Exhibit 1.1
THE XXXXX COMPANY
COMMON STOCK
UNDERWRITING AGREEMENT
February 3, 2004
To the Representative of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time The Xxxxx Company, a Maryland corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell to the firms
named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and
the securities specified therein) certain shares of its Common Stock, par
value $0.01 per share (the "Shares"), specified in Schedule I to such
Pricing Agreement (with respect to such Pricing Agreement, the "Firm
Shares"). If specified in such Pricing Agreement, the Company may grant to
the Underwriters the right to purchase at their election an additional
number of Shares, specified in such Pricing Agreement as provided in
Section 3 hereof (the "Optional Shares"). The Firm Shares and the Optional
Shares, if any, which the Underwriters elect to purchase pursuant to
Section 3 hereof are herein collectively called the "Designated Shares").
The terms and conditions of any particular issuance of Designated
Shares shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The
term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to an Underwriter or Underwriters
who act without any firm being designated as its or their representatives.
This Underwriting Agreement (the "Agreement") shall not be construed as an
obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase the Shares. The obligation of the
Company to issue and sell any of the Shares and the obligation of any of
the Underwriters to purchase any of the Shares shall be evidenced by the
Pricing Agreement with respect to the Designated Shares specified therein.
Each Pricing Agreement shall specify the aggregate number of Firm Shares,
the maximum number of Optional Shares, if any, the initial public offering
price of such Firm Shares and Optional Shares or the manner of determining
such price, the purchase price to the Underwriters of such Designated
Shares, the names of the Underwriters of such Designated Shares, the names
of the Representatives of such Underwriters and the number of
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such Designated Shares to be purchased by each Underwriter and the
commission, if any, payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such Firm Shares
and Optional Shares, if any, and payment therefor. The Pricing Agreement
shall also specify (to the extent not set forth in the registration
statement and prospectus with respect thereto) the terms and conditions of
such Designated Shares. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of facsimile communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing
Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-67137) in
respect of the Shares has been (i) prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) filed with the Commission
under the Act and (iii) declared effective by the Commission; the
registration statement, as amended at the date of this Agreement, meets the
requirements set forth in Rule 415(a)(1)(x) under the Act and complies in
all material respects with such Rule; and no stop order suspending the
effectiveness of the registration statement or any post-effective amendment
thereto, if any, has been issued, and no proceeding for that purpose has
been initiated or threatened by the Commission; the Company proposes to
file with the Commission pursuant to Rule 424(b) under the Act ("Rule
424(b)") a supplement to the form of prospectus included in the
registration statement relating to the offering of the Designated Shares
and has previously advised you of all information (financial and other)
with respect to the Company to be set forth therein. The term "Registration
Statement" means the registration statement, as amended as of the date of
the Company's Annual Report on Form 10-K for the year ended December 31,
2002 (the "2002 Form 10-K"), as amended at the date of this Agreement and
as amended from time to time hereafter, including the exhibits thereto, and
the 2002 Form 10-K and all other documents incorporated or deemed to be
incorporated therein by reference pursuant to Item 12 of Form S-3 (the
"Incorporated Documents"), and such prospectus as then amended, including
the Incorporated Documents, is hereinafter referred to as the "Base
Prospectus"; and such supplemented form of prospectus, in the form in which
it shall be filed with the Commission pursuant to Rule 424(b) (including
the Base Prospectus as so supplemented), is hereinafter called the
"Prospectus". The Base Prospectus, as the same may be amended or
supplemented from time to time by a preliminary form of prospectus
supplement relating to the Designated Shares, as and if filed pursuant to
Rule 424(b), is hereinafter called a "Preliminary Prospectus". Any
reference herein to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the Incorporated Documents that were filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or the Act, as the case may be, on or before the issue date of any
Preliminary Prospectus or the issue date of the Prospectus, as the case may
be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
filing of any Incorporated Documents under the Exchange Act or the Act, as
the case may be, after the date of the Pricing Agreement or the issue date
of the Base Prospectus, any Preliminary
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Prospectus or the Prospectus, as the case may be, and deemed to be
incorporated therein by reference;
(b) The documents incorporated or deemed to be incorporated by
reference in the Prospectus, when they were filed with the Commission or
became effective, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and any further documents so filed
and incorporated by reference in the Prospectus, when such documents are
filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act and will not contain an untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein not misleading;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder; the
Registration Statement and any amendment thereto do not and will not, as of
the applicable effective date, 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; the Prospectus
does not contain and as amended or supplemented will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus relating to such Shares;
(d) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
issuances of capital stock (i) pursuant to bonus stock awards granted in
the ordinary course of business, (ii) upon exercise of options and stock
