Exhibit 1
XXXXXX FINANCIAL
HFI TRUST I
6,100,000 Mandatory Enhanced Dividend
Securities(SM) Units--MEDS(SM) Units
Form of Underwriting Agreement
__________, 2001
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
ABN AMRO Rothschild LLC
Banc of America Securities LLC
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxxx Xxxxx, Pierce, Fenner, & Xxxxx
Incorporated
c/o X. X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
HFI Trust I, a Delaware statutory business trust formed under the laws of
the State of Delaware (the "Trust"), and Xxxxxx Financial, Inc., a Delaware
corporation (the "Company", and together with the Trust, the "Issuers"), propose
to issue and sell to the several Underwriters listed in Schedule I hereto (the
"Underwriters"), an aggregate of 6,100,000 Mandatory Enhanced Dividend
Securities(SM) Units - MEDS(SM) Units of the Issuers (the "Underwritten
Securities"), the terms of which are set forth in Schedule II hereto, and, for
the sole purpose of covering over-allotments in connection with the sale of the
Underwritten Securities, at the option of the Underwriters, up to an additional
900,000 MEDS Units of the Issuers (the "Option Securities"). The Underwritten
Securities and the Option Securities are herein referred to as the "Securities."
Each of the Securities will consist of (a) a stock purchase contract (a
"Purchase Contract" and, collectively with each other Purchase Contract, the
"Purchase Contracts") under which the holder of the MEDS Unit (a "Holder," and,
collectively with other Holders of MEDS Units, the "Holders") will purchase from
the Company on _________, 2004, for an amount in cash equal to the stated amount
per Security of $25 (the "Stated Amount"), a number of shares (each, a "Common
Share" and, collectively with all other Common Shares that may be issued and
sold by the Company upon settlement of the Purchase Contracts, the "Common
Shares") of Class A Common Stock, par value $0.25 per share, of the Company (the
"Common Stock"), as set forth in the Purchase Contract Agreement (as defined
below), and (b) a Trust Preferred Security (a "Trust Preferred Security") having
a stated liquidation amount of $25 per Trust Preferred Security,
representing an undivided beneficial ownership interest in the assets of the
Trust and guaranteed by the Company to the extent set forth in the Guarantee
Agreement (as defined herein). In accordance with the terms of a Purchase
Contract Agreement (the "Purchase Contract Agreement") to be entered into
between the Company and BNY Midwest Trust Company, as Purchase Contract Agent
(the "Purchase Contract Agent"), the holders of the MEDS Units will pledge the
Trust Preferred Securities to Xxxxx Fargo Bank Minnesota, N.A., as Collateral
Agent (the "Collateral Agent"), pursuant to a Pledge Agreement (the "Pledge
Agreement") to be entered into between the Company and the Collateral Agent, to
secure the Holders' obligations to purchase Common Stock under the Purchase
Contracts. The Purchase Contracts, the Purchase Contract Agreement and the
Pledge Agreement are herein collectively referred to as the "MEDS Agreements."
The Company will acquire all of the beneficial ownership interests
represented by the common securities (the "Common Securities" and, together with
the Trust Preferred Securities, the "Trust Securities") of the Trust pursuant to
a Common Securities Purchase Agreement (the "Common Securities Purchase
Agreement") to be entered into between the Company and the Trust. Concurrently
with the issuance of the Trust Preferred Securities and the Company's purchase
of all of the Common Securities, the Trust will invest all of the proceeds of
the sale of the Trust Securities pursuant to a Subordinated Deferrable Note
Purchase Agreement (the "Subordinated Deferrable Note Purchase Agreement") to be
entered into between the Company and the Trust, in the Company's Subordinated
Deferrable Notes due 2006 (the "Subordinated Deferrable Notes") to be issued
pursuant to an Indenture with respect to subordinated securities, dated as of
September 1, 1995, between the Company and State Street Bank and Trust, as
successor to Shawmut Bank Connecticut, N.A., as trustee (the "Indenture
Trustee") as amended by the First Supplemental Indenture dated as of October 13,
1995 and by the Second Supplemental Indenture dated as of ____, 2001
(collectively, the "Indenture"). The Company will guarantee (the "Guarantee")
payments on the Trust Preferred Securities to the extent set forth in a
Guarantee Agreement (the "Guarantee Agreement") to be entered into between the
Company and BNY Midwest Trust Company, as guarantee trustee (the "Guarantee
Trustee"), for the benefit of the holders from time to time of the Trust
Preferred Securities. The Trust Securities will be issued in accordance with the
amended and restated declaration of trust of the Trust (the "Amended
Declaration"), among the Company, as Sponsor, Xxxxxxx O'X. Xxxxxx, Xxxxxxxx X.
Xxxxxx and Xxxx X. Xxxxxx, as the initial regular trustees (the "Regular
Trustees"), BNY Midwest Trust Company, as the initial property trustee (the
"Property Trustee"), and The Bank of New York (Delaware) as the Delaware Trustee
(the "Delaware Trustee" and, together with the Property Trustee and the Regular
Trustees, the "Trustees"), and the holders from time to time of the undivided
beneficial ownership interests in the assets of the Trust.
The Issuers have prepared and filed with the Securities and Exchange
Commission (the "Commission"), in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement on Form S-3 (registration nos. 333-58052 and 333-58052-01), including
a prospectus, relating to the registration of the MEDS Units, the Purchase
Contracts, the Trust Preferred Securities, the Guarantee, the Subordinated
Deferrable Notes and the Common Shares (the "Registered Securities"). The
registration statement as amended at the time when it shall become effective,
including information, if any, deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this
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Agreement as the "Registration Statement," and the prospectus in the form first
used to confirm sales of Securities is referred to in this Agreement as the
"Prospectus." If the Company has filed an abbreviated registration statement
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
to the term 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, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Issuers hereby agree with the Underwriters as follows:
1. The Issuers agree to issue and sell to the several Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Issuers the respective number of Underwritten Securities set forth opposite such
Underwriters name in Schedule I hereto at a purchase price per MEDS Unit (the
"Purchase Price") of $25.00.
In addition, the Company agrees to issue and sell the Option Securities to
the several Underwriters as hereinafter provided, and the Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company up to an aggregate of 900,000 Option Securities at
the Purchase Price for the sole purpose of covering over-allotments (if any) in
the sale of Underwritten Securities by the several Underwriters.
If any Option Securities are to be purchased, the number of Option
Securities to be purchased by each Underwriter shall be the number of Option
Securities which bears the same ratio to the aggregate number of Option
Securities being purchased as the number of Underwritten Securities set forth
opposite the name of such Underwriter in Schedule I hereto (or such number
increased as set forth in Section 9 hereof) bears to the aggregate number of
Underwritten Securities being purchased from the Company by the several
Underwriters, subject, however, to such adjustments to eliminate any fractional
Securities as the Underwriters in their sole discretion shall make.
The Underwriters may exercise the option to purchase the Option Securities
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Underwriters to the
Company. Such notice shall set forth the aggregate number of Option Securities
as to which the option is being exercised and the date and time when the Option
Securities are to be delivered and paid for, which may be the same date and time
as the Closing Date (as hereinafter defined) but shall not be earlier than the
Closing Date nor later than the tenth full Business Day (as hereinafter defined)
after the date of such notice
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(unless such time and date are postponed in accordance with the provisions of
Section 9 hereof). Any such notice shall be given at least two Business Days
prior to the date and time of delivery specified therein.
2. The Company understands that the Underwriters intend (i) to make a
public offering of the Securities as soon after (A) the Registration Statement
has become effective and (B) the parties hereto have executed and delivered this
Agreement, as in the judgment of the Underwriters is advisable and (ii)
initially to offer the Securities upon the terms set forth in the Prospectus.
