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Exhibit 1.1
[NUMBER OF SHARES]
WESCO INTERNATIONAL, INC.
COMMON STOCK, PAR VALUE $0.01 PER SHARE
U.S. UNDERWRITING AGREEMENT
_____ __, 1999
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXX X. XXXXX & CO. INCORPORATED
ING BARING XXXXXX XXXX LLC
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
WESCO International, Inc., a Delaware corporation (the "Company"),
proposes to sell _________ shares (the "Firm Stock") of the Company's common
stock, par value $0.01 per share (the "Common Stock"). In addition, the Company
proposes to grant to the U.S. Underwriters named in Schedule 1 hereto (the "U.S.
Underwriters") an option to purchase up to an additional _______ shares of the
Common Stock on the terms and for the purposes set forth in Section 2 (the
"Option Stock"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock". This is to confirm the agreement
concerning the purchase of the Stock from the Company by the U.S. Underwriters
named in Schedule 1 hereto (the "U.S. Underwriters").
It is understood by all parties that the Company is concurrently
entering into an agreement dated the date hereof (the "International
Underwriting Agreement") providing for the sale by the Company of __________
shares of Common Stock (including the over-allotment option thereunder) (the
"International Stock") through arrangements with certain underwriters outside
the United States (the "International Managers"), for whom Xxxxxx Brothers
International (Europe) and Bear, Xxxxxxx International Limited, Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities International, Xxxxxxx, Sachs International, Xxxxxx
X. Xxxxx & Co. Incorporated and Baring Brothers Limited, as agent for ING Bank
NV, are acting as lead managers. The U.S. Underwriters and the International
Managers simultaneously are entering into an agreement between the U.S. and
international underwriting syndicates (the "Agreement Between U.S. Underwriters
and International Managers") which provides for, among other things, the
transfer of shares of Common Stock
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between the two syndicates. Two forms of prospectus are to be used in connection
with the offering and sale of shares of Common Stock contemplated by the
foregoing, one relating to the Stock and the other relating to the International
Stock. The latter form of prospectus will be identical to the former except for
certain substitute pages as included in the registration statement and
amendments thereto referred to below. Except as used in Sections 2, 3, 4, 9 and
10 herein, and except as the context may otherwise require, references herein to
the Stock shall include all the shares of the Common Stock which may be sold
pursuant to either this Agreement or the International Underwriting Agreement,
and references herein to any prospectus whether in preliminary or final form,
and whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and one or more
amendments thereto, with respect to the Stock has (i) been prepared by
the Company in conformity with the requirements of the United States
Securities Act of 1933 (the "Securities Act") and the rules and
regulations (the "Rules and Regulations") of the United States
Securities and Exchange Commission (the "Commission") thereunder, (ii)
been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act; and a second registration
statement on Form S-1 with respect to the Stock (i) may also be
prepared by the Company in conformity with the requirements of the
Securities Act and the Rules and Regulations and (ii) if to be so
prepared, will be filed with the Commission under the Securities Act
pursuant to Rule 462(b) of the Rules and Regulations on the date
hereof. Copies of the first such registration statement and the
amendment to such registration statement, together with the form of any
such second registration statement, have been delivered by the Company
to you as the representatives (the "Representatives") of the U.S.
Underwriters. As used in this Agreement, "Effective Time" means (i)
with respect to the first such registration statement, the date and the
time as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission and (ii) with respect to any second registration statement,
the date and time as of which such second registration statement is
filed with the Commission, and "Effective Times" is the collective
reference to both Effective Times; "Effective Date" means (i) with
respect to the first such registration statement, the date of the
Effective Time of such registration statement and (ii) with respect to
any second registration statement, the date of the Effective Time of
such second registration statement, and "Effective Dates" is the
collective reference to both Effective Dates; "Preliminary Prospectus"
means each prospectus included in any such registration statement, or
amendments thereof, before it became effective under the Securities Act
and any prospectus filed with the Commission by the Company with the
consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Primary Registration Statement" means the first
registration statement referred to in this Section 1(a), as amended at
its
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Effective Time, "Rule 462(b) Registration Statement" means the second
registration statement, if any, referred to in this Section 1(a), as
filed with the Commission, and "Registration Statements means both the
Primary Registration Statement and any Rule 462(b) Registration
Statement, including in each case all information contained in the
final prospectus filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations in accordance with Section 5(a) hereof and
deemed to be a part of the Registration Statements as of the Effective
Time of the Primary Registration Statement pursuant to paragraph (b) of
Rule 430A of the Rules and Regulations; and "Prospectus" means such
final prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
(b) The Primary Registration Statement conforms (and the Rule
462(b) Registration Statement, if any, the Prospectus and any further
amendments or supplements to the Registration Statements or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform) in all respects to the
requirements of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to the
Registration Statements and any amendment thereto) and as of the
applicable filing date (as to 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; provided that
no representation or warranty is made as to information contained in or
omitted from the Registration Statements or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of any U.S.
Underwriter specifically for inclusion therein.