appreciation rights and upon conversions or redemptions of convertible
securities and (iii) pursuant to the terms of the Contingent Stock
Agreement, effective as of January 1, 1996, executed in connection with the
acquisition by the Company of all of the outstanding equity interests in
The Xxxxxx Corporation and its affiliated partnership, Xxxxxx Xxxxxx
Properties, Limited Partnership (the "Contingent Stock Agreement"), in each
case, except with respect to bonus stock awards granted in the ordinary
course of business, which were outstanding as of the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus), or any material and adverse change in the long-term debt of
the Company and its subsidiaries, taken as a whole (it being understood
that, absent unusual circumstances, an increase in long term debt of the
Company and its subsidiaries, taken as a whole, of less than 5% would not
be a material and adverse change to
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the Company and its subsidiaries, taken as a whole), or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the, business, properties, management, financial
condition or results of operations (based on Funds From Operations)
("Material Adverse Effect") of the Company and its subsidiaries, taken as a
whole, except as set forth or contemplated in the Prospectus;
(e) Except as noted therein, the consolidated financial statements,
and the related notes thereto, incorporated by reference in the
Registration Statement and the Prospectus present fairly in all material
respects the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
their operations and changes in their consolidated cash flows for the
periods specified; and such financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States applied on a consistent basis; the supporting schedules incorporated
by reference in the Registration Statement present fairly in all material
respects the information required to be stated therein; and the pro forma
financial information, and the related notes thereto, contained or
incorporated by reference in the Registration Statement and the Prospectus
fairly present in all material respects the information contained therein
and have been prepared on a reasonable basis using reasonable assumptions
and on a basis consistent with the segment accounting principles and
policies of the Company reflected in such financial statements;
(f) The Company and its subsidiaries have, or, in those cases where
such subsidiary is a general partner in a partnership, such partnership
has, good and marketable fee simple and/or leasehold title (as the case may
be) to all real property owned by it or them (except for those lesser
estates in real property which, in the aggregate, are not material in value
to the Company and its subsidiaries), subject only to (A) those liens and
encumbrances which have been reflected generally or in the aggregate in the
financial statements of the Company as disclosed in the Prospectus or as
are described specifically, generally or in the aggregate in the
Prospectus, or (B) such liens and encumbrances (i) not required by
generally accepted accounting principles to be disclosed in the financial
statements of the Company, which (a) if all material covenants and
conditions thereof are observed or performed, will not materially interfere
with the use made or proposed to be made of such property by the Company
and its subsidiaries or (b) are reasonable and customary with regard to the
normal operation of land and improvements held for commercial purposes by
first class owners and operators of commercial real estate, or (ii) which
were incurred after the date of the latest audited financial statements
included or incorporated by reference in the Prospectus in the ordinary
course of business (including financings) and which, in the aggregate (on a
net basis), are not material to the Company and its subsidiaries, taken as
a whole. The Company and its subsidiaries have title to the personal
property owned by it or them and, subject to the continued performance of
the material covenants and conditions of liens and encumbrances thereon,
have the right to use such property without interference in the normal
course of business, except for such interference as would not have a
Material Adverse Effect on the Company and its subsidiaries, taken as a
whole;
(g) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of Maryland, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which the failure so to
qualify and maintain
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good standing would have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and each subsidiary of the Company,
including, without limitation, The Xxxxx Company LP, has been duly
incorporated or formed and is validly existing as a corporation, limited
liability company or limited partnership in good standing under the laws of
its jurisdiction of incorporation or formation except for such failures to
maintain good standing as would not have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole;
(h) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned (with exceptions that are
disclosed, whether directly or through incorporation by reference, in the
Prospectus or are not material to the Company and its subsidiaries, taken
as a whole) directly or indirectly by the Company, free and clear of all
liens, encumbrances or claims (collectively, "Liens") except for (i) Liens
in respect of our existing revolving credit facility and Liens relating to
debt that have been disclosed specifically, generally or in the aggregate
in the Prospectus or incurred after the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus in the ordinary course of business (including financings), (ii)
Liens incurred in the ordinary course of business that are not materially
adverse to the operations of the Company and its subsidiaries, taken as a
whole, (iii) restrictions on the transfer or use of the capital stock of
any subsidiary under any partnership, joint venture or lease agreements to
which the Company or any of its subsidiaries is a party and (iv) Liens
relating to certain affiliates in which the Company acquired interests in
connection with the acquisition of The Woodlands, a master-planned
community in the Houston, Texas metropolitan area; and, except as described
in or expressly contemplated by the Prospectus, there are no outstanding
rights (including, without limitation, preemptive rights), warrants or