The Company hereby guarantees the timely performance by the Trust of its
obligations under this Agreement.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Underwriters, in the case of the Underwritten Securities, on _________, 2001, or
at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Underwriters and the Company may agree upon in
writing or, in the case of the Option Securities, on the date and time specified
by the Underwriters in the written notice of the Underwriters' election to
purchase such Option Securities. The time and date of such payment for the
Underwritten Securities is referred to herein as the "Closing Date" and the time
and date for such payment for the Option Securities, if other than the Closing
Date, are herein referred to as the "Additional Closing Date." As used herein,
the term "Business Day" means any day other than a day on which banks are
permitted or required to be closed in New York City.
Payment for the Securities to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the several Underwriters of the Securities to be purchased on such date
registered in such names and in such denominations as the Underwriters shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, and against credit to
the securities account of the Collateral Agent of security entitlements in
respect of the Trust Preferred Securities constituting a part of such Securities
as set forth in the Pledge Agreement, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Company. The certificates for the Securities will be made available for
inspection and packaging by the Underwriters at the office of X.X. Xxxxxx
Securities Inc. set forth above not later than 1:00 P.M., New York City time, on
the Business Day prior to the Closing Date or the Additional Closing Date, as
the case may be.
As compensation to the Underwriters for their commitments hereunder, the
Company will pay, or cause to be paid to X.X. Xxxxxx Securities Inc., for the
accounts of the several Underwriters, an amount equal to $_________ per Security
for the Securities to be delivered by the Company hereunder on the Closing Date
or the Additional Closing Date, as the case may be (the "Underwriting
Commission"). On _________, 2001, or on such other date, not later than the
fifth Business Day thereafter as the Underwriters and the Company may agree upon
in writing, or, in the case of the Option Securities, on the date and time
specified by the Underwriters to purchase such Option Securities, the Company
will pay or cause to be paid by wire transfer, in immediately available funds,
such Underwriting Commission to the account specified by X.X. Xxxxxx Securities
Inc.
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4. Each of the Issuers jointly and severally represents and warrants to
each Underwriter that:
(a) no order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus 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 any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus, as amended
or supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by such Underwriter expressly for use therein;
(c) the documents incorporated by reference in the Registration
Statement, when they become effective or were filed with the Commission, as
the case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Registration Statement, 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, in light of
the circumstances under which they were made, not misleading;
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(d) the financial statements, and the related notes thereto, included
in the Registration Statement and the Prospectus present fairly 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
said financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis, and the
supporting schedules included or incorporated by reference in the
Registration Statement present fairly the information required to be stated
therein;
(e) since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Trust or of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated
in the Registration Statement and the Prospectus; and except as set forth
or contemplated in the Registration Statement and the Prospectus neither
the Company nor any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) material to
the Company and its subsidiaries taken as a whole;
(f) 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 power and authority (corporate and other) to own its
properties and conduct its business as described in the Registration
Statement and 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 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;
(g) each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation under the laws of its jurisdiction of
incorporation, 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 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; and all the outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized
and validly issued, are fully-paid and non-assessable, and (except, in the
case of foreign subsidiaries, for directors' qualifying shares and except
as described in the Prospectus) are owned by the Company, directly or
indirectly, free and clear of all liens, encumbrances, security interests
and claims;
(h) the Company has an authorized capitalization as set forth in
the Prospectus and such authorized capital stock conforms as to legal
matters to
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the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully-paid and non-assessable and are
not subject to any pre-emptive or similar rights except as described in or
expressly contemplated by the Prospectus; and, except as described in or
expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of
the Company or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options;
(i) this Agreement has been duly authorized, executed and delivered
by each of the Company and the Trust;
(j) the Securities and the MEDS Agreements have been duly authorized
and, at the Closing Date or, in the case of Option Securities and Purchase
Contracts constituting part of the Option Securities, the Additional
Closing Date, will have been duly executed and delivered by the Company
and, as of the Closing Date or the Additional Closing Date, as the case may
be, will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as the enforceability thereof is subject to the effect of: (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
or other laws relating to or affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
sought in a proceeding in equity or at law); provided, however, that upon
the occurrence of a Termination Event (as defined in the Purchase Contract
Agreement), Section 365(e) of the Bankruptcy Code (11 U.S.C. (S)(S) 101-
1330, as amended) and Section 541 of the Bankruptcy Code, should not
substantively limit the provisions of Sections 3.15 and 5.06 of the
Purchase Contract Agreement or Section 5.4 of the Pledge Agreement that
require termination of the Purchase Contracts and release of the Collateral
Agent's security interest in (i) the Trust Preferred Securities; (ii) any
U.S. treasury securities substituted by Holders for their Trust Preferred
Securities pursuant to the MEDS Agreements ("the "Treasury Securities");
(iii) the applicable ownership interest of a treasury portfolio of zero-
coupon U.S. treasury securities maturing on __________, 2004 (the
"Applicable Ownership Interest of the Treasury Portfolio"); and/or (iv) the
Subordinated Deferrable Notes, as applicable. The Securities and the MEDS
Agreements conform in all material respects to the descriptions thereof
contained in the Prospectus;
(k) the Common Shares have been duly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions
of the MEDS Agreements, will be duly issued and fully paid and non-
assessable and will conform to the description thereof in the Prospectus,
and the issuance of the Common Shares will not be subject to any preemptive
or similar rights, other than such rights of the holders of the Company's
Class B Common Stock, par value $_____ per share (the "Class B Common
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Shares"), pursuant to the terms thereof under the Company's certificate of
incorporation, which rights of the Class B Common Shares have been
irrevocably waived.
