[ ] Shares
XXXXXX XXXXX CORP.
Common Stock
FORM OF U.S. UNDERWRITING AGREEMENT
-----------------------------------
, 1997
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
PAINEWEBBER INCORPORATED
As Representatives of the Several Underwriters
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxx Xxxxx Corp., a New York corporation (together with its
successor by merger to Xxxxxx Xxxxx Inc., a Pennsylvania corporation that upon
effectiveness of the merger will change its name to Xxxxxx Xxxxx Corp., the
"Company"), proposes to issue and sell an aggregate of [ ] shares of
its common stock, par value $.01 per share, and the persons named in Part A of
Schedule I hereto (the "Selling Shareholders") propose to sell an aggregate of
[ ] shares of common stock of the Company (together with the [ ]
shares of common stock to be issued and sold by the Company, the "Firm Shares")
to the several Underwriters named in Schedule II hereto (the "U.S.
Underwriters") for whom Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx & Co. and PaineWebber
Incorporated are acting as representatives (the "Representatives"). In addition,
solely for the purpose of covering over-allotments, the Company proposes to sell
to the U.S. Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional [ ] shares (the "Additional Shares") of the
Company's common stock. The Company and the Selling Shareholders are hereinafter
sometimes referred to as the "Sellers." The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares." The Company's
common stock, par value $.01 per share, including the Shares and the
International Shares (as defined herein), is hereinafter referred to as the
"Common Stock."
It is understood that the Company and the Selling Shareholders are
concurrently entering into an International Underwriting Agreement, dated the
date hereof (the "International Underwriting Agreement"), providing for the sale
of [ ] shares of the Common Stock (the "Firm International Shares"), of
which [ ] shares will be sold by the Company and [ ] will be
sold by the Selling Shareholders (plus an option granted by the Company to
purchase up to an additional [ ] shares of Common Stock (the
"Additional International Shares") solely for the purpose of covering over-
allotments) through arrangements with certain underwriters outside the United
States and Canada (the "Managers"), for whom Xxxxx Xxxxxx Inc., Xxxxxxx Xxxxx
International and PaineWebber International are acting as lead Managers (the
"Lead Managers"). All shares of Common Stock proposed to be offered to the
Managers pursuant to the International Underwriting Agreement, including the
Firm International Shares and the Additional International Shares, are herein
called the "International Shares"; the International Shares and the Shares,
collectively, are herein called the "Underwritten Shares."
The Company and the Selling Shareholders also understand that the
Representatives and the Lead Managers have entered into an agreement (the
"Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from the Managers a portion of the
International Shares or sell to the Managers a portion of the Shares. The
Company and the Selling Shareholders understand that any such purchases and
sales between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement or the International Underwriting Agreement.
The Company and the Selling Shareholders wish to confirm as follows
their respective agreements with you and the other several Underwriters on whose
behalf you are acting, in connection with the several purchases of the Shares by
the Underwriters.
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 prospectuses subject to
completion, relating to the Underwritten Shares. The term "Registration
Statement" as used in this Agreement means the
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registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, or, if the registration statement
became effective prior to the execution of this Agreement, as supplemented or
amended prior to the execution of this Agreement. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed and must be declared effective before the
offering of the Shares may commence, the term "Registration Statement" as used
in this Agreement means the registration statement as amended by said post-
effective amendment. If an abbreviated registration statement is prepared and
filed with the Commission in accordance with Rule 462(b) under the Act ("an
Abbreviated Registration Statement"), the term "Registration Statement" as used
in this Agreement includes the Abbreviated Registration Statement. The term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
included in the Registration Statement, or, if the prospectuses included in the
Registration Statement omit information in reliance on Rule 430A under the Act
and such information is included in prospectuses filed with the Commission
pursuant to Rule 424(b) under the Act, the term "Prospectuses" as used in this
Agreement means the prospectuses in the forms included in the Registration
Statement as supplemented by the addition of the Rule 430A information contained
in the prospectuses filed with the Commission pursuant to Rule 424(b). The term
"Prepricing Prospectuses" as used in this Agreement means the prospectuses
subject to completion in the forms included in the Registration Statement at the
time of the initial filing of the Registration Statement with the Commission,
and as such prospectuses shall have been amended from time to time prior to the
date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and two forms
of Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
Shares that are to be offered and sold in the United States (as defined herein)
or Canada (as defined herein) to U.S. or Canadian Persons (the "U.S. Prepricing
Prospectus" and the "U.S. Prospectus," respectively), and a Prepricing
Prospectus and a Prospectus relating to the International Shares which are to be
offered and sold outside the United States or Canada to persons other than U.S.
or Canadian Persons (the "International Prepricing Prospectus" and the
"International Prospectus," respectively). The U.S. Prospectus and the
International Prospectus are herein collectively called the "Prospectuses," and
the U.S. Prepricing Prospectus and the International Prepricing Prospectus are
herein called the "Prepricing Prospectuses." For purposes of this Agreement:
"Rules
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and Regulations" means the rules and regulations adopted by the Commission under
either the Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as applicable; "U.S. or Canadian Person" means any resident or national
of the United States or Canada, any corporation, partnership or other entity
created or organized in or under the laws of the United States or Canada or any
estate or trust the income of which is subject to United States or Canadian
income taxation regardless of the source of its income (other than the foreign
branch of any U.S. or Canadian Person), and includes any United States or
Canadian branch of a person other than a U.S. or Canadian Person; "United
States" means the United States of America (including the states thereof and the
District of Columbia) and its territories, its possessions and other areas
subject to its jurisdiction; and "Canada" means Canada and its territories, its
possessions and other areas subject to its jurisdiction.
2. Agreements to Sell and Purchase. Upon the basis of the
representations, warranties and agreements contained herein and subject to all
the terms and conditions set forth herein and to such adjustments as you may
determine to avoid fractional shares, the Company hereby agrees to issue and
sell to each U.S. Underwriter and each U.S. Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ per
share (the "purchase price per share"), the number of Firm Shares that bears the
same proportion to the aggregate number of Firm Shares to be issued and sold by
the Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule II hereto (or such number of Firm Shares increased as
set forth in Section 12 hereof) bears to the aggregate number of Firm Shares to
be sold by the Company and the Selling Shareholders.
Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein
and to such adjustments as you may determine to avoid fractional shares, each
Selling Shareholder agrees to sell to each U.S. Underwriter and each U.S.
Underwriter agrees, severally and not jointly, to purchase from each Selling
Shareholder, at the purchase price per share, the number of Firm Shares that
bears the same proportion to the number of Firm Shares set forth opposite the
name of such Selling Shareholder in Schedule I hereto as the number of Firm
Shares set forth opposite the name of such U.S. Underwriter in Schedule II
hereto (or such number of Firm Shares increased as set forth in Section 12
hereof) bears to the aggregate number of Firm Shares to be sold by the Company
and the Selling Shareholders.
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Upon the basis of the representations, warranties and agreements
contained herein and subject to all the terms and conditions set forth herein,
the Company also agrees to sell to the U.S. Underwriters, and the U.S.
Underwriters shall have the right to purchase from the Company, at the purchase
price per share, pursuant to an option (the "over-allotment option") which may
be exercised prior to 5:00 p.m., New York City time, on the 30th day after the
date of the U.S. Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the New York Stock
Exchange is open for trading), up to an aggregate of [ ] Additional
Shares from the Company. Upon any exercise of the over-allotment option, each
U.S. Underwriter, severally and not jointly, agrees to purchase from the Company
the number of Additional Shares (subject to such adjustments as you may
determine in order to avoid fractional shares) that bears the same proportion to
the number of Additional Shares to be sold by the Company as the number of Firm
Shares set forth opposite the name of such U.S. Underwriter in Schedule II
hereto (or such number of Firm Shares increased as set forth in Section 12
hereof) bears to the aggregate number of Firm Shares to be sold by the Company.
