EXHIBIT 1.01
__________ Shares
KBW, INC.
Common Stock
FORM OF
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UNDERWRITING AGREEMENT
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__________, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXX, XXXXXXXX & XXXXX, INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
KBW, Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), and the selling stockholders listed in Schedule II-A (such
selling stockholders are referred to herein as the "Management Selling
Stockholders") and the selling stockholder listed in Schedule II-B (the
"Additional Selling Stockholder" and together with the Management Selling
Stockholders, the "Selling Stockholders") severally propose to sell to the
several Underwriters, an aggregate of _______________ shares of the Common
Stock, par value $0.01 per share, of the Company (the "Firm Shares"), of which
_____________ shares are to be issued and sold by the Company and _____________
shares are to be sold by the Selling Stockholders, each Selling Stockholder
selling the amount of Firm Shares set forth opposite such Selling Stockholder's
name in Schedule II hereto. The Management Selling Stockholders also propose to
issue and sell to the several Underwriters not more than an additional _______
shares of the Common Stock, par value $0.01 per share, (the "Additional Shares")
if requested by the Underwriters as provided in Section 2 hereof. The Firm
Shares and the Additional Shares are hereinafter referred to collectively as the
"Shares." The shares of common stock of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "Common Stock". The Company and the Selling Stockholders are hereinafter
sometimes referred to collectively as the "Sellers."
The Company, the Selling Stockholders and the Underwriters agree that up to
____ shares of the Securities to be purchased by the Underwriters (the "Reserved
Securities") shall be reserved for sale by the Underwriters to certain eligible
Company employees, as part of the distribution of the Securities by the
Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the National Association of
Securities Dealers, Inc. (the "NASD") and all other applicable laws, rules and
regulations. To the extent that such Reserved Securities are not orally
confirmed for purchase by such eligible employees by the end of the first
business day after the day of the Agreement, such Reserved Securities may be
offered to the public as part of the public offering contemplated hereby.
Section 1. Registration Statement and Prospectus. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1, including a prospectus, relating
to the Shares. The registration statement (including the exhibits thereto), as
amended at the time it became effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"Registration Statement;" and the prospectus in the form first used to confirm
sales of Shares is hereinafter referred to as the "Prospectus." If the Company
has filed or is required pursuant to the terms hereof to file a registration
statement pursuant to Rule 462(b) under the Act registering additional shares of
Common Stock (a "Rule 462(b) Registration Statement"), then, unless otherwise
specified, any reference herein to the term "Registration Statement" shall be
deemed to include such Rule 462(b) Registration Statement.
Section 2. Agreements to Sell and Purchase and Lock-Up Agreements. On the
basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) the Company agrees to issue and sell
______________ Firm Shares, (ii) each Selling Stockholder agrees, severally and
not jointly, to sell the number of Firm Shares set forth opposite such Selling
Stockholder's name in Schedule II-A hereto and (iii) each Underwriter agrees,
severally and not jointly, to purchase from each Seller at a price per Share of
$______ (the "Purchase Price") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Firm Shares to be sold by such Seller as
the number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Stockholders
agree to sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, all or a portion of the Additional Shares
from the Selling Stockholders at the Purchase Price. Additional Shares may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. The Underwriters may exercise their right
to purchase Additional Shares in whole or in part from time to time by giving
written notice thereof to the Company and the Selling Stockholders within 30
days after the date of this Agreement. You shall give any such notice on behalf
of the Underwriters and such notice shall specify the aggregate number of
Additional Shares to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no earlier
than two business days after such notice has been given (and, in any event, no
earlier than the Closing Date (as hereinafter defined)) and (ii) no later than
ten business days after such notice has been given. If
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any Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Selling Stockholders the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
you may determine) which bears the same proportion to the total number of
Additional Shares to be purchased from the Selling Stockholders as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I bears
to the total number of Firm Shares and each Selling Stockholder, severally and
not jointly, agrees to sell to the Underwriters the number of Additional Shares
which bears the same proportion to the total number of Additional Shares to be
purchased from all of the Selling Stockholders as the number of Additional
Shares set forth opposite the name of such Selling Stockholder in Schedule III
bears to the total number of Additional Shares set forth in Schedule III.
Each Seller hereby agrees not to (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (ii) enter
into any swap or other arrangement that transfers all or a portion of the
economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's stock option plan described in the Prospectus, (ii)
the Company may issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and (iii)
the Company may issue, offer and sell shares of Common Stock or securities
convertible, exercisable or exchangeable therefor as an inducement for employees
to join the Company provided that in each case the recipient of such securities
agrees in writing to be bound by the restrictions set forth in this paragraph
for the shares of Common Stock issued or issuable pursuant to this clause (iii).
The Company also agrees not to file any registration statement with respect to
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 180 days after the date of the
Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation, except that the Company may file a registration
statement on Form S-8 under the Act to register the shares of Common Stock
issuable upon exercise of options granted under the Company's stock option plans
as described in the Registration Statement. In addition, each Selling
Stockholder agrees that, for a period of 180 days after the date of the
Prospectus without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, it will not make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock. The
Company shall, prior to or concurrently with the execution of this Agreement,
deliver an agreement (the "Lock-Up Agreements") executed by (i) each Selling
Stockholder, (ii) each of the directors and officers of the Company who is not a
Selling Stockholder and (iii) each stockholder listed on Annex I hereto to the
effect that such person will not, during the period commencing on the date
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such person signs such agreement and ending 180 days after the date of the
Prospectus, without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
Corporation, (A) with respect to shares of Common Stock owned by such
stockholders immediately prior to consummation of the offering contemplated
hereby, engage in any of the transactions described in the first sentence of
this paragraph or (B) make any demand for, or exercise any right with respect
to, the registration of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock.
The Company hereby confirms its engagement of Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation ("DLJ") as, and DLJ hereby confirms its agreement with
the Company to render services as, a "qualified independent underwriter," within
the meaning of Section (b)(15) of Rule 2720 of the National Association of
Securities Dealers, Inc. with respect to the offering and sale of the Shares.
DLJ, solely in its capacity as the qualified independent underwriter and not
otherwise, is referred to herein as the "QIU." As compensation for the services
of the QIU hereunder, the Company agrees to pay the QIU $5,000 on the Closing
Date. The price at which the Shares will be sold to the public shall not be
higher than the maximum price recommended by the QIU.