(l) the Remarketing Agreement (the "Remarketing Agreement") has been
duly authorized by each of the Company and the Trust and, as of the Closing
Date or the Additional Closing Date, as the case may be, will have been
duly executed and delivered by each of the Company and the Trust and, as of
the Closing Date or the Additional Closing Date, as the case may be, will
constitute a valid and binding obligation of each of the Company and the
Trust, enforceable against each of them in accordance with its terms,
except as the enforceability thereof is subject to the effect of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other laws relating to or affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Remarketing
Agreement will conform to the description thereof in the Prospectus;
(m) the Subordinated Deferrable Notes have been duly authorized, and,
as of the Closing Date or the Additional Closing Date, as the case may be,
will have been duly executed, issued and delivered by the Company and
authenticated by the Indenture Trustee and, as of the Closing Date or the
Additional Closing Date, as the case may be, will constitute valid and
binding obligations of the Company, entitled to the benefits provided by
the Indenture and enforceable against the Company in accordance with their
terms, except as the enforceability thereof is subject to the effect of (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other laws relating to or affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); the Indenture has been
duly authorized, executed and delivered by the Company and constitutes a
valid and binding instrument of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability thereof
is subject to the effect of (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws relating to or affecting
creditors' rights generally and (ii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law); and each of the Subordinated Deferrable Notes and the
Indenture will conform to the descriptions thereof in the Prospectus;
(n) each of the Guarantee and the Guarantee Agreement has been duly
authorized and, as of the Closing Date or the Additional Closing Date, as
the case may be, will have been duly executed and delivered by the Company
and, as of the Closing Date or the Additional Closing Date, as the case may
be, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
the enforceability thereof is subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Guarantee and
Guarantee Agreement will conform to the descriptions thereof in the
Prospectus;
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(o) each of the Indenture, the Amended Declaration and the Guarantee
Agreement has been duly qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act");
(p) the Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of
the State of Delaware (the "Delaware Trust Act") and is a "grantor trust"
for federal income tax purposes, with the trust power and authority to own
property and conduct its business as described in the Prospectus, and has
conducted and will conduct no business other than the transactions
contemplated by this Agreement as described in the Prospectus; the Trust is
not, and will not be, a party to or bound by any agreement or instrument
other than this Agreement, the Remarketing Agreement, the Amended
Declaration and the other agreements entered into in connection with the
transactions contemplated hereby; the Trust has no liabilities or
obligations other than those arising out of the transactions contemplated
by this Agreement, the Remarketing Agreement and the Amended Declaration;
and the Trust is not a party to or subject to any action, suit or
proceeding of any nature;
(q) the Amended Declaration has been duly authorized by the Company,
as Sponsor, and, when executed and delivered by the Company, as Sponsor,
and the Regular Trustees (assuming due authorization, execution and
delivery by the Property Trustee and the Delaware Trustee), will constitute
a valid and binding obligation of each of the Company and the Trustees,
enforceable against each of them in accordance with its terms, except as
the enforceability thereof is subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Amended
Declaration will conform to the description thereof in the Prospectus;
(r) the Trust Preferred Securities have been duly authorized and,
when executed and authenticated in accordance with the provisions of the
Amended Declaration and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be validly issued and
(subject to the terms of the Amended Declaration) fully paid and non-
assessable undivided beneficial interests in the assets of the Trust and
will conform to the description thereof in the Prospectus, and the issuance
of such Trust Preferred Securities will not be subject to any preemptive or
similar rights. Holders of the Trust Preferred Securities will be entitled
to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. The Common Securities have been
duly executed under the Amended Declaration and, when issued and
delivered to the Company against payment therefor as described in the
Prospectus, will be validly issued undivided beneficial interests in the
assets of the Trust and will conform to the description thereof in the
Prospectus, and the issuance of such Common Securities will not be subject
to any preemptive or similar rights;
(s) each of the Common Securities Purchase Agreement and the
Subordinated Deferrable Note Purchase Agreement has been duly authorized
and, as of the Closing
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Date or the Additional Closing Date, as the case may be, will have been
duly executed and delivered by each of the Company and the Trust and, as of
the Closing Date or the Additional Closing Date, as the case may be, will
constitute valid and binding obligations of the Company and the Trust
enforceable against each of them in accordance with their terms, except as
the enforceability thereof is subject to the effect of (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(t) the Trust is not, nor with the giving of notice or lapse of time
or both would be, in violation of or in default under, nor will the
execution, delivery and performance by the Trust of its obligations under
this Agreement, the Remarketing Agreement, the Trust Securities, the Common
Securities Purchase Agreement, the Subordinated Deferrable Note Purchase
Agreement, the distribution of the Subordinated Deferrable Notes upon the
liquidation of the Trust in the circumstances contemplated by the Amended
Declaration or the consummation by the Trust of the transactions
contemplated by this Agreement, the Amended Declaration or the Remarketing
Agreement (the "Trust Transactions"), result in any violation of any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body, self-regulatory organization or financial
institution (foreign or domestic) having jurisdiction over the Trust or any
of its assets; and no consent, approval, authorization, order, license,
registration or qualification of, or with, any such court, governmental
agency or body or financial institution is required for the consummation of
the Trust Transactions, except such consents, authorizations, orders,
licenses, registrations or qualifications as have been obtained under the
Securities Act and the Trust Indenture Act and as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(u) 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 corporate charter or by-laws 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 which individually and in the aggregate are not material to the
Company and its subsidiaries, taken as a whole; the issue and sale of the
Securities, the execution and delivery and performance by the Company of
its obligations under this Agreement, the Securities, the MEDS Agreements,
the Common Securities Purchase Agreement, the Subordinated Deferrable Note
Purchase Agreement, the Amended Declaration, the Guarantee, the Guarantee
Agreement, the Subordinated Deferrable Notes, the Indenture, and the
Remarketing Agreement (the foregoing agreements excluding this Agreement
collectively, the "Offering Documents"), and the consummation of the
transactions contemplated herein and therein, will not conflict with or
result in a breach 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, nor will any such action result in any
violation of the
10
provisions of the corporate charter or by-laws of the Company or any of its
subsidiaries or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body, self-regulatory
organization or financial institution (foreign or domestic) having
jurisdiction over the Company, its subsidiaries or any of their respective
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental
agency or body or financial institution is required for the issue and sale
of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement and the Offering Documents, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(v) there are no legal or governmental investigations, actions, suits
or proceedings pending or, to the knowledge of the Company, threatened
against or affecting the Trust, the Company or any of its subsidiaries or
any of their respective properties or to which the Trust, the Company or
any of its subsidiaries is or may be a party or to which any property of
the Trust, the Company or any of its subsidiaries is or may be the subject
which, if determined adversely to the Trust, the Company or any of its
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of 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 or
contemplated by others; and there are no 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;
(w) the Company and its subsidiaries have good and marketable title
in fee simple to all items of real property and good and marketable title
to all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to
in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made or proposed to be
made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, existing and enforceable leases with such
exceptions as are not material and do not interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries;
(x) no relationship, direct or indirect, exists between or among the
Company or any or its subsidiaries on the one hand, and the directors,
officers, customers, suppliers, or beneficial owners (direct or indirect)
of the capital stock of the Company or any of its subsidiaries or on the
other hand, which is required by the Securities Act to be described in the
Registration Statement and the Prospectus and which has not so been
described;
(y) except as set forth in the Prospectus, no person has the right to
require the Company to register any securities for offering and sale under
the Securities Act by
11
reason of the filing of the Registration Statement with the Commission or
the issue and sale of the Securities and, without limiting the foregoing,
The Fuji Bank, Limited ("Fuji Bank") and Fuji America Holdings, Inc.
("FAHI"), parents of the Company, have irrevocably waived any rights they
would have, absent such waiver, to participate in the offering as selling
security holders or to require the inclusion of securities held by them in
the Registration Statement;
(z) neither the Company nor the Trust is, and, after giving effect to
the offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, neither the Company nor the Trust
will 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");
(aa) the Amended and Restated Keep Well Agreement, dated as of April
15, 1998 (the "Keep Well Agreement"), between the Company and Fuji Bank has
been duly authorized, executed and delivered by, and constitutes the valid
and binding obligation of, the Company and Fuji Bank and conforms to the
description thereof in the Prospectus;
(bb) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Securities Act;
(cc) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being
contested in good faith; and, except as disclosed in the Registration
Statement and the Prospectus, there is no tax deficiency which has been or
might reasonably be expected to be asserted or threatened against the
Company or any of its subsidiaries;
(dd) 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 stabilization or manipulation of the price of the
Securities or the Common Stock;
(ee) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations,
all financial institutions and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof,
and neither the Company nor any such subsidiary has received any actual
notice of any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and the
Prospectus; and each of the Company and its subsidiaries is in compliance
with all laws and regulations relating to the conduct of its business as
conducted as of the date hereof;
12
(ff) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended, (the "Code"). No prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code has occurred with respect
to any such plan, excluding transactions effected pursuant to a statutory
or administrative exemption. For each such plan which is subject to the
funding rules of Section 412 of the Code or Section 302 of ERISA, no
"accumulated funding deficiency" as defined in Section 412 of the Code has
been incurred, whether or not waived, and the fair market value of the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeded the present value of all benefits accrued under
such plan determined using reasonable actuarial assumptions.
(gg) except as restricted by laws governing the activities of broker-
dealers, none of the Company's subsidiaries is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to
the Company or any other subsidiary of the Company.
