EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
NALCO HOLDING COMPANY
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
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UNDERWRITING AGREEMENT
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_______, 2005
Xxxxxxx, Xxxxx & Co.,
Citigroup Global Markets Inc.,
UBS Securities LLC,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
Nalco LLC, a Delaware limited liability company and a stockholder (the
"Selling Stockholder") of Nalco Holding Company, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 25,000,000 shares (the "Firm Shares") and, at
the election of the Underwriters, up to 3,750,000 additional shares (the
"Optional Shares") of Common Stock, par value $0.01 per share ("Stock"), of the
Company (the Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are herein collectively called the
"Shares").
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-126642)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
knowledge of the Company, threatened by the Commission (any preliminary
prospectus
included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement
became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such
final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "Prospectus");
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. and
Citigroup Global Markets Inc. expressly for use therein;
(iii) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Sachs & Co. and Citigroup Global Markets Inc.
expressly for use therein;
(iv) Since the date of the latest audited financial statements
included in the Prospectus, except as set forth in or contemplated in
the Prospectus, (A) there has not been any material adverse change in
the condition (financial or otherwise), business or results of
operations of the Company and its subsidiaries, taken as a whole, and
(B) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of
its significant subsidiaries (as such term is defined in Rule 1-02(w)
of Regulation S-X, as promulgated by the Commission (the "Significant
Subsidiaries"));
(v) Each of the Company and its subsidiaries owns, leases or
licenses all such real properties as are necessary to conduct its
operations as presently conducted, except as would not reasonably be
expected to have a material adverse effect on the condition (financial
or otherwise), business or results of operations of Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect");
(vi) Each of the Company and its subsidiaries has been duly
organized and is validly existing as an entity in good standing under
the laws of the jurisdiction in which it is chartered
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or organized with full corporate or other organizational power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus,
and is duly qualified to do business as a foreign corporation or other
entity and is in good standing under the laws of each jurisdiction
where the ownership or leasing of its properties or the conduct of its
business requires such qualification except where the failure to be so
organized or qualified, have such power or authority or be in good
standing would not reasonably be expected to have a Material Adverse
Effect;
(vii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
description of the Stock contained in the Prospectus under the heading
"Description of Capital Stock"; and all of the issued shares of capital
stock of each subsidiary of the Company (or in the case of a
non-wholly-owned subsidiary, such portion of the capital stock of such
subsidiary issued to the Company or any of its subsidiaries), have been
duly and validly authorized and issued, are fully paid and
non-assessable and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock of the Company's subsidiaries
are owned by the Company either directly or through its subsidiaries
free and clear of any security interest, claim, lien or encumbrance
(other than liens, encumbrances and restrictions (i) imposed by the Act
and state securities or "blue sky" laws of certain jurisdictions and
(ii) imposed in connection with the senior credit facilities described
in the Prospectus);
(viii) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection
with the execution, delivery and performance of this Agreement, except
such (i) as may be required under the blue sky laws of any jurisdiction
in which the Shares are offered and sold or (ii) as shall have been
obtained or made prior to the First Time of Delivery (as defined in
Section 4);
(ix) None of the execution and delivery of this Agreement, the
sale of the Shares, or the consummation of any other of the
transactions herein contemplated, or the fulfillment of the terms
hereof will (A) conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its Significant Subsidiaries pursuant
to (i) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
Significant Subsidiaries is a party or bound or to which its or their
property is subject; or (ii) any statute, law, rule, regulation,
judgment, order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or any of the Company's Significant
Subsidiaries or any of its or their properties, other than in the case
of clause (i), such breaches, violations, liens, charges, or
encumbrances that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or (B) result
in the violation of the charter or by-laws of the Company;
(x) Neither the Company nor any of its subsidiaries is in
violation or default of (i) any provision of its charter, bylaws or any
equivalent organizational document; (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
such subsidiary or any of its properties, as applicable, other than in
the cases of clauses (ii) and (iii), such violations and defaults that
would not reasonably be expected to have a Material Adverse Effect;