(c) The Company and each "significant subsidiary" (within the
meaning of Rule 1-02 of Regulation S-X)of the Company have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary
to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify, be in good standing or have such power or authority would not,
singularly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect").
(d) The Company will have a pro forma capitalization as set
forth in the Prospectus under the heading "Capitalization". All of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
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Prospectus; and all of the outstanding shares of capital stock of each
"significant subsidiary" (within the meaning of Rule 1-02 of Regulation
S-X) of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of any lien, charge, encumbrance,
security interest, restriction upon voting or transfer or any other
claim of any third party, other than those incurred in connection with
the Credit Agreement as set forth in the Prospectus. WESCO
Distribution, Inc. and WESCO Distribution-Canada, Inc. are the only
"significant subsidiaries" (within the meaning of Rule 1-02 of
Regulation S-X) of the Company on the date hereof.
(e) The unissued shares of the Stock to be issued and sold by
the Company to the U.S. Underwriters hereunder and under the
International Underwriting Agreement have been duly and validly
authorized and, when issued and delivered against payment therefor as
provided herein and in the International Underwriting Agreement, will
be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the description thereof contained in the
Prospectus.
(f) The Company has full right, power and authority to execute
and deliver this Agreement and the International Underwriting Agreement
and to perform its obligations hereunder and thereunder; and all
corporate action required to be taken for the due and proper
authorization, execution and delivery of each of the Underwriting
Agreement and the International Underwriting Agreement and the
consummation of the transactions contemplated hereby and thereby has
been duly and validly taken.
(g) Each of this Agreement and the International Underwriting
Agreement has been duly authorized, executed and delivered by the
Company.
(h) Each of this Agreement and the International Underwriting
Agreement conforms in all material respects to the description thereof
contained in the Prospectus.
(i) The execution, delivery and performance of this Agreement
and the International Underwriting Agreement by the Company, and the
consummation of the transactions contemplated hereby and thereby, will
not conflict with or contravene, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company, (ii) any
agreement or other instrument binding upon the Company or any of its
subsidiaries or their respective assets or (iii) any provision of
applicable law or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any of
its subsidiaries or their respective assets, except, in the case of
clause (ii) and (iii), for conflicts, contraventions, defaults, liens,
charges or encumbrances which would not, singularly or in the
aggregate, have a Material
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Adverse Effect. No consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
execution, delivery and performance of this Agreement or the
International Underwriting Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations or qualifications (i) as may
be required to be obtained or made under the Exchange Act and under
applicable state or foreign securities laws in connection with the
purchase and distribution of the Stock by the U.S. Underwriters and the
International Managers and (ii) the failure to obtain would not,
singularly or in the aggregate, have a Material Adverse Effect.
(j) There are no contracts, agreements or understandings
between the Company and any person granting such person the right
(other than rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statements or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act.
(k) Except as described in the Prospectus, the Company has not
sold or issued any shares of Common Stock during the six-month period
preceding the date of the Prospectus, including any sales pursuant to
Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to
outstanding options, rights or warrants.
(l) The historical financial statements (including the related
notes) filed as part of the Registration Statements or contained in the
Prospectus have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
covered thereby and fairly present the financial position of the
entities purported to be covered thereby at the respective dates
indicated and the results of their operations and their cash flows for
the respective periods indicated; and the financial information filed
as part of the Registration Statements or contained in the Prospectus
under the headings "Selected Historical Consolidated Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Management--Executive Compensation" are
derived from the accounting records of the Company and its subsidiaries
and fairly present the information purported to be shown thereby. The
pro forma financial information contained in the Prospectus has been
prepared on a basis consistent with the historical financial statements
contained in the Prospectus (except as specified therein), includes all
material adjustments to the historical financial information required
by Rule 11-02 of Regulation S-X under the Securities Act and the
Exchange Act to reflect the transactions described in the Prospectus,
gives effect to assumptions made on a reasonable basis and fairly
presents the historical and proposed transactions contemplated by the
Prospectus, this Agreement and the International Underwriting
Agreement.
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(m) PricewaterhouseCoopers LLP, who have certified certain
financial statements of the Company, whose report appears in the
Prospectus and who have delivered the initial letter referred to in
Section 7(e) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations and Anchin, Block &
Anchin LLP, whose report appears in the Prospectus and who have
delivered the initial letter referred to in Section 7(f) hereof, were
independent accountants as required by the Securities Act and the Rules
and Regulations during the periods covered by the financial statements
on which they reported contained in the Prospectus.
(n) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or any
of its subsidiaries is a party or to which any property or assets of
the Company or any of its subsidiaries is subject other than
proceedings that could not singularly or in the aggregate, reasonably
be expected to have a Material Adverse Effect or have a material
adverse effect on the power or ability of the Company or any of its
subsidiaries to perform its obligations under this Agreement or the
International Underwriters Agreement or to consummate the transactions
contemplated hereby or thereby or the Prospectus.