Section 3. Terms of Public Offering. The Sellers are advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
Section 4. Delivery and Payment. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
shall request no later than two business days prior to the Closing Date or the
applicable Option Closing Date (as defined below), as the case may be. The
Shares shall be delivered by or on behalf of the Sellers, with any transfer
taxes thereon duly paid by the respective Sellers, to Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation through the facilities of The Depository Trust
Company ("DTC"), for the respective accounts of the several Underwriters,
against payment to the Sellers of the Purchase Price therefor by wire transfer
of Federal or other funds immediately available in New York City. The
certificates representing the Shares shall be made available for inspection not
later than 10:00 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be, at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of delivery and payment for the Firm Shares shall be 9:00 A.M., New
York City time, on ________, 1999 or such other time on the same or such other
date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company
shall agree in writing. The time and date of delivery and payment for the Firm
Shares are hereinafter referred to as the "Closing Date." The time and date of
delivery and payment for any Additional Shares to be purchased by the
Underwriters shall be 9:00 A.M., New York City time, on the date specified in
the applicable exercise notice given by you pursuant to Section 2 or such other
time on the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and the
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Company shall agree in writing. The time and date of delivery and payment for
any Additional Shares are hereinafter referred to as the "Option Closing Date."
The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 10 of this Agreement
shall be delivered at the offices of Xxxxx & Wood LLP, Xxx Xxxxx Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, and the Shares shall be delivered at the Designated
Office, all on the Closing Date or such Option Closing Date, as the case may be.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such advice
in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when the Registration
Statement or any amendment to the Registration Statement becomes effective, (iv)
if the Company is required to file a Rule 462(b) Registration Statement after
the effectiveness of this Agreement, when the Rule 462(b) Registration Statement
has become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you four (4) copies of the Registration Statement as
first filed with the Commission and of each amendment to it, including all
exhibits, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of each
amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall be
satisfactory to you, and to file the Prospectus in such form with the Commission
within the applicable period specified in Rule 424(b) under the Act; during the
period specified in Section 5(d) below, not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and, during such period, to
prepare and file with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to the
Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its reasonable best efforts to
cause any such amendment to the Registration Statement to become promptly
effective.
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(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall occur
or condition shall exist as a result of which, in the opinion of counsel for the
Underwriters or for the Company, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you and
counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such registration or qualification in effect so
long as required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To make generally available to its stockholders as soon as practicable
an earnings statement covering the twelve-month period ending ___________, 2000
that shall satisfy the provisions of Section 11(a) of the Act, and to advise you
in writing when such statement has been so made available.
(h) During the period of three years after the date of this Agreement, to
furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees,
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disbursements and expenses of the Company's counsel, the Company's accountants
and any Selling Stockholder's counsel (in addition to the Company's counsel) in
connection with the registration and delivery of the Shares under the Act and
all other fees and expenses in connection with the preparation, printing, filing
and distribution of the Registration Statement (including financial statements
and exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivery of
copies thereof to the Underwriters and dealers in the quantities provided for
herein, (ii) all costs and expenses related to the transfer and delivery of the
Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the
Underwriters in connection with such registration or qualification and memoranda
relating thereto), (v) the filing fees and disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Shares by the National Association of Securities Dealers, Inc., (vi) all fees
and expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to the listing of the Shares on the New York Stock Exchange ("NYSE"),
(vii) the cost of printing certificates representing the Shares, (viii) the
costs and charges of any transfer agent, registrar and/or depositary, (ix) the
reasonable fees and expenses of the QIU (including the reasonable fees and
disbursements of counsel to the QIU) and (x) all other costs and expenses
incident to the performance of the obligations of the Company and the Selling
Stockholders hereunder for which provision is not otherwise made in this
Section. The provisions of this Section shall not supersede or otherwise affect
any agreement that the Company and the Selling Stockholders may otherwise have
for allocation of such expenses among themselves.
(j) To use its reasonable best efforts to list, subject to notice of
issuance, the Shares on the NYSE and to use its reasonable best efforts to
maintain the listing of the Shares on the NYSE for a period of three years after
the date of this Agreement.
(k) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the effectiveness of this
Agreement does not cover all of the Shares, to file a Rule 462(b) Registration
Statement with the Commission registering the Shares not so covered in
compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
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(m) The Company hereby agrees to use its reasonable best efforts to ensure
that the Reserved Securities will be restricted as required by the NASD or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for a period
of three months following the effectiveness of this Agreement. At the request of
the Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
Section 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any Rule
462(b) Registration Statement to be filed by the Company after the effectiveness
of this Agreement); any Rule 462(b) Registration Statement filed after the
effectiveness of this Agreement will become effective no later than 10:00 P.M.,
New York City time, on the date of this Agreement; and no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings
for such purpose are pending before or, to the knowledge of the Company,
threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b) Registration
Statement to be filed by the Company after the effectiveness of this Agreement),
when it became effective, did not contain and, as amended, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement) and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Act, (iii) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, such Rule 462(b) Registration Statement and any
amendments thereto, when they become effective (A) will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(B) will comply in all material respects with the Act and (iv) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to any Underwriter furnished to the Company in writing by or on behalf of such
Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Act, complied when so filed in all material respects with the
Act, and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or
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necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter through
you expressly for use therein.
(d) Each of the Company and its subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to carry
on its business and to own, lease and operate its properties as described in the
Prospectus, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect").
(e) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of its subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of its subsidiaries, except as otherwise disclosed in the Registration
Statement.
(f) All the outstanding shares of capital stock of the Company (including
the Shares to be sold by the Selling Stockholders) have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to any
preemptive or similar rights other than such rights as may be provided by the
Former Stockholders' Agreement (as defined in the Registration Statement), which
rights will be terminated prior to consummation of the offering contemplated
hereby, the Stockholders' Agreement (as defined in the Registration Statement)
and the Lock-Up Agreements; the Company shall have taken by the Closing Date
sufficient corporate action to ensure that the Shares to be sold by the Selling
Stockholders to the Underwriters are not subject to any restrictions under the
Stockholders' Agreement; and the Shares to be issued and sold by the Company
have been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(g) All of the outstanding shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, and will be, as of the Closing Date, owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any nature.
(h) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
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(i) Neither the Company nor any of its subsidiaries is in violation of its
respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound except for such defaults that
would not result in a Material Adverse Effect .
