4,100,000 SHARES
XXXXX & XXXXXXXX COMPANIES, INC.
COMMON STOCK, PAR VALUE $1.00 PER SHARE
UNDERWRITING AGREEMENT
April 5, 1999
April 5, 1999
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Xxxxx & XxXxxxxx Companies, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to you, as underwriter (the
"UNDERWRITER") 4,100,000 shares of its Common Stock, par value $1.00 per
share (the "SHARES"). The shares of Common Stock, par value $1.00 per
share, of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to
the Shares, which has become effective. The registration statement as
amended at the time it became effective, or, if a post-effective amendment
is filed with respect thereto, as amended by such post-effective amendment
at the time of its effectiveness including in each case the information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), is hereinafter referred to as the
"REGISTRATION STATEMENT"; the prospectus as supplemented by the prospectus
supplement relating to the sale of the Shares by the Underwriters in the
form first used to confirm sales of Shares is hereinafter referred to as
the "PROSPECTUS." If the Company has filed an abbreviated registration
statement to register additional shares of Common Stock pursuant to Rule
462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"),
then any reference herein to the term "REGISTRATION STATEMENT" shall be
deemed to include such Rule 462 Registration Statement. Any reference in
this Agreement to the Registration Statement, any preliminary prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act, as of the effective date of the Registration Statement or
the date of such preliminary prospectus or the Prospectus, as the case may
be, and any reference to "amend", "amendment" or "supplement" with respect
to the Registration Statement, any preliminary prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
and the rules and regulations of the Commission thereunder that are deemed
to be incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to and agrees with the Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and
(iii) the Prospectus does not contain and, as amended or supplemented,
if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this paragraph do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to the Underwriter furnished to the Company in writing by you
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company listed on Schedule A hereto,
each a "SIGNIFICANT SUBSIDIARY," has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; except
as described or incorporated by reference in or contemplated by the
Prospectus, all of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and, except
for Class B Common Stock of Xxxxxx Investments, Inc. are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance
of the Shares have been duly authorized and are validly issued, fully
paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, except for any
such contraventions which, individually or in the aggregate, would not
have a material adverse affect on the Company and its subsidiaries
taken as a whole, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for
the performance by the Company of the transaction contemplated by this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares.
(j) There has not occurred any material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) To the knowledge of the Company, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is a party or to which any of the properties
of the Company or any of its subsidiaries is subject that are required
to be described in the Registration Statement or the Prospectus and
are not so described or any statutes, regulations, contracts or other
documents that are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(l) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally
filed or as part of any amendment thereto, or filed pursuant to Rule
424 under the Securities Act, complied when so filed in all material
respects with the Securities Act, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information relating to the Underwriter furnished to
the Company in writing by you expressly for use therein.
(m) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended.
(n) Except for the registration rights agreement dated March 12,
1997, as amended on March 27, 1997, by and among the Company and the
stockholders of Xxxxxxx & Xxxxxxx (the "J&H AGREEMENT"), there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the Underwriter, and the Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Company all of
the Shares at $73.555 a share (the "PURCHASE PRICE").
The Company hereby agrees that, without your prior written consent,
it will not, during the period ending 90 days after the date of this
Agreement, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock
or (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the
Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof, (C) the granting
of stock options or the issuance of restricted stock under the current
employee benefit plans of the Company or (D) the issuance of shares of
Common Stock by the Company in connection with acquisitions.
3. Terms of Public Offering. The Company is advised by you that the
Underwriter proposes to make a public offering of the Shares as soon after
the Registration Statement and this Agreement have become effective as in
your judgment is advisable. The Company is further advised by you that the
Shares are to be offered to the public on the terms set forth in the
Prospectus.
4. Payment and Delivery. Payment for the Shares shall be made to the
Company in Federal or other funds immediately available in New York City
against delivery of such Shares for the account of the Underwriter at 10:00
a.m., New York City time, on April 8, 1999, or at such other time on the
same or such other date, not later than April 15, 1999, as shall be
designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE."