5. Each of the Issuers jointly and severally covenants with each of the
several Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time and, if required, to file
the final Prospectus with the Commission within the time periods specified
by Rule 424(b) and Rule 430A under the Securities Act and 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 subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities; and to furnish
copies of the Prospectus to the Underwriters in New York City prior to
10:00 a.m., New York City time, on the Business Day next succeeding the
date of this Agreement, in such quantities as the Underwriters may
reasonably request;
(b) to deliver, at the expense of the Company, to the Underwriters
eight signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and, during the period mentioned in
paragraph (e) below, to each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) and documents
incorporated by reference therein as the Underwriters may reasonably
request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes
13
effective, to furnish to the Underwriters a copy of the proposed amendment
or supplement for review and not to file any such proposed amendment or
supplement to which the Underwriters reasonably object;
(d) to advise the Underwriters promptly, and to confirm such advice
in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriters with copies
thereof, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi) of the occurrence of any event, within
the period referenced in paragraph (e) below, 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
when the Prospectus is delivered to a purchaser, not misleading, and (vii)
of the receipt by the Company or the Trust of any notification with respect
to any suspension of the qualification of the Securities for offer and sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of any
such stop order, or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any order suspending any
such qualification of the shares, or notification of any such order thereof
and, if issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law to
be delivered in connection with sales by the Underwriters or any dealer,
any event shall occur 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 it is necessary to amend or supplement the Prospectus
to comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Underwriters will furnish to the Company) to which Securities may have
been sold by the Underwriters on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary 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 will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriters
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Securities; provided
--------
that the Company shall not be required to file a general consent to service
of process in any jurisdiction;
14
(g) to make generally available to its security holders and to the
Underwriters as soon as practicable an earnings statement covering a period
of at least twelve months beginning with the first fiscal quarter of the
Company occurring after the effective date of the Registration Statement,
which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder;
(h) so long as the Securities are outstanding, to furnish to the
Underwriters copies of all reports or other communications (financial or
other) furnished to holders of the Securities and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) for a period of 90 days after the date of the initial public
offering of the Securities, not to (i) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any Securities, Purchase Contracts or shares of Common Stock or
any securities convertible into or exercisable or exchangeable for
Securities, Purchase Contracts, or Common Stock or (ii) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, Purchase Contracts or Common
Stock, whether any such transaction described in clause (i) or (ii) above
is to be settled by delivery of Securities, Purchase Contracts or Common
Stock or such other securities, in cash or otherwise, without the prior
written consent of X.X. Xxxxxx Securities Inc., other than the Securities
and Purchase Contracts to be sold hereunder, any shares of capital stock of
the Company issued upon the exercise of outstanding options granted under
existing employee stock option plans of which the Underwriters have
previously been advised in writing ("Stock Option Plans"), and any
additional options granted under the Stock Option Plans, provided that any
such additional options are note exercisable during such 90-day period;
(j) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement and the sale of the Subordinated
Deferrable Notes to the Trust in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) to use its best efforts to list, subject to notice of issuance,
the Securities and the Common Shares on the New York Stock Exchange (the
"Exchange");
(l) whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing, all
costs, fees, charges and expenses (i) incident to the preparation,
issuance, execution and delivery of the Securities, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements thereto),
(iii) incurred in connection with the registration or qualification of the
Securities under the laws of such jurisdictions as the Underwriters may
designate (including fees of counsel for the Underwriters and its
disbursements), (iv)
15
incurred in connection with the listing of the Securities and the Common
Shares on the Exchange, (v) related to the filing with, and clearance of
the offering by, the National Association of Securities Dealers, Inc.
(including fees of counsel for the Underwriters and its disbursements),
(vi) incurred in connection with the printing (including word processing
and duplication costs) and delivery of this Agreement, the Preliminary and
Supplemental Blue Sky Memoranda and the furnishing to the Underwriters and
dealers of copies of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided, (vii) incurred by the
Company in connection with a "road show" presentation to potential
investors, (viii) related to the preparation of certificates representing
the Securities or any other securities, (ix) of any transfer agent,
registrar and/or depositary and of the Purchase Contract Agent, the
Collateral Agent, the Guarantee Trustee, the Trustees and the Securities
Intermediary, (x) of rating agencies for the rating of the securities and,
(xi) otherwise incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Section.
6. The several obligations of the Underwriters hereunder to purchase the
Securities on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the following additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than
5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the Commission; the Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and
regulations under the Securities Act and in accordance with Section 5(a)
hereof; and all requests for additional information shall have been
complied with to the satisfaction of the Underwriters;
(b) no order suspending the qualification under the Trust Indenture
Act of the Indenture, the Guarantee Agreement or the Amended Declaration
shall be in effect, and no proceedings for such purpose shall be pending
before or threatened by the Commission;
(c) the representations and warranties of each of the Trust and the
Company contained herein are true and correct on and as of the Closing Date
or the Additional Closing Date, as the case may be, as if made on and as of
the Closing Date or the Additional Closing Date, as the case may be, and
each of the Trust and the Company shall have complied with all agreements
and all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case may
be;
(d) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of, or guaranteed by,
16
the Company by any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
(e) since the respective dates as of which information is given in
the Prospectus, there shall not have been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, business, prospects,
management, financial position, stockholders' equity or results of
operations of the Trust or the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, the
effect of which in the judgment of the Underwriters makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Securities on the Closing Date or the Additional Closing Date, as the case
may be, on the terms and in the manner contemplated in the Prospectus; and
neither the Company nor any of its subsidiaries has 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;
(f) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of
an executive officer of the Company, with specific knowledge about the
Company's financial matters, satisfactory to the Underwriters to the effect
set forth in subsections (a) through (e) (with respect to the respective
representations, warranties, agreements and conditions of the Company) of
this Section and to the further effect that there has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries taken as a whole from
that set forth or contemplated in the Registration Statement;
(g) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of
the Regular Trustees of the Trust, satisfactory to the Underwriters to the
effect set forth in subsections (a) through (e) (with respect to the
respective representations, warranties, agreements and conditions of the
Trust) of this Section and to the further effect that there has not
occurred any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity
or results of operations of the Trust from that set forth or contemplated
in the Registration Statement;
(h) Xxxx X. Xxxxxxxx, General Counsel to the Company, shall have
furnished to the Underwriters his written opinion, dated the Closing Date
or the Additional Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, to the effect that:
17
(i) 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 power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus;
(ii) 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 other 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;
(iii) each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation 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 it owns or
leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified and in
good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and all of the outstanding
shares of capital stock of each subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and (except,
in the case of foreign subsidiaries, for directors' qualifying shares
and except as otherwise set forth in the Prospectus) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(iv) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the best of such counsel's knowledge,
threatened against or affecting the Trust, the Company or any of its
subsidiaries or any of their respective properties or to which the
Trust, the Company or any of its subsidiaries is or may be a party or
to which any property of the Trust, the Company or its subsidiaries is
or may be the subject which, if determined adversely to the Trust, the
Company or any of its subsidiaries, could individually or in the
aggregate have, or reasonably be expected to have, a material adverse