options (other than stock options that have been issued to employees and
rights to the issuance of Shares held by the former Xxxxxx owners pursuant
to the Contingent Stock Agreement) to acquire, or instruments (other than
the outstanding shares of Series B Preferred Stock of the Company)
convertible or exchangeable for, any shares of capital stock or other
equity interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any
capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants, or options, which such rights,
warrants, options, instruments, or contract, commitment, agreement,
understanding or arrangement may be reasonably expected to be material to
the securityholders of the Company. As used herein, the term "capital
stock" means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a person that is not a corporation
and any and all warrants or options to purchase any of the foregoing;
(i) The Shares have been duly and validly authorized, and, when
Firm Shares are issued and delivered against payment therefor pursuant to
this Agreement and the Pricing Agreement with respect to such Designated
Shares, and, in the case of Optional Shares, pursuant to Over allotment
Options (as defined in Section 3 hereof) with respect to such Designated
Shares, such Designated Shares will be duly and validly issued and fully
paid and non-assessable; the Shares conform to the description thereof
contained in the Registration Statement and the Designated Shares will
conform to the description thereof contained in the Prospectus
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with respect to such Designated Shares; and the Designated Shares will have
the rights set forth in the Company's articles of incorporation, as then
amended or supplemented; and the holders of outstanding capital stock of
the Company are not entitled to preemptive or other rights afforded by the
Company to subscribe for the Designated Shares;
(j) Neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both, would be, in violation of or in
default under, its articles of incorporation or bylaws or equivalent
constitutive documents or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults that,
individually and in the aggregate, do not have a Material Adverse Effect on
the Company and its subsidiaries, taken as a whole; the issue and sale of
the Shares, the compliance by the Company with all of the provisions of
this Agreement, any Pricing Agreement and each Over-allotment Option, if
any, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is subject
except for such conflict, breach, violation or default which does not have
a Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, nor will such actions result in any violation of the provisions of
the articles of incorporation or the bylaws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any
of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any court or governmental agency
or body is required for the issue and sale of the Shares or the
consummation by the Company of the other transactions contemplated by this
Agreement, any Pricing Agreement or any Over-allotment Option, except such
as have been, or will have been prior to each Time of Delivery (as defined
in Section 4 hereof), obtained under the Act and such consents, approvals,
authorizations, orders, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(k) Other than as set forth in the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of
its subsidiaries is subject, which are likely, individually or in the
aggregate, to have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole, and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) The Company is not, and after giving effect to each offering
and sale of the Designated Shares will not be, an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(m) The Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in manipulation of the price of the Shares;
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(n) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(o) The independent certified public accountants of the Company,
who have certified certain financial statements of the Company and its
subsidiaries or other specified entities referred to in their reports, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder; and
(p) At all times commencing with the Company's taxable year ended
December 31, 1998, the Company has been and after giving effect to the
offering and the sale of the Designated Shares will continue to be,
organized and operated in conformity with the requirements for
qualification of the Company as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
proposed method of operation of the Company will enable the Company to
continue to meet the requirements for qualification and taxation as a REIT
under the Code.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release
of the Firm Shares, the several Underwriters propose to offer the Firm
Shares for sale upon the terms and conditions set forth in the Prospectus.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the
right (an "Over-allotment Option") to purchase at their election up to the
number of Optional Shares set forth in such Pricing Agreement, on the terms
set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from the
Representatives to the Company, given within a period specified in the
Pricing Agreement, setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be
delivered, as determined by the Representatives but in no event earlier
than the First Time of Delivery (as defined in Section 4 hereof) or, unless
the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of
such notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Shares shall be, in each
case, the number of Optional Shares which the Company has been advised by
the Representatives have been attributed to such Underwriter; provided
that, if the Company has not been so advised, the number of Optional Shares
to be so added shall be, in each case, that proportion of Optional Shares
which the number of Firm Shares to be purchased by such Underwriter under
such Pricing Agreement bears to the aggregate number of Firm Shares
(rounded as the Representatives may determine to the nearest 100 shares).
The total number of Designated Shares to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the aggregate
number of Firm Shares set forth in Schedule I to such Pricing Agreement
plus the aggregate number of Optional Shares which the Underwriters elect
to purchase.