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(xi) The consolidated historical financial statements of the
Company and its consolidated subsidiaries present fairly the financial
condition, results of operations and cash flows of the Company, as of
the dates and for the periods indicated and have been prepared in
conformity with United States generally accepted accounting principles
applied on a consistent basis throughout the periods involved (except
as otherwise noted therein); the selected historical financial data set
forth under the captions "Prospectus Summary - Summary Historical and
Pro Forma Financial Data" and "Selected Historical Financial Data" in
the Prospectus fairly present, on the basis stated in the Prospectus,
the information included therein; the pro forma financial statements
included in the Prospectus include assumptions that provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions and events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, the pro forma adjustments reflect the proper application
of those adjustments to the historical financial statement amounts in
the pro forma financial statements included in the Prospectus; the pro
forma financial statements included in the Prospectus comply as to form
with the applicable accounting requirements of Regulation S-X under the
Act, except as otherwise noted in the letter delivered on the date
hereof pursuant to Section 7(g), and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of
those statements;
(xii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, under the captions
"Description of Indebtedness", "Material U.S. Tax Consequences," and
"Underwriting", insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair;
(xiii) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending
or, to the best knowledge of the Company, threatened that (i) would
reasonably be expected to have a material adverse effect on the
performance of this Agreement or the consummation of any of the
transactions contemplated hereby or (ii) would reasonably be expected
to have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus;
(xiv) The Company is not and, after giving effect to the sale
of the Shares by the Selling Stockholder, will not be an "investment
company", as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(xv) Ernst & Young LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the applicable rules and
regulations of the Commission thereunder;
(xvi) The Company and its subsidiaries have filed all non-U.S.,
U.S. federal, state and local tax returns that are required to be filed
or has requested extensions thereof (except in any case in which the
failure so to file would not reasonably be expected to have a Material
Adverse Effect and except as disclosed in the Prospectus) and have paid
all taxes required to be paid by them and any other assessment, fine or
penalty levied against them, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not reasonably
be expected to have a Material Adverse Effect and except as disclosed
in the Prospectus;
(xvii) No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists that would reasonably be
expected to have a Material Adverse Effect or, to the Company's
knowledge, is threatened, and the Company is not aware of any existing
labor disturbance that would reasonably be expected to have a Material
Adverse Effect;
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(xviii) The Company and its subsidiaries are insured against
such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged or as required by law;
(xix) The Company and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the
appropriate U.S. federal, state or non-U.S. regulatory authorities
necessary to conduct their respective businesses, except where the
failure to possess such licenses, certificates, permits and other
authorizations would not reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any of its subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to have a Material
Adverse Effect, except as disclosed in the Prospectus;
(xx) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences;
(xxi) The Company and its subsidiaries are (i) in compliance
with any and all applicable non-U.S., U.S. federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"); (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses; (iii) have not received notice of any actual or
potential liability under any Environmental Law; and (iv) have not
been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended, except where such non-compliance with
Environmental Laws, failure to receive or comply with required
permits, licenses or other approvals, liability or status as a
potentially responsible party would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
except as disclosed in the Prospectus;
(xxii) The minimum funding standard under Section 302 of the
Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has
been satisfied by each "pension plan" (as defined in Section 3(2) of
ERISA) which has been established or maintained by the Company and/or
one or more of its subsidiaries, and the trust forming part of each
such plan which is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its subsidiaries has
fulfilled its obligations, if any, under Section 515 of ERISA; each
pension plan and welfare plan established or maintained by the Company
and/or one or more of its subsidiaries is in compliance in all material
respects with the currently applicable provisions of ERISA; and neither
the Company nor any of its subsidiaries has incurred or, except as
disclosed in the Prospectus, could reasonably be expected to incur any
material withdrawal liability under Section 4201 of ERISA, any material
liability under Section 4062, 4063, or 4064 of ERISA, or any other
