Exhibit 1.1
THE XXXXX COMPANY
[COMMON STOCK] [PREFERRED STOCK]
UNDERWRITING AGREEMENT
____________, 199_
To the Representatives of the
several Underwriters named in the
respective Pricing Agreements
hereinafter described.
Ladies and Gentlemen:
From time to time The Xxxxx Company, a Maryland corporation (the
"Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its [Common Stock, par value $0.01 per
share] [Preferred Stock, par value $0.01 per share] (the "Shares") specified in
Schedule II to such Pricing Agreement (with respect to such Pricing Agreement,
the "Firm Shares"). If specified in such Pricing Agreement, the Company may
grant to the Underwriters the right to purchase at their election an additional
number of shares, specified in such Pricing Agreement as provided in Section 3
hereof (the "Optional Shares"). The Firm Shares and the Optional Shares, if
any, which the Underwriters elect to purchase pursuant to Section 3 hereof are
herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representatives. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the Shares
or as an obligation of any of the Underwriters to purchase the Shares. The
obligation of the Company to issue and sell any of the Shares and the obligation
of any of the Underwriters to purchase any of the Shares shall be evidenced by
the Pricing Agreement with respect to the Designated Shares specified therein.
Each Pricing Agreement shall specify the aggregate number of Firm Shares, the
maximum number of Optional Shares, if any, the initial public offering price of
such Firm Shares and Optional Shares or the manner of determining such price,
the purchase price to the Underwriters of such Designated Shares, the names of
the Underwriters of such Designated Shares, the names of the Representatives of
such Underwriters and the number of such Designated Shares to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm Shares and Optional Shares, if any, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the registration
statement and prospectus with respect thereto) the terms of such Designated
Shares. A Pricing Agreement shall be in the form of an executed writing (which
may be in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-_____) (the
"Initial Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered or to be
delivered to the Representatives, excluding exhibits to such registration
statement, but including all documents incorporated by reference in the
prospectus included therein, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement") filed pursuant to Rule
462(b) of the rules and regulations of the Commission under the Act which became
effective upon filing, no other document with respect to such registration
statement or document incorporated by reference therein has heretofore been
filed or transmitted for filing with the Commission (other than the prospectuses
filed pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Act, each in the form heretofore delivered to the Representatives);
and no stop order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus included
in the Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act, is
hereinafter called a "Preliminary Prospectus"; the various parts of the Initial
Registration Statement and the 462(b) Registration Statement, if any, including
all exhibits thereto and including (i) the
2
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) of the rules and the regulations of the Commission under
the Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
of the rules and regulations of the Commission under the Act to be part of the
Initial Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus relating to the Shares, in
the form in which it has most recently been filed, or transmitted for filing,
with the Commission pursuant to Rule 424(b) under the Act on or prior to the
date of this Agreement, is hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of the Form S-3 form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated therein by reference;
any reference to any amendment to the Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the Registration
Statement; and any reference to the Prospectus as amended or supplemented shall
be deemed to refer to and include the Prospectus as amended or supplemented in
relation to the applicable Designated Shares in the form filed or transmitted
for filing with the Commission pursuant to Rule 424(b) under the Act and in
accordance with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact
3
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter of Designated Shares through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to such
Shares;
(d) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock (other than issuances of capital stock pursuant to bonus stock
awards granted in the ordinary course of business, or upon exercise of options
and stock appreciation rights and upon conversions of convertible securities, in
each case, except with respect to bonus stock awards granted in the ordinary
course of business, which were outstanding as of the date of the latest audited
financial statements included or incorporated by reference in the Prospectus),
or any material and adverse change in the long-term debt of the Company and its
subsidiaries, taken as a whole (it being understood that, absent unusual
circumstances, an increase in long-term debt of the Company and its
subsidiaries, taken as a whole, of less than 5% would not be a material and
adverse change to the Company and its subsidiaries, taken as a whole), or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, current value
basis shareholders' equity or results of operations (based on Earnings Before
Depreciation and Deferred Taxes from Operations) of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
4
(e) The Company and its subsidiaries have, or in those cases where
such subsidiary is a general partner in a partnership, such partnership has,
good and marketable fee simple and/or leasehold title (as the case may be) to
all real property (except for those lesser estates in real property which, in
the aggregate, are not material in value to the Company and its subsidiaries),
subject only to (A) those liens and encumbrances which have been reflected
generally or in the aggregate in the financial statements of the Company as
disclosed in the Prospectus or as are described specifically, generally or in
the aggregate in the Prospectus, or (B) such liens and encumbrances (i) not