(o) No action has been taken by the Company or its
subsidiaries and no statute, rule, regulation or order has been
enacted, adopted or issued by any governmental agency or body which
prevents the issuance of the Stock or suspends the sale of the Stock in
any jurisdiction; no injunction, restraining order or order of any
nature by any federal or state court of competent jurisdiction has been
issued with respect to the Company or any of its subsidiaries which
would prevent or suspend the issuance or sale of the Stock or the use
of the Preliminary Prospectus or the Prospectus in any jurisdiction; no
action, suit or proceeding is pending against or, to the knowledge of
the Company, threatened against or affecting the Company or any of its
subsidiaries before any court or arbitrator or any governmental agency,
body or official, domestic or foreign, which could reasonably be
expected to interfere with or adversely affect the issuance of the
Stock or in any manner draw into question the validity or
enforceability of either this Agreement or the International
Underwriting Agreement or any action taken or to be taken pursuant
thereto; and the Company has complied with any and all requests by any
securities authority in any jurisdiction for additional information to
be included in the Preliminary Prospectus and the Prospectus.
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(p) Neither the Company nor any of its "significant
subsidiaries" (within the meaning of Rule 1-02 of Regulation S-X) is
(i) in violation of its charter or by-laws, (ii) in default in any
respect, and no event has occurred which, with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject or (iii) in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject,
except, in the case of clauses (ii) or (iii), as would not have a
Material Adverse Effect.
(q) Except as would not, singularly or in the aggregate, have
a Material Adverse Effect, the Company and each of its subsidiaries
possesses all licenses, certificates, authorizations and permits issued
by, and has made all declarations and filings with, the appropriate
federal, state or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of its properties or the
conduct of its business as described in the Prospectus, and none of the
Company or any of its subsidiaries has received notification of any
revocation or modification of any such license, certificate,
authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in
the ordinary course.
(r) The Company and each of its subsidiaries has filed all
federal, state, local and foreign income and franchise tax returns
required to be filed though the date hereof and has paid all taxes due
thereon, and no tax deficiency has been determined adversely to the
Company or any of its subsidiaries which has had (nor does the Company
or any of its subsidiaries have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have) a Material Adverse
Effect.
(s) The Company is not and, after giving effect to the
offering and sale of the Stock and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" or an entity "controlled by" an investment company within the
meaning of the United States Investment Company Act of 1940, as amended
(the "Investment Company Act"), and the rules and regulations of the
Commission thereunder.
(t) The Company and each of its subsidiaries has insurance
covering its properties, operations, personnel and business, which
insurance is in amounts and insures against such losses and risks as
are adequate to protect the Company and each of its subsidiaries and
each of their respective businesses.
(u) The Company and each of its subsidiaries has good and
marketable title in fee simple to, or has valid rights to lease or
otherwise use, all items of real and personal property which are
material to the business of the Company and its subsidiaries, in each
case free and clear of all liens, encumbrances, claims and defects
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and imperfections of title except such as (i) do not materially
interfere with the use made and proposed to be made of such property by
the applicable Issuer and its subsidiaries or (ii) could not reasonably
be expected to have a Material Adverse Effect.
(v) No labor disturbance by or dispute with the employees of
the Company or any of its subsidiaries exists or, to the best knowledge
of the Company, is contemplated or threatened, except as would not have
a Material Adverse Effect.
(w) No "prohibited transaction" (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code")) or "accumulated funding
deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect
to which the 30-day notice requirement under Section 4043 of ERISA has
been waived) has occurred with respect to any employee benefit plan of
the Company or any of its subsidiaries which could reasonably be
expected to have a Material Adverse Effect; each such employee benefit
plan is in compliance in all respects with applicable law, including
ERISA and the Code, except as would not have a Material Adverse Effect;
the Company and each of its subsidiaries has not incurred and does not
expect to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan for which the
Company or any of its subsidiaries would have any liability, except as
would not have a Material Adverse Effect; and each such pension plan
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all respects and nothing has occurred, whether by action
or by failure to act, which could reasonably be expected to cause the
loss of such qualification, except as would not have a Material Adverse
Effect.
(x) Except as described in the Prospectus, there are no costs
or liabilities of the Company or any of its subsidiaries associated
with or arising from the application of any and all applicable foreign,
federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with any Environmental Laws or any permits, licenses or other approvals
required of the Company or any of its subsidiaries under applicable
Environmental Laws to conduct its business, any related constraints on
operating activities and any potential liabilities to third parties,
including governmental authorities) which would, singularly or in the
aggregate, have a Material Adverse Effect.
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(y) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus, the Company has not (i) issued or granted
any securities, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any transaction
not in the ordinary course of business or (iv) declared or paid any
dividend on its capital stock.
(z) The Company has not taken or will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the offering of the Stock.
(aa) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Preliminary Prospectus or the
Prospectus has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(bb) The Company and each of its subsidiaries has complied
with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida) relating to doing business
with the Government of Cuba or with any person or affiliate
located in Cuba.
(cc) Since the date as of which information is given in
the Prospectus, except as otherwise stated therein, there has
been no material adverse change or any development involving a
prospective material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs,
management or business prospects of the Company, whether or
not arising in the ordinary course of business.