material liability under Title IV of ERISA;
(xxiiii) The Company and its subsidiaries own, possess, license
or have other rights to use on reasonable terms, all patents,
trademarks and service marks, trade names, copyrights, domain names (in
each case including all registrations and applications to register
same),
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inventions, trade secrets, technology, know-how, and other
intellectual property (collectively, the "Intellectual Property"),
necessary for the conduct of the Company's business as now conducted
or as proposed in the Prospectus to be conducted, except where the
failure to own, possess, license or otherwise have such rights would
not reasonably be expected to have a Material Adverse Effect. Except
as disclosed in the Prospectus, and except as would not reasonably be
expected to have a Material Adverse Effect, (i) the Company and its
subsidiaries own, or have rights to use under license, all such
Intellectual Property free and clear in all respects of all adverse
claims, liens or other encumbrances except those granted in connection
with the senior credit facilities described in the Prospectus; (ii) to
the knowledge of the Company, there is no infringement by third
parties of any such Intellectual Property; (iii) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or
claim by any third party challenging the Company's or its
subsidiaries' rights in or to any such Intellectual Property, and the
Company is not aware of any reasonable basis for any such claim; (iv)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by any third party challenging the validity,
scope or enforceability of any such Intellectual Property, and the
Company is not aware of any reasonable basis for any such claim; and
(v) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by any third party that the Company
or any subsidiary infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of any
third party, and the Company is not aware of any reasonable basis for
any such claim;
(xxiv) No forward-looking statement (within the meaning of
Section 27A of the Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) or presentation of
market-related or statistical data contained in the Preliminary
Prospectus or Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith; and
(xxv) Except as disclosed in the Prospectus, no person or
entity other than the Selling Stockholder has the right to require
registration of shares of Stock or other securities of the Company
because of the filing or effectiveness of the Initial Registration
Statement or otherwise, except for persons and entities who have
expressly waived such right or who have been given proper notice and
have failed to exercise such right within the time or times required
under the terms and conditions of such right.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Selling Stockholder of
this Agreement, and for the sale and delivery of the Shares to be sold
by the Selling Stockholder hereunder, have been obtained; and the
Selling Stockholder has full right, power and authority to enter into
this Agreement and to sell, assign, transfer and deliver the Shares to
be sold by the Selling Stockholder hereunder;
(ii) The sale of the Shares and the compliance by the Selling
Stockholder with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not, in any
material respect, conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Selling Stockholder is a party or by which
the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the Certificate of
Formation or Limited Liability Company Operating Agreement of the
Selling Stockholder or any material violation of a statute or any
order, rule or regulation of any court or
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governmental agency or body having jurisdiction over the Selling
Stockholder or the property of the Selling Stockholder;
(iii) The Shares to be sold by such Selling Stockholder
pursuant to this Agreement are certificated securities in registered
form and are not held in any securities account or by or through any
securities intermediary within the meaning of the Uniform Commercial
Code as in effect on the date of this Agreement (the "UCC"); upon the
Underwriters acquiring possession of the Shares to be sold by such
Selling Stockholder and paying the purchase price therefor pursuant to
this Agreement, each of the Underwriters (assuming that the
Underwriters have no notice of any "adverse claim", within the meaning
of Section 8-102 of the UCC, to such Shares) will acquire its interest
in such Shares (including without limitation, all rights that such
Selling Stockholder had or has power to transfer in such Shares) free
and clear of any adverse claim within the meaning of Section 8-102 of
the UCC; upon payment for the Shares to be sold by such Selling
Stockholder pursuant to this Agreement, delivery of such Shares, as
directed by the Underwriters, to Cede & Co. ("Cede") or such other
nominee as may be designated by The Depository Trust Company ("DTC"),
registration of such Shares in the name of Cede or such other nominee
and the crediting of such Shares on the books of DTC to securities
accounts of the Underwriters (assuming that neither DTC nor the
Underwriters have notice of any adverse claim) (within the meaning of
Section 8-105 of the UCC) to such Shares), (A) DTC shall be a
"protected purchaser" of such Shares within the meaning of Section
8-303 of the UCC, (B) under Section 8-501 of the UCC, the Underwriters
will acquire a valid security entitlement in respect of such Shares,
and (C) no action based on any "adverse claim", within the meaning of
Section 8-102 of the UCC, to such Shares may be asserted against the
Underwriters with respect to such security entitlement; for purposes