required by generally accepted accounting principles to be disclosed in the
financial statements of the Company, which (a) if all material covenants and
conditions thereof are observed or performed, will not materially interfere with
the use made or proposed to be made of such property by the Company and its
subsidiaries or (b) are reasonable and customary with regard to the normal
operation of land and improvements held for commercial purposes by first class
owners and operators of commercial real estate, or (ii) which were incurred
after the date of the latest audited financial statements included or
incorporated by reference in the Prospectus in the ordinary course of business
(including financings) and which, in the aggregate (on a net basis), are not
material to the Company and its subsidiaries, taken as a whole. The Company and
its subsidiaries have title to the personal property owned by it or them and,
subject to the continued performance of the material covenants and conditions of
liens and encumbrances thereon, have the right to use such without interference
in the normal course of business, except for such interference as would not have
a material adverse effect on the Company and its subsidiaries as a whole;
(f) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of Maryland, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which the failure so to qualify and maintain
good standing would have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation except for such failures to maintain
good standing as would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of each subsidiary of
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned (with exceptions that are disclosed in the
Prospectus or are not material to the Company and its subsidiaries, taken as a
whole)
5
directly or indirectly by the Company, free and clear of all liens, encumbrances
or claims (collectively, "Liens") except (i) Liens relating to debt which has
been disclosed specifically, generally or in the aggregate in the Prospectus or
incurred after the date of the latest audited financial statements included or
incorporated by reference in the Prospectus in the ordinary course of business
(including financings), (ii) Liens incurred in the ordinary course of business
which are not materially adverse to the operations of the Company and its
subsidiaries, taken as a whole, and (iii) restrictions on the transfer or use of
the stock of any subsidiary under any partnership, joint venture or lease
agreements to which the Company or any of its subsidiaries is a party;
(h) The Shares have been duly and validly authorized, and, when Firm
Shares are issued and delivered against payment therefor pursuant to this
Agreement and the Pricing Agreement with respect to such Designated Shares and,
in the case of Optional Shares, pursuant to Over-allotment Options (as defined
in Section 3 hereof) with respect to such Shares, such Designated Shares will be
duly and validly issued and fully paid and non-assessable; the Shares conform to
the description thereof contained in the Registration Statement and the
Designated Shares will conform to the description thereof in the Prospectus as
amended or supplemented with respect to such Designated Shares; and the
Designated Shares will have the rights set forth in the Company's Articles of
Incorporation, as then amended[, including any amendment effected by any
Articles Supplementary relating to the Designated Shares]; the holders of
outstanding capital stock of the Company are not entitled to preemptive or other
rights afforded by the Company to subscribe for the Designated Shares;
(i) The issue and sale of the Shares, the compliance by the Company
with all of the provisions of this Agreement, any Pricing Agreement and each
Over-allotment Option, if any, and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject except
for such conflict, breach, violation or default which does not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, nor will
such action result in any violation of the provisions of the Articles of
Incorporation (or any articles supplementary thereto) or the Bylaws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale of the Shares or
the consummation by the Company of the other transactions contemplated by this
Agreement, any Pricing Agreement or any Over-allotment Option, except such as
have been, or will have been
6
prior to each Time of Delivery (as defined in Section 4 hereof), obtained under
the Act and such consents, approvals, authorizations, orders, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters;
(j) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or to which any property of the Company or any of its subsidiaries is
subject, which are likely, individually or in the aggregate, to have a material
adverse effect on the Company and its subsidiaries taken as a whole, and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(k) The Company is not, and after giving effect to each offering and
sale of the Shares will not be, an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(l) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes; and
(m) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the
7
respective number of business days after the date of such notice set forth in
such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares to
be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Shares (rounded as the Representatives may
determine to the nearest 100 shares). The total number of Designated Shares to
be purchased by all the Underwriters pursuant to such Pricing Agreement shall be
the aggregate number of Firm Shares set forth in Schedule I to such Pricing
Agreement plus the aggregate number of Optional Shares which the Underwriters
elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement, and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer in federal (same day) funds, payable to
the order of the Company in the funds specified in such Pricing Agreement, (i)
with respect to the Firm Shares, all in the manner and at the place and time and
date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "First Time of Delivery" and (ii) with respect
to the Optional Shares, if any, in the manner and at the time and date specified
by the Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, herein called the "Second Time
of Delivery". Each such time and date for delivery is herein called a "Time of
Delivery".