Certificates for the Shares shall be in definitive form and registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date. The
certificates evidencing the Shares shall be delivered to you on the Closing
Date with any transfer taxes payable in connection with the transfer of the
Shares to the Underwriter duly paid, against payment of the Purchase Price
therefor.
5. Conditions to the Underwriter's Obligations. The obligations of
the Company to sell the Shares to the Underwriter and the obligation of the
Underwriter to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall be effective
on the Closing Date and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for that
purpose shall be pending before or threatened by the Commission.
The obligation of the Underwriter is subject to the following further
conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential
downgrading or of any review for a possible change with negative
implications, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a change, in the condition, financial or
otherwise, or in the earnings, business or operations of the
Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement)
that, in your judgment, is material and adverse and that makes
it, in your judgment, impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriter shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in the first paragraph of this
Section 5, in Section 5(a), and to the effect that the representations
and warranties of the Company contained in this Agreement are true and
correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part
to be performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely upon
the best of his or her knowledge as to proceedings threatened.
(c) The Underwriter shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, outside counsel
for the Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated and is
subsisting and in good standing under the laws of the State of
Delaware;
(ii) the Company has the corporate power and authority to
conduct its business and own its properties, in each case as
described in the Prospectus;
(iii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description
thereof set forth in the Company's Registration Statements on
Form 8-B, dated May 22, 1969, Form 8-A, dated September 21, 1987,
as amended by Amendments on Form 8, dated September 18, 1990 and
February 19, 1991 and Form 8-A dated October 10, 1997, taken
together with the statements in the Prospectus under "Description
of Capital Stock"; all such statements taken together have been
reviewed by such counsel and, to the extent they constitute a
summary of legal matters or documents referred to therein, they
fairly present in all material respects the information called
for with respect to such legal matters or documents;
(iv) the Shares have been duly authorized and, when issued
and delivered to the Underwriter in accordance with the terms of
this Agreement, will be validly issued, fully paid and
non-assessable, and the sale of such Shares will not be subject
to any preemptive or similar rights of any stockholder of the
Company arising under the Certificate of Incorporation, the By-
Laws, Applicable Laws or any agreement filed as an exhibit to any
of the Incorporated Documents;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) no Governmental Approval is required for the
registration of the Shares by the Company or the consummation by
the Company of the transactions contemplated by this Agreement,
each in accordance with the terms of this Agreement, except such
as have been made or obtained and except those which are not
required to be obtained, made or taken prior to the date hereof;
(vii) the Company is not required to be registered or
regulated as an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(viii) the statements in the Prospectus in the sections
entitled "Plan of Distribution" and "Underwriter", to the extent
that they relate to this Agreement, have been reviewed by such
counsel and fairly summarize the provisions described in all
material respects;
(ix) (a) the Registration Statement and the Prospectus, in
each case excluding the documents incorporated by reference
therein, as of their respective effective or issue date, complied
as to form in all material respects with the requirements of the
Securities Act and (b) the documents incorporated by reference
into the Registration Statement, as of their respective dates of
filing with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act (excluding in
the case of both clause(a) and (b) the financial statements,
financial statement schedules and other financial or statistical
data included in the Registration Statement and the Prospectus,
in each case including the documents incorporated by reference
therein); and
(x) such counsel shall state that no facts have come to
their attention that have led them to believe that (except for
the financial statements, financial statement schedules and other
financial or statistical data included or incorporated by
reference in the Registration Statement or excluded therefrom or
the exhibits thereto, as to which such counsel need not express a
belief) the Registration Statement, at the time the Registration
Statement became effective, 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, as of its date and as of the
date hereof, 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 the light of the
circumstances under which they were made, not misleading.
For purposes of the foregoing opinion, the term "APPLICABLE LAWS"
means the Delaware General Corporation Law and those laws, rules and
regulations of the State of New York and the United States of America that,
in the experience of such counsel, are normally applicable to transactions
of the type contemplated by this Agreement (but without such counsel having
made any special investigation concerning any other laws, rules or
regulations), provided that the term "Applicable Laws" does not include (1)
any federal or state securities or blue sky laws or (2) any anti-fraud
laws. The term "GOVERNMENTAL AUTHORITIES" means any New York or federal
executive, legislative, judicial, administrative or regulatory body under
Applicable Laws and the term "GOVERNMENTAL APPROVAL" means any consent,
approval, license, authorization or validation of or filing, recording or
registration with, any Governmental Authority pursuant to Applicable Laws.