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4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement, and in such
authorized denominations and registered in such names as the
Representatives may request upon at least twenty-four hours' prior notice
to the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by
such Underwriter or on its behalf of the purchase price therefor by wire
transfer in federal or other same day funds, payable to the order of the
Company in the funds specified in such Pricing Agreement, (i) with respect
to the Firm Shares, all in the manner and at the place and time and date
specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such
time and date being herein called the "First Time of Delivery" and (ii)
with respect to the Optional Shares, if any, in the manner and at the time
and date specified by the Representatives in the written notice given by
the Representatives of the Underwriter's election to purchase such Optional
Shares, or at such other time and date as the Representatives and the
Company may agree upon in writing, such time and date, if not the First
Time of Delivery, herein called the "Second Time of Delivery". Each such
time and date for delivery is herein called a "Time of Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus in relation to the applicable
Designated Shares in a form approved by the Representatives and to file
such Prospectus pursuant to Rule 424(b) under the Act no later than the
Commission's close of business on the second business day following the
execution and delivery of the Pricing Agreement relating to the applicable
Designated Shares or, if applicable, such earlier time as may be required
by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus after the date of the Pricing
Agreement relating to such Shares and prior to any Time of Delivery for
such Shares which shall be disapproved by the Representatives for such
Shares promptly after reasonable notice thereof, to advise the
Representatives promptly of any such amendment or supplement after any Time
of Delivery for such Shares and furnish the Representatives with copies
thereof, to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of such Shares, and during such same period to
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or any order preventing or suspending the use
of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares
or suspending any such qualification, to promptly use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering
and sale under the securities laws of such
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jurisdictions as the Representatives may request and to comply with such
laws so as to permit the continuance of sales and dealings therein for as
long as may be necessary to complete the distribution of such Shares;
provided, however, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent
to service of process in any jurisdiction;
(c) To furnish the Underwriters with (i) two copies of the
Registration Statement (as originally filed) and each amendment thereto,
and all exhibits and documents incorporated or deemed to be incorporated by
reference therein and (ii) copies of the Prospectus in such quantities as
the Representatives may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time in connection with the
offering or sale of the Shares and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated or
deemed to be incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify the Representatives and upon
their request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus, which will correct
such statement or omission or effect such compliance;
(d) During the period beginning from the date of the Pricing
Agreement for the Designated Shares and continuing to the 60th day after
the date of the Pricing Agreement for such Designated Shares, not to offer,
sell, contract to sell or otherwise dispose of any securities of the
Company that are substantially similar to such Designated Shares (other
than pursuant to employee or non-employee director stock grants or pursuant
to employee or non-employee director stock option plans existing on or upon
the conversion or redemption of convertible or exchangeable securities
outstanding as of the date of the Pricing Agreement for such Designated
Shares, or pursuant to the Contingent Stock Agreement), without the prior
written consent of the Representatives;
(e) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11 (a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158); and
(f) To apply the net proceeds from the sale of the Designated
Shares as described in the Preliminary Prospectus and the Prospectus.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under
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the Act and all other expenses in connection with the preparation, printing
and filing of the Registration Statement, any Preliminary Prospectus and
the Prospectus and all other amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) the cost of printing and producing any Agreement among Underwriters,
this Agreement, any Pricing Agreement, any Blue Sky and legal investment
memoranda, closing documents (including any compilations thereof) and any
other documents so long as such documents have been approved by the Company
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of Xxxxxxx Xxxxxxx & Xxxxxxxx
LLP, counsel to the Underwriters in connection with such qualification and
in connection with Blue Sky and legal investment surveys; (iv) any filing
fees incident to, and the reasonable fees and disbursements of Xxxxxxx
Xxxxxxx & Xxxxxxxx LLP, counsel to the Underwriters in connection with, any
required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Shares; (v) the cost of preparing the
certificates for the Shares; (vi) the reasonable fees and expenses of any
transfer agent or registrar or dividend disbursing agent; (vii) any taxes
payable in connection with the issuance, sale and delivery of the
Designated Shares to the Underwriters; (viii) all fees imposed by any stock
exchange related to the filing or registration of the Designated Shares;
and (ix) all other costs and expenses incident to the performance of its
obligations hereunder and under any Over-allotment Options, which are not
otherwise specifically provided for in this Section. It is understood,
however, that, except as provided in this Section 6 and Sections 8 and 11
hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject,
in the Representatives' discretion, to the condition that all
representations and warranties and other statements of the Company included
or incorporated by reference in the Pricing Agreement relating to such
Designated Shares are true and correct at and as of each Time of Delivery
for such Designated Shares and the condition that prior to such Time of
Delivery the Company shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) (i) The Prospectus in relation to the applicable Designated
Shares shall have been filed with the Commission pursuant to Rule 424(b)
under the Act within the applicable time period prescribed for such filing
by the rules and regulations under the Act and in accordance with Section
5(a) hereof; (ii) no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and (iii) all requests for additional information on the part
of the Commission shall have been complied with to the reasonable
satisfaction of the Representatives;
(b) Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters
shall have furnished to the Representatives such opinion or opinions, dated