effect on the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Trust or the Company and its subsidiaries, taken as a whole; to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others; and such counsel does not know of any statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement that are not described or
filed as required;
(v) this Agreement has been duly authorized, executed and
delivered by each of the Company and the Trust;
18
(vi) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(vii) the shares of capital stock of the Company outstanding
prior to the issuance of the Securities to be sold by the Company have
been duly authorized and are validly issued, fully paid and non-
assessable;
(viii) the Securities have been duly authorized, executed and
delivered by the Company, and each is a valid and binding obligation
of the Company, enforceable against the Company in accordance with
their terms, except as the enforceability thereof is subject to the
effect of (A) bankruptcy insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Securities conform to the
descriptions thereof contained in the Prospectus;
(ix) the Common Shares have been duly authorized and reserved
for issuance, and when issued and delivered in accordance with the
provisions of the MEDS Agreements, will be validly issued, fully paid
and non-assessable, and except as otherwise stated in the Prospectus,
the issuance of the Common Shares will not be subject to any
preemptive or similar rights other than such rights held by the owners
of the Class B Common Shares, which have been irrevocably waived;
(x) the statements (A) in the Prospectus under the captions
"Business - Legal Proceedings," "Description of MEDS Units,"
"Description of the Purchase Contracts," "Certain Provisions of the
Purchase Contracts, the Purchase Contract Agreement and the Pledge
Agreement," "Description of the Trust and the Trust Preferred
Securities," "Description of the Subordinated Deferrable Notes,"
"Description of the Guarantee," "Relationship Among the Trust
Preferred Securities, the Subordinated Deferrable Notes and the
Guarantee," "Description of Capital Stock," and "ERISA
Considerations," and (B) in the Registration Statement in Item 15,
insofar as such statements constitute a summary of the terms of the
Securities, legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such terms, legal matters, documents or proceedings;
(xi) neither the Company nor the Trust is, and after giving
effect to the offering and sale of the Securities and the application
of the proceeds thereof as described in the Prospectus, neither the
Company nor the Trust will be, an "investment company," or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act;
(xii) each of the Guarantee and the Guarantee Agreement has been
duly authorized, executed and delivered by the Company and is a valid
and binding obligation of the Company, enforceable against the Company
in accordance with
19
its terms, except as the enforceability thereof is subject to the
effect of (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Guarantee and the Guarantee
Agreement conform to the descriptions thereof in the Prospectus; and
the Guarantee Agreement is duly qualified under the Trust Indenture
Act;
(xiii) the Amended Declaration has been duly authorized by the
Company and duly executed and delivered by the Company (as Sponsor)
and the Regular Trustees and is a valid and binding obligation of each
of the Company and the Regular Trustees, enforceable against each of
them in accordance with its terms, except as the enforceability
thereof is subject to the effect of (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Amended
Declaration conforms to the description thereof in the Prospectus;
(xiv) the Subordinated Deferrable Notes have been duly
authorized, and, when issued and delivered by the Company and
authenticated by the Indenture Trustee pursuant to the Indenture, will
be duly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company, entitled to
the benefits provided by the Indenture and enforceable against the
Company in accordance with their terms, except as the enforceability
thereof is subject to the effect of (A) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) ; the Indenture has
been duly authorized, executed and delivered by the Company and is
duly qualified under the Trust Indenture Act and constitutes a valid
and binding instrument of the Company, enforceable against the Company
in accordance with its terms, except as the enforceability thereof is
subject to the effect of (A) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws relating to or
affecting creditors' rights generally and (B) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); the Indenture and the Subordinated
Deferrable Notes conform to the descriptions thereof in the
Prospectus;
(xv) the Trust will be classified as a grantor trust for United
States federal income tax purposes and not as an association taxable
as a corporation; the Subordinated Deferrable Notes will be classified
as indebtedness of the Company, and deductions for interest on the
Subordinated Deferrable Notes will not be disallowed under section
163(l) of the Internal Revenue Code; and the statements set forth in
the Prospectus under the caption "United States Federal Income Tax
Consequences," insofar as they purport to constitute summaries of
matters of United States federal tax laws and regulations or legal
conclusions with respect
20
thereto, constitute accurate summaries of the matters described
therein in all material respects;
(xvi) each of the MEDS Agreements has been duly authorized,
executed and delivered by the Company, and each is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject to the effect of (A) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other
laws affecting creditors' rights generally and (B) general principles
of equity (regardless of whether enforcement is sought in a proceeding
in equity or at law); provided, however, that upon the occurrence of a
Termination Event, Section 365(e) of the Bankruptcy Code (11 U.S.C.
(S)(S) 101-1330, as amended) and, based on a review of the applicable
case law, Section 541 of the Bankruptcy Code should not substantively
limit the provisions of Sections 3.15 and 5.06 of the Purchase
Contract Agreement or Section 5.4 of the Pledge Agreement that require
termination of the Purchase Contracts and release of the Collateral
Agent's security interest in (1) the Trust Preferred Securities, or
(2) the Treasury Securities, or (3) the Applicable Ownership Interest
of the Treasury Portfolio or (4) the Subordinated Deferrable Notes, as
applicable; provided, however, that (a) the foregoing opinion is
subject to the equitable powers of the Bankruptcy Court and the
Bankruptcy Court's power under Section 105(a) of the Bankruptcy Code
and (b) procedural delays could affect the timing of the exercise of
such rights and remedies; and the MEDS Agreements conform to the
descriptions thereof in the Prospectus;
(xvii) each of the Common Securities Purchase Agreement and the
Subordinated Deferrable Note Purchase Agreement has been duly
authorized, executed and delivered by each of the Company and the
Trust and each is a valid and binding obligation of each of the
Company and the Trust, enforceable against each of them in accordance
with their terms except as the enforceability thereof is subject to
the effect of (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(xviii) the Remarketing Agreement has been duly authorized,
executed and delivered by each of the Company and the Trust and is a
valid and binding obligation of each of the Company and the Trust,
enforceable against each of them in accordance with its terms, except
as the enforceability thereof is subject to the effect of (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law); and the Remarketing Agreement conforms to the description
thereof in the Prospectus;
(xix) the Pledge Agreement is effective to create in favor of
the Collateral Agent, for the benefit of the Company, a valid security
interest under the New York Uniform Commercial Code as in effect on
the date hereof in the
21
State of New York (the "UCC") in the security entitlements in respect
of the Pledged Trust Preferred Securities and the Pledged Treasury
Securities (as each is defined in the Pledge Agreement) that are from
time to time credited to the securities account created by the
Securities Intermediary pursuant to the Pledge Agreement (the
"Collateral Account") and, subject to Article 9-306 of the UCC, the
proceeds thereof, to secure the obligations of the Holders under the
Purchase Contracts;
(xx) the security interest of the Collateral Agent in
security entitlements with respect to the Pledged Trust Preferred
Securities and the Pledged Treasury Securities that are from time to
time credited to the Collateral Account will be perfected, and the
Collateral Agent will have "control" (within the meaning of Article 8-
106 of the UCC) thereof, once the Securities Intermediary has
indicated by book entry that such financial assets have been credited
to the Collateral Account, provided that the Securities Intermediary
has agreed that it will comply with "entitlement orders" originated by
the Collateral Agent without further consent by the "entitlement
holder" (as each is defined in Article 8-102(a)(7) and (8) of the
UCC). Under Section 4.3 of the Pledge Agreement, the Securities
Intermediary has agreed that it will comply with entitlement orders
originated by the Collateral Agent, as the secured party with respect
to the Collateral Account, without further consent by the Purchase
Contract Agent, the entitlement holder with respect to such security
entitlements; under Section 8-510 of the UCC, assuming that neither
the Collateral Agent nor the Company has any notice of any adverse
claim to such security entitlements, insofar as Articles 8 and 9 of
the UCC are applicable thereto, no action based on an adverse claim to
such security entitlements, whether framed in conversion, replevin,
constructive trust, equitable lien or other theory, may be
successfully asserted against the Collateral Agent or the Company; in
giving the opinions contained in this paragraph (xx) such counsel may
rely upon the representations of the Securities Intermediary contained
in, and may assume compliance by the Securities Intermediary with its
undertakings set forth in, Sections 4.1 through 4.5 and 4.9 of the
Pledge Agreement;
(xxi) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements
thereto (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the
Securities Act and believes that (other than the financial statements
and related schedules therein, as to which such counsel need express
no belief) the Registration Statement and the prospectus included
therein at the time the Registration Statement became effective did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that the Prospectus, as amended
or supplemented, if applicable, does not contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
22
(xxii) 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 corporate charter or by-laws or
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 it or any of them or