of this representation, the Selling Stockholder may assume that when
such payment, delivery and crediting occur, (x) such Shares will have
been registered in the name of Cede or another nominee designated by
DTC, in each case on the Company's share registry in accordance with
its Certificate of Incorporation, Bylaws and applicable law, (y) DTC
will be registered as a clearing corporation within the meaning of
Section 8-102 of the UCC and (z) appropriate entries to the account of
the Underwriters on the records of DTC will have been made pursuant to
the UCC;
(iv) The Selling Stockholder has delivered to the
Underwriters an executed copy of an agreement in the form of Annex
III(a);
(v) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted 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;
(vi) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by
such Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement
and the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that it is understood and agreed that, for purposes of this
Agreement, including Section 8 hereof, the only such information
furnished by the Selling Stockholder consists of the information in
the Prospectus contained under the captions "Principal Stockholders
and Selling Stockholder",
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insofar as it relates to the Selling Stockholder and the beneficial
owners of the Selling Stockholder, and "The Acquisition--Our
Sponsors"; and
(vii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or
at the First Time of Delivery (as defined in Section 4 hereof) a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
2. Subject to the terms and conditions herein set forth, (a) the
Selling Stockholder agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Selling Stockholder, at a purchase price per share of $___, the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto and
(b) in the event and to the extent that the Underwriters shall exercise the
election to purchase Optional Shares as provided below, the Selling Stockholder
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a
fraction, the numerator of which is the maximum number of Optional Shares which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Selling Stockholder hereby grants to the Underwriters the right to
purchase at their election up to 3,750,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares, provided that
the purchase price per Optional Share shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Optional Shares. Any such election to
purchase Optional Shares may be exercised only by written notice from you to the
Selling Stockholder and the Company, given within a period of 30 calendar days
after the date of this Agreement, setting forth the aggregate number of Optional
Shares to be purchased and the date on which such Optional Shares are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you and the Selling
Stockholder otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares,
the several Underwriters propose to offer the Firm Shares for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Selling Stockholder shall be delivered by or on behalf of the
Selling Stockholder to Xxxxxxx, Sachs & Co., through the facilities of the DTC,
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Selling Stockholder to Xxxxxxx,
Xxxxx & Co. at least forty-eight hours in advance. The Company and the Selling
Stockholder will cause the certificates representing the Shares to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) with respect thereto at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New
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York time, on ______, 2005 or such other time and date as Xxxxxxx, Sachs & Co.,
the Company and the Selling Stockholder may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York time, on the date specified
by Xxxxxxx, Xxxxx & Co. in the written notice given by Xxxxxxx, Sachs & Co. of
the Underwriters' election to purchase such Optional Shares, or such other time
and date as Xxxxxxx, Xxxxx & Co., the Company and the Selling Stockholder may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Sections 7(l) and 7(m) hereof will be delivered at the
offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at 3:00 p.m., New York City time, on the New York Business Day
next preceding such Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you,
such approval not to be unreasonably withheld or delayed, and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus to which you reasonably object
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to
the Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you with copies thereof; to advise you, promptly after
it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Shares for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or a dealer in securities or to file a general
consent to service of process in any jurisdiction or to subject itself
to taxation in excess of a nominal amount in respect of doing business
in any jurisdiction;
9
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with written and electronic copies
of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the Shares
and if at such time any events shall have occurred as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason in the opinion
of counsel for the Underwriters it shall be necessary during such
period to amend or supplement the Prospectus in order to comply with
the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time
nine months or more after the time of issue of the Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many written and electronic copies as
you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the Lock-up Period (as defined below), not to