Certificates in transferable form for the Shares that each of the
Selling Shareholders agrees to sell pursuant to this Agreement have been placed
in custody with [ ] (the "Custodian") for delivery under this Agreement
pursuant to a Custody Agreement and Power of Attorney (the "Custody Agreement")
executed by each of the Selling Shareholders appointing and
as agents and attorneys-in-fact (the "Attorneys-in-Fact"). Each Selling
Shareholder agrees that (i) the Shares represented by the certificates held in
custody pursuant to the Custody Agreement are subject to the interests of the
U.S. Underwriters, the Company and each other Selling Shareholder, (ii) the
arrangements made by the Selling Shareholders for such custody are, except as
specifically provided in the Custody Agreement, irrevocable, and (iii) the
obligations of the Selling Shareholders hereunder and under the Custody
Agreement shall not be terminated by any act of such Selling Shareholder or by
operation of law, whether by the death or incapacity of any Selling Shareholder
or the occurrence of any other event or, if the Selling Shareholder is not a
natural person, upon any dissolution, winding up, distribution of assets or
other event affecting the legal existence of such Selling Shareholder. If any
Selling Shareholder shall die or be incapacitated or if any other event shall
occur before the delivery of the Shares hereunder or if the Selling Shareholder
is not a natural person, shall dissolve, wind up, distribute assets or if any
other event affecting the legal existence of such Selling
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Shareholder shall occur before the delivery of the Shares hereunder,
certificates for the Shares of such Selling Shareholder shall be delivered to
the Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity, dissolution, winding up or distribution of assets or other event had
not occurred, regardless of whether or not the Attorneys-in-Fact or any U.S.
Underwriter shall have received notice of such death, incapacity, dissolution,
winding up or distribution of assets or other event. Each Attorney-in-Fact is
authorized, on behalf of each of the Selling Shareholders, to execute this
Agreement and any other documents necessary or desirable in connection with the
sale of the Shares to be sold hereunder by such Selling Shareholder, to make
delivery of the certificates for such Shares, to receive the proceeds of the
sale of such Shares, to give receipts for such proceeds, to pay therefrom any
expenses to be borne by such Selling Shareholder in connection with the sale and
public offering of such Shares, to distribute the balance thereof to such
Selling Shareholder, and to take such other action as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
Each U.S Underwriter represents, warrants, covenants and agrees that,
except as contemplated under Section 2 of the Agreement Between U.S.
Underwriters and Managers dated the date hereof, (i) it is not purchasing any
Shares for the account of anyone other than a U.S. or Canadian Person, (ii) it
has not offered or sold, and will not offer, sell, resell or deliver, directly
or indirectly, any Shares or distribute any U.S. Prospectus outside the United
States or Canada or to anyone other than a U.S. or Canadian Person, and (iii)
any offer of Shares in Canada will be made only pursuant to an exemption from
the requirement to file a prospectus in the relevant province of Canada in which
such offer is made.
3. Terms of Public Offering. The Sellers have been advised by you that
the U.S. Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the U.S. Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the U.S.
Underwriters of and payment for the Firm Shares shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on ,
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1997 (the "Closing Date"). The place of closing for the Firm Shares and the
Closing Date may be varied by agreement among you, the Company and the
Attorneys-in-Fact.
Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at the
aforementioned office of Xxxxx Xxxxxx Inc. at such time on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
no event be earlier than the Closing Date nor earlier than two nor later than
ten business days after the giving of the notice hereinafter referred to, as
shall be specified in a written notice from you on behalf of the U.S.
Underwriters to the Company of the U.S. Underwriters' determination to purchase
a number, specified in such notice, of Additional Shares. The place of closing
for any Additional Shares and the Option Closing Date for such Shares may be
varied by agreement between you and the Company.
Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request by written notice, it being understood that a facsimile
transmission shall be deemed written notice, prior to 9:30 A.M., New York City
time, on the second business day preceding the Closing Date or any Option
Closing Date, as the case may be. Such certificates shall be made available to
you in New York City for inspection and packaging not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date or the
Option Closing Date, as the case may be. The certificates and stock powers
evidencing the Firm Shares and any Additional Shares to be purchased hereunder
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, against payment of the purchase price therefor in immediately
available funds.
5. Agreements of the Company. The Company agrees with the several U.S.
Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
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(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectuses or the Prospectuses 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 purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or other), business,
prospects, properties, net worth or results of operations, or of the happening
of any event, including the filing of any information, documents or reports
pursuant to the Exchange Act, that makes any statement of a material fact made
in the Registration Statement or the Prospectuses (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectuses (as then amended or
supplemented) in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectuses (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits to
the Registration Statement and will also furnish to you, without charge, such
number of conformed copies of the Registration Statement as originally filed and
of each amendment thereto, but without exhibits, as you may reasonably request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses of which you
shall not previously have been advised or to which you shall reasonably object
in writing after being so advised or (ii) so long as, in the written opinion of
counsel for the U.S. Underwriters (a copy of which shall be delivered to the
Company), a prospectus is required to be delivered in connection with sales by
any U.S. Underwriter or dealer, file any information, documents or reports
pursuant to the Exchange Act, without delivering a copy of such information,
documents or reports to you,
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as Representatives of the U.S. Underwriters, prior to or concurrently with such
filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered or will deliver to you, without charge, in such quantities
as you have reasonably requested or may hereafter reasonably request, copies of
each form of the U.S. Prepricing Prospectus. The Company consents to the use,
in accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Shares are offered by the several U.S.
Underwriters and by dealers, prior to the date of the U.S. Prospectus, of each
U.S. Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the written
opinion of counsel for the U.S. Underwriters a U.S. Prospectus is required by
the Act to be delivered in connection with sales by any U.S. Underwriter or
dealer, the Company will expeditiously deliver to each U.S. Underwriter and each
dealer, without charge, as many copies of the U.S. Prospectus (and of any
amendment or supplement thereto) as you may reasonably request. The Company
consents to the use of the U.S. Prospectus (and of any amendment or supplement
thereto) in accordance with the provisions of the Act and with the securities or
Blue Sky laws of the jurisdictions in which the Shares are offered by the
several U.S. Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering and sale of the Shares and for such period of time
thereafter as the U.S. Prospectus is required by the Act to be delivered in
connection with sales by any U.S. Underwriter or dealer. If during such period
of time any event shall occur that in the judgment of the Company or in the
written opinion of counsel for the U.S. Underwriters is required to be set forth
in the U.S. Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the U.S. Prospectus to comply with the Act or any other
law, the Company will make every reasonable effort to prepare and, subject to
the provisions of paragraph (d) above, file with the Commission an appropriate
supplement or amendment thereto and will expeditiously furnish to the U.S.
Underwriters and dealers a reasonable number of copies thereof. In the event
that the Company and you, as Representatives of the several Underwriters, agree
that the Prospectus should be amended or supplemented, the Company, if requested
by you, will
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promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the U.S.
Underwriters in connection with the registration or qualification of the Shares
for offering and sale by the several U.S. Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as you may reasonably
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to taxation or to service of process in suits,
other than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as reasonably
practicable after the end of such period, which consolidated earnings statement
shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission or the New York Stock
Exchange and (ii) from time to time such other information concerning the
Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 12 hereof or by notice given by you terminating this
Agreement pursuant to Section 12 or Section 13 hereof) or if this Agreement
shall be terminated by the U.S. Underwriters because of any failure or refusal
on the part of the Company or any of the Selling Shareholders to comply, in any
material respect, with the terms or fulfill, in any material respect, any of the
conditions of this Agreement, the Company agrees to reimburse the
Representatives for all reasonable out-of-pocket expenses (including reasonable
fees and expenses of counsel for the U.S. Underwriters) incurred by you in
connection herewith.