each Time of Delivery, with respect to the incorporation of the Company,
the Designated Shares, the Registration Statement, the Prospectus and such
other related matters as the Representatives may reasonably request, and
Page 11
such counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters;
(c) The General Counsel of the Company, or other counsel for the
Company satisfactory to the Representatives, shall have furnished to the
Representatives such counsel's written opinion (which may be limited to the
laws of the State of Maryland and the federal laws of the United States),
dated each Time of Delivery in form and substance reasonably satisfactory
to the Representatives, to the following effect:
(i) The Company, The Xxxxx Company LP and each other
Significant Subsidiary (as defined in Rule 405 under the Act) has
been duly incorporated or organized and is validly existing in good
standing under the laws of the State of Maryland or other
jurisdiction of its incorporation or organization, as the case may
be, with corporate, partnership or limited liability company, as
the case may be, power and authority to own its properties and
conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus; and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and
are fully paid and non-assessable;
(iii) The Designated Shares have been duly and validly
authorized, and, when Firm Shares are issued and delivered against
payment therefor pursuant to this Agreement and the Pricing
Agreement with respect to such Firm Shares and, in the case of
Optional Shares, pursuant to Over-allotment Options (as defined in
Section 3 hereof) with respect to such Shares, such Designated
Shares will be duly and validly issued and fully paid and
non-assessable; the Shares conform, in all material respects, to
the description thereof contained in the Registration Statement,
and the Designated Shares will conform, in all material respects,
to the description thereof in the Prospectus; the Designated Shares
will have the rights set forth in the Company's articles of
incorporation and bylaws, each, as then amended or supplemented
(including the applicable provisions of the Maryland General
Corporation Law); and there are no preemptive or other rights
afforded by the Company to subscribe for or to purchase any Shares;
(iv) The Company, The Xxxxx Company LP and each other
Significant Subsidiary has been duly qualified as a foreign
corporation, partnership or limited liability company, as the case
may be, for the transaction of business and is in good standing
under the laws of each other jurisdiction in which the failure so
to qualify and maintain good standing would have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole (such
counsel being entitled to rely in respect of the opinion in this
clause (iv) upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company);
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property
Page 12
of the Company or any of its subsidiaries is the subject which is
likely, individually or in the aggregate, to have a Material
Adverse Effect on the Company and its subsidiaries, taken as a
whole, and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and
delivered by the Company;
(vii) The issue and sale of the Designated Shares being
delivered at such Time of Delivery, the compliance by the Company
with all of the provisions of this Agreement and the Pricing
Agreement with respect to the Designated Shares, and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject except
for any such conflict, breach, violation or default which does not
have a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole, nor will such actions result in any violation of
the provisions of the Company's articles of incorporation or
bylaws, each, as then amended or supplemented, or any federal or
Maryland statute or any order, rule or regulation known to such
counsel of any federal or Maryland court or governmental agency or
body having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any federal or Maryland governmental
agency or body or, to such counsel's knowledge, any federal or
Maryland court is required for the issue and sale of the Designated
Shares being delivered at such Time of Delivery or the consummation
by the Company of the other transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been
obtained under the Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Shares by the
Underwriters;
(ix) The Incorporated Documents (other than the financial
statements and related notes and schedules therein and other
financial data and statistical information included therein or
omitted therefrom, as to which such counsel need express no
opinion), when they were filed with the Commission appeared on
their face to be appropriately responsive, in all material
respects, to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and nothing has come to such counsel's attention to
cause such counsel to believe that any of the Incorporated
Documents, when they
Page 13
were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading;
and
(x) To such counsel's knowledge, there are no contracts, or
agreements or understandings between the Company and any person
granting such person the right to require the Company to include
any Shares of the Company owned or to be owned by such person in
the securities registered pursuant to the Registration Statement.
Such counsel shall also advise the Underwriters that nothing has
come to such counsel's attention to cause such counsel to believe that
the Registration Statement (including the Incorporated Documents), as
of the date of filing of the 2002 Form 10-K (other than the financial
statements and related notes and schedules therein and other financial
data derived therefrom included or incorporated by reference therein,
as to which such counsel need express no opinion), contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus (including the
Incorporated Documents), as of the date of the Prospectus Supplement
and as of such Time of Delivery (other than the financial statements
and related notes and schedules therein and other financial data
derived therefrom included or incorporated by reference therein, as to
which such counsel need express no opinion), contained or contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and such
counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus or required to be described in the Registration Statement
or the Prospectus which are not filed or incorporated by reference or
described as required.
(d) Xxxxx Xxxxxxx LLP, Maryland counsel for the Company, shall have
furnished to the Representatives its written opinion, dated each Time of
Delivery, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Designated Shares have been duly and validly
authorized, and, when Firm Shares are issued and delivered against
payment therefor pursuant to this Agreement and the Pricing
Agreement with respect to such Shares and, in the case of Optional
Shares, pursuant to Over-allotment Options (as defined in Section 3
hereof) with respect to such Shares, such Designated Shares will be
duly and validly issued and fully paid and non-assessable; and
(ii) The Shares conform, in all material respects, to the
description thereof contained in the Registration Statement, and
the Designated Shares will conform, in all material respects, to
the description thereof in the Prospectus; and the Designated
Shares will have the rights set forth in the Company's articles of
Page 14
incorporation or bylaws, each, as then amended or supplemented
(including the applicable provisions of the Maryland General
Corporation Law).