(dd) There are no contracts or other documents which are
required to be described in the Prospectus or filed as
exhibits to either of the Registration Statements by the
Securities Act or by the Rules and Regulations which have not
been described in the Prospectus or filed as exhibits to
either of the Registration Statements or incorporated therein
by reference as permitted by the Rules and Regulations.
2. Purchase of the Stock by the U.S. Underwriters. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell _______
shares of the Firm Stock, severally and not jointly, to the several U.S.
Underwriters and each of the U.S. Underwriters, severally and not jointly,
agrees to purchase the number of shares of the Firm Stock set opposite that U.S.
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the U.S. Underwriters with respect to the Firm Stock shall be rounded among the
U.S. Underwriters to avoid fractional shares, as the Representatives may
determine.
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In addition, the Company grants to the U.S. Underwriters an option to
purchase up to _______ shares of Option Stock. Such option is granted solely for
the purpose of covering over-allotments in the sale of Firm Stock and is
exercisable as provided in Section 4 hereof. Shares of Option Stock shall be
purchased severally for the account of the U.S. Underwriters in proportion to
the number of shares of Firm Stock set opposite the name of such U.S.
Underwriters in Schedule 1 hereto. The respective purchase obligations of each
U.S. Underwriter with respect to the Option Stock shall be adjusted by the
Representatives so that no U.S. Underwriter shall be obligated to purchase
Option Stock other than in 100 share amounts.
The price of both the Firm Stock and any Option Stock shall be $_____
per share.
The Company shall not be obligated to deliver any of the Stock to be
delivered on the First Delivery Date or the Second Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein and in the International
Underwriting Agreement.
3. Offering of Stock by the U.S. Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several U.S. Underwriters propose to offer the Firm Stock for sale
upon the terms and conditions set forth in the Prospectus; provided, however,
that no Stock registered pursuant to the Rule 462(b) Registration Statement, if
any, shall be offered prior to the Effective Time thereof.
It is understood that _______ shares of the Firm Stock will initially
be reserved by the several U.S. Underwriters for offer and sale upon the terms
and conditions set forth in the Prospectus to employees and persons having
business relationships with the Company and its subsidiaries who have heretofore
delivered to the Representatives offers to purchase shares of Firm Stock in form
satisfactory to the Representatives, and that any allocation of such Firm Stock
among such persons will be made in accordance with timely directions received by
the Representatives from the Company; provided, that under no circumstances will
the Representatives or any U.S. Underwriter be liable to the Company or to any
such person for any action taken or omitted in good faith in connection with
such offering to employees and persons having business relationships with the
Company and its subsidiaries. It is further understood that any shares of such
Firm Stock which are not purchased by such persons will be offered by the U.S.
Underwriters to the public upon the terms and conditions set forth in the
Prospectus.
Each U.S. Underwriter agrees that, except to the extent permitted by
the Agreement Between U.S. Underwriters and International Managers, it will not
offer or sell any of the Stock outside of the United States.
4. Delivery of and Payment for the Stock. Delivery of and payment for
the Firm Stock shall be made at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time,
on the third full business day following the date of this Agreement or at such
other date or place as shall be determined by agreement between the
Representatives and the Company. This date and time are sometimes referred to as
the "First Delivery Date." On the First Delivery Date, the Company shall deliver
or
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cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each U.S. Underwriter against payment to or
upon the order of the Company of the purchase price by certified or official
bank check or checks payable in New York Clearing House (next-day) funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each U.S.
Underwriter hereunder. Upon delivery, the Firm Stock shall be registered in such
names and in such denominations as the Representatives shall request in writing
not less than two full business days prior to the First Delivery Date. For the
purpose of expediting the checking and packaging of the certificates for the
Firm Stock, the Company shall make the certificates representing the Firm Stock
available for inspection by the Representatives in New York, New York, not later
than 2:00 P.M., New York City time, on the business day prior to the First
Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of shares of Option Stock as to which the option is being
exercised, the names in which the shares of Option Stock are to be registered,
the denominations in which the shares of Option Stock are to be issued and the
date and time, as determined by the Representatives, when the shares of Option
Stock are to be delivered; provided, however, that this date and time shall not
be earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as the "Second Delivery Date" and the First Delivery Date and the
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each U.S. Underwriter against payment to or upon the order of the
Company of the purchase price by certified or official bank check or checks
payable in New York Clearing House (next-day) funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each U.S. Underwriter hereunder.