In giving the opinions set forth in paragraphs (ix) and (x) above,
such counsel may state that they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus and have made no independent check or
verification thereof except as set forth in paragraphs (iii) and (viii).
In addition, in giving the opinion set forth in paragraph (x) above, such
counsel may state that they have participated in conferences with officers
and other representatives of the Company, counsel for the Company,
accountants for the Company, the Underwriter and Underwriter's counsel
discussing the Registration Statement and Prospectus and have reviewed, but
did not participate in the preparation of, the documents incorporated by
reference therein and discussed the business and affairs of the Company
with officers and other representatives of the Company.
(d) The Underwriter shall have received on the Closing Date an
opinion of Xxxxxxx X. Xxx Xxxxx, general counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, other than where the failure to be so qualified or
in good standing would not have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(ii) each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and, except
as described or incorporated by reference in or contemplated by
the Prospectus, all the issued shares of capital stock of each
Significant Subsidiary have been duly authorized and validly
issued, are fully-paid and non-assessable, and, except for Class
B Common Stock of Xxxxxx Investments Inc., are owned by the
Company, directly or indirectly, free and clear of all liens,
encumbrances, equities or claims;
(iii) the performance by the Company of its obligations under
this Agreement, and the consummation of the transactions
contemplated herein will not conflict with or result in any
violation of any order of any court or governmental agency or
body having jurisdiction over the Company or any of its
Significant Subsidiaries or in a breach of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument required to be filed as an exhibit to a form under the
Exchange Act pursuant to Item 601 of Regulation S-K, in each case
to which the Company or any of its Significant Subsidiaries is a
party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the property or assets
of the Company or any of its Significant Subsidiaries is subject,
except for any such violations, breaches, conflicts or defaults
which individually or in the aggregate would not have a material
adverse affect on the Company and its subsidiaries taken as a
whole;
(iv) other than as set forth or contemplated or incorporated
by reference in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of such
counsel, overtly threatened to which the Company or any of its
Significant Subsidiaries is a party or to which any property of
the Company or any of its Significant Subsidiaries is or may be
subject which, individually or in the aggregate, would reasonably
be expected to have a material adverse effect on the business,
operations or condition, financial or otherwise, of the Company
and its subsidiaries taken as a whole; and such counsel does not
know of any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the
Prospectus which are not filed or described as required;
(v) except for the J&H Agreement, such counsel does not know
of any right to require the Company to register any securities
for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the
sale of the Shares by the Company; and
(vi) the statements in or incorporated by reference into the
Company's Annual Report on Form 10-K for the year ended
December 31, 1998 under "Regulation", "Legal Proceedings" and
"Certain Relationships and Related Transactions", insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present in all material
respects the information called for with respect to such legal
matters, documents or proceedings.
In rendering the opinions set forth in paragraph (d) above, such
counsel may state that the opinion is limited to the General Corporation
Law of the State of Delaware, the laws of the State of New York and the
federal laws of the United States. In rendering the opinions described in
paragraphs (c) and (d) above, such counsel may rely as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials or jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company.
(e) The Underwriter shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriter, dated
the Closing Date, covering the matters referred to in Sections
5(c)(v), 5(c)(viii), 5(c)(ix) and 5(c)(x) above.
With respect to Section 5(c)(ix) and 5(c)(x) above, Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP and Xxxxx Xxxx & Xxxxxxxx may state
that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified.
The opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP described
in Section 5(c) above shall be rendered to the Underwriter at the
request of the Company and shall so state therein.