(j) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not (i) require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency (except (a) such as may be required under
the securities or Blue Sky laws of the various states and (b) registration under
the Act, NASD clearance and NYSE approval for listing, all of which shall have
been obtained by the Closing Date), (ii) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, (A) the charter or by-
laws of the Company or any of its subsidiaries or (B) any indenture, loan
agreement, mortgage, lease or other agreement or instrument that, in each case,
is material to the Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property or (iv) result
in the suspension, termination or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or any other impairment of the
rights of the holder of any such Authorization except for such suspensions,
terminations or revocations that would not adversely affect the ability of the
Company to conduct its business as described in the Registration Statement or
the transactions contemplated hereby.
(k) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or, in the case of threatened proceedings, could be a party or
to which any of their respective property is or, in the case of threatened
proceedings, could be subject that are required to be described in the
Registration Statement or the Prospectus and are not so described; nor are there
any statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(l) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any provisions
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
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(m) Each of the Company and 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 Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(n) This Agreement has been duly authorized, executed and delivered by the
Company.
(o) KPMG Peat Marwick LLP are independent public accountants with respect
to the Company and its subsidiaries as required by the Act.
(p) The consolidated financial statements included in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), together
with related schedules and notes, present fairly the consolidated financial
position, results of operations and changes in financial position of the Company
and its subsidiaries on the basis stated therein at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with United States
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with United
States generally accepted accounting principles the information required to be
stated therein; the other financial information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared, as
applicable, on a basis consistent with such financial statements and the books
and records of the Company. The statistical information and data related to the
Company, its employees and its business set forth in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are true and
correct in all material respects and to the best of the Company's knowledge all
other statistical information and data set forth in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are true and
correct in all material respects.
11
(q) The Company is not and, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(r) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
(s) 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), (i)
there has not occurred any material adverse change or any development involving
a prospective material adverse change in the financial condition or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development which would reasonably be expected to result in a
material adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(t) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
(u) The Company has filed a registration statement pursuant to Section
12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
to register the Common Stock, has filed an application to list the Shares on the
New York Stock Exchange and has received notification that the listing has been
approved, subject to notice of issuance of the Shares.
(v) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and 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.
(w) The Company has not taken, and will not take, directly or indirectly,
any action designed to, or which might reasonably be expected to, cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement (other than any actions taken by
Xxxxx, Xxxxxxxx & Xxxxx, Inc. in its capacity as an Underwriter as permitted by
the Act), and
12
other than as permitted by the Act, the Company has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.
(x) Xxxxx, Xxxxxxxx & Xxxxx, Inc. is registered as a broker-dealer with the
Commission and under the laws of all fifty U.S. states, the District of Columbia
and Puerto Rico, is a member of the NASD and the NYSE, and, in each case, is in
compliance with all applicable laws, rules, regulations, orders, by-laws and
similar requirements in connection with such registrations and membership,
including without limitation Rule 15c-1 under the Exchange Act (the "Net Capital
Rule"), except where the failure to be so registered or in such compliance would
not have a Material Adverse Effect.
(y) KBW Asset Management, Inc. is registered as an investment advisor with
the Commission, is registered or exempt from registration in all fifty states,
the District of Columbia and Puerto Rico, and is in compliance in all material
respects with all applicable laws, rules, regulations, orders and similar
requirements in connection therewith except where the failure to be so
registered or in such compliance therewith except where the failure to be so
registered or in such compliance would not have a Material Adverse Effect.
(z) Prior to consummation of the Offering, both the Merger and the
Contribution (as each term is defined in the Prospectus) will be effective. Both
the Merger and the Contribution have been duly authorized by the Company, Xxxxx,
Xxxxxxxx & Xxxxx, Inc. or KBW Asset Management, Inc., as applicable, and will
not conflict with or constitute a breach of any of the terms or provisions of,
or a default under any contract, indenture, mortgage, loan agreement, credit
agreement, note, guarantee, lease or other instrument or agreement to which the
Company, Xxxxx, Xxxxxxxx & Xxxxx, Inc. or KBW Asset Management, Inc. is or was a
party or by which any of them is or was bound, or to which any of the property
or assets of the Company, Xxxxx, Xxxxxxxx & Xxxxx, Inc. or KBW Asset Management
Inc. is or was subject, except where such conflict, breach or default, singly or
in the aggregate, would not have a Material Adverse Effect, nor did the Merger
and Contribution result in any violation of the provisions of the charter or by-
laws of the Company, Xxxxx, Xxxxxxxx & Xxxxx, Inc. and KBW Asset Management,
Inc. or any applicable law, administrative regulation or administrative or court
decree.
(aa) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(bb) All material tax returns required to be filed by the Company and each
of its subsidiaries in any jurisdiction have been filed, other than those
filings being contested in good faith, and all material taxes, including
withholding taxes, payroll taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
13
received by the Company or any of its subsidiaries have been paid, other than
those being contested in good faith and for which reserves which the Company
reasonably believes to be adequate have been provided.
Section 7. Representations and Warranties of the Selling Stockholders.
(a) Representations and Warranties of the Management Selling Stockholders.
---------------------------------------------------------------------
Each Management Selling Stockholder, severally and not jointly, represents and
warrants to each Underwriter, solely in such Management Selling Stockholder's
capacity as a Management Selling Stockholder, that:
(i) Such Management Selling Stockholder is the lawful owner of the
Shares to be sold by such Management Selling Stockholder pursuant to this
Agreement and has, and on the Closing Date will have, good and clear title
to such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever, other than, in each
case, pursuant to the Custody Agreement, if any, the Power of Attorney,
this Agreement, the Former Stockholders' Agreement (as defined in the
Registration Statement) (which Former Stockholders' Agreement will be
terminated as of, or prior to, the Closing Date, as described in the
Registration Statement), and other than any such restriction on transfer,
lien, encumbrance, security interest, equity or claim created by an
Underwriter or resulting from any actions taken by an Underwriter.
(ii) Such Management Selling Stockholder has, and on the Closing Date
will have, full legal right, power and authority, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement signed by such Management Selling Stockholder and
_________________________, as Custodian, relating to the deposit of the
Shares to be sold by such Management Selling Stockholder (the "Custody
Agreement") and the Power of Attorney of such Management Selling
Stockholder appointing certain individuals as such Management Selling
Stockholder's attorneys-in-fact (the "Attorneys") to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement and the Custody Agreement (the "Power of Attorney")
and to sell, assign, transfer and deliver the Shares to be sold by such
Management Selling Stockholder in the manner provided herein and therein.
(iii) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Management Selling Stockholder.
(iv) The Custody Agreement of such Management Selling Stockholder has
been duly authorized, executed and delivered by such Management Selling
Stockholder and is a valid and binding agreement of such Management Selling
Stockholder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity.