Upon delivery, the Option Stock shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
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5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representatives and to file such
Rule 462(b) Registration Statement with the Commission on the date
hereof; to prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than 10:00 A.M., New York City time,
on the day following the execution and delivery of this Agreement; to
make no further amendment or any supplement to the Registration
Statements or to the Prospectus except as permitted herein; to advise
the Representatives, promptly after it receives notice thereof, of the
time when any amendment to either Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statements or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the U.S. Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives in New York
City such number of the following documents as the Representatives
shall reasonably request: (i) conformed copies of the Registration
Statements as originally filed with the Commission and each amendment
thereto (in each case excluding exhibits other than this Agreement and
the computation of per share earnings) and (ii) each Preliminary
Prospectus, the Prospectus (not later than 10:00 A.M., New York City
time, of the day following the execution and delivery of this
Agreement) and any amended or supplemented Prospectus (not later than
10:00 A.M., New York City time, on the day following the date of such
amendment or supplement); and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
Effective Time of the Primary Registration Statement in connection with
the offering or sale of the Stock (or any other securities relating
thereto) and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period
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to amend or supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their request,
to prepare and furnish without charge to each U.S. Underwriter and to
any dealer in securities as many copies as the Representatives may from
time to time reasonably request of an amended or supplemented
Prospectus which will correct such statement or omission or effect such
compliance, and in case any U.S. Underwriter is required to deliver a
prospectus in connection with sales of any of the Stock at any time
nine months or more after the Effective Time of the Primary
Registration Statement, upon the request of the Representatives but at
the expense of such U.S. Underwriter, to prepare and deliver to such
U.S. Underwriter as many copies as the Representatives may from time to
time reasonably request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) To file promptly with the Commission any amendment to the
Registration Statements or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission either of the
Registration Statements or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the U.S.
Underwriters and not to file any such document to which the
Representatives shall reasonably object after having been given
reasonable notice of the proposed filing thereof;
(f) As soon as practicable after the Effective Date of the
Primary Registration Statement (it being understood that the Company
shall have until at least 410 days after the end of the Company's
current fiscal quarter), to make generally available to the Company's
security holders and to deliver to the Representatives an earnings
statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule
158);
(g) For a period of five years following the Effective Date of
the Primary Registration Statement, to furnish to the Representatives
copies of all materials furnished by the Company to its shareholders
and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange
or automatic quotation system upon which the Common Stock may be listed
or quoted pursuant to requirements of or agreements with such exchange
or system or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
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(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition or
purchase by any person at any time in the future of) any shares of
Common Stock (other than the Stock and shares issued pursuant to
employee benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options,
rights or warrants with respect to any shares of Common Stock (other
than the grant of options pursuant to option plans existing on the date
hereof), or (2) enter into any swap or other derivatives transaction
that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether
any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx
Brothers Inc.; and to cause each officer and director of the Company to
furnish to Xxxxxx Brothers Inc., prior to the First Delivery Date, a
letter or letters, in form and substance satisfactory to counsel for
the U.S. Underwriters, pursuant to which each such person shall agree
not to, directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or (2)
enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
for a period of 180 days from the date of the Prospectus, without the
prior written consent of Xxxxxx Brothers Inc.;
(j) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the U.S. Underwriters and receive and
consider its comments thereon, and to deliver promptly to the
Representatives a signed copy of each report on Form SR filed by it
with the Commission;
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
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(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment
company" within the meaning of such term under the Investment Company
Act and the rules and regulations of the Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statements and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statements as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement,
the Agreement Between U.S. Underwriters and International Managers and the
Supplemental Agreement Among U.S. Underwriters; (e) the costs of distributing
the terms of agreement relating to the organization of the domestic underwriting
syndicate and selling group to the members thereof by mail, telex or other means
of communication; (f) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of sale of
the Stock; (g) any applicable listing or other fees; (h) the fees and expenses
of qualifying the Stock under the securities laws of the several jurisdictions
as provided in Section 5(h) and of preparing, printing and distributing a Blue
Sky Memorandum (including related fees and expenses of counsel to the U.S.
Underwriters); (i) all costs and expenses of the U.S. Underwriters, including
the fees and disbursements of counsel for the U.S. Underwriters, incident to the
offer and sale of shares of the Stock by the U.S. Underwriters to employees and
persons having business relationships with the Company and its subsidiaries, as
described in Section 3; and (j) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 6 and in Section 11, the U.S.
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the U.S.
Underwriters.
7. Conditions of U.S. Underwriters' Obligations. The respective
obligations of the U.S. Underwriters hereunder are subject to the accuracy, on
and as of the date hereof and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the accuracy of the statements of
the Company and its officers made in any certificates delivered pursuant hereto,
to the performance by the Company of its obligations hereunder, and to each of
the following additional terms and conditions:
(a) The Rule 462(b) Registration Statement, if any, and the
Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the
effectiveness of either of the Registration Statements or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of
the Commission for inclusion of additional information in either of the
Registration Statements or the Prospectus or otherwise shall have been
complied with.