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended or supplemented in relation
to the applicable Designated Shares in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Act no later than
the Commission's
8
close of business on the second business day following the execution and
delivery of the Pricing Agreement relating to the applicable Designated Shares
or, if applicable, such earlier time as may be required by Rule 424(b); to make
no further amendment or any supplement to the Registration Statement or
Prospectus as amended or supplemented after the date of the Pricing Agreement
relating to such Shares and prior to any Time of Delivery for such Shares which
shall be disapproved by the Representatives for such Shares promptly after
reasonable notice thereof; to advise the Representatives promptly of any such
amendment or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Shares, and during such same period
to advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed with the Commission, of the issuance by the Commission of any stop order
or any order preventing or suspending the use of any prospectus relating to the
Shares, of the suspension of the qualification of such Shares for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any prospectus relating to the
Shares or suspending any such qualification, to promptly use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein for as long as may be necessary to complete the
distribution of such Shares; provided, however, that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from time
to time reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the Shares and if at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
9
to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) During the period beginning from the date of the Pricing Agreement
for such Designated Shares and continuing to and including the later of (i) the
termination of trading restrictions for such Designated Shares, as notified to
the Company by the Representatives and (ii) the last Time of Delivery for such
Designated Shares, not to offer, sell, contract to sell or otherwise dispose of
any securities of the Company which are substantially similar to such Designated
Shares (other than pursuant to employee stock option plans existing on, or upon
the conversion of convertible or exchangeable securities outstanding as of, the
date of the Pricing Agreement for such Designated Shares), without the prior
written consent of the Representatives; and
(e) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158).
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and all other amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing and producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Blue Sky and
Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents so long as such documents have been approved by
the Company in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (iv) any filing fees incident to, and the
reasonable fees and disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx in
connection with, any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Shares; (v) the cost of preparing
10
the certificates for the Shares; (vi) the reasonable fees and expenses of any
transfer agent of registrar or dividend disbursing agent; and (vii) all other
costs and expenses incident to the performance of its obligations hereunder and
under any Over-allotment Options which are not otherwise specifically provided
for in this Section. It is understood, however, that, except as provided in
this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Shares by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
Representatives' discretion, to the condition that all representations and
warranties and other statements of the Company in or incorporated by reference
in the Pricing Agreement relating to such Designated Shares are true and correct
at and as of each Time of Delivery for such Designated Shares and the condition
that prior to such Time of Delivery the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) (i) The Prospectus as amended or supplemented in relation to the
applicable Designated Shares shall have been filed with the Commission pursuant
to Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance with
Section 5(a) hereof; (ii) no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and (iii) all requests for additional information on the part of the
Commission shall have been complied with to the reasonable satisfaction of the
Representatives;
(b) Counsel for the Underwriters, shall have furnished to the
Representatives such opinion or opinions, dated each Time of Delivery, with
respect to the incorporation of the Company, the Shares, the Registration
Statement, the Prospectus, and such other related matters as the Representatives
may reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) The General Counsel of the Company, or other counsel for the
Company satisfactory to the Representatives, shall have furnished to the
Representatives his written opinion (which may be limited to the laws of the
State of Maryland and, with respect to clauses (xiii) and (xiv) below, the
federal securities laws), dated each Time of Delivery in form and substance
reasonably satisfactory to the Representatives, to the effect that:
11
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, as amended or
supplemented;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iii) The Shares have been duly and validly authorized, and,
when Firm Shares are issued and delivered against payment therefor pursuant
to this Agreement and the Pricing Agreement with respect to such Designated
Shares and, in the case of Optional Shares, pursuant to Over-allotment
Options (as defined in Section 3 hereof) with respect to such Shares, such
Designated Shares will be duly and validly issued and fully paid and non-
assessable; the Shares conform to the description thereof contained in the
Registration Statement and the Designated Shares will conform to the
description thereof in the Prospectus as amended or supplemented with
respect to such Designated Shares; and the Designated Shares will have the
rights set forth in the Company's Articles of Incorporation, as then
amended[, including any amendment effected by any Articles Supplementary