14
(v) The Power of Attorney of such Management Selling Stockholder has
been duly authorized, executed and delivered by such Management Selling
Stockholder and is a valid and binding instrument of such Management
Selling Stockholder, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general principles of equity, and, pursuant to
such Power of Attorney, such Management Selling Stockholder has, among
other things, authorized the Attorneys, or any one of them, to execute and
deliver on such Management Selling Stockholder's behalf this Agreement and
any other document that they, or any one of them, may deem necessary or
desirable in connection with the transactions contemplated hereby and
thereby and to deliver the Shares to be sold by such Management Selling
Stockholder pursuant to this Agreement.
(vi) Upon delivery of and payment for the Shares to be sold by such
Management Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests, equities
and claims whatsoever, other than any such restriction on transfer, lien,
encumbrance, security interest, equity or claim created by an Underwriter
or resulting from any actions taken by an Underwriter.
(vii) The execution, delivery and performance of this Agreement and the
Custody Agreement and Power of Attorney of such Management Selling
Stockholder by or on behalf of such Management Selling Stockholder, the
compliance by such Management Selling Stockholder with all the provisions
hereof and thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency applicable to such Management Selling
Stockholder (except (A) such as may be required in connection with this
offering under the Act or the Exchange Act or by the NYSE or the NASD, all
of which shall have been obtained by the Closing Date and (B) such as may
be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the organizational documents of such Management
Selling Stockholder, if such Management Selling Stockholder is not an
individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Management Selling Stockholder is a
party or by which such Management Selling Stockholder or any property of
such Management Selling Stockholder is bound or (iii) assuming the
representations and warranties of the Company in Section 6 hereof are true
and accurate in all material respects, violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over such
Management Selling Stockholder or any property of such Management Selling
Stockholder.
(viii) Each Management Selling Stockholder has reviewed and is familiar
with the Registration Statement and Prospectus and, to the knowledge
without any additional
15
inquiry of each Management Selling Stockholder, neither the Prospectus nor
any amendments or supplements thereto includes any untrue statement of a
material fact or omits 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.
(ix) At any time during the period described in Section 5(d), if, to the
Management Selling Stockholder's actual knowledge without independent
investigation, there is any change in the information referred to in
Section 7(a)(viii), such Management Selling Stockholder will immediately
notify you of such change.
(x) Each certificate signed by or on behalf of such Management Selling
Stockholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such
Management Selling Stockholder to the Underwriters as to the matters
covered thereby.
(b) Representations and Warranties of the Additional Selling Stockholder.
--------------------------------------------------------------------
The Additional Selling Stockholder, severally and not jointly, represents and
warrants to each Underwriter, solely in such Additional Selling Stockholder's
capacity as an Additional Selling Stockholder, that:
(i) Such Additional Selling Stockholder is the lawful owner of the
Shares to be sold by such Additional Selling Stockholder pursuant to this
Agreement and has, and on the Closing Date will have, good and clear title
to such Shares, free of all restrictions on transfer, liens, encumbrances,
security interests, equities and claims whatsoever, other than, in each
case, pursuant to the Custody Agreement, if any, the Power of Attorney,
this Agreement, the Former Stockholders' Agreement (which Former
Stockholders' Agreement will be terminated as of, or prior to, the Closing
Date, as described in the Registration Statement), and other than any such
restriction on transfer, lien, encumbrance, security interest, equity or
claim created by an Underwriter or resulting from any actions taken by an
Underwriter.
(ii) Such Additional Selling Stockholder has, and on the Closing Date
will have, full legal right, power and authority, and all authorization and
approval required by law, to enter into this Agreement, the Custody
Agreement and the Power of Attorney of such Additional Selling Stockholder
appointing the Attorneys as the Additional Selling Stockholder's attorneys-
in-fact to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be sold
by such Additional Selling Stockholder in the manner provided herein and
therein.
(iii) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Additional Selling Stockholder.
(iv) The Custody Agreement of such Additional Selling Stockholder has
been duly authorized, executed and delivered by such Additional Selling
Stockholder and is a
16
valid and binding agreement of such Additional Selling Stockholder,
enforceable in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles
of equity.
(v) The Power of Attorney of such Selling Stockholder has been duly
authorized, executed and delivered by such Additional Selling Stockholder
and is a valid and binding instrument of such Additional Selling
Stockholder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity, and, pursuant to such Power of Attorney,
such Additional Selling Stockholder has, among other things, authorized the
Attorneys, or any one of them, to execute and deliver on such Additional
Selling Stockholder's behalf this Agreement and any other document that
they, or any one of them, may deem necessary or desirable in connection
with the transactions contemplated hereby and thereby and to deliver the
Shares to be sold by such Additional Selling Stockholder pursuant to this
Agreement.
(vi) Upon delivery of and payment for the Shares to be sold by such
Additional Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests, equities
and claims whatsoever, other than any such restriction on transfer, lien,
encumbrance, security interest, equity or claim created by an Underwriter
or resulting from any actions taken by an Underwriter.
(vii) The execution, delivery and performance of this Agreement and the
Custody Agreement and Power of Attorney of such Additional Selling
Stockholder by or on behalf of such Additional Selling Stockholder, the
compliance by such Additional Selling Stockholder with all the provisions
hereof and thereof and the consummation of the transactions contemplated
hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency applicable to such Additional Selling
Stockholder (except (A) such as may be required in connection with this
offering under the Act or the Exchange Act or by the NYSE or the NASD, all
of which shall have been obtained by the Closing Date and (B) such as may
be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the organizational documents of such Additional
Selling Stockholder, if such Additional Selling Stockholder is not an
individual, or any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which such Additional Selling Stockholder is a
party or by which such Additional Selling Stockholder or any property of
such Additional Selling Stockholder is bound or (iii) assuming the
representations and warranties of the Company in Section 6 hereof are true
and accurate in all material respects, violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over
17
such Additional Selling Stockholder or any property of such Additional
Selling Stockholder.
(viii) The Additional Selling Stockholder has reviewed and is familiar
with the Registration Statement and the Prospectus and the information
concerning such Additional Selling Stockholder in the Registration
Statement and the Prospectus is true, complete and correct in all material
respects.
(ix) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(b)(viii), such
Additional Selling Stockholder will immediately notify you of such change.
(x) Each certificate signed by or on behalf of such Additional Selling
Stockholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such
Additional Selling Stockholder to the Underwriters as to the matters
covered thereby.
