxx & Xxxxxxxx, 0000 Xxxxxxxx Xxxxxx, Xxxx Xxxx,
Xxxxxxxxxx 00000 Attention: Xxxxx Xxxxxxx, Esq. (Fax: (000) 000-0000;
Telephone: (000) 000-0000);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Xxxx X. Xxxx (Fax: (000) 000-0000);
and
with a copy to Xxxxx Xxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxxxx, Xx. (Fax: (000) 000-0000); Telephone
(000) 000-0000);
(c) if to any Selling Stockholder, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at the
address set forth on Schedule II hereto, with a copy to the counsel, if
any, to such Selling Stockholder listed on such schedule;
provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Xxxxxx Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or
34
agreement given or made on behalf of the Selling Stockholders by either
Xxxxxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxx, as attorneys-in-fact.
15. Persons Entitled to Benefit of Agreement. This Agreement will
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholders contained in this Agreement will also
be deemed to be for the benefit of the directors, officers and employees of the
Underwriters and the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Securities Act and (B) any indemnity
agreement of the Underwriters contained in Section 10(c) of this Agreement will
be deemed to be for the benefit of (i) directors, officers and employees of the
Company and any person controlling the Company within the meaning of Section 15
of the Securities Act and (ii) directors, officers and employees of any Selling
Stockholder and any person controlling such Selling Stockholder within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 15, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
16. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, will survive the delivery of and payment for the
Securities and will remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by or on
behalf of any of them or any person controlling any of them.
17. Definition of the Term "Business Day". For purposes of this
Agreement, "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
18. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
19. Consent to Jurisdiction; Forum Selection; Waiver of Jury Trial.
(a) Each of the Underwriters, the Company and each Selling
Stockholder hereby submits to the jurisdiction of the courts of the State
of New York and the courts of the United States of America located in the
State of New York over any suit, action or proceeding with respect to this
Agreement or the transactions contemplated hereby.
(b) Any suit, action or proceeding with respect to this
Agreement or the transactions contemplated hereby may be brought only in
the courts of the State of New York or the courts of the United States of
America located in the State of New York, located in the Borough of
Manhattan, City of New York, State of New York. Each of the parties hereto
waives any objection that it may have to the venue of such suit, action or
proceeding in any such court or that such suit, action or proceeding in
such court was brought in an inconvenient court and agrees not to plead or
claim the same.
35
(c) Any right to trial by jury with respect to any lawsuit,
claim, action or other proceeding arising out of or relating to this
Agreement or is expressly and irrevocably waived.
20. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
21. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[Signature page follows]
36
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
FTI Consulting, Inc.
By ____________________________________
Name:
Title:
The Selling Stockholders Set Forth in
Schedule II Hereto
By ____________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Attorney-in-Fact
By ____________________________________
Name: Xxxxxx X. Xxxxxx
Title: Attorney-in-Fact
Accepted:
Xxxxxx Brothers Inc.
Banc of America Securities LLC
Xxxxx, Xxxxxxxx & Xxxx, Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
SunTrust Capital Markets, Inc.
By Xxxxxx Brothers Inc.
By: ____________________________
Authorized Representative
SCHEDULE I
Number of Firm
Securities to be
Underwriters Purchased
------------ ----------------
Xxxxxx Brothers Inc. ....................................... ________________
Banc of America Securities LLC ............................. ________________
Xxxxx, Xxxxxxxx & Xxxx, Inc. ............................... ________________
Xxxxxx Xxxxxxxxxx Xxxxx LLC ................................ ________________
SunTrust Capital Markets, Inc. ............................. ________________
----------------
Total ............................................ 2,121,969
================
SCHEDULE II
Firm Securities to be
Name and Address of Selling Stockholder Sold
--------------------------------------- --------------------- ----------
Xxxxxx Xxxxxx/(a)/ 15,969
Xxxxx Xxxxx/(a)/ 6,000
--------------------------------------- --------------------- ----------
Total 21,969
(a) This Selling Stockholder is represented by Xxxxx Xxxxxxx LLP, 0000 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Xx.
(Fax: (000) 000-0000; Telephone (000) 000-0000), and has appointed Xxxxxxxx
X. Xxxxxx and Xxxxxx X. Xxxxxx, and each of them, as Attorneys-in-Fact for
such Selling Stockholder. The address of this Selling Stockholder is 000
Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000.
SCHEDULE III
Lock-Up Letter Agreements to be provided by:
Xxxx X. Xxxx, XX
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx, Xx.
Xxxxx X. X'Xxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxx
ANNEX A
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
on behalf of the several Underwriters (as defined below)
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $0.01 per share (the "Common Stock"), of
FTI Consulting, Inc. a Maryland corporation (the "Company"), and that the
Underwriters propose to reoffer the Shares to the public pursuant to the
Underwriting Agreement (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of (or
enter into any transaction or device which is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock or any securities convertible into or exchangeable for
Common Stock (other than any of the Shares) or substantially similar securities
or sell or grant options, warrants or rights with respect to any shares of
Common Stock, securities convertible into or exchangeable for Common Stock or
substantially similar securities, or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise,
for a period of 90 days after the date of the final prospectus relating to the
Offering.
Notwithstanding the foregoing paragraph, the restrictions contained in this
Lock-Up Letter Agreement shall not apply to up to an aggregate of 200,000 shares
of Common Stock beneficially owned by the Company's officers and directors as a
group, but only in the event that the per share closing price of the Common
Stock on any trading day that is at least 30 days after the date of the
Underwriting Agreement equals or exceeds 110% of the per share offering price
specified in the Underwriting Agreement.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement. Whether
or not the Offering actually occurs depends on a number of factors, including
market conditions. Any Offering will only be made pursuant to the Underwriting
Agreement, the terms of which are subject to negotiation between the Company,
the Underwriters and the Selling Stockholders named therein. In addition, it is
understood that, if the Company notifies you that it does not intend to proceed
with the Offering, if the Underwriting Agreement is not executed or if the
Underwriting Agreement (other than the provisions thereof which survive
termination) shall terminate or be terminated
prior to payment for and delivery of the Securities, the undersigned will be
released from its obligations under this Lock-Up Letter Agreement.
This Agreement shall be governed by, and construed in accordance with, the
laws of New York.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
This Lock-Up Letter Agreement does not constitute an offer of any
securities for sale. No offer to buy the securities can be accepted and no part
of the purchase price can be received until the registration statement to be
filed by FTI Consulting, Inc. with the Securities and Exchange Commission has
become effective, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to notice of its
acceptance given after the effective date. An indication of interest in response
to this Lock-Up Letter Agreement will involve no obligation or commitment of any
kind.
Very truly yours,
By:__________________________
Name:
Title:
Dated: _______________