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(k) The Company will apply the net proceeds from the sale of the
Shares to be sold by it hereunder substantially in accordance with the
description set forth in the Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will make every
reasonable effort to timely file the Prospectuses pursuant to Rule 424(b) under
the Act and will advise you of the time and manner of such filing.
(m) For a period of 180 days after the date hereof (the "Lock-up
Period"), the Company will not, without the prior written consent of Xxxxx
Xxxxxx Inc., offer, sell, contract to sell or otherwise dispose of any Common
Stock (or any securities convertible into or exercisable or exchangeable for
Common Stock) or grant any options or warrants to purchase Common Stock that are
exercisable during the Lock-up Period, except for (i) sales to the U.S.
Underwriters pursuant to this Agreement and the Managers pursuant to the
International Underwriting Agreement, (ii) the issuance of Shares upon exercise
of outstanding options and [(iii) the issuance of Shares in connection with
acquisitions, provided that the recipients of such Shares agree not to sell the
Shares during the Lock-up Period.]
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current executive officers and directors and each of its stockholders designated
by you.
(o) Except as stated in this Agreement and in the International
Underwriting Agreement and in the Prepricing Prospectuses and Prospectuses, the
Company has not taken, nor will it take, directly or indirectly, any action
designed to or that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(p) The Company will use its best efforts to have the Common Stock
listed, subject to notice of issuance, on the New York Stock Exchange
concurrently with the effectiveness of the Registration Statement.
6. Agreements of the Selling Shareholders. Each of the Selling
Shareholders agrees with the several U.S. Underwriters as follows:
(a) Such Selling Shareholder will cooperate to the extent reasonably
necessary to cause the Registration Statement or
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any post-effective amendment thereto to become effective at the earliest
possible time.
(b) Such Selling Shareholder will pay all Federal and other taxes, if
any on the transfer or sale of such Shares that are sold by the Selling
Shareholder to the U.S. Underwriters.
(c) Such Selling Shareholder will do or perform all things required to
be done or performed by the Selling Shareholder prior to the Closing Date, as
the case may be, to satisfy all conditions precedent to the delivery of the
Shares pursuant to this Agreement.
(d) Such Selling Shareholder has executed or will execute a "lock-up"
letter as provided in Section 5(n) above and will not sell, contract to sell or
otherwise dispose of any Common Stock, except as provided therein or for the
sale of Shares to the Underwriters pursuant to this Agreement, prior to the
expiration of 180 days after the date of the Prospectus, without the prior
written consent of Xxxxx Xxxxxx Inc.
(e) Except as stated in this Agreement and the International
Underwriting Agreement and in the Prepricing Prospectuses and the Prospectuses,
such Selling Shareholder has not taken, nor will it take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(f) To the extent that any statements or omissions made in the
Registration Statement or the Prospectuses (as amended or supplemented, if
amended or supplemented) specifically refer to the information regarding a
Selling Shareholder under the caption "Principal and Selling Shareholders,"
such Selling Shareholder will advise you promptly upon becoming aware, and if
requested by you, will confirm such advice in writing, within the period of time
referred to in Section 5(f) hereof, of any change in such information that comes
to the attention of such Selling Shareholder that makes any statement made in
the Registration Statement or the Prospectuses (as then amended or supplemented)
untrue or which requires the making of any additions to or changes in the
Registration Statement or the Prospectuses (as then amended or supplemented) in
order to state a material fact required by the Act or the regulations thereunder
to be stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectuses (as then
amended or supplemented) to comply with the Act or any other law.
7. Representations and Warranties of the Company. The Company represents
and warrants to each U.S. Underwriter that:
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(a) Each U.S. Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act; except that
this representation and warranty does not apply to statements in or omissions
from such U.S. Prepricing Prospectus (or any amendment or supplement thereto)
made in reliance upon and in conformity with information relating to any Selling
Shareholder or to any U.S. Underwriter or Manager furnished to the Company in
writing by a U.S. Underwriter through the Representatives or by a Manager
through the Lead Managers expressly for use therein. The Commission has not
issued any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Registration Statement in the form in which it became or
becomes effective, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A(b),
and also in such form as it may be when any post-effective amendment thereto
shall become effective and the Prospectuses and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the Act, complied
or will comply in all material respects with the provisions of the Act and will
not at any such times 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; except that this representation and warranty
does not apply to statements in or omissions from the Registration Statement or
the Prospectuses made in reliance upon and in conformity with information
relating to any Selling Shareholder or to any U.S. Underwriter or Manager
furnished to the Company in writing by a U.S. Underwriter through the
Representatives or by a Manager through the Lead Managers expressly for use
therein.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares to be issued and sold
by the Company have been duly authorized and, when issued and delivered to the
U.S. Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and nonassessable and free of any preemptive
or similar rights; and the capital stock of the Company conforms to the
description thereof in the Registration Statement and the Prospectuses.
(d) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of New York, and within fourteen
days of the Closing Date will be a
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corporation duly organized and validly subsisting under the Commonwealth of
Pennsylvania with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectuses, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction where the nature of
its properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not and
will not (1) have a material adverse effect on the condition (financial or
other), business affairs, prospects, properties, shareholder's equity or results
of operations of the Company and the Subsidiaries (as hereinafter defined),
taken as a whole, (2) adversely affect the issuance, validity or enforceability
of the Shares or (3) adversely affect the consummation of any of the
transactions contemplated by this Agreement (each of (1), (2) and (3) above, a
"Material Adverse Effect").
(e) All the Company's subsidiaries (as defined in Rule 1-02(x) of
Regulation S-X and as required to be identified by Item 601(b)(21) of Regulation
S-K) are listed in an exhibit to the Registration Statement (collectively, the
"Subsidiaries"). Each Subsidiary is either (i) a corporation duly organized,
validly existing and in good standing in the jurisdiction of its incorporation,
or (ii) a partnership duly organized and validly existing under the applicable
laws of the Commonwealth of Pennsylvania. Each Subsidiary has the requisite
corporate or partnership, as the case may be, and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction or place
where the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not and will not individually or in the aggregate have a Material
Adverse Effect. All the outstanding shares of capital stock of each of the
corporate Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable, and are owned by the Company directly, or indirectly
through one or more of the other Subsidiaries, free and clear of any lien,
adverse claim, security interest, equity or other encumbrance, except that
Xxxxxx Xxxxx Command Company is only 99% owned (indirectly) by the Company.
(f) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of its
Subsidiaries which are materially adverse
14
to the Company and its Subsidiaries, taken as a whole, or to which the Company
or any of the Subsidiaries, or to which any of their respective properties, is
subject which are material to the Company and its Subsidiaries, taken as a
whole, that are required to be described in the Registration Statement or the
Prospectuses but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments relating to the Company that
are required to be described in the Registration Statement or the Prospectuses
or to be filed as an exhibit to the Registration Statement that are not
described or filed as required by the Act or the Exchange Act. The descriptions
of the terms of any such agreements, contracts, indentures, leases or other
instruments contained in the Registration Statement or the Prospectuses are
correct in all material respects.
(g) Neither the Company nor any of the Subsidiaries is in (i)
violation of its certificate or articles of incorporation or by-laws, or other
organizational documents, (ii) in violation of any statute, law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries or of any ruling, judgment, injunction, order or decree
of any court or governmental agency or body having jurisdiction over the Company
or any of the Subsidiaries (except where any such violation or violations in the
aggregate would not have a Material Adverse Effect), or (iii) in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound, and no condition or state of facts
exists, which with the passage of time or the giving of notice or both, would
constitute such a default (except where any such default or defaults in the
aggregate would not have a Material Adverse Effect).