relating to the Designated Shares]; the holders of outstanding capital
stock of the Company are not entitled to preemptive or other rights
afforded by the Company to subscribe for the Designated Shares;
(iv) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of
each other jurisdiction in which the failure so to qualify and maintain
good standing would have a material adverse effect on the Company and its
subsidiaries, taken as a whole (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company);
(v) Each Significant Subsidiary (as defined below) of the Company
that is incorporated under the laws of the State of Maryland has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Maryland; and all of the issued shares of
capital stock of each such subsidiary have been duly and validly authorized
and issued, are fully paid and non-assessable, and are owned (with
exceptions that are disclosed in the Prospectus or are not material to the
Company and its subsidiaries, taken as a whole) directly or indirectly by
the Company, free and clear of all liens, encumbrances or claims
(collectively "Liens") except (i) Liens relating to debt which has been
disclosed specifically,
12
generally or in the aggregate in the Prospectus, as amended or
supplemented, or incurred after the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented in the ordinary course of business (including
financings), (ii) Liens incurred in the ordinary course of business which
are not materially adverse to the operations of the Company and its
subsidiaries, taken as a whole, or (iii) restrictions on the transfer or
use of the stock of any subsidiary under any partnership, joint venture
agreements or lease agreements to which the Company or any of its
subsidiaries is a party (such counsel being entitled to rely in respect of
the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that he believes that
both such Agent and he are justified in relying upon such opinions and
certificates); "Significant Subsidiary" is defined to be any subsidiary of
the Company that holds assets that have a value, on a current value basis,
in excess of 3% of the Company's Total Common Stock and Other Shareholders'
Equity, on a current value basis, as reported in the Company's most recent
Annual Report on Form 10-K or Annual Report to Shareholders;
(vi) To the best of such counsel's knowledge and other than as
set forth in the Prospectus as amended or supplemented, 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 of the Company or any of
its subsidiaries is the subject which is likely, individually or in the
aggregate, to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and delivered by
the Company;
(viii) The Designated Shares have been duly authorized;
(ix) To the best of such counsel's knowledge, the issue and sale
of the Designated Shares being delivered at such Time of Delivery and the
compliance by the Company with all of the provisions of this Agreement and
the Pricing Agreement with respect to the Designated Shares, and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound
13
or to which any of the property or assets of the Company or any of its
subsidiaries is subject except for any such conflict, breach, violation or
default which does not have a material adverse effect on the Company and
its subsidiaries, taken as a whole, nor will such actions result in any
violation of the provisions of the Articles of Incorporation or Bylaws of
the Company 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 properties;
(x) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or with
any court or governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of Delivery or the
consummation by the Company of the other transactions contemplated by this
Agreement or such Pricing Agreement, except such as have been obtained
under the Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Designated
Shares by the Underwriters;
(xi) The Designated Shares will conform, in all material respects
to the descriptions thereof contained in the Prospectus as amended or
supplemented;
(xii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(xiii) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and related
notes and schedules therein and other financial data included therein or
omitted therefrom, as to which such counsel need express no opinion), when
they were filed with the Commission appear on their face to be
appropriately responsive, in all material respects, to the requirements of
the Exchange Act and the rules and regulations of the Commission
thereunder; and nothing has come to such counsel's attention to cause such
counsel to believe that any of such documents, when they were so filed
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such documents
were so filed, not misleading; and
(xiv) Nothing has come to such counsel's attention to cause such
counsel to believe that, as of its effective date, the Registration
Statement or any further amendment or supplement thereto made by the
Company prior to such
14
Time of Delivery (other than the financial statements and related notes and
schedules therein and other financial data included therein or excluded
therefrom, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading or that, as of the date of such opinion, the Prospectus as
amended or supplemented or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the financial
statements and related notes and schedules therein and other financial data
included therein or excluded therefrom, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading; and
such counsel does not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or
the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
(d) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel for the
Company, or other counsel for the Company satisfactory to the Representatives,
shall have furnished to the Representatives their written opinion (which will be
limited to the laws of the State of New York and federal laws and may rely on an
opinion of Xxxxx X. Xxxxxxxxxx, or other counsel for the Company reasonably
satisfactory to the Representatives, as to the laws of the State of Maryland),
dated the Time of Delivery in form and substance reasonably satisfactory to the
Representatives, to the effect that at the time the Registration Statement was