offer, sell, contract to sell, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement
or otherwise) by the Company or any affiliate of the Company or any
person in privity with the Company or any affiliate of the Company),
directly or indirectly, including to establish or increase a put
equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act, except
as provided hereunder, any Stock, any securities of the Company that
are substantially similar to the Shares, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially
similar securities (other than (i) the Shares to be sold by the
Selling Stockholder hereunder, (ii) the issuance of shares of Stock
upon the exercise of an option or warrant or upon the conversion or
exchange of convertible or exchangeable securities, in each case
outstanding as of the date of this Agreement or described in the
Prospectus as being outstanding on or prior to the First Time of
Delivery, (iii) the grant of options to purchase shares of Stock under
the Company's stock option plans existing on the date of this
Agreement and described in the Prospectus, (iv) the issuance of
securities of the Company in exchange for the assets of, or a majority
or controlling portion of the equity of, another entity in connection
with the acquisition by the Company of such entity, provided, however,
that in the case of (iv), (A) prior to such issuance of securities,
each recipient of such securities shall have executed and delivered to
the Representatives an agreement substantially in the form of Annex
III(a) hereto, and (B) the aggregate market value of such securities
shall not exceed 5% of the market capitalization of the Company
immediately following the First Time of Delivery, and (v) the filing
of a registration statement in respect of the Stock during the Lock-up
Period), without the prior
10
written consent of Xxxxxxx, Xxxxx & Co.. The initial lock-up period
will commence on the date hereof and will continue to and including
the date 90 days after the date of the Prospectus; provided, however,
that if (1) during the last 17 days of the initial lock-up period the
Company releases earnings results or announces material news or a
material event or (2) prior to the expiration of the initial lock-up
period the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the initial
lock-up period, then in each case the lock-up period will be
automatically extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the
announcement of the material news or material event, as applicable,
unless Xxxxxxx, Sachs & Co. waives, in writing, such lock-up
restriction (the "Lock-up Period");
(f) To provide written notice to the Representatives and to
each of the Company's directors and executive officers and such other
persons listed in Annex III(b) hereto of any event that would result
in an extension of the Lock-up Period in accordance with the agreement
in the form of Annex III(a) hereto executed by each such person and
delivered to the Underwriters on or prior to the date hereof;
(g) So long as the Company is required to file reports with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act
(but in any event for a period of no less than two years and no more
than five years from the effective date of the Registration
Statement), to furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; provided, however,
that the Company may satisfy the requirements of this subsection by
making any such reports, communications or information generally
available on its web site or by filings such information with the
Commission via XXXXX;
(h) So long as the Company is required to file reports with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act
(but in any event for a period of no less than two years and no more
than five years from the effective date of the Registration
Statement), to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the
Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
provided, however, that the Company may satisfy the requirements of
this subsection by making any such reports, communications or
information generally available on its web site or by filings such
information with the Commission via XXXXX;
(i) To use its commercially reasonable efforts to list,
subject to notice of issuance, the Shares on the New York Stock
Exchange (the "Exchange");
(j) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00
11
P.M., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act;
(l) Upon request of any Underwriter, to furnish, or cause to
be furnished, to such Underwriter an electronic version of the
Company's owned trademarks, servicemarks and corporate logo for use on
the website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the Shares (the "License");
provided, however, that the License shall be used solely for the
purpose described above, is granted without any fee and may not be
assigned or transferred; and
(m) Not to take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
6. The Company and the Selling Stockholder covenant and agree with
one another and with the several Underwriters that (a) the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants and the Selling Stockholder's counsel in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Blue Sky Memorandum and any other related documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the
reasonable fees and disbursements of counsel for the Underwriters in connection
with such qualification and in connection with the Blue Sky survey; (iv) all
fees and expenses in connection with listing the Shares on the Exchange; and (v)
the filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the NASD of the
terms of the sale of the Shares; (vi) the cost of preparing stock certificates;
(vii) the cost and charges of any transfer agent or registrar; and (viii) all