(h) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or the International Underwriting
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby and thereby (i) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except as may be required for the registration of the Shares under the
Act and the Exchange Act (which has been effected) and such as may be required
under state or foreign securities laws) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
15
or articles of incorporation or bylaws, or other organizational documents, of
the Company or any of the Subsidiaries or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing (except as may be required for the registration of the
Shares under the Act and the Exchange Act (which has been effected) and such as
may be required under state or foreign securities laws) or judgment, injunction,
order or decree applicable to the Company or any of the Subsidiaries or any of
their respective properties, or will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
the Subsidiaries pursuant to the terms of any agreement or instrument to which
any of them is a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject other than security interests
granted pursuant to the Credit Agreement.
(i) The accountants, Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP,
who have certified or shall certify the financial statements filed or to be
filed as part of the Registration Statement or the Prospectuses (or any
amendment or supplement thereto) are independent public accountants as required
by the Act.
(j) The historical consolidated financial statements of the
Company, together with related schedules and notes forming part of the
Registration Statement and the Prospectuses (and any amendment or supplement
thereto), and, to the knowledge of the Company, the historical financial
statements of Security Archives, Inc. and Records Management Services, Inc.,
together with related schedules and notes forming part of the Registration
Statement and the Prospectus (and any amendment or supplement thereto) comply
with the requirements of the Act and present fairly the consolidated financial
position, results of operations, cash flows and changes in financial position of
the Company and the Subsidiaries and Security Archives, Inc. and Records
Management Services, Inc., as the case may be, on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; the statements and related schedules and notes of the Company
and, to the knowledge of the Company, the statements and related schedules and
notes of Security Archives, Inc. and Records Management Services, Inc., have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the pro forma financial information,
16
and the related notes thereto, included in the Registration Statement and the
Prospectuses (and any amendment or supplement thereto) have been prepared in
accordance with the applicable requirements of the Act and the assumptions used
in preparing such information are reasonable; and the other historical and pro
forma financial and statistical information and data set forth in the
Registration Statement and the Prospectuses (and any amendment or supplement
thereto) are accurately presented and prepared on a basis consistent with the
books and records of the Company and its Subsidiaries.
(k) The execution and delivery of, and the performance by the
Company of its obligations under, each of this Agreement and the International
Underwriting Agreement have been duly and validly authorized by the Company, and
each of this Agreement and the International Underwriting Agreement has been
duly executed and delivered by the Company and constitutes the valid and legally
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except (i) the enforceability hereof or thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) the remedy of specific performance and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which the proceedings may be brought and (iii) rights to indemnity
and contribution hereunder or thereunder may be limited by federal or state
securities laws or the public policy underlying such laws.
(l) Except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock of the Company, or material increase in the short-term debt or long-term
debt, of the Company or any of the Subsidiaries, or any development having or
which may reasonably be expected to involve, a prospective Material Adverse
Effect.
(m) Each of the Company and the Subsidiaries has good and valid
title to all property (real and personal) described in the Prospectuses as being
owned by it which is material to the business of the Company and its
Subsidiaries taken as a whole, free
17
and clear of all liens, claims, security interests or other encumbrances except
such as are described in the Registration Statement and the Prospectuses or in a
document filed as an exhibit to the Registration Statement and all the property
described in the Prospectuses as being held under lease by each of the Company
and the Subsidiaries which is material to the business of the Company and its
Subsidiaries taken as a whole is held by it under valid, subsisting and
enforceable leases with only such exceptions as in the aggregate do not
interfere in any material respect with the conduct of the business of the
Company and the Subsidiaries, taken as a whole or the use made or proposed to be
made of such property by the Company or its Subsidiaries.
(n) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date or the Option Closing Date, if any, and (ii)
completion of the distribution of the Shares, will not distribute any offering
material in connection with the offering and sale of the Shares other than the
Registration Statement, the Prepricing Prospectuses, the Prospectuses or other
materials, if any, permitted by the Act.
(o) Except as described in clause (d) above, the Company and each
of the Subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits") as are necessary to own its
respective properties and to conduct its business in the manner described in the
Prospectuses, except where the failure to so possess would not, individually or
in the aggregate, have a Material Adverse Effect and subject to such
qualifications as may be set forth in the Prospectuses; the Company and each of
the Subsidiaries has fulfilled and performed all its material obligations with
respect to such Permits and no event has occurred that allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such Permit,
subject in each case to such qualification as may be set forth in the
Prospectuses, except where any such revocation, termination or impairment would
not have a Material Adverse Effect; and, except as described in the
Prospectuses, none of such Permits contains any restriction that is materially
burdensome to the Company or any of the Subsidiaries.
(p) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
18
maintain accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(q) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary or received or retained
any funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectuses.
(r) The Company and, to the Company's knowledge, each of the
Subsidiaries have filed all tax returns required to be filed, which returns are
true and correct in all material respects, or extensions therefor, and neither
the Company nor any Subsidiary is in default in the payment of any taxes which
were payable pursuant to said returns or any assessments with respect thereto,
except where the failure to file such returns or to pay such taxes is not
reasonably likely to have a Material Adverse Effect.
(s) Except as described in the Prospectuses, no holder of any
security of the Company has any right to require registration of shares of
Common Stock or any other security of the Company because of the filing of the
Registration Statement or consummation of the transactions contemplated by this
Agreement or the International Underwriting Agreement, or otherwise. Except as
described in or contemplated by the Prospectuses, there are no outstanding
options, warrants or other rights calling for the issuance of, and there are no
commitments, plans or arrangements to issue, any shares of Common Stock of the
Company or any security convertible into or exchangeable or exercisable for
Common Stock of the Company.
(t) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registration, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectuses as being owned by them or any of them or necessary
for the conduct of their respective businesses except where the lack of such
ownership or possession would not, individually or in the aggregate, have a
Material Adverse Effect, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
the Subsidiaries with respect to the foregoing.
19
(u) The Company is not and, upon sale of the Shares to be issued
and sold in accordance herewith and upon application of the net proceeds to the
Company from such sale as described in the Prospectuses under the caption "Use
of Proceeds," will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(v) The Company and the Subsidiaries have complied with all
provisions of Florida Statutes, (S)517.075, relating to issuers doing business
with Cuba.
(w) The businesses of the Company and the Subsidiaries as presently
conducted and as described in the Prospectuses comply with all statutes, laws,
ordinances, administrative or governmental rules or regulations applicable to
the Company or any of the Subsidiaries (collectively, "Laws") and with all
orders, rulings, judgments, injunctions or decrees of any court or governmental
agency or body having jurisdiction over the Company or any of the Subsidiaries,
except for any failure to comply which would not, individually or in the
aggregate, have a Material Adverse Effect.
(x) 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; neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect, except as
described in or contemplated by the Prospectuses.
(y) No Subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary's capital stock, from repaying to the Company
any loans or advances to such Subsidiary from the Company or from transferring
any of such Subsidiary's property or assets to the Company or any other
Subsidiary of the Company, except as described in or contemplated by the
Prospectuses.
(z) Except for the shares of capital stock or partnership
interests of each of the Subsidiaries owned by the Company and such
Subsidiaries, neither the Company nor any such Subsidiary owns any shares of
stock or any other equity securities
20
of any corporation or has any equity interest in any firm, partnership,
association or other entity, except as described in or contemplated by the
Prospectuses.
(aa) There are no labor disputes with the Company's employees or
with employees of the Subsidiaries that exist or, to the Company's knowledge,
are imminent that could materially adversely affect the Company and the
Subsidiaries taken as a whole, and the Company is not aware of any existing or
imminent labor disturbance by any of its or the Subsidiaries' principal
suppliers, contractors or customers that could be expected to have a Material
Adverse Effect.