any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate are not material to
the Company and its subsidiaries, taken as a whole; the issue and sale
of the Securities being delivered on the Closing Date or the
Additional Closing Date, as the case may be, and the execution,
delivery and performance by the Company of its obligations under this
Agreement and each of the Offering Documents and the consummation of
the transactions contemplated herein and therein will not conflict
with or result in a breach 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, nor will any such action result in any violation of the
provisions of the certificate of incorporation or by-laws of the
Company or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its subsidiaries or any of their
respective properties;
(xxiii) no consent, approval, authorization, order, license,
registration or qualification of, or with, any court, governmental
agency or body self-regulatory organization or financial institution
(foreign or domestic) is required for the issue and sale of the
Securities or the consummation of the other transactions contemplated
by the Offering Documents, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act and the Trust Indenture
Act and as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
(xxiv) the Keep Well Agreement has been duly authorized,
executed and delivered by each of the Company and Fuji Bank and
constitutes a valid and legally binding agreement of each of the
Company and Fuji Bank, enforceable against each of them in accordance
with its terms, except as the enforceability thereof is subject to the
effect of (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting creditors
rights generally and (B) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law); and the Keep Well Agreement conform to the descriptions
thereof contained in the Prospectus;
(xxv) the letter dated April ______, 2001, from Fuji Bank,
FAHI and Mizuho Holdings, Inc. ("Mizuho") to the Company and the
Underwriters, waiving certain preemptive rights (the "Preemptive
Rights Waiver"), has been duly authorized, executed and delivered by
each of Fuji Bank, XXXX and Mizuho
23
and constitutes an irrevocable waiver and binding instrument of each
of Fuji Bank FAHI and Mizuho, enforceable against each of them in
accordance with its terms, except as the enforceability thereof is
subject to the effect of (A) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws relating to or
affecting creditors' rights generally and (B) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and the Preemptive Rights Waiver
conforms to the description thereof contained in the Prospectus;
(xxvi) the letter dated April _______, 2000 from Fuji Bank,
FAHI and Mizuho to the Company and the Underwriters, waiving certain
registration rights, (the "Registration Rights Waiver") constitutes an
irrevocable waiver and binding instrument of each of Fuji Bank, FAHI
and Mizuho, enforceable against each of them in accordance with its
terms, except as the enforceability thereof is subject to the effect
of (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law); and the Registration Rights Waiver conforms to the description
thereof contained in the Prospectus;
(xxvii) except as set forth in the Prospectus, no person has the
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 issue and sale of
the Securities;
(xxviii) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date or the Additional Closing Date, as
the case may be (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission, as the
case may be, complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder; and such
counsel has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may be, in
the case of a registration statement which became effective under the
Securities Act, 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, in the
case of other documents which were filed under the Exchange Act with
the Commission, 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;
(xxix) each of the Company and its subsidiaries owns, possesses
or has obtained all licenses, permits, certificates, consents, orders,
approvals and other
24
authorizations from, and has made all declarations and filings with,
all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory
organizations, all financial institutions (foreign or domestic) and
all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to
carry on its business as conducted as of the date hereof, and neither
the Company nor any such subsidiary has received any actual notice of
any proceeding relating to revocation or modification of any such
license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and
the Prospectus; and each of the Company and its subsidiaries is in
compliance with all laws and regulations relating to the conduct of
its business as conducted as of the date of the Prospectus; and
(xxx) the Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company
and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company or its subsidiaries;
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of Illinois and the General Corporation Law of the State of Delaware,
to the extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to the Underwriters' counsel, familiar with the applicable laws; (B)
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 of jurisdictions having custody of documents respecting
the corporate existence or good standing of the Company. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
upon which he relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters are justified in relying thereon. With
respect to the matters to be covered in subparagraph (xxi) above, such counsel
may state that his opinion and belief is based upon their participation in the
preparation of the Registration Statement and the Prospectus and any amendment
or supplement thereto (other than the documents incorporated by reference
therein) and review and discussion of the contents thereof (including the
documents incorporated by reference therein) but is without independent check or
verification except as specified.
The opinion of Xxxx X. Xxxxxxxx described above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
25
(i) Xxxxxxxx, Xxxxxx & Xxxxxx, P.A. shall have furnished to the
Underwriters its written opinion, as special Delaware counsel to the
Issuers, dated the Closing Date or the Additional Closing Date, as the case
may be, in form and substance satisfactory to the Underwriters, to the
effect that:
(i) the Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Trust Act. Under
the Delaware Trust Act and the Amended Declaration, the Trust has the
business trust power and authority to own property and to conduct its
business as described in the Prospectus, as amended and supplemented,
and to enter into and perform its obligations under this Agreement and
the Trust Securities;
(ii) the Common Securities have been duly authorized by the
Amended Declaration and, when issued and delivered by the Trust to the
Company against payment therefor in accordance with the terms of the
Amended Declaration and as described in the Prospectus, will be
validly issued and (subject to the terms in this paragraph) fully paid
undivided beneficial interests in the assets of the Trust (such
counsel may note that the holders of Common Securities will be subject
to the withholding provisions of Section 10.04 of the Amended
Declaration, will be required to make payment or provide indemnity or
security as set forth in the Amended Declaration and will be liable
for the debts and obligations of the Trust to the extent provided in
Section 9.01(b) of the Amended Declaration); under the Delaware Trust
Act and the Amended Declaration, the issuance of the Common Securities
is not subject to preemptive rights;
(iii) the Trust Preferred Securities have been duly authorized by
the Amended Declaration and, when issued and delivered in accordance
with the terms of the Amended Declaration against payment therefor as
set forth herein, the Trust Preferred Securities will be validly
issued and (subject to the terms in this paragraph) fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust, and the holders of the Trust Preferred Securities will be
entitled to the benefits of the Amended Declaration (subject to the
limitations set forth in paragraph (v) below) and will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware (such counsel may note that
the holders of Trust Preferred Securities will be subject to the
withholding provisions of Section 10.04 of the Amended Declaration and
will be required to make payment or provide indemnity or security as
set forth in the Amended Declaration); under the Delaware Trust Act
and the Amended Declaration, the issuance of the Trust Preferred
Securities is not subject to preemptive rights;
(iv) under the Delaware Trust Act and the Amended Declaration,
all necessary trust action has been taken to duly authorize the
execution, delivery and performance by the Trust of this Agreement and
the Remarketing Agreement;
26
(v) assuming the Amended Declaration has been duly authorized
by the Company and has been duly executed and delivered by the Company
and the Regular Trustee, and assuming due authorization, execution and
delivery of the Amended Declaration by the Property Trustee and the
Delaware Trustee, the Amended Declaration constitutes a valid and
binding obligation of the Company and the Regular Trustees,
enforceable against the Company and the Regular Trustees in accordance
with its terms, except as the enforceability thereof is subject to the
effect of (A) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws relating to or affecting creditors
rights generally, (B) general principles of equity, (regardless of
whether such enforceability is considered in a proceeding in equity or
at law), and (C) applicable public policy on the enforceability of
provisions relating to indemnification or contribution;
(vi) the issuance and sale by the Trust of the Trust Securities,
the purchase by the Trust of the Subordinated Deferrable Notes, the
execution, delivery and performance by the Trust of this Agreement,
the consummation by the Trust of the transactions contemplated by the
Underwriting Agreement and the compliance by the Trust with its
obligations thereunder do not violate any of the provisions of the
Certificate of Trust or the Amended Declaration or any applicable
Delaware law or administrative regulation; and
(vii) assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware Trustee as required by the
Delaware Trust Act and the filing of documents with the Secretary of
State of Delaware) or employees in the State of Delaware, no filing
with, or consent approval, authorization, order, license,
registration, or qualification of, or with, any Delaware court or
Delaware governmental agency or body (other that as may be required
under the securities or Blue Sky laws of the state of Delaware, as to
which such counsel need express no opinion) is necessary or required
to be obtained by the Trust solely in connection with the due
authorization, execution and delivery by the Trust of this Agreement
or the offering, issuance, sale or delivery of the Trust Preferred
Securities.