Section 8. Indemnification. (a) The Company and the Management Selling
Stockholders, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its directors, its officers and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any reasonable legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by or on behalf of such
Underwriter through you expressly for use therein; and provided, further, that
the Company shall not be liable to an Underwriter or its directors, its officers
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act under the indemnity
agreement in this subsection (a) with respect to any preliminary prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Shares to a person as to whom
it shall be established that there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus in any case where
such delivery is required by the Act if the Company has previously furnished
copies thereof in sufficient quantity to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the preliminary prospectus which was
corrected in the Prospectus or in the Prospectus as then amended or supplemented
and such correction would have cured the defect giving rise to such loss, claim,
damage or liability.
18
(b) The Additional Selling Stockholder agrees to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company and the Management Selling Stockholders to such persons, as set
forth in Section 8(a) above, but only to the extent that any such untrue
statement or alleged untrue statement or omission or alleged omission was made
or omitted in reliance upon and in conformity with information relating to such
Additional Selling Stockholder furnished by such Additional Selling Stockholder
for use in connection therewith, which information is set forth under the
caption "Principal and Selling Stockholders" in the Prospectus.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each Selling
Stockholder and each person, if any, who controls such Selling Stockholder
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company and the Management
Selling Stockholders to such Underwriter but only with reference to information
relating to such Underwriter furnished in writing to the Company by or on behalf
of such Underwriter through you expressly for use in the Registration Statement
(or any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus.
(d) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Sections 8(a), 8(b) or 8(c) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and/or 8(b) and Section 8(c), the
Underwriter shall not be required to assume the defense of such action pursuant
to this Section 8(d), but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as provided
below, shall be at the expense of such Underwriter). Any indemnified party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general
19
allegations or circumstances, be liable for (i) the reasonable fees and expenses
of more than one separate firm of attorneys (in addition to any local counsel)
for all Underwriters, their officers and directors and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, (ii) the reasonable fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for the
Company, its directors, its officers who sign the Registration Statement and all
persons, if any, who control the Company within the meaning of either such
Section and (iii) the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Selling
Stockholders and all persons, if any, who control any Selling Stockholder within
the meaning of either such Section, and all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters, their officers and directors and such control persons of any
Underwriters, such firm shall be designated in writing by Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. In the case of any such separate firm for the
Company and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company. In the case of any such
separate firm for the Selling Stockholders and such control persons of any
Selling Stockholders, such firm shall be designated in writing by the Attorneys.
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is entered into
more than thirty days after the indemnifying party shall have received a request
from the indemnified party for reimbursement for the fees and expenses of
counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(e) In situations where the provisions of Sections 8(a) and (c) would be
applicable but the indemnification provided for in this Section 8 is unavailable
to an indemnified party or insufficient in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Sellers on the one
hand and the Underwriters on the other hand from the offering of the Shares or
(ii) if the allocation provided by clause 8(e)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(e)(i) above but also the relative
fault of the Sellers on the one hand and the Underwriters on the other hand in
connection with the statements or omissions which resulted in
20
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the Sellers
on the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions, but before deducting expenses) received
by the Sellers, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Sellers on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or the Underwriters on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 8(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(f) Notwithstanding any other provision of this Agreement, the maximum
aggregate liability of any Selling Stockholder pursuant to this Section 8 and
Section 9 shall be limited to an amount equal to the gross proceeds (after
deducting underwriting discounts and commissions and expenses) received by such
Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Selling Stockholder hereunder.
(g) The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
21
(h) Each Selling Stockholder hereby designates KBW, Inc., Xxx Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized agent, upon which process
may be served in any action which may be instituted in any state or federal
court in the State of New York by any Underwriter, any director or officer of
any Underwriter or any person controlling any Underwriter asserting a claim for
indemnification or contribution under or pursuant to this Section 8, and each
Selling Stockholder will accept the jurisdiction of such court in such action,
and waives, to the fullest extent permitted by applicable law, any defense based
upon lack of personal jurisdiction or venue. A copy of any such process shall be
promptly sent or given to such Selling Stockholder, at the address for notices
specified in Section 13 hereof.
Section 9. Indemnification of QIU. (a) The Company and the Management
Selling Stockholders, jointly and severally, agree to indemnify and hold
harmless the QIU, its directors, its officers and each person, if any, who
controls the QIU within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any reasonable legal
or other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) related to, based upon or arising out of (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading or (ii) the
QIU's activities as QIU under its engagement pursuant to Section 2 hereof,
except in the case of this clause (ii) insofar as any such losses, claims,
damages, liabilities or judgments are found in a final judgment by a court of
competent jurisdiction, not subject to further appeal, to have resulted solely
from the willful misconduct or gross negligence of the QIU.
(b) The Additional Selling Stockholder agrees to indemnify and hold
harmless the QIU, its directors, its officers, and each person, if any, who
controls the QIU within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, as set forth in Section 9(a) above, but only to the extent
that any such untrue statement or alleged untrue statement or omission or
alleged omission was made or omitted in reliance upon and in conformity with
information relating to such Additional Selling Stockholder furnished by such
Additional Selling Stockholder for use in connection therewith, which
information is set forth under the caption "Principal and Selling Stockholders"
in the Prospectus.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 9(a) or 9(b) (the "QIU
Indemnified Party"), the QIU Indemnified Party shall promptly notify the Sellers
in writing and the Sellers shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the QIU Indemnified Party
and the payment of all reasonable fees and expenses of such counsel, as
incurred. Any QIU Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the QIU Indemnified
Party unless (i) the employment of such counsel shall
22
have been specifically authorized in writing by the Sellers, (ii) the Sellers
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the QIU Indemnified Party or (iii) the named parties
to any such action (including any impleaded parties) include both the QIU
Indemnified Party and one or more of the Sellers, and the QIU Indemnified Party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Sellers (in which case the Sellers shall not have the right to
assume the defense of such action on behalf of the QIU Indemnified Party). In
any such case, the Sellers shall not, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all QIU Indemnified Parties, which firm shall
be designated by the QIU, and all such fees and expenses shall be reimbursed as
they are incurred. The Sellers shall indemnify and hold harmless the QIU
Indemnified Party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with the Sellers' written consent or (ii) effected without the Sellers' written
consent if the settlement is entered into more than thirty days after the
Sellers shall have received a request from the QIU Indemnified Party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of the Sellers) and, prior to the date of such
settlement, the Sellers shall have failed to comply with such reimbursement
request. The Sellers shall not, without the prior written consent of the QIU
Indemnified Party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the QIU Indemnified Party is or could have been a party and indemnity
or contribution may be or could have been sought hereunder by the QIU
Indemnified Party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the QIU Indemnified Party from all liability on
claims that are or could have been the subject matter of such action and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act, by or on behalf of the QIU Indemnified Party.