(f) The Underwriter shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory
to the Underwriters, from Deloitte & Touche LLP and Pricewaterhouse
Coopers LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement
and the Prospectus;
6. Covenants of the Company. In further consideration of the
agreements of the Underwriter herein contained, the Company covenants with
the Underwriter as follows:
(a) To furnish to you, without charge, two signed copies of the
Registration Statement (including exhibits thereto) and to furnish to
you in New York City, without charge, prior to 10:00 a.m. New York
City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c) below, as
many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Prospectus to furnish to
you a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which you reasonably
object, and to file with the Commission within the applicable period
specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriter the Prospectus is required by law to be delivered in
connection with sales by the Underwriter or any dealer, any event
shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriter, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare,
file with the Commission and furnish, at its own expense, to the
Underwriter and to the dealers (whose names and addresses you will
furnish to the Company) to which Shares may have been sold by you on
behalf of the Underwriter and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 2000 that satisfies the provisions
of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriter, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with
the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriter in connection with such qualification and in connection
with the Blue Sky memorandum, (iv) all filing fees and the reasonable
fees and disbursements of counsel to the Underwriter incurred in
connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v)
all fees and expenses in connection with the preparation and filing of
the registration statement on Form 8-A relating to the Common Stock
and all costs and expenses incident to listing the Shares on the New
York Stock Exchange, the Chicago Stock Exchange, the Pacific Exchange
and the London Stock Exchange, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations
with the prior approval of the Company, travel and lodging expenses of
the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with
the road show, (ix) fees and disbursements of counsel for the
Underwriters, and (x) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 7 entitled
"Indemnity and Contribution", and the last paragraph of Section 9
below, the Underwriter will pay all of its costs and expenses, stock
transfer taxes payable on resale of any of the Shares by it and any
advertising expenses connected with any offers it may make.
7. Indemnity and Contribution. (a) The Company agrees to indemnify
and hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission
based upon information relating to the Underwriter furnished to the Company
in writing by you expressly for use therein and except, that with respect
to any Preliminary Prospectus, such indemnity shall not insure to the
benefit of the Underwriter (or the benefit of any person controlling the
Underwriter) if the person asserting any such losses, liabilities, claims,
damages or expenses purchased the Shares that are the subject thereof from
the Underwriter and if such person was not sent or given a copy of the
Prospectus at or prior to confirmation of the sale of such Shares to such
person in any case where such sending or giving is required by the Act and
the untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
its directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Company to the Underwriter,
but only with reference to information relating to the Underwriter
furnished to the Company in writing by you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to Section 7(a) or 7(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party,
upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for the Underwriter and such control
persons of the Underwriter shall be designated in writing by the
Underwriter in the case of parties indemnified pursuant to Section 7(a);
and by the Company, in the case of parties indemnified pursuant to Section
7(b). The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss
or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened 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 proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 7(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriter on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on
the one hand and the Underwriter on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriter, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate
Public Offering Price of the Shares. The relative fault of the Company on
the one hand and the Underwriter 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 by the
Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(e) The Company and the Underwriter agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph 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 or defending any such action or
claim. Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages that the 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (i) trading generally shall
have been suspended or materially limited on or by, as the case may be, any
of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium
on commercial banking activities in New York shall have been declared by
either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses 8(a)(i) through 8(a)(iv), such event, singly or together with any
other such event, makes it, in your judgment, impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties
hereto.
If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Company to comply with the terms
or to fulfill any of the conditions of this Agreement, or if for any reason
the Company shall be unable to perform its obligations under this
Agreement, the Company will
reimburse the Underwriter for all out-of-pocket expenses reasonably
incurred by such Underwriter in connection with this Agreement or the
offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York, without
giving effect to the conflicts of laws provisions thereof.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
Xxxxx & XxXxxxxx Companies, Inc.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date hereof
/s/ Xxxxxxx, Sachs & Co.
-------------------------
Xxxxxxx, Xxxxx & Co.
Schedule A
Significant Subsidiaries of Xxxxx & McLennan
Companies, Inc.
1. J&H Xxxxx & XxXxxxxx, Inc.
2. Xxxxxx Investments, Inc.
3. Xxxxxx Consulting Group, Inc.