other costs and expenses incident to the performance of its obligations and the
Selling Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section 6, including the transportation and other expenses
incurred by or on behalf of the Company representatives or the Selling
Stockholder representatives in connection with presentations to prospective
purchasers of the Shares (it being understood that the Company and the
Representatives shall each bear half of the costs, respectively, associated with
any chartered aircraft), and (b) the Selling Stockholder will pay or cause to be
paid all taxes incident to the sale and delivery of the Shares to be sold by the
Selling Stockholder to the Underwriters hereunder. In connection with clause (b)
of the preceding sentence, Xxxxxxx, Xxxxx & Co. agrees to pay New York State
stock transfer tax, and the Selling Stockholder agrees to reimburse Xxxxxxx,
Sachs & Co. for associated carrying costs if such tax payment is not rebated on
the day of payment and for any portion of such tax payment not rebated. It is
understood, however, that, except as provided in this Section 6, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees and disbursements of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that (i) all representations and warranties and other
statements of the Company and the Selling Stockholder herein that are qualified
by Material Adverse Effect or another materiality qualifier are, at and as of
such Time of Delivery, true
12
and correct and (ii) all representations and warranties and other statements of
the Company and the Selling Stockholder herein that are not qualified by
Material Adverse Effect or another materiality qualifier are, at and as of such
Time of Delivery, true and correct in all material respects, the condition that
each of the Company and the Selling Stockholder shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated
such Time of Delivery, with respect to the incorporation of the
Company, the validity of the Shares and such other related matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them
to pass upon such matters;
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Company
and the Selling Stockholder, shall have furnished to you their written
opinion (a draft of the opinion to be delivered on the First Time of
Delivery is attached as Annex II(a) hereto), dated such Time of
Delivery, in form and substance satisfactory to you;
(d) Xxxxxxx X. Xxxxxxxx, Esq., General Counsel of the
Company, shall have furnished to you his written opinion (a draft of
the opinion to be delivered on the First Time of Delivery is attached
as Annex II(b) hereto), dated such Time of Delivery, in form and
substance satisfactory to you;
(e) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, Ernst & Young LLP shall have furnished to you a
letter or letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex
I(a) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the Registration
Statement and as of each Time of Delivery is attached as Annex I(b)
hereto);
(f) Subsequent to the date of the Prospectus or, if earlier,
the dates as of which information is given in the Prospectus
(exclusive of any amendment or supplement thereto), there shall not
have been any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise),
business or results of operations of the Company and its subsidiaries,
taken as a whole and after giving effect to the offering, except as
set forth in or contemplated in the Prospectus (exclusive of any
amendment or supplement thereto), the effect of which, is, in the
judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectus (exclusive
of any amendment or supplement thereto);
13
(g) On or after the date hereof, there shall not have been
any decrease in the rating of any of the Company or any of its
Significant Subsidiaries' debt securities by any "nationally
recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible
change;
(h) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the Exchange; (ii) a suspension
or material limitation in trading in the Company's securities on the
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war or (v) the occurrence of
any other calamity or crisis, if the effect on the financial markets
of any such event specified in clause (iv) or (v) in the judgment of
the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated
in the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly
listed, subject to notice of issuance, on the Exchange;
(j) The Company has obtained and delivered to the
Underwriters executed copies of an agreement in the form of Annex
III(a) from the Company's directors and executive officers, the
Selling Stockholder and such other persons listed in Annex III(b);
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses; and
(l) The Company shall have furnished or caused to be
furnished to you at such Time of Delivery customary certificates of
officers of the Company satisfactory to you to the effect that:
(i) the representations and warranties of the Company
herein that are not qualified by Material Adverse Effect or another
materiality qualifier are true and correct in all material respects at
and as of such Time of Delivery;
(ii) the representations and warranties of the Company
herein that are qualified by Material Adverse Effect or another
materiality qualifier are true and correct at and as of such Time of
Delivery;
(iii) the Company has performed in all material respects
all obligations and satisfied all conditions on its part to be
performed or satisfied pursuant to this Agreement at or prior to such
Time of Delivery;
(iv) the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) under the Act within the applicable
time period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) of this Agreement;