(e) Xxxxxx & Xxxxxx LLP, special tax counsel for the Company, shall
have furnished to the Representatives its written opinion, dated each Time
of Delivery, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company qualified to be taxed as a REIT pursuant to
sections 856 through 860 of the Code for its taxable years ended
December 31, 1998 through December 31, 2003, and the Company's
organization and current and proposed method of operation will
enable it to continue to meet the requirements for qualification
and taxation as a REIT under the Code for all future taxable years;
and
(ii) The descriptions of the law and the legal conclusions
contained in the Prospectus Supplement under the captions "Risk
Factors - Risks Related to our Business - We are a real estate
investment trust and will continue to be subject to complex current
and future tax requirements", "Risk Factors - Risks Related to Our
Common Stock - Recently enacted U.S. federal income tax legislation
reduces the maximum tax rates applicable to corporate dividends
from 38.6% to 15%, which may make investments in equity securities
of corporations relatively more attractive than investments in
REITs and may have an adverse affect the market price of our common
stock", and "U.S. Federal Tax Considerations" are correct in all
material respects, and the discussions thereunder fairly summarize
the federal income tax considerations that are likely to be
material to a holder of the Shares.
(f) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel for the
Company, shall have furnished to the Representatives their written opinion
(which may be limited to the laws of the State of New York and federal laws
and may rely on opinions of the General Counsel of the Company and Xxxxx
Xxxxxxx LLP, or other counsel for the Company reasonably satisfactory to
the Representatives, as to the laws of the State of Maryland), dated each
Time of Delivery in form and substance reasonably satisfactory to the
Representatives, to the following effect:
(i) Each of the Underwriting Agreement and the Pricing
Agreement have been duly executed and delivered by the Company;
(ii) The Registration Statement has become effective under the
Act, and the filing of the Prospectus pursuant to Rule 424(b) under
the Act has been made in the manner and within the time period
required by Rule 424(b);
(iii) The Registration Statement, at the time it was declared
effective by the Commission, and the Prospectus, as of its date,
appeared on their face to be responsive as to form in all material
respects to the requirements of the Act and the rules and
regulations promulgated thereunder (other than (a) the financial
statements, notes and schedules thereto included therein or omitted
therefrom, (b)
Page 15
other financial data included therein or omitted therefrom, and (c)
the Incorporated Documents, as to which such counsel need express
no opinion); and
(iv) The Company is not an "investment company" (as such term
is defined in the Investment Company Act).
Such counsel shall also advise the Underwriters that no facts have
come to such counsel's attention that cause such counsel to believe that
the Registration Statement (including the Incorporated Documents), as of
the date of the 2002 Form 10-K, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (including the Incorporated Documents), as of the date of the
Prospectus Supplement and as of such Time of Delivery, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. In each case,
however, such counsel need express no view or belief with respect to
financial statements, notes, or schedules and other financial data included
in or omitted therein or therefrom.
(g) At each Time of Delivery for such Designated Shares, KPMG LLP,
independent certified public accountants of the Company, who have certified
the financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement, shall have
furnished to the Representatives letters, dated the respective dates of
delivery, in form and substance satisfactory to the Representatives,
containing statements and information of the type customarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained or
incorporated by reference in the Registration Statement and the Prospectus;
(h) (i) The Company and its subsidiaries, taken as a whole, have
not sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus and (ii) since the respective dates as of
which information is given in the Registration Statement and the Prospectus
prior to the date of the Pricing Agreement relating to the Designated
Shares there shall not have been any change in the capital stock (other
than issuances of capital stock pursuant to bonus stock awards granted in
the ordinary course of business, upon exercise of options and stock
appreciation rights, upon conversion or redemption of convertible
securities and pursuant to the terms of the Contingent Stock Agreement, in
each case, except with respect to bonus stock awards granted in the
ordinary course of business, which were outstanding as of the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus) or any material adverse change in the long-term debt of
the Company and its subsidiaries, taken as a whole (it being understood
that, absent unusual circumstances, an increase in long-term debt of the
Company and its subsidiaries, taken as a whole, of less than 5% would not
be a material and adverse change to the Company and its subsidiaries, taken
as a whole), or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
properties, management, financial condition or results of operations (based
on Funds From Operations) of the Company
Page 16
and its subsidiaries, taken as a whole, except as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Representatives so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Designated Shares on the terms and
in the manner contemplated in the Prospectus;
(i) On or after the date of the Pricing Agreement relating to the
Designated Shares, (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as the term is defined by the Commission
for purposed of Rule 436(g)(2) under the Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities;
(j) On or after the date of the Pricing Agreement relating to the
Designated Shares, there shall not have occurred any of the following: (i)
a suspension or material limitation in trading in securities generally on
the New York Stock Exchange; (ii) a suspension or material limitation in
trading in the Company's securities on the New York Stock Exchange; (iii) a
general moratorium on commercial banking activities in New York declared by
either federal or New York State authorities; (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war; or (v) the occurrence of