(d) In situations where the provisions of Section 9(a) or 9(b) would be
applicable but the indemnification provided for in this Section 9 is unavailable
to a QIU Indemnified Party or insufficient in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then the Sellers, in lieu
of indemnifying such QIU Indemnified Party, shall contribute to the amount paid
or payable by such QIU Indemnified Party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Sellers on the one hand and the
QIU on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause 9(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 9(d)(i) above but also the relative fault of the Sellers on the one
hand and the QIU on the other hand in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Sellers on the one hand and the QIU on the other hand
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Sellers, and the fee
received by the QIU
23
pursuant to Section 2 hereof, bear to the sum of such total net proceeds and
such fee. The relative fault of the Sellers on the one hand and the QIU on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholders on the one hand or the QIU on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission and whether the QIU's activities
as QIU under its engagement pursuant to Section 2 hereof involved any willful
misconduct or gross negligence on the part of the QIU.
The Company and the QIU agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by a QIU Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such QIU Indemnified Party
in connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding any other provision of this Agreement, the maximum
aggregate liability of any Selling Stockholder pursuant to Section 8 and this
Section 9 shall be limited to an amount equal to the gross proceeds (after
deducting underwriting discounts and commissions and expenses) received by such
Selling Stockholder from the Underwriters for the sale of the Shares sold by
such Selling Stockholder hereunder.
(f) The remedies provided for in this Section 9 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any QIU
Indemnified Party at law or in equity.
Section 10. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the Selling
Stockholders contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
(b) If the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
24
proceedings for that purpose shall have been commenced or shall be pending
before or, to the knowledge of the Company, contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Xxxxx X. XxXxxxxxx and Xxx X. Xxxxx, in their capacities
as the chief executive officer and chief financial officer of the Company,
confirming the matters set forth in Sections 6(t), 10(a) and 10(b) and that the
Company has complied in all materials respects with all of the agreements and
satisfied in all material respects all of the conditions herein contained and
required to be complied with or satisfied by the Company on or prior to the
Closing Date.
(d) 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), (i)
there shall not have occurred any change or any development involving a
prospective change in the financial condition or the earnings, business,
management or operations of the Company and its subsidiaries, taken as a whole,
(ii) there shall not have been any change or any development which would
reasonably be expected to result in a change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries and (iii) neither the
Company nor any of its subsidiaries shall have incurred any liability or
obligation, direct or contingent, the effect of which, in any such case
described in clause 10(d)(i), 10(d)(ii) or 10(d)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
(e) All the representations and warranties of each Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received on the Closing Date a certificate dated the Closing Date from each
Selling Stockholder to such effect and to the effect that such Selling
Stockholder has complied in all material respects with all of the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied in all material respects by such Selling Stockholder on or
prior to the Closing Date.
(f) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters and containing such customary
qualifications and limitations, including reliance upon certifications of
officers of the Company, for such opinions as shall be satisfactory to you and
counsel for the Underwriters), dated the Closing Date, of Wachtell, Lipton,
Xxxxx & Xxxx, special counsel for the Company and the Selling Stockholders, to
the effect that:
(i) each of the Company and its subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and each of the Company and its subsidiaries
has the corporate power and authority to carry on its business and to own,
lease and operate its properties, in each case, as described in the
Prospectus;
25
(ii) all the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights arising by operation of
law, under the certificate of incorporation or by-laws of the Company, any
agreement known to such counsel to which the Company or any of its
subsidiaries is a party, except as may be provided by the Former
Stockholders' Agreement, the Stockholders' Agreement and the Lock-Up
Agreements;
(iii) the Shares to be issued and sold by the Company hereunder have
been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance and sale of such
Shares will not be subject to any preemptive or similar rights arising by
operation of law, under the certificate of incorporation or by-laws of the
Company, any agreement known to such counsel to which the Company or any of
its subsidiaries is a party;
(iv) this Agreement has been duly authorized, executed and delivered by
the Company and by or on behalf of each Selling Stockholder;
(v) as of the time of the purchase of the Shares pursuant to this
Agreement, the authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
(vi) the Registration Statement has become effective under the Act, no
stop order suspending its effectiveness has been issued and no proceedings
for that purpose are, to such counsel's knowledge, pending before or
contemplated by the Commission;
(vii) the statements under the captions "Risk Factors -- Anti-takeover
Effects of Certain Charter and Bylaw Provisions," "Management," "Certain
Transactions Occurring Prior to the Offering," "Description of Capital
Stock" "Certain Anti-Takeover Provisions," "Shares Eligible for Future
Sale" and "Tax Consequences to Non-U.S. Holders" in the Prospectus and
Items 14 and 15 of Part II of the Registration Statement, insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present in all material respects
the information called for with respect to such legal matters, documents
and proceedings;
(viii) the execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (A) with
respect to the Subject Laws (as defined below), require any consent,
approval, authorization or other order of, or qualification with, any court
or governmental body or agency (except such as may be required under the
securities or Blue Sky laws of the various states as to which no opinion is
expressed), (B)(1) conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the charter or by-laws of the Company
or (2) any
26
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is either (x) filed as an exhibit to the Registration
Statement or (y) known to such counsel and which is binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole or (C) with respect to the Subject Laws,
violate or conflict with any applicable law, rule, regulation, or, to the
knowledge of such counsel, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any of
its subsidiaries or their respective property, which in the case of clauses
(A), (B)(2) or (C) would individually or in the aggregate have a Material
Adverse Effect or impair the consummation of the transaction contemplated
hereby. "Subject Laws" means (A) the laws of the State of New York, (B) the
general corporation law of the State of Delaware and (C) the federal laws
of the United States normally applicable, in our experience, to
transactions of the type contemplated by this Agreement;
(ix) after due inquiry, but without having performed a docket search
or other independent investigation, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of their respective
property is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described, or of any statutes or
regulations that are required to be described in the Registration Statement
or the Prospectus;
(x) the Company is not and, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended;
(xi) the Registration Statement and the Prospectus and any supplement or
amendment thereto (except for the financial statements and other financial
data included therein as to which no opinion need be expressed) comply as
to form in all material respects with the Act. Such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the
Company, and representatives of and counsel to the Underwriters, all of
whom participated in the preparation of the Registration Statement and the
Prospectus, at which conferences the contents of the Registration Statement
and Prospectus were discussed, and, although such counsel is not passing
upon and does not assume responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, and has not otherwise verified or made independent
investigation thereof, no facts have come to its attention during the
course of such participation (relying as to materiality and for an
explanation of technical terms to an extent we deemed appropriate upon the
statements of officers and other representatives of the Company) which