the Company's Registration Statement No. 333-126642 under the Act shall
have become effective; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission; and all requests for additional information relating to the
Registration Statement on the part of the Commission have been complied
with;
14
(v) since the date of the most recent financial
statements included in the Prospectus (exclusive of any amendment or
supplement thereto), there has been no material adverse change in the
condition (financial or otherwise), business or results of operations
of the Company and its subsidiaries, taken as a whole, except as set
forth in or contemplated in the Prospectus (exclusive of any amendment
or supplement thereto); and
(vi) the pro forma financial statements included in the
Prospectus comply as to form in all material respects with the
accounting requirements of Regulation S-X under the Act, except as
otherwise noted in the letter delivered on the date hereof pursuant to
Section 7(e) hereof, and the pro forma adjustments have been properly
applied in all material respects to the historical amounts in the
compilation of those statements; and
(m) The Selling Stockholder shall have furnished or caused
to be furnished to you at such Time of Delivery customary certificates
of officers of the Selling Stockholder satisfactory to you to the
effect that:
(i) the representations and warranties of the Selling
Stockholder herein that are not qualified by Material Adverse Effect or
another materiality qualifier are true and correct in all material
respects at and as of such Time of Delivery;
(ii) the representations and warranties of the Selling
Stockholder herein that are qualified by Material Adverse Effect or
another materiality qualifier are true and correct at and as of such
Time of Delivery; and
(iii) the Selling Stockholder has performed in all
material respects all obligations and satisfied all conditions on its
part to be performed or satisfied pursuant to this Agreement at or
prior to such Time of Delivery.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (subject to the limitations set forth
in the proviso to this sentence) will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. and Citigroup Global Markets Inc. expressly for use
therein. The Company shall not be liable under this Section 8 to any indemnified
party regarding any settlement or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent is consented to by the
Company, which consent shall not be unreasonably withheld.
(b) The Selling Stockholder will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect
15
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by the
Selling Stockholder expressly for use therein; and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the liability
of the Selling Stockholder pursuant to this subsection (b) shall not exceed the
product of the number of Shares sold by the Selling Stockholder and the public
offering price of the Shares as set forth in the Prospectus. The Selling
Stockholder shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by the Selling
Stockholder, which consent shall not be unreasonably withheld.
(c) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company and the Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or the Selling Stockholder
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Xxxxxxx, Sachs
& Co. and Citigroup Global Markets Inc. expressly for use therein. The
Underwriters shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent is consented to by the
Underwriters, which consent shall not be unreasonably withheld.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party
16
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any fees and expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest (based on the advice of counsel to the indemnified party), (ii) the
actual or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholder on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholder on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares (before
deducting expenses) received by the Selling Stockholder bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Selling Stockholder on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission and other equitable
considerations appropriate under the circumstances. The Company, the Selling
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Stockholder and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
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 in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder under
this Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each officer, director and affiliate of the respective
Underwriters and to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company and to each person, if any, who controls the
Company or the Selling Stockholder within the meaning of the Act.
9. (a) If, on any Time of Delivery, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it has or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate number of the Shares to
be purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the number of Firm Shares or Optional Shares, as
applicable, set forth opposite their respective names in Schedule I bear to the
aggregate number of Firm Shares or Optional Shares, as applicable, set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Shares 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 Shares that any Underwriter
has agreed to purchase pursuant to this Agreement be increased pursuant to this
Section 9 by an amount in excess of one-ninth of such number of Shares without
the written consent of such Underwriter. In any such case either you or the
Selling Stockholder shall have the right to postpone the Time of Delivery, but
in no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected.