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(b) No U.S. Underwriter or International Manager shall have
discovered and disclosed to the Company on or prior to such Delivery
Date that either of the Registration Statements or the Prospectus or
any amendment or supplement thereto contains any untrue statement of a
fact which, in the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for
the U.S. Underwriters, is material or omits to state any fact which, in
the opinion of such counsel, is material and is required to be stated
therein or is necessary to made the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
International Underwriting Agreement, the Stock, the Registration
Statements and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
U.S. Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
(d) Xxxxxxxxxxx & Xxxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company,
addressed to the U.S. Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Company and each of its subsidiaries have been
duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions
of incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification (other than those jurisdictions in which the
failure to so qualify would not have a material adverse effect
on the Company or the Company and its subsidiaries taken as a
whole), and have all power and authority necessary to own or
hold their respective properties and conduct the businesses in
which they are engaged;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock
being delivered on such Delivery Date) have been duly and
validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid,
non-assessable and (except for directors' qualifying shares
and except as set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
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(iii) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or
transfer of, any shares of the Stock pursuant to the Company's
charter or by-laws or any agreement or other instrument known
to such counsel;
(iv) The Company and each of its subsidiaries have good
and marketable title in fee simple to all real property owned
by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use
made and proposed to be made of such property by the Company
and its subsidiaries; and all real property and buildings held
under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(v) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property or
asset of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, are reasonably likely to have a material adverse
effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the
Company and its subsidiaries; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(vi) The Primary Registration Statement was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b) Registration
Statement, if any, was filed with the Commission on the date
specified therein, the Prospectus was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of either of the Registration Statements has
been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the
Commission;
(vii) The Registration Statements, as of their respective
Effective Dates, and the Prospectus, as of its date, and any
further amendments or supplements thereto, as of their
respective dates, made by the Company prior to such Delivery
Date (other than the financial statements and other financial
data contained therein, as to which such counsel need express
no opinion) complied as to form in all material respects with
the requirements of the Securities Act and the Rules and
Regulations;
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(viii) The statements contained in the Prospectus under
the caption "Certain United States Federal Income Tax
Consequences", insofar as they describe federal statutes,
rules and regulations, constitute a fair summary thereof;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the
Registration Statements by the Securities Act or by the Rules
and Regulations which have not been described or filed as
exhibits to the Registration Statements or incorporated
therein by reference as permitted by the Rules and
Regulations;
(x) This Agreement and the International Underwriting
Agreement has each been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the shares of Stock being
delivered on such Delivery Date by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement, and
the consummation of the transactions contemplated hereby and
thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the properties or assets of the
Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets; and, except for the
registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and
applicable state or foreign securities laws in connection with
the purchase and distribution of the Stock by the U.S.
Underwriters and the International Managers, no consent,
approval, authorization or order of, or filing or registration
with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement or the International Underwriting Agreement by the
Company and the consummation of the transactions contemplated
hereby and thereby; and
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(xii) To the best of such counsel's knowledge, there are
no contracts, agreements or understandings between the Company
and any person granting such person the right (other than
rights which have been waived or satisfied) to require the
Company to file a registration statement under the Securities
Act with respect to any securities of the Company owned or to
be owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statements or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Securities Act.
In rendering such opinion, such counsel may (i) state that its opinion
is limited to matters governed by the Federal laws of the United States
of America, the laws of the Commonwealth of Pennsylvania and the
General Corporation Law of the State of Delaware; and (ii) in giving
the opinion referred to in Section 7(d)(iv), state that no examination
of record titles for the purpose of such opinion has been made, and
that it is relying upon a general review of the titles of the Company
and its subsidiaries, upon opinions of local counsel and abstracts,
reports and policies of title companies rendered or issued at or
subsequent to the time of acquisition of such property by the Company
or its subsidiaries, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates of
officers of the Company or its subsidiaries, provided that such counsel
shall state that it believes that both the U.S. Underwriters and it are
justified in relying upon such opinions, abstracts, reports, policies
and certificates. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the U.S. Underwriters
and dated such Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel and has acted as
counsel to the Company in connection with the preparation of the
Registration Statements, and (y) based on the foregoing, no facts have
come to the attention of such counsel which lead it to believe that the
Registration Statements, as of their respective Effective Dates,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the Prospectus
contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing opinion and statement may
be qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statements or the
Prospectus except for the statements made in the Prospectus under the
captions "Description of Capital Stock" and "Certain United States
Federal Income Tax Consequences", insofar as such statements relate to
the Stock and concern legal matters.
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(e) With respect to the letter of PricewaterhouseCoopers LLP
delivered to the Representatives concurrently with the execution of
this Agreement (as used in this paragraph, the "initial letter"), the
Company shall have furnished to the Representatives a letter (as used
in this paragraph, the "bring-down letter") of such accountants,
addressed to the U.S. Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(f) With respect to the letter of Anchin, Block & Anchin LLP
delivered to the Representatives concurrently with the execution of
this Agreement (as used in this paragraph, the "initial letter"), the
Company shall have furnished to the Representatives a letter (as used
in this paragraph, the "bring-down letter") of such accountants,
addressed to the U.S. Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(g) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its chief executive officer
and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery
Date; the Company has complied with all its agreements
contained herein; and the conditions set forth in Section 7(a)
have been fulfilled;
(ii) (A) Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial
statements included in the Prospectus any 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
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as set forth or contemplated in the Prospectus or (B) since
such date there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus; and
(iii) They have carefully examined the Registration
Statements and the Prospectus and, in their opinion (A) the
Registration Statements, as of their respective Effective
Dates, and the Prospectus, as of each of the Effective Dates,
did not include any untrue statement of a material fact and
did not omit to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date of the Primary
Registration Statement, no event has occurred which should
have been set forth in a supplement or amendment to either of
the Registration Statements or the Prospectus.