any other major calamity or crisis in the United States or affecting the
United States, if the effect of any such event specified in clauses (iv)
and (v) in the Representatives' reasonable judgment makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Firm Shares or Optional Shares or both on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented relating to
the Designated Shares;
(k) The Shares at each Time of Delivery shall have been duly
listed, subject to notice of issuance, on the New York Stock Exchange; and
(l) The Company shall have furnished or caused to be furnished to
the Representatives at each Time of Delivery for the Designated Shares a
certificate or certificates of officers of the Company in such form and
executed by such officers of the Company as shall be satisfactory to the
Representatives, as to the accuracy of the representations and warranties
of the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in Sections 7(a), (h) and (k) and as to such other matters as the
Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter, its directors, officers and employees and each person, if any,
who controls any Underwriter within the meaning of the Act, from and
against any losses, claims, damages or liabilities, joint or several, or
any action in respect thereof to which such Underwriter, officer, employee
or controlling person may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities or actions arise out
of or are based upon (i) an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus and any
other
Page 17
prospectus relating to the Designated Shares, or any amendment or
supplement thereto, or (ii) the omission or alleged omission to state in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus and any other prospectus relating to
the Designated Shares, or any amendments or supplements thereto a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each such
director, officer, employee and controlling person promptly upon demand for
any legal or other expenses reasonably incurred by such Underwriter and
each such director, officer, employee and controlling person in connection
with investigating or defending any such loss, damage, liability, action or
claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus and any other prospectus relating to
the Designated Shares, or any such amendment or supplement, in reliance
upon and in conformity with information furnished in writing to the Company
by any Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus relating to such Shares.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus and any other prospectus relating to
the Designated Shares, or any amendment or supplement thereto, or (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus and any other
prospectus relating to the Designated Shares, or any such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
expressly for use therein, and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under Section
8(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying
Page 18
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs
of investigation provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to participate
in the defense thereof but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the employment thereof
has been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that there
may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has failed
to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action on
behalf of such indemnified party, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate
counsel (plus local counsel in each such jurisdiction) at any time for all
such indemnified parties. If the indemnifying party does not assume the
defense of such action, it is understood that the indemnifying party shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses
of more than one separate counsel (plus local counsel in each such
jurisdiction) at any time for all such indemnified parties, which firms
shall be designated in writing by you, if the indemnified parties under
this Section 8 consist of any Underwriter of the Designated Shares or any
of its respective directors, officers, employees or controlling persons, or
by the Company, if the indemnified parties under this Section 8 consist of
the Company or any of its directors, officers, administrative trustees or
controlling persons. The indemnifying party shall not be liable for any
settlement of an action or claim for monetary damages which an indemnified
party may effect without the consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement
or compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim),
unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include a statement as to, or
an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party. For purposes of this Section 8, references to
"counsel" shall include a firm of attorneys.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in
Page 19
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters of the Designated
Shares on the other from the offering of the Designated Shares to which
such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 8(c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits referred to in the immediately preceding sentence
but also the relative fault of the Company on the one hand and the
Underwriters of the Designated Shares on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and such Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from such offering (before
deducting expenses) received by the Company bear to the total commissions
or discounts received by such Underwriters in respect thereof. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any such
Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this Section 8(d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 8(d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total public offering price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Designated Shares in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations with respect to
such Shares and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
any Underwriter and to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the
Act.
Page 20
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under
the Pricing Agreement relating to such Shares, the Representatives may in
their discretion arrange for themselves or another party or other parties
to purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter the Representatives do not
arrange for the purchase of such Firm Shares or Optional Shares, as the
case may be, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Shares on such terms.