(b) If, on the First Time of Delivery, 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, and
arrangements satisfactory to you and the Selling Stockholder for the purchase of
such Firm Shares are not made within 72 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company or the Selling Stockholder except for the expenses to be borne by
the Company and the Selling Stockholder and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof.
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(c) If, on any Time of Delivery on which Optional Shares are
delivered, any Underwriter or Underwriters shall fail or refuse to purchase
Optional Shares and the aggregate number of Optional Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Optional Shares to be purchased on such Time of Delivery, the non-defaulting
Underwriters shall have the option to (i) terminate obligation hereunder to
purchase Optional Shares or (ii) purchase not less than the number of Optional
Shares that such non-defaulting Underwriters would have been obligated to
purchase 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 such Underwriter under this Agreement.
(d) The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section 9 with like effect as if such person
had originally been a party to this Agreement with respect to such Shares.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or the Selling Stockholder, or any officer or
director or controlling person of the Company, or any controlling person of the
Selling Stockholder, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor the Selling Stockholder shall be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 7 hereof
is not satisfied or because of any refusal, inability or failure on the part of
the Company or the Selling Stockholder to perform any agreement herein or comply
with any provision hereof other than by reason of a default by any of the
Underwriters, including pursuant to Section 9 hereof, the Company and the
Selling Stockholder will reimburse the Underwriters severally through Xxxxxxx,
Xxxxx & Co. and Citigroup Global Markets Inc. on behalf of the Underwriters on
demand for all reasonable out-of-pocket accountable expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Shares, but the
Company and the Selling Stockholder shall then be under no further liability to
any Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Sachs & Co. and Citigroup Global Markets
Inc. on behalf of you as the representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of: (i) Xxxxxxx,
Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department and (ii) Citigroup Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, 00000, Attention: General Counsel (fax no.: (000) 000-0000); and
if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Xxxxxxx Xxxxxxxx, Vice President, General Counsel and
Corporate Secretary (fax no.: (000) 000-0000); and if to the Selling Stockholder
shall be delivered or sent by mail, telex
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or facsimile transmission to Nalco LLC, 0000 Xxxx Xxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxx (fax no.: (000) 000-0000);
provided, however, that any notice to an Underwriter pursuant to Section 8(d)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company or the Selling Stockholder by you on request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, the Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. The Company and the Selling Stockholder acknowledge and agree
that (i) the purchase and sale of the Shares pursuant to this Agreement is an
arm's-length commercial transaction between the Company and the Selling
Stockholder, on the one hand, and the several Underwriters, on the other, (ii)
in connection therewith and with the process leading to such transaction each
Underwriter is acting solely as a principal and not the agent or fiduciary of
the Company or of the Selling Stockholder, (iii) no Underwriter has assumed an
advisory or fiduciary responsibility in favor of the Company or of the Selling
Stockholder with respect to the offering contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company or such Selling Stockholder on other matters) or
any other obligation to the Company or to the Selling Stockholder except the
obligations expressly set forth in this Agreement and (iv) each of the Company
and the Selling Stockholder has consulted its own legal and financial advisors
to the extent it deemed appropriate. Each of the Company and the Selling
Stockholder agrees that it will not claim that the Underwriters, or any of them,
has rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company or to the Selling Stockholder, in connection with
such transaction or the process leading thereto.
16. This Agreement supersedes all prior agreements and understandings
(whether written or oral) between the Company and the Underwriters, or any of
them, or between the Selling Stockholder and the Underwriters, or any of them,
with respect to the subject matter hereof.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
18. The Company, the Selling Stockholder and each of the Underwriters
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
19. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
20. The Company and the Selling Stockholder are authorized, subject
to applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
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If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and the Selling Stockholder. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholder for examination.
Very truly yours,
Nalco Holding Company
By:
----------------------------------------
Name:
Title:
Nalco LLC
By:
----------------------------------------
Name:
Title:
Xxxxxxx, Xxxxx & Co.
Citigroup Global Markets Inc.
UBS Securities LLC
By:
------------------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
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