leads such counsel to believe that (i) as of its date and as of the Closing
Date, the Prospectus, as amended or supplemented through such date, (other
than the financial statements and schedules and other financial and
statistical data and information included therein or omitted therefrom, as
to which no opinion is expressed) contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading or (ii) as of its effective date and as of
the date of this Agreement, the Registration Statement (other than the
financial statements and schedules and other financial and statistical data
and
27
information included therein or omitted therefrom, as to which no
opinion is expressed) contained or contains an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(xii) to such counsel's knowledge, each Selling Stockholder owns the
Shares to be sold by such Selling Stockholder pursuant to this Agreement,
free and clear of any pledge, liens, encumbrances, security interests,
equities and claims whatsoever, other than pursuant to the Custody
Agreement, the Power of Attorney, the Underwriting Agreement and other than
any such restriction on transfer, lien, encumbrance, security interest,
equity or claim created by an Underwriter or resulting from any actions
taken by an Underwriter;
(xiii) to such counsel's knowledge, each Selling Stockholder has full
legal right, power and authority, and all authorization and approval
required by law (other than as required by the NASD and state securities
and Blue Sky laws as to which no opinion need be expressed), to enter into
this Agreement and the Custody Agreement and the Power of Attorney of such
Selling Stockholder and to sell, assign, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided herein and
therein;
(xiv) to such counsel's knowledge, the Custody Agreement of each Selling
Stockholder has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding agreement of such Selling
Stockholder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
by general principles of equity;
(xv) to such counsel's knowledge, the Power of Attorney of each Selling
Stockholder has been duly authorized, executed and delivered by such
Selling Stockholder and is a valid and binding instrument of such Selling
Stockholder, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar law affecting the rights of creditors generally and
by general principles of equity;
(xvi) upon sale and delivery of and payment for the Shares to be sold by
each Selling Stockholder pursuant to this Agreement, and assuming the
Underwriters purchase such shares for value and in good faith without
notice of any adverse claim (within the meaning of Section 8-102 of the
Uniform Commercial Code as in effect in the State of New York (the "UCC")),
each Selling Stockholder will have transferred to the Underwriters
ownership of the Shares being sold by such Selling Stockholder at the
28
Closing, free and clear of any adverse claim (within the meaning of the
UCC) and any restrictions on transfer imposed by the Company; and
(xvii) to the knowledge of such counsel, assuming that the
representations and warranties of the Company in this Agreement as to
factual matters are true and correct, the execution, delivery and
performance of this Agreement and the Custody Agreement and Power of
Attorney of each Selling Stockholder by such Selling Stockholder, the
compliance by such Selling Stockholder with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby will not (A) with respect to the Subject Laws, require any consent,
approval, authorization or other order of, or qualification with, any court
or governmental body or agency applicable to such Selling Stockholder
(except (a) such as may be required under the securities or Blue Sky laws
of the various states as to which no opinion is expressed, and (b)
registration under the Act, NASD clearance and NYSE approval for listing,
all of which shall have been obtained by the Closing Date), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of such Selling Stockholder, if
such Selling Stockholder is not an individual, or any indenture, loan
agreement, mortgage, lease or other agreement or instrument to which such
Selling Stockholder is a party or by which any property of such Selling
Stockholder is bound or (C) with respect to the Subject Laws, violate or
conflict with any applicable law or any rule, regulation, judgment, order
or decree of any court or any governmental body or agency having
jurisdiction over such Selling Stockholder or any property of such Selling
Stockholder.
The opinion of Wachtell, Lipton, Xxxxx & Xxxx described in Section 10(f)
above shall be rendered to you at the request of the Company and the Selling
Stockholders and shall so state therein.
(g) You shall have received on the Closing Date an opinion (satisfactory to
you and counsel for the Underwriters, and containing customary qualifications
and limitations, including reliance upon certifications of officers of the
Company, for such opinions), dated the Closing Date, of Xxxxxxxx X. Xxxxxxxx,
General Counsel of the Company, to the effect that:
(i) each of the Company and its subsidiaries is duly qualified and is in
good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a Material Adverse Effect;
(ii) all the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights arising by operation of
law, under the certificate of incorporation or by-laws of the Company, or
to such counsel's knowledge, otherwise, except as may be provided by the
29
Former Stockholders' Agreement, the Stockholders' Agreement and the Lock-up
Agreements;
(iii) the Shares to be issued and sold by the Company hereunder have
been duly authorized and, when issued and delivered to the Underwriters
against payment therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance and sale of such
Shares will not be subject to any preemptive or similar rights arising by
operation of law, under the certificate of incorporation or by-laws of the
Company or, to such counsel's knowledge, otherwise;
(iv) all of the outstanding shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature;
(v) the statements under the captions "Risk Factors -- Risks Relating to
Regulation," "Business -- Regulation," "Business -- Net Capital
Requirements," insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly present in
all material respects the information called for with respect to such legal
matters, documents and proceedings;
(vi) neither the Company nor any of its subsidiaries is in violation of
its respective charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, neither the Company nor any of its
subsidiaries is in default in the performance of any obligation, agreement,
covenant or condition contained in any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or their respective property is bound;
(vii) the execution, delivery and performance of this Agreement 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 constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of any of its subsidiaries or
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property
is bound or (b) 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 (other
than such suspensions, terminations or revocations as would not,
individually or in the aggregate, result in a Material Adverse Effect);
30
(viii) after due inquiry, such counsel does not know of any contracts or
other documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required;
(ix) to the knowledge of such counsel, neither the Company nor any of
its subsidiaries has violated any Environmental Law, any provisions of the
Employee Retirement Income Security Act of 1974, as amended, or any
provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which,
singly or in the aggregate, would not have a Material Adverse Effect;
(x) to the knowledge of such counsel, each of the Company and its
subsidiaries has such Authorizations 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 as are necessary to own,
lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to
make any such filing or notice would not, singly or in the aggregate, have
a Material Adverse Effect; each such Authorization is valid and in full
force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction
with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; except in
each case, as would not, singly or in the aggregate, have a Material
Adverse Effect;
(xi) to such counsel's knowledge after due inquiry, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement;
(xii) Xxxxx, Xxxxxxxx & Xxxxx, Inc. is registered as a broker-dealer
with the Commission and is registered or exempt from registration as a
broker-dealer under the laws of all fifty U.S. states, the District of
Columbia and Puerto Rico, is a member of the NASD and the NYSE, and, to the
knowledge of such counsel, in each case, is in compliance with all
applicable laws, rules, regulations, orders, by-laws and similar
requirements in connection with such registrations and memberships,
including without limitation the Net Capital Rule, except where the failure
to be so registered or in such compliance would not have a Material Adverse
Effect; and
31
(xiii) KBW Asset Management, Inc. is registered as an investment adviser
with the Commission, is registered or exempt from registration in all fifty
U.S. states, the District of Columbia and Puerto Rico and to the knowledge
of such counsel, is in compliance with all applicable laws, rules,
regulations, orders and similar requirements in connection therewith except
where the failure to be so registered or in such compliance would not have
a Material Adverse Effect.