(j) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to BNY Midwest Trust Company ("BNY"), as the
Property Trustee, the Guarantee Trustee and the Purchase Contract Agent,
addressed to the Underwriters and dated as of the Closing Date, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) BNY is a national banking association with all necessary
power and authority to execute, deliver and perform its obligations
under the Amended Declaration, the Guarantee Agreement, the Purchase
Contract Agreement, and the Pledge Agreement;
27
(ii) the execution, delivery and performance by the BNY of each
of the Amended Declaration, the Guarantee Agreement, the Purchase
Contract Agreement and the Pledge Agreement have been duly authorized
by all necessary corporate action on the part of BNY, and each of the
Amended Declaration, the Guarantee Agreement, the Purchase Contract
Agreement and the Pledge Agreement has been duly executed and
delivered by BNY, and each constitutes the valid and binding agreement
of BNY, enforceable against BNY in accordance with their terms, except
as the enforceability thereof is subject to the effect of (A)
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and other laws relating to or affecting creditors' rights
generally, and (B) general principles of equity regardless of whether
such enforceability is (considered in a proceeding in equity or at
law);
(iii) the execution, delivery and performance of each of the
Amended Declaration, the Guarantee Agreement, the Purchase Contract
Agreement and the Pledge Agreement by BNY do not conflict with or
constitute a breach of the charter or by-laws of BNY; and
(iv) no consent, approval, authorization, order, license,
registration or qualification of, or with, any court, governmental
agency or body, self-regulatory organization or financial institution
(foreign or domestic) is required for the execution, delivery or
performance by BNY of the Amended Declaration, the Guarantee
Agreement, the Purchase Contract Agreement and the Pledge Agreement.
(k) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to The Bank of New York (Delaware), as Delaware
Trustee, addressed to the Underwriters and dated the Closing Date or the
Additional Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, to the effect that:
(i) the Delaware Trustee has been duly incorporated and is
validly existing as a Delaware corporation in good standing under the
laws of the State of Delaware with all necessary power and authority
to execute and deliver, and to carry out and perform its obligations
under the terms of the Amended Declaration;
(ii) the execution, delivery and performance by the Delaware
Trustee of the Amended Declaration has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee; the
Amended Declaration has been duly executed and delivered by the
Delaware Trustee and constitutes the valid and binding agreement of
the Delaware Trustee enforceable against the Delaware Trustee in
accordance with its terms, except as the enforceability thereof is
subject to the effect of (A) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other laws relating to or
affecting creditors' rights generally, (B) general principles of
equity, (regardless of whether such enforceability is considered in a
proceeding in equity or at law), and (C) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution;
28
(iii) the execution, delivery and performance of the Amended
Declaration by the Delaware Trustee do not conflict with or constitute
a breach of the charter or by-laws of the Delaware Trustee; and
(iv) no consent, approval, authorization, order, license,
registration or qualification of, or with, any court, governmental
agency or body, self-regulatory organization or financial institution
(foreign or domestic) is required for the execution, delivery or
performance by the Delaware Trustee of the Amended Declaration.
(l) A written opinion of counsel shall have been furnished to the
Underwriters by counsel to Xxxxx Fargo Bank Minnesota, N.A. ("Xxxxx
Fargo"), as the Collateral Agent and the Securities Intermediary, addressed
to the Underwriters and dated the Closing Date, or the Additional Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) Xxxxx Fargo is duly incorporated as a national banking
association with all necessary power and authority to execute, deliver
and perform its obligations under the Pledge Agreement;
(ii) the execution, delivery and performance by Xxxxx Fargo of
the Pledge Agreement have been duly authorized by all necessary
corporate action on the part of Xxxxx Fargo; and the Pledge Agreement
has been duly executed and delivered by Xxxxx Fargo and constitutes
the valid and binding agreement of Xxxxx Fargo enforceable against
Xxxxx Fargo in accordance with its terms, except as the enforceability
thereof is subject to the effect of (A) bankruptcy insolvency,
reorganization, moratorium, fraudulent conveyance or other laws
relating to or affecting creditors' rights generally and (B) general
principals of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iii) the execution, delivery and performance of the Pledge
Agreement by Xxxxx Fargo does not conflict with or constitute a breach
of the charter or by-laws of Xxxxx Fargo; and
(iv) no consent, approval, authorization, order, license,
registration or qualification of, or with, any court, governmental
agency or body, or self-regulatory organization or financial
institution (foreign or domestic) is required for the execution,
delivery or performance by Xxxxx Fargo of the Pledge Agreement.
(m) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or the Additional
Closing Date, as the case may be, Xxxxxx Xxxxxxxx, LLP shall have furnished
to the Underwriters letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to the Underwriters, containing
statements and information of the type customarily included in accountants'
"comfort
29
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectus;
(n) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, an opinion of
Xxxxxx Xxxxxx Xxxxx, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Securities, the Registration
Statement, the Prospectus and other related matters as the Underwriters may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(o) the Underwriters shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, an opinion of
Xxxxx Xxxx & Xxxxxxxx, special counsel to the Underwriters, with respect to
such matters as the Underwriters may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(p) the Securities to be delivered on the Closing Date or the
Additional Closing Date, as the case may be, and the Common Shares shall
have been approved for listing on the New York Stock Exchange, subject to
official notice of issuance;
(q) on or prior to the Closing Date or the Additional Closing Date,
as the case may be, the Company shall have furnished to the Underwriters
such further certificates and documents as the Underwriters shall
reasonably request;
(r) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between the Underwriters and certain stockholders,
officers and directors of the Company relating to sales and certain other
dispositions of shares of stock or certain other securities, delivered to
you on or before the date hereof, shall be in full force and effect on the
Closing Date on the Additional Closing Date, as the case may be.
7. Each of the Trust and the Company, jointly and severally, agrees to
indemnify and hold harmless each Underwriter, each affiliate of any Underwriter
which assists such Underwriter in the distribution of the Shares and each
person, if any, who controls any 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, the legal fees and other expenses incurred in connection with any
suit, action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter expressly for use therein.