(ab) With respect to each employee benefit plan, program and
arrangement (including, without limitation, any "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), maintained or contributed to by the Company or the
Subsidiaries, or with respect to which the Company or the Subsidiaries could
incur any liability under ERISA (collectively, the "Benefit Plans"), no event
has occurred and there exists no condition or set of circumstances in connection
with which the Company or the Subsidiaries could be subject to any liability
under the terms of such Benefit Plan or applicable law (including, without
limitation, ERISA and the Internal Revenue Code of 1986, as amended (the
"Code")) that could have a Material Adverse Effect.
(ac) The Company and the Subsidiaries are (i) (A) in full compliance
with any and all applicable foreign, 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"), (B) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses, and (C) and are in full compliance with all terms
and conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect; (ii) except as disclosed in the Registration
Statement and the Prospectuses, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release, threatened release, or disposal of any material
(including radiation and noise), that could form the basis of any claim (whether
by a governmental authority or other person or entity) under
21
Environmental Laws for cleanup costs, damages, penalties, fines, or otherwise,
against any of the Company or the Subsidiaries, or against any person or entity
whose liability for such claim may have been retained by any of the Company or
the Subsidiaries, whether by contract or law; and (iii) the Company and the
Subsidiaries have fully disclosed to the Underwriters and their counsel all
studies, reports, assessments, audits and other information in their possession
or control relating to any pollution or release, threatened release or disposal
of materials regulated under Environmental Laws on, at, under, from or
transported from any of their currently or formerly owned, leased or operated
properties, including, without limitation, all information relating to
underground storage tanks and asbestos containing materials. Neither the
Company nor any of the Subsidiaries has been named as a "potentially responsible
party" under the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended ("CERCLA").
8. Representations and Warranties of the Selling Shareholders. Each
Selling Shareholder represents and warrants to each U.S. Underwriter that:
(a) Such Selling Shareholder now has, and on the Closing Date will
have, valid and marketable title to the Shares to be sold by such Selling
Shareholder, free and clear of any lien, claim, security interest or other
encumbrance, including, without limitation, any restriction on transfer, except
as otherwise described in the Prospectuses.
(b) Such Selling Shareholder now has, and on the Closing Date will
have, full legal right, power and authorization, and any approval required by
law, to sell, assign, transfer and deliver such Shares in the manner provided in
this Agreement and the International Underwriting Agreement, and upon delivery
of and payment for such Shares hereunder, the several U.S. Underwriters will
acquire valid and marketable title to such Shares free and clear of any lien,
claim, security interest, or other encumbrance.
(c) This Agreement, the International Underwriting Agreement and
the Custody Agreement have been duly authorized, executed and delivered by or on
behalf of such Selling Shareholder and are the valid and binding agreements of
such Selling Shareholder enforceable against such Selling Shareholder in
accordance with their terms, except that (i) the enforceability hereof or
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) the remedy
22
of specific performance and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which the
proceedings may be brought and (iii) rights to indemnity and contribution
hereunder or thereunder may be limited by federal or state securities laws or
the public policy underlying such laws.
(d) Neither the sale of the Shares, the execution, delivery or
performance of this Agreement, the International Underwriting Agreement or the
Custody Agreement by or on behalf of such Selling Shareholder nor the
consummation by or on behalf of such Selling Shareholder of the transactions
contemplated hereby and thereby (i) requires any consent, approval,
authorization or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except as may be required for the registration of the Shares under the
Act and the Exchange Act (which has been effected) and such as may be required
under state or foreign securities laws), or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder is or may be bound,
or violates or will violate any statute, law, regulation or filing or judgment,
injunction, order or decree applicable to such Selling Shareholder, or will
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of such Selling Shareholder pursuant to the terms of any
agreement or instrument to which such Selling Shareholder is a party or by which
such Selling Shareholder may be bound or to which any of the property or assets
of such Selling Shareholder is subject.
(e) The information pertaining to such Selling Shareholder
provided to the Company for inclusion under the caption "Principal and Selling
Shareholders" in the Prospectuses, does not and will not contain an 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.
(f) The representations and warranties of such Selling Shareholder
in the Custody Agreement are, and on the Closing Date and any Option Closing
Date will be, true and correct.
(g) Such Selling Shareholder has not taken, directly or indirectly,
any action designed to or that might reasonably be expected to cause or result
in stabilization or manipulation of the price of the Common Stock to facilitate
the sale or resale of the
23
Shares, except for the lock-up arrangements referred to in the Prospectuses.
(h) Such Selling Shareholder has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection with the
offering and sale of the Shares.
9. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless you and each other U.S. Underwriter and each person,
if any, who controls any U.S. Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any U.S. Prepricing Prospectus
or in the Registration Statement or the U.S. Prospectus or in any amendment or
supplement thereto, or arising out of or based upon 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 expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such U.S. Underwriter or Manager furnished in
writing to the Company by or on behalf of any U.S. Underwriter through you or by
or on behalf of any Manager through a Lead Manager expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any U.S. Prepricing Prospectus shall not
inure to the benefit of any U.S. Underwriter (or to the benefit of any person
controlling such U.S. Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Shares by such U.S.
Underwriter to any person if a copy of the U.S. Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such U.S.
Prepricing
24
Prospectus was corrected in the U.S. Prospectus, provided that the Company has
delivered the U.S. Prospectus to the several U.S. Underwriters in requisite
quantity on a timely basis to permit such delivery or sending.
(b) If any action, suit or proceeding shall be brought against any
U.S. Underwriter or any person controlling any U.S. Underwriter in respect of
which indemnity may be sought against the Company or any Selling Shareholder,
such U.S. Underwriter or such controlling person shall promptly notify the
parties against whom indemnification is being sought (the "indemnifying
parties"), and such indemnifying parties shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses;
provided, however, that the failure so to notify the indemnifying parties shall
not relieve the indemnifying parties from any obligation or liability except to
the extent that the indemnifying parties have been prejudiced materially by such
failure. Such U.S. Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such U.S. Underwriter or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such fees and
expenses, (ii) the indemnifying parties have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such U.S. Underwriter
or such controlling person and the indemnifying parties and such U.S.
Underwriter or such controlling person shall have been advised by its counsel in
writing that representation of such indemnified party and any indemnifying party
by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of such U.S. Underwriter or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such U.S.
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Xxxxx Xxxxxx Inc., and that all such fees and expenses as required
25
to be paid by the indemnifying parties hereunder shall be reimbursed as they are
incurred. The indemnifying parties shall not be liable for any settlement of
any such action, suit or proceeding effected without their written consent, but
if settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying parties agree
to indemnify and hold harmless any U.S. Underwriter, to the extent provided in
the preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, the Company, its directors, its
officers who sign the Registration Statement, and any person who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with respect to the information furnished in writing
by or on behalf of such Selling Shareholder expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto; provided, however, the liability of a Selling
Shareholder under this paragraph (c) shall not exceed the proceeds received by
such Selling Shareholder from the sale of such Selling Shareholder's shares
hereunder. If any action, suit or proceeding shall be brought against any
Underwriter, any such controlling person of any Underwriter, the Company, any of
its directors, any such officer, or any such controlling person of the Company,
based on the Registration Statement, the Prospectus or any Prepricing Prospectus
or any amendment or supplement thereto, and in respect of which indemnity may be
sought against any Selling Shareholder pursuant to this paragraph (c), such
Selling Shareholder shall have the rights and duties given to the Company by
paragraph (b) above (except that if the Company shall have assumed the defense
thereof such Selling Shareholder shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such Selling Shareholder's expense),
and each Underwriter, each such controlling person of any Underwriter, the
Company, its directors, any such officer, and any such controlling person of the
Company shall have the rights and duties given to the Underwriters by paragraph
(b) above. The foregoing indemnity agreement shall be in addition to any
liability which any Selling Shareholder may otherwise have.