(h) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxx & Wood LLP, counsel for the Underwriters, as to the
matters referred to in Sections 10(f)(iii), 10(f)(iv) (but only with respect to
the Company), 10(f)(vii) (but only with respect to the statements under the
caption "Description of Capital Stock" and "Underwriting") and 10(f)(xi).
In giving such opinions with respect to the matters covered by Section
10(f)(xi), Wachtell, Lipton, Xxxxx & Xxxx and Xxxxx & Xxxx LLP may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(i) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(j) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(k) The Shares shall have been duly listed, subject to official notice of
issuance, on the NYSE.
(l) The Company and the Selling Stockholders shall not have failed on or
prior to the Closing Date to perform or comply in any material respect with any
of the agreements herein contained and required to be performed or complied with
by the Company or the Selling Stockholders, as the case may be, on or prior to
the Closing Date.
(m) You shall have received on the Closing Date, a certificate of each
Selling Stockholder who is not a U.S. Person (as defined under applicable U.S.
federal tax legislation) to the effect that such Selling Stockholder is not a
U.S. Person, which certificate may be in the form of a properly completed and
executed United States Treasury Department Form W-8 (or other applicable form or
statement specified by Treasury Department regulations in lieu thereof).
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as
32
you may reasonably request with respect to the good standing of the Company, the
due authorization and issuance of such Additional Shares and other matters
related to the issuance of such Additional Shares.
Section 11. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Sellers if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or The Nasdaq Stock Market or limitation on prices for securities or other
instruments on any such exchange or The Nasdaq Stock Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States and, in your judgment, makes it
impracticable to market the Shares on the terms and in the manner contemplated
by the Prospectus.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Firm Shares or Additional
Shares, as the case may be, which any Underwriter has agreed to purchase
pursuant to Section 2 hereof be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing
33
Date any Underwriter or Underwriters shall fail or refuse to purchase Firm
Shares and the aggregate number of Firm Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Firm Shares to
be purchased by all Underwriters, and arrangements satisfactory to you, the
Company and the Management Selling Stockholders for purchase of such Firm Shares
are not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Management Selling Stockholders. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 12. Agreements of the Selling Stockholders. Each Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all costs and expenses, including any
transfer or other taxes payable in connection with the transfer of the Shares to
be sold by such Selling Stockholder to the Underwriters or incident to the
performance of the obligations of the Selling Stockholders hereunder for which
provision is not otherwise made.
(b) To do and perform all things to be done and performed by such Selling
Stockholder under this Agreement prior to the Closing Date and to use
commercially reasonable efforts to satisfy all conditions precedent to the
delivery of the Shares to be sold by such Selling Stockholder pursuant to this
Agreement.
Section 13. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (i) if to the Company, to KBW, Inc.,
Two World Financial Center, New York, New York 10048, Attention General Counsel
(ii) if to the Selling Stockholders, to [NAME OF ATTORNEY-IN-FACT] c/o [ADDRESS
OF ATTORNEY-IN-FACT] and (iii) if to any Underwriter or to you, to you c/x
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
34
any Underwriter, the officers or directors of any Underwriter, any person
controlling any Underwriter, any QIU Indemnified Party, the Company, the
officers or directors of the Company, any person controlling the Company, any
Selling Stockholder or any person controlling such Selling Stockholder, (ii)
acceptance of the Shares and payment for them hereunder and (iii) termination of
this Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 11 or breach of this Agreement by any
Underwriter), the Company and the Management Selling Stockholders agree, jointly
and severally, to reimburse the several Underwriters for all out-of-pocket
expenses (including the reasonable fees and disbursements of counsel) incurred
by them. Notwithstanding any termination of this Agreement, the Company shall be
liable for all expenses which it has agreed to pay pursuant to Section 5(i)
hereof. The Company and the Management Selling Stockholders also agree, jointly
and severally, to reimburse the several Underwriters, their directors, officers
and any persons controlling any of the Underwriters, the QIU Indemnified Parties
(the "Reimbursed Parties") for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 8 hereof); provided, however, that the Reimbursed Parties shall not
be entitled to reimbursement pursuant to this sentence to the extent the
Reimbursed Party is determined not to be the prevailing party by a court of
competent jurisdiction in a final non-appealable judgment.
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Selling
Stockholders, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the QIU Indemnified Parties, the
Company's directors and the Company's officers who sign the Registration
Statement and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Shares from any of the several
Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
35
Please confirm that the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
KBW, INC.
By: ________________________________________
Title:
THE SELLING STOCKHOLDERS NAMED IN SCHEDULE II
HERETO, ACTING SEVERALLY
By: ________________________________________
Attorney-in-fact
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXX, XXXXXXXX & XXXXX, INC.
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:_____________________________
36
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Xxxxxxx, Sachs & Co.
Xxxxx, Xxxxxxxx & Xxxxx, Inc.
_________________
Total
S-1
SCHEDULE II-A
-------------
Selling Stockholders
--------------------
Number of Firm
Name Shares Being Sold
---- -----------------
_________
Total
S-2
SCHEDULE II-B
-------------
Selling Stockholders
--------------------
Number of Firm
Name Shares Being Sold
---- -----------------
_________
Total
S-3
SCHEDULE III
------------
Selling Stockholders
--------------------
Number of Additional
Name Shares Being Sold
---- -----------------
_________
Total
S-4
Annex I
[Insert names of stockholders of the Company who will be
required to sign lock ups]
A-1