(h) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Prospectus any 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 or (ii) since such date 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 change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Stock being delivered on such Delivery Date on the terms and in the
manner contemplated in the Prospectus.
(i) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating
of any of the Company's debt securities.
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(j) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest
of the several U.S. Underwriters, impracticable or inadvisable to
proceed with the public offering or delivery of the Stock being
delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.
(k) The New York Stock Exchange, Inc. shall have approved the
Stock for listing, subject only to official notice of issuance and
evidence of satisfactory distribution.
(l) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the
First Delivery Date.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the U.S. Underwriters.
8. Indemnification and Contribution.
(a) The Company and WESCO Distribution, Inc., its principal
operating subsidiary (the "Principal Subsidiary"), jointly and
severally, shall indemnify and hold harmless each U.S. Underwriter, its
officers and employees and each person, if any, who controls any U.S.
Underwriter within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action
in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock),
to which that U.S. Underwriter, officer, employee or controlling person
may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, either of
the Registration Statements or the Prospectus, or in any amendment or
supplement thereto, or (B) in any blue sky application or other
document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of
qualifying any or all of the Stock under the securities laws of any
state or other jurisdiction (any such application, document or
information being hereinafter called a "Blue Sky
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Application"), (ii) the omission or alleged omission to state in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus, or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any
act or failure to act, or any alleged act or failure to act, by any
U.S. Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company and the Principal Subsidiary shall not
be liable in the case of any matter covered by this clause (iii) to the
extent that it is determined in a final judgement by a court of
competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such act or failure to act undertaken
or omitted to be taken by such U.S. Underwriter through its gross
negligence or wilful misconduct), and shall reimburse each U.S.
Underwriter and each such officer, employee and controlling person
promptly upon demand for any legal or other expenses reasonably
incurred by that U.S. Underwriter, officer, employee or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and the
Principal Subsidiary shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, or in any Blue Sky Application in reliance upon and in
conformity with the written information furnished to the Company
through the Representatives by or on behalf of any U.S. Underwriter
specifically for inclusion therein and described in Section 8(e); and
provided further that as to any Preliminary Prospectus this indemnity
agreement shall not inure to the benefit of any U.S. Underwriter, its
officers or employees or any person controlling that U.S. Underwriter
on account of any loss, claim, damage, liability or action arising from
the sale of Stock to any person by that U.S. Underwriter if that U.S.
Underwriter failed to send or give a copy of the Prospectus, as the
same may be amended or supplemented, to that person within the time
required by the Securities Act, and the untrue statement or alleged
untrue statement of any material fact or omission or alleged omission
to state a material fact in such Preliminary Prospectus was corrected
in the Prospectus, unless such failure resulted from non-compliance by
the Company with Section 5(c). The foregoing indemnity agreement is in
addition to any liability which the Company and the Principal
Subsidiary may otherwise have to any U.S. Underwriter or to any
officer, employee or controlling person of that U.S. Underwriter.
(b) Each U.S. Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, its officers and employees,
each of its directors and each person, if any, who controls the Company
within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus, or
in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, either of the Registration Statements or the
Prospectus, or in any
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amendment or supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent
that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the
written information furnished to the Company through the
Representatives by or on behalf of that U.S. Underwriter specifically
for inclusion therein and described in Section 8(e), and shall
reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition
to any liability which any U.S. Underwriter may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced
by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 8. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it
elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated
in writing by the Representatives, if the indemnified parties under
this Section 8 consist of any U.S. Underwriter
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25
or any of their respective officers, employees or controlling persons,
or by the Company, if the indemnified parties under this Section
consist of the Company or any of the Company's directors, officers,
employees or controlling persons. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with its written consent or if there be a final judgment of
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred
to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company and the Principal Subsidiary on the one hand and the U.S.
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Principal Subsidiary on the one hand and
the U.S. Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Principal Subsidiary on the one hand and the U.S. Underwriters on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company and the Principal Subsidiary, on the one hand, and the
total underwriting discounts and commissions received by the U.S.
Underwriters with respect to the shares of the Stock purchased under
this Agreement, on the other hand, bear to the total gross proceeds
from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Principal Subsidiary or the
U.S. Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such statement or omission. For purposes of the preceding two
sentences, the net proceeds deemed to be received by the Company shall
be deemed to be also for the benefit of the Principal Subsidiary and
information supplied by the Company shall also be deemed to have been
supplied by the Principal Subsidiary. The Company, the Principal
Subsidiary and the U.S. Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such
26
26
purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in
this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
8(d), no U.S. Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock
underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such U.S. Underwriter
has otherwise paid or become liable to pay by reason of any 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
U.S. Underwriters' obligations to contribute as provided in this
Section 8(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The U.S. Underwriters severally confirm that the
statements with respect to the public offering of the Stock set forth
on the cover page of, and under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information furnished in
writing to the Company by or on behalf of the U.S. Underwriters
specifically for inclusion in the Registration Statements and the
Prospectus.