In the event that, within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the
purchase of such Shares, or the Company notifies the Representatives that
it has so arranged for the purchase of such Shares, the Representatives or
the Company shall have the right to postpone a Time of Delivery for such
Shares for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and
the Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this
Section with like effect as if such person had originally been a party to
the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the number of Firm
Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, then the Company shall have the right to
require each nondefaulting Underwriter to purchase the number of Firm
Shares or Optional Shares, as the case may be, which such Underwriter
agreed to purchase under the Pricing Agreement relating to such Designated
Shares and, in addition, to require each non-defaulting Underwriter to
purchase its pro-rata share (based on the number of Firm Shares or Optional
Shares, as the case may be, which such Underwriter agreed to purchase under
such Pricing Agreement) of the Firm Shares or Optional Shares, as the case
may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as
provided in subsection (a) above, the aggregate number of Firm Shares or
Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of Firm Shares or Optional Shares, as
the case may be, to be purchased at the respective Time of Delivery as
referred to in subsection (b) above, or if the Company shall not exercise
the right described in subsection (b) above to require non-defaulting
Underwriters to purchase the Firm Shares or Optional Shares, as the case
may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Shares or the Over-allotment Option
relating to such Optional Shares, as the case may be, shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter
or the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section
Page 21
6 hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any officer or
director or controlling person of any Underwriter, or the Company, or any
officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Shares.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof or if the condition in Section 7(j) is not satisfied, the Company
shall not then be under any liability to any Underwriter with respect to
the Firm Shares or Optional Shares covered by such Pricing Agreement except
as provided in Sections 6 and 8 hereof, but, if for any other reason,
Designated Shares are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through the
Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Shares, but the Company shall then be under
no further liability to any Underwriter with respect to such Designated
Shares except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by
such Representatives jointly or by such of the Representatives, if any, as
may be designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Representatives as
set forth in the Pricing Agreement; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement, Attention: General
Counsel; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
underwriters' questionnaire, or telex constituting such questionnaire,
which address will be supplied to the Company by the Representatives upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to
the extent provided in Sections 8 and 10 hereof, the directors, officers
and employees of the Company or any Underwriter and each person who
controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or any
such Pricing Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
Page 22
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day on which the New York Stock
Exchange, Inc. is open for trading.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same
instrument.
Page 23
Very truly yours,
THE XXXXX COMPANY
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Managing Director
On behalf of themselves and each of the other Underwriters
Page 24
ANNEX I
PRICING AGREEMENT
-----------------
_____________ __, 20__
Deutsche Bank Securities Inc.
As Representative of the several
Underwriters named in Schedule I hereto
Ladies and Gentlemen:
The Xxxxx Company, a Maryland corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated February __, 2004 (the "Underwriting
Agreement"), to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Shares specified in Schedule I hereto (the
"Designated Shares", consisting of Firm Shares and any Optional Shares the
Underwriters may elect to purchase). Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as if
such provisions had been set forth in full herein, and each of the
representations and warranties set forth therein shall be deemed to have
been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of
the Underwriting Agreement shall be deemed to be a representation or
warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as
of the date of this Pricing Agreement in relation to the Prospectus
relating to the Designated Shares which are the subject of this Pricing
Agreement. Each reference to the Representative herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall
be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Shares, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at the purchase price to the
Underwriters set forth in Schedule I hereto, the number of Firm Shares set
forth in Schedule I hereto and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Company agrees to issue and sell to each of
Underwriters, and each of Underwriters agrees to purchase from the Company
at the purchase price to the Underwriters set forth in Schedule I hereto
that portion of the number of Optional Shares as to which such election
shall have been exercised.
The Company hereby grants to the each of the Underwriters the
right to purchase, from time to time, at its election up to the number of
Optional Shares set forth in Schedule I
Page 25
hereto on the terms referred to in the paragraph above for the sole purpose
of covering over-allotments in the sale of the Firm Shares. Any such
election to purchase Optional Shares may be exercised by written notice
from the Underwriters to the Company given within a period of 30 calendar
days after the date of this Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Underwriters, but
in no event earlier than the First Time of Delivery or, unless the
Underwriters and the Company otherwise agree in writing, no earlier than
two or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please
sign and return to us four counterparts hereof (one for the Company and one
for the Representative plus one for each counsel) and upon acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Company.
Very truly yours,
THE XXXXX COMPANY
By:
---------------------------
Name:
Title:
Accepted as of the date hereof
DEUTSCHE BANK SECURITIES INC.
By:
---------------------------
Name:
Title:
By:
---------------------------
Name:
Title:
Page 26
SCHEDULE I
----------
Title of Designated Shares: Common Stock, par value $0.01
Number of Designated Shares:
Number of Firm Shares: _______________
Maximum Number of Optional Shares: _______________
Initial Offering Price to Public: $_____________ per share
Purchase Price by Underwriters: $______________ per share
Form of Designated Shares: Definitive form to be made available for
checking by the Representative at least twenty-four hours prior to the Time
of Delivery at the office of The Depository Trust Company or its designated
custodian.
Specified Funds for Payment of Purchase Price: Federal or other same day
funds
Time of Delivery: 9:30 a.m. (New York City time), __________ __, 20__
Closing Location: Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000
Names and Addresses of Representative: _________________
Addresses for Notices, etc.: __________________
Underwriters' Counsel: Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
Additional Terms and Conditions: _______________