(d) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, any person who controls the Company within the
meaning of Section 15 of the Act or
26
Section 20(a) of the Exchange Act and the Selling Shareholders, to the same
extent as the foregoing indemnity from the Company and the Selling Shareholders
to each U.S. Underwriter, insofar as such losses, claims, damages, liabilities
and expenses arise out of or are based upon the untrue statement or alleged
untrue statement of a material fact contained in any U.S. Prepricing Prospectus
or in the Registration Statement or the U.S. Prospectus or in any amendment or
supplement thereto, or arise out of or are based upon 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, in each case to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such U.S. Underwriter through you
specifically for use therein. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, any such
controlling person or any Selling Shareholder based on the Registration
Statement, the U.S. Prospectus or any U.S. Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any U.S. Underwriter pursuant to this paragraph (d), such U.S.
Underwriter shall have the rights and duties given to the Company by paragraph
(b) above (except that if the Company or the Selling Shareholders shall have
assumed the defense thereof such U.S. Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such U.S.
Underwriter's expense), and the Company, its directors, any such officer, any
such controlling person, and the Selling Shareholders, shall have the rights and
duties given to the U.S. Underwriters by paragraph (b) above.
(e) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a), (c) or (d) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an 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 or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholders on the one hand and the U.S. Underwriters
on the other hand from the offering of the Shares, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand
27
and the U.S. Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Shareholders on the one hand
and the U.S. Underwriters 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 Company and the Selling Shareholders bear to the total
underwriting discounts and commissions received by the U.S. Underwriters, in
each case as set forth in the table on the cover page of the U.S. Prospectus;
provided that, in the event that the U.S. Underwriters shall have purchased any
Additional Shares hereunder, any determination of the relative benefits received
by the Company, the Selling Shareholders or the U.S. Underwriters from the
offering of the Shares shall include the net proceeds (before deducting
expenses) received by the Company, and the underwriting discounts and
commissions received by the U.S. Underwriters, from the sale of such Additional
Shares, in each case computed on the basis of the respective amounts set forth
in the notes to the table on the cover page of the U.S. Prospectus. The
relative fault of the Company and the Selling Shareholders on the one hand and
the U.S. 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 Shareholders on the one hand
or by the U.S. Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company, the Selling Shareholders and the U.S. Underwriters
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the U.S.
Underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in paragraph (e) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in paragraph (e) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the provisions
of this Section 9, no U.S. Underwriter shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the
28
amount of any damages which such U.S. Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. Notwithstanding the provisions of this Section 9, no Selling
Shareholder shall be required to contribute any amount in excess of the total
net proceeds of the Shares sold by such Selling Shareholder. 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 U.S. Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to the respective numbers
of Firm Shares set forth opposite their names in Schedule II hereto (or such
numbers of Firm Shares increased as set forth in Section 12 hereof) and not
joint.
(g) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(h) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 9 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 9 and the
representations and warranties of the Company and the Selling Shareholders set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any U.S. Underwriter
or any person controlling any U.S. Underwriter, the Company, its directors or
officers or the Selling Shareholders, any director, officer or partner of a
Selling Shareholder or any person controlling the Company or any Selling
Shareholder, (ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any U.S. Underwriter or
any person controlling any U.S. Underwriter, or to the Company, its directors or
officers, or to a Selling Shareholder, any director, officer or partner of a
Selling Shareholder or any person controlling the Company or any Selling
Shareholder, shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 9.
29
10. Conditions of U.S. Underwriters' Obligations. The several
obligations of the U.S. Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M. New York City time, on the date hereof, or at
such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any U.S. Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectuses or
otherwise) shall have been complied with to your reasonable satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectuses, which in your opinion, as
Representatives of the several U.S. Underwriters, would materially adversely
affect the market for the Shares, or (ii) any event or development relating to
or involving the Company or any officer or director of the Company or any
Selling Shareholder which makes any statement made in the Prospectuses untrue or
which, in the opinion of the Company and its counsel or the U.S. Underwriters
and their counsel, requires the making of any addition to or change in the
Prospectuses in order to state a material fact required by the Act or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectuses to reflect such
event or development would, in your opinion, as Representatives of the several
U.S. Underwriters, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of Cozen
and X'Xxxxxx, counsel for the Company and the Selling Shareholders, dated the
Closing Date and addressed to you, as Representatives of the several U.S.
Underwriters, to the effect that:
30
(i) The Company is a corporation duly incorporated and validly
subsisting under the laws of the Commonwealth of Pennsylvania with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectuses, [and is duly registered and qualified to conduct its business and
is in good standing in each jurisdiction or place where the nature or the
conduct of the business transacted or property owned or leased by it makes such
registration or qualification necessary, except where the failure so to register
or qualify or be in good standing would not have a Material Adverse Effect];
(ii) Each of the Subsidiaries is either (A) a corporation duly
organized and validly existing in good standing under the laws of the
jurisdiction of its organization, or (B) a limited partnership duly organized
under the laws of the Commonwealth of Pennsylvania; [with full corporate power
and authority to own, lease, and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectuses (and
any amendment or supplement thereto); and all the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, and are owned by the Company directly, free
and clear of any perfected security interest, or, to the best knowledge of such
counsel after reasonable inquiry, any other security interest, lien, adverse
claim, equity or other encumbrance];
(iii) The authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectuses; and the
authorized capital stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the Prospectuses under the
caption "Description of Capital Stock";
(iv) All the shares of capital stock of the Company outstanding
prior to the issuance of the Shares to be issued and sold by the Company
pursuant to the Underwriting Agreements have been duly authorized and validly
issued, are fully paid and nonassessable;
(v) The Underwritten Shares to be issued and sold to the U.S.
Underwriters and Managers by the Company under the U.S. Underwriting Agreement
and the International Underwriting Agreement have been duly authorized and when
issued and delivered to the U.S. Underwriters and Managers against payment
therefor in accordance with the terms of the U.S. Underwriting Agreement and the
International Underwriting Agreement, will be validly issued, fully
31
paid and nonassessable and free of any (A) preemptive rights or (B) to the best
knowledge of such counsel after reasonable inquiry, similar rights that entitle
or will entitle any person to acquire any Shares upon the issuance thereof by
the Company;
(vi) The form of certificates for the Shares conforms to
the requirements of the Pennsylvania Business Law of 1988, as amended;
(vii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the knowledge of
such counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose are pending before
or contemplated by the Commission; and any required filing of the Prospectuses
pursuant to Rule 424(b) has been made in accordance with Rule 424(b);
(viii) The Company has the requisite corporate power and
authority to enter into the U.S. Underwriting Agreement and the International
Underwriting Agreement and to issue, sell and deliver the Underwritten Shares to
be sold by it to the U.S. Underwriters and Managers as provided therein, and
each of the U.S. Underwriting Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by the Company and
is a legal, valid and binding agreement of the Company,
(ix) Neither the Company nor any of the Subsidiaries is (A)
in violation of its respective certificate of incorporation or bylaws or other
organizational documents or (B) to the knowledge of such counsel, in default in
the performance of any material obligation, agreement or condition contained in
any bond, debenture, note or other evidence of indebtedness, except as may be
disclosed in the Prospectuses or where any such default or defaults in the
aggregate would not, singularly or in the aggregate, have a Material Adverse
Effect;
(x) Neither the offer, issuance, sale or delivery of the
Underwritten Shares, nor the execution, delivery or performance of the U.S.