9. Defaulting U.S. Underwriters.
If, on either Delivery Date, any U.S. Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting U.S. Underwriters shall be obligated to purchase the Stock which
the defaulting U.S. Underwriter agreed but failed to purchase on such Delivery
Date in the respective proportions which the number of shares of the Firm Stock
set opposite the name of each remaining non-defaulting U.S. Underwriter in
Schedule 1 hereto bears to the total number of shares of the Firm Stock set
opposite the names of all the remaining non-defaulting U.S. Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-defaulting U.S.
Underwriters shall not be obligated to purchase any of the Stock on such
Delivery Date if the total number of shares of the Stock which the defaulting
U.S. Underwriter or U.S. Underwriters agreed but failed to purchase on such date
exceeds 9.09% of the total number of shares of the Stock to be purchased on such
Delivery Date, and any remaining non-defaulting U.S. Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 2.
If the foregoing maximums are exceeded, the remaining non-defaulting U.S.
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining U.S. Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting U.S. Underwriter or U.S. Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the U.S. Underwriters to purchase, and of the
Company to sell, the Option Stock) shall terminate without liability on the
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27
part of any non-defaulting U.S. Underwriter or the Company, except that the
Company will continue to be liable for the payment of expenses to the extent set
forth in Sections 6 and 11. As used in this Agreement, the term "U.S.
Underwriter" includes, for all purposes of this Agreement unless the context
requires otherwise, any party not listed in Schedule 1 hereto who, pursuant to
this Section 9, purchases Firm Stock which a defaulting U.S. Underwriter agreed
but failed to purchase.
Nothing contained herein shall relieve a defaulting U.S. Underwriter of
any liability it may have to the Company for damages caused by its default. If
other underwriters are obligated or agree to purchase the Stock of a defaulting
or withdrawing U.S. Underwriter, either the Representatives or the Company may
postpone the First Delivery Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the U.S. Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.
10. Termination.
The obligations of the U.S. Underwriters hereunder may be terminated by
the Representatives by notice given to and received by the Company prior to
delivery of and payment for the Firm Stock if, prior to that time, any of the
events described in Sections 7(h), 7(i) or 7(j) shall have occurred or if the
U.S. Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
11. Reimbursement of U.S. Underwriters' Expenses. If (a) the Company
shall fail to tender the Stock for delivery to the U.S. Underwriters for any
reason permitted under this Agreement, or (b) the U.S. Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 15(b)), the
Company shall reimburse the U.S. Underwriters for the reasonable fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of the Stock, and upon demand the Company shall pay the full amount
thereof to the Representatives. If this Agreement is terminated pursuant to
Section 9 by reason of the default of one or more U.S. Underwriters, the Company
shall not be obligated to reimburse any defaulting U.S. Underwriter on account
of those expenses.
12. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Xxxxxx Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth
in the Primary Registration Statement, Attention: [Xxxxxx X. Xxxxxxxx]
(Fax: (000) 000-0000);
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28
provided, however, that any notice to an U.S. Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to such
U.S. Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the U.S. Underwriters by Xxxxxx Brothers Inc. on behalf of
the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the U.S. Underwriters, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers and
employees of each U.S. Underwriter and the person or persons, if any, who
control each U.S. Underwriter within the meaning of Section 15 of the Securities
Act and for the benefit of each International Manager (and controlling persons
thereof) who offers or sells any shares of Common Stock in accordance with the
terms of the Agreement Between U.S. Underwriters and International Managers and
(B) the indemnity agreement of the U.S. Underwriters contained in Section 8(b)
of this Agreement shall be deemed to be for the benefit of directors, officers
and employees of the Company and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Principal Subsidiary and the U.S.
Underwriters contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Stock and shall remain in full force and effect, regardless of
any investigation made by or on behalf of any of them or any person controlling
any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the Company;
the Principal Subsidiary and the U.S. Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
WESCO INTERNATIONAL, INC.
By
------------------------------
[Vice President, Chief Financial
Officer and Corporate Controller]
WESCO DISTRIBUTION, INC.,
By
------------------------------
[Vice President, Chief Financial
Officer and Corporate Controller]
Accepted:
XXXXXX BROTHERS INC.
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, SACHS & CO.
XXXXXX X. XXXXX & CO. INCORPORATED
ING BARING XXXXXX XXXX LLC
For themselves and as Representatives
of the several U.S. Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By
------------------------------
Authorized Representative
30
SCHEDULE 1
Number of
U.S. Underwriters Shares
----------------- ------
Xxxxxx Brothers Inc.....................................
Bear, Xxxxxxx & Co. Inc.................................
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation...........................................
Xxxxxxx, Sachs & Co.....................................
Xxxxxx X. Xxxxx & Co. Incorporated......................
ING Baring Xxxxxx Xxxx LLC..............................
---------
Total.......................................................
=========