30
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Trust and the Company, the directors of the Company, the officers
of the Company who sign the Registration Statement, the Trustees and each person
who controls the Company or the Trust within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Trust and the Company to each Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person 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 Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person 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 Person shall not, in connection with any
proceeding or related proceeding 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 Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the
Underwriters, each affiliate of any Underwriter which assists such Underwriter
in the distribution of the Security and such control persons of Underwriters
shall be designated in writing by X.X. Xxxxxx Securities Inc. and any such
separate firm for the Trust, the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement, the Trustees and
such control persons of the Company or the Trust shall be designated in writing
by the Company or the Trust, as the case may be. The Indemnifying Person 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 Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought
31
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person 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 Trust and the Company on the one hand, and the
Underwriters on the other hand, from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust or the
Company on the one hand, and the Underwriters 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 Trust and the Company on the one hand, and the
Underwriters on the other hand, shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Company and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Trust or the Company on the one hand, and
the Underwriters on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Trust or by the Underwriters' and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Trust, the Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
---
rata allocation (even if the Underwriters were treated as one entity for such
----
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person 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 incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective number of Securities set forth opposite their names in Schedule I
hereto, and not joint.
32
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.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Company set forth 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
any Underwriter or any person controlling any Underwriter or by or on behalf of
the Trust or the Company, its officers or directors, the Trustees or any other
person controlling the Company and (iii) acceptance of and payment for any of
the Securities.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Securities)
may be terminated in the absolute discretion of the Underwriters, by notice
given to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date (or, in the case of the Option Securities, prior to
the Additional 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 or the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of, or
guaranteed by, 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 the judgment of the Underwriters, is material and adverse and which, in
the judgment of the Underwriters, makes it impracticable to market the
Securities being delivered at the Closing Date or the Additional Closing Date,
as the case may be, on the terms and in the manner contemplated in the
Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any post-
effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Securities set forth opposite their respective names in Schedule I bears to the
aggregate number of Underwritten Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as X.X. Xxxxxx
Securities Inc. may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the number of Securities that any
--------
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 9 by an amount in excess of one-tenth of such number of
Securities without the written consent of such Underwriter. If on the Closing
Date or the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate number of
Securities with respect
33
to which such default occurs is more than one-tenth of the aggregate number of
Securities to be purchased on such date, and arrangements satisfactory to the
Underwriters and the Company for the purchase of such Securities are not made
within 36 hours after such default, this Agreement (or the obligations of the
several Underwriters to purchase the Option Securities, as the case may be)
shall terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Trust. In any such case either the Underwriters or the
Company shall have the right to postpone the Closing Date (or, in the case of
the Option Securities, the Additional Closing Date), but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Trust or the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
or if for any reason the Trust or the Company shall be unable to perform its
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company agrees to reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
fees and expenses of its counsel) reasonably incurred by the Underwriter in
connection with this Agreement or the offering contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Company, the Trust, the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Securities, any controlling
persons referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Securities from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Underwriters jointly or by X.X. Xxxxxx Securities Inc. on behalf of the
Underwriters, and any such action taken by the Underwriters jointly or by X.X.
Xxxxxx Securities Inc. shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to them, c/o X.X.
Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telefax: (212)
483-2323); Attention: Syndicate Department. Notices to the Company shall be
given to it at Xxxxxx Financial, Inc., 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, (telefax: (000) 000-0000); Attention: Secretary.
13. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
34
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
Very truly yours,
HFI TRUST I
By: XXXXXX FINANCIAL, INC., as Sponsor
By: ________________________________
Name:
Title:
XXXXXX FINANCIAL, INC.
By: ________________________________
Name:
Title:
Accepted as of the date hereof.
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC
ABN AMRO ROTHSCHILD INC.
BANC OF AMERICA SECURITIES LLC
DEUTSCHE BANC ALEX. BROWN INC.
INCORPORATED
By: X.X. XXXXXX SECURITIES INC.
By:__________________________________
Name:
Title:
35
SCHEDULE I
Underwriter Number of Underwritten Securities
----------- To Be Purchased
---------------
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
ABN AMRO Rothschild LLC
Banc of America Securities LLC
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Total 6,100,000
SCHEDULE II
Title of Securities:
% MEDS(SM) Units
Registration Statement:
Registration Statement Nos. 333-58052 and 000-00000-00
Number of Firm Securities:
6,100,000 MEDS(SM) Units
Number of Option Securities:
900,000 MEDS(SM) Units
Price to Public:
$25 per MEDS(SM) Unit
Purchase Price by Underwriters:
$25 per MEDS(SM) Unit
Commission Payable to Underwriters:
$0.__ Per MEDS(SM) Unit
Distribution Rate on Trust Preferred Securities:
% of the stated liquidation preference of $25 per annum
Specified funds for payment of purchase price:
Federal (same day) funds
Reference Price:
$______
Threshold Appreciation Price:
$______
Closing Price of Xxxxxx Common Stock on _______, 2001:
$______
Payment Dates:
Purchase Contract Settlement Date:
_________, 2004
Maturity of Trust Preferred Security:
_________, 2006
Stock Exchange Listing:
New York Stock Exchange
Closing Date:
_________, 2001
Closing Location:
Chicago, Illinois
Names and addresses of Underwriters:
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
ABN AMRO Rothschild LLC
Bank of America Securities LLC
Deutsche Banc Xxxx. Xxxxx Inc.
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Exhibit A
[FORM OF MEDS LOCK-UP AGREEMENT]
______________, 2001
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
As Joint Lead Managers and on Behalf of
the Several Underwriters
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In order to induce you to act as underwriters in the public offering (the
"Offering") of Mandatory Enhanced Dividend Securities Units ("MEDS Units") of
Xxxxxx Financial, Inc. (the "Company"), the undersigned hereby irrevocably
agrees that it will not, directly or indirectly, sell, announce the intention to
sell, offer, contract to sell, transfer (in whole or in part) the economic risk
of ownership in, make any short sale, pledge or otherwise dispose of any (i)
MEDS Units, (ii) purchase contracts for the purchase of the Company's Class A
Common Stock ("Purchase Contracts"), (iii) shares of the Company's Class A or
Class B Common Stock (collectively, the "Common Stock") or (iv) any securities
convertible into or exchangeable or exercisable for MEDS Units, Purchase
Contracts or Common Stock or any other rights to purchase or acquire such
securities, without the prior written consent of X.X. Xxxxxx Securities Inc.,
acting on behalf of the underwriters, for a period from the date hereof until 90
days after the date of the final prospectus pursuant to which the MEDS Units are
sold in the Offering (the "Prospectus").
Notwithstanding the foregoing, if the undersigned is an individual, he or she
may transfer any MEDS Units, Purchase Contracts, shares of Common Stock or
securities convertible into or exchangeable or exercisable for MEDS Units,
Purchase Contracts or Common Stock either during his or her lifetime or on death
by will or intestacy to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided, however, that prior to any
such transfer each transferee shall execute an agreement, satisfactory to X.X.
Xxxxxx Securities Inc., pursuant to which each transferee shall agree to receive
and hold such MEDS Units, Purchase Contracts and/or shares of Common Stock, or
securities convertible into or exchangeable or exercisable for MEDS Units,
Purchase Contracts and/or Common Stock, subject to the provisions hereof, and
there shall be no further transfer except in accordance with the provisions
hereof. For the purposes of this paragraph, "immediate family" shall mean
spouse, lineal descendant, father, mother, brother or sister of the transferor.
The undersigned hereby waives any rights of the undersigned to sell any
securities of the Company pursuant to the Registration Statement on Form S-3
filed with the Securities and
Exchange Commission in connection with the Offering, and acknowledges and agrees
that for a period of 90 days from the date of the Prospectus the undersigned has
no right to require the Company to register under the Securities Act of 1933, as
amended, any securities of the Company.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the applicable party against the
transfer of securities of the Company held by the undersigned except in
compliance with this agreement.
Very truly yours,
Dated:_____________________
Signature
_______________________________________
Printed Name and Title