Underwriting Agreement or the International Underwriting Agreement, or
compliance by the Company with all provisions of this Agreement and the
International Underwriting Agreement, nor consummation by the Company of the
transactions contemplated hereby or by the International Underwriting Agreement
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate of incorporation or bylaws or other
organizational document of the Company or any of
32
the Subsidiaries or any material agreement, indenture, lease or other instrument
known to such counsel to which the Company is a party or by which it or any of
its properties is bound that is made an exhibit to the Registration Statement,
or, except as disclosed in the Registration Statement, will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of the Subsidiaries under any such agreement,
indenture, lease or other instrument, nor, to such counsel's knowledge will any
such action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky laws), or
any ruling, judgment, injunction, order or decree of any court or governmental
entity or instrumentality known to such counsel, and applicable to the Company,
the Subsidiaries or any of their respective properties;
(xi) No consent, approval, authorization or other order, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company (except as have been obtained under the Act or such as may be required
under state or foreign securities or Blue Sky laws governing the purchase and
distribution of the Shares) for the valid issuance and sale of the Shares to the
U.S. Underwriters as contemplated by the U.S. Underwriting Agreement;
(xii) The Registration Statement and the Prospectuses and
any supplements or amendments thereto (except for the financial statements,
schedules, and notes thereto and other financial and statistical data included
therein, as to which such counsel need not express any opinion) comply as to
form in all material respects with the requirements of the Act;
(xiii) To the knowledge of such counsel, (A) other than as
described or contemplated in the Prospectuses, there are no legal or
governmental proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company, the Subsidiaries or any of their
respective properties, is subject which are required to be described in the
Registration Statement or Prospectuses (or any amendment or supplement thereto)
and (B) there are no agreements, contracts, indentures, leases or other
instruments relating to the Company or any of the Subsidiaries, of a character
that are required to be described in the Registration Statement or the
Prospectuses (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement that are not described or filed as
required, as the case may be;
33
(xiv) To the knowledge of such counsel, the U.S.
Underwriting Agreement, the International Underwriting Agreement and the Custody
Agreement have each been duly authorized, executed and delivered by or on behalf
of each of the Selling Shareholders [and are valid and binding agreements of
each Selling Shareholder enforceable against each Selling Shareholder in
accordance with their respective terms except that (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally, (ii)
the remedy of specific performance and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the court before
which the proceedings may be brought and (iii) rights to indemnity and
contribution thereunder may be limited by Federal or state securities laws or
the public policy underlying such laws];
[(xv) To the best knowledge of such counsel after reasonable
inquiry and except as set forth in the Prospectuses, neither the Company nor any
of the Subsidiaries is in violation of any Laws or of any ruling, judgment,
injunction, order or decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries which violation or
violations would not, singularly or in the aggregate, have a Material Adverse
Effect;]
[(xvi) The Company and each of the Subsidiaries has all
necessary orders, consents, approvals, permits, licenses, franchises and
authorizations of and from all regulatory authorities to conduct their
respective businesses as described in the Registration Statement and
Prospectuses, except, in any case, where the failure to so possess would not,
singularly or in the aggregate, have a Material Adverse Effect, and to the best
of such counsel's knowledge after due inquiry, neither the Company nor the
Subsidiaries has received any actual notification from any regulatory authority
to the effect that any additional approval is required to be obtained by the
Company or the Subsidiaries;]
(xvii) The statements in the Registration Statement and
Prospectuses, insofar as they are descriptions of contracts, agreements or other
legal documents, or refer to statements of law or legal conclusions, are
accurate in all material respects and present fairly the information required to
be shown;
(xviii) Except as described in the Prospectuses, such counsel
does not know of any outstanding option, warrant or other right calling for the
issuance of, and such counsel does not know of any commitment, plan or
arrangement to issue, any share of
34
capital stock of the Company or any security convertible into or exchangeable or
exercisable for capital stock of the Company; and such counsel does not know of
any holder of any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue to
them, or permit them to underwrite the sale of, any of the Shares or the right
to have any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of Common Stock or
other securities of the Company;
(xix) The Company is not now and upon the sale of the Shares
to be issued and sold in accordance herewith and upon application of the net
proceeds from such sale as described in the Prospectuses under the caption "Use
of Proceeds" will not be an "investment company" within the meaning of the 1940
Act;
[(xx) The Company and the Subsidiaries own or possess all
patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade secrets and
rights described in the Prospectuses as being owned by them or any of them or,
to the best knowledge of such counsel after reasonable inquiry, necessary for
the conduct of their respective businesses, except where the failure to so own
or possess would not, singularly or in the aggregate, have a Material Adverse
Effect, and such counsel is not aware of any claim to the contrary or any
challenge by any other person to the rights of the Company and the Subsidiaries
with respect to the foregoing;]
(xxi) Each Selling Shareholder has full legal right, power
and authorization, and any approval required by law (except such as may be
required under state or foreign securities or Blue Sky laws), to sell, assign,
transfer and deliver good and valid title to the Shares which such Selling
Shareholder has agreed to sell pursuant to the U.S. Agreement and the
International Underwriting Agreement;
(xxii) The execution and delivery of this Agreement and the
sale of the Shares by each Selling Shareholder to the Underwriters, and
compliance by such Selling Shareholder with the terms of this Agreement,
including the delivery to the Underwriters of certificates evidencing such
shares and the execution and delivery to the Underwriters of a stock power in
blank, have been duly authorized by all necessary action on the part of such
Selling Shareholder and to the knowledge of such counsel, do not, and will not,
conflict with, or result in a breach
35
of any of the terms and provisions of, or constitute a default under (I) any
statute, rule or regulation (assuming compliance with all applicable state
securities and Blue Sky laws) relating to such Selling Shareholder or its legal
or regulatory status in each case, that in the experience of such counsel are
normally applicable to transactions of the type provided for in this Agreement,
(II) any material judgment, order, rule, injunction or regulation of any court
or governmental agency or body, domestic or foreign, known to such counsel as
having jurisdiction over such Selling Shareholder or any of its respective
properties or (III) any material contract, agreement or other instrument known
to such counsel to which such Selling Shareholder is a party or by which it or
any of its properties are subject;
(xxiii) Upon consummation of the sale of the Shares pursuant
to this Agreement, assuming the Underwriters purchased the Shares for value, in
good faith and without notice of adverse claim, the Underwriters will have
acquired all rights of the Selling Shareholder in the Shares free and clear of
any security interest, mortgage, lien, pledge, encumbrance, claim or equity,
[and the owner of the Shares, if other than such Selling Shareholder, is
precluded from asserting against the Underwriters the ineffectiveness of any
unauthorized endorsement].
In addition, such counsel shall state that although counsel has not
undertaken, [except as otherwise indicated in their opinion,] to determine
independently, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements in the Registration Statement
[(except to the extent set forth in paragraphs (iii) and (xvii) above),] such
counsel has participated in the preparation of the Registration Statement and
the Prospectuses, including general review and discussion of the contents
thereof and nothing has come to the attention of such counsel that would lead
them to believe that the Registration Statement at the time the Registration
Statement became effective, or the Prospectuses, as of their respective dates
and as of the Closing Date or the Option Closing Date, as the case may be,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated or, necessary to make the statements therein, in the
case of the Prospectuses, in the light of the circumstances under which they
were made, not misleading or that any amendment or supplement to the
Prospectuses, as of its respective date, and as of the Closing Date or the
Option Closing Date, as the case may be, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated in the
Prospectuses or necessary in order to make the statements therein, in the case
of the Prospectuses, in the light
36
of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no statement with respect to the
financial statements, financial schedules, pro forma financial statements and
the notes thereto and other financial and statistical data included in the
Registration Statement or the Prospectuses).
In rendering their opinion as aforesaid, counsel may, as to factual
matters, rely, to the extent such counsel deems proper, upon written
certificates or statements of officers of the Company and the Selling
Shareholders and, as to matters of law, may rely upon an opinion or opinions,
each dated the Closing Date, of other counsel retained by them or the Company as
to laws of any jurisdiction other than the United States or the Commonwealth of
Pennsylvania. The foregoing opinion may be limited to the federal laws of the
United States of America and the Commonwealth of Pennsylvania, and counsel
rendering the foregoing opinion may rely as to questions of fact upon the
representations of the Selling Shareholders as set forth in this Agreement and
in the Custody Agreement.
(d) You shall have received on the Closing Date an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, counsel for the U.S. Underwriters,
dated the Closing Date, with respect to the matters referred to in clauses (v)
(other than subclause (B) thereof), (vii), (viii), (x) and the paragraph
immediately following clause (xxiii) of the foregoing paragraph (c) and such
other related matters as you may request.
(e) You shall have received letters addressed to you, as
Representatives of the several U.S. Underwriters, and dated the date hereof and
the Closing Date from Xxxxxx Xxxxxxxx LLP and Deloitte & Touche LLP independent
certified public accountants, substantially in the forms heretofore approved by
you.
(f)(i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any material change in the capital stock of the Company nor any
material increase in the short-term or long-term debt of the Company (other than
in the ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectuses (or any amendment or Supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectuses
(or any amendment or
37
supplement thereto), except as may otherwise be stated or contemplated in the
Registration Statement and Prospectuses (or any amendment or supplement
thereto), any material adverse change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and the Significant Subsidiaries taken as a whole; (iv) the Company and
the Subsidiaries shall not have any liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), that are
material to the Company and the Subsidiaries taken as a whole, other than those
reflected in the Registration Statement or the Prospectuses (or any amendment or
supplement thereto); and (v) all the representations and warranties of the
Company contained in this Agreement shall be true and correct [in all material
respects] on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date, and you shall have received a certificate,
dated the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you), to the effect set forth in this Section 10(f) and in Section 10(g) hereof.
(g) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(h) All the representations and warranties of the Selling
Shareholders contained in this Agreement and in the International Underwriting
Agreement shall be true and correct, on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by or on behalf of
each of the Selling Shareholders to the effect set forth in this Section 10(h)
and in Section 10(i) hereof.
(i) The Selling Shareholders shall not have failed at or prior to
the Closing Date to have performed or complied in all material respects with any
of their agreements contained in this Agreement or the International
Underwriting Agreement and required to be performed or complied with by them at
or prior to the Closing Date.
(j) The Sellers shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have reasonably
requested.
38
(k) The Common Stock shall have been listed or approved for
listing, subject to notice of issuance, on the New York Stock Exchange.
(l) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the Closing Date.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company or
any Attorney-in-Fact or any Selling Shareholder and delivered to you, as
Representatives of the U.S. Underwriters, or to counsel for the U.S.
Underwriters, shall be deemed a representation and warranty by the Company, the
Selling Shareholders or the particular Selling Shareholder, as the case may be,
to each U.S. Underwriter as to the statements made therein.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the satisfaction on and as of any
Option Closing Date of the conditions set forth in this Section 10, except that,
if any Option Closing Date is other than the Closing Date, the certificates,
opinions and letters referred to in this Section 10 shall be dated the Option
Closing Date in question and the opinions or letters called for by paragraphs
(c), (d), (e) and (f) shall be revised to reflect the sale of Additional Shares.
11. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by the Company of
its obligations hereunder: (i) the printing (or reproduction) and filing with
the Commission and delivery (including postage, air freight (or reproduction)
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp taxes
in connection with the original issuance and sale of the Shares by the Company;
(iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the original
issuance
39
and sale of the Shares; (v) the registration of the Common Stock under the
Exchange Act and the listing of the Shares on the New York Stock Exchange; (vi)
the registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel for
the Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc.; (viii) the transportation and other expenses incurred by or on behalf of
representatives of the Company in connection with presentations to prospective
purchasers of the Shares; and (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company. Each Selling Shareholder agrees to pay for any
transfer taxes on the sale by such Selling Shareholder of such Selling
Shareholder's Shares to the U.S. Underwriters.
12. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Shares may commence, when notification of
the effectiveness of the registration statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying you, or
by you, as Representatives of the several U.S. Underwriters, by notifying the
Company and the Selling Shareholders.
If any one or more of the U.S. Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting U.S.
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the U.S.
Underwriters are obligated to purchase on the Closing Date, each non-defaulting
U.S. Underwriter shall be obligated, severally, in the proportion which the
number of Firm Shares set forth opposite its name in Schedule II hereto bears to
the aggregate number of Firm Shares set forth opposite the names of all non-
defaulting U.S. Underwriters or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Xxxxx
Xxxxxx Inc., to purchase the Shares which such defaulting U.S. Underwriter or
40
Underwriters are obligated, but fail or refuse, to purchase. If any one or more
of the U.S. Underwriters shall fail or refuse to purchase Shares which it or
they are obligated to purchase on the Closing Date and the aggregate number of
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the U.S. Underwriters are obligated to purchase
on the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting U.S. Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting U.S. Underwriter or the Company. In any such case which
does not result in termination of this Agreement, either you or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
U.S. Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "U.S. Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule II hereto which, with your approval and the approval of the Company,
purchases Shares which a defaulting U.S. Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 12 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
13. Termination of Agreement. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
U.S. Underwriter to the Company or any Selling Shareholder, by notice to the
Company, if prior to the Closing Date or any Option Closing Date (if different
from the Closing Date and then only as to the Additional Shares), as the case
may be, (i) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering
41
price to the public set forth on the cover page of the U.S. Prospectus or to
enforce contracts for the resale of the Shares by the U.S. Underwriters.
Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
14. Information Furnished by the U.S. Underwriters. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover page, and the statements in the [ through ] paragraphs under
the caption "Underwriting" in any U.S. Prepricing Prospectus and in the U.S.
Prospectus constitute the only information furnished by or on behalf of the U.S.
Underwriters through you as such information is referred to in Sections 7(b) and
9 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5, 12 and 13
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or the Selling Shareholders
at the office of the Company at, 000 Xxxx Xxxxxx, Xxxx xx Xxxxxxx, XX, 00000,
Attention: , [ ]; or (ii) if to you, as Representatives of the
several U.S. Underwriters, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several U.S. Underwriters, the Company, its directors and officers, the other
controlling persons referred to in Section 9 hereof and the Selling Shareholders
and their respective successors and assigns, to the extent provided herein, and
no other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns"
as used in this Agreement shall include a purchaser from any U.S. Underwriter of
any of the Shares in his status as such purchaser.
16. Applicable Law; Counterparts. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless
42
at least one counterpart hereof shall have been executed and delivered on behalf
of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Shareholders and the several U.S. Underwriters.
Very truly yours,
XXXXXX XXXXX CORP.
By .......................
President and Chief
Executive Officer
Each of the Selling Shareholders
named in Schedule I hereto
By ..........................
Attorney-in-Fact
By .......................
Attorney-in-Fact
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several U.S.
Underwriters named in Schedule II
hereto.
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
PAINEWEBBER INCORPORATED
As Representatives of the Several U.S. Underwriters
By XXXXX XXXXXX INC.
By ............................
Managing Director
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SCHEDULE I
XXXXXX, XXXXX CORP.
Part A - Firm Shares
--------------------
Number of
Selling Shareholders Firm Shares
-------------------- -----------
--------------
Total........
--------------
45
SCHEDULE II
XXXXXX XXXXX CORP.
Number of Number of
Underwriter Firm Shares Underwriter Firm Shares
----------- ----------- ----------- -----------
Xxxxx Xxxxxx Inc. ..........
Xxxxxxx Xxxxx & Co.
PaineWebber Incorporated...
-----------
Total.....
-----------
46