declared effective by the Commission, the Registration Statement and the
Prospectus (other than (a) the financial statements, notes and schedules
thereto, (b) other financial data and statistical information included therein,
and (c) the documents incorporated by reference therein, as to which such
counsel need not express an opinion), appeared on their face to be responsive as
to form in all material respects to the requirements of the Act and the rules
and regulations promulgated thereunder;
(e) On the date of the Pricing Agreement for such Designated Shares at
a time prior to the execution of the Pricing Agreement with respect to such
Designated Shares and at such Time of Delivery for such Designated Shares, the
independent certified public accountants of the Company who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement, as amended or
supplemented, or such other independent certified
15
public accountants as are reasonably satisfactory to the Representatives, shall
have furnished to the Representatives a letter, dated the effective date of the
Registration Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such effective
date, and a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives;
(f) (i) The Company and its subsidiaries, taken as a whole, have not
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or supplemented prior to
the date of the Pricing Agreement relating to the Designated Shares any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented prior to the date of
the Pricing Agreement relating to the Designated Shares and (ii) since the
respective dates as of which information is given in the Prospectus as amended
or supplemented prior to the date of the Pricing Agreement relating to the
Designated Shares there shall not have been any change in the capital stock
(other than issuances of capital stock pursuant to bonus stock awards granted in
the ordinary course of business or upon exercise of options and stock
appreciation rights and upon conversion of convertible securities, in each case,
except with respect to bonus stock awards granted in the ordinary course of
business which were outstanding as of the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Agreement relating to the
Designated Shares) or any material adverse change in the long-term debt of the
Company and its subsidiaries, taken as a whole, or any material adverse change,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, current value basis shareholders'
equity or results of operations (based on Earnings Before Depreciation and
Deferred Taxes from Operations) of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus as first
amended or supplemented relating to the Designated Shares, the effect of which,
in any such case described in clause (i) or (ii), is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the Prospectus
as first amended or supplemented prior to the date of the Pricing Agreement
relating to the Designated Shares;
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical
16
rating organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange; (ii) a general moratorium on commercial banking activities
in New York declared by either federal or New York State authorities; or (iii)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iii) in the Representatives'
reasonable judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Firm Shares or Optional Shares or both on
the terms and in the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Shares;
(i) The Shares at each Time of Delivery shall have been duly listed,
subject to notice of issuance, on the New York Stock Exchange; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at each Time of Delivery for the Designated Shares a certificate
or certificates of officers of the Company in such form and executed by such
officers of the Company as shall be satisfactory to the Representatives, as to
the accuracy of the representations and warranties of the Company herein at and
as of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsections (a) and (f) of this Section, and as to
such other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as
17
such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Shares, or any such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by any Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the
18
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. If the indemnifying party does not assume the defense of such
action, it is understood that the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to one separate firm of local attorneys in each
such jurisdiction) at any time for all such indemnified parties, which firms
shall be designated in writing by you, if the indemnified parties under this
Section consist of any Underwriter of Designated Shares or any of its respective
controlling persons, or by the Company, if the indemnified parties under this
Section consist of the Company or any of its directors, officers, administrative
trustees or controlling persons. The indemnifying party shall not be liable for
any settlement of an action or claim for monetary damages which an indemnified
party may effect without the consent of the indemnifying party, which consent
shall not be unreasonably withheld. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim), unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates.
If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the
19
Company on the one hand and the Underwriters of the Designated Shares on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to the total
commissions or discounts received by such Underwriters in respect thereof. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading relates to
information supplied by the Company on the one hand or by any such Underwriters
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total public offering price at which the applicable
Designated Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Shares in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations with respect to such Shares and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company and to each
person, if any, who controls the Company within the meaning of the Act.
20
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Shares or Optional Shares which it has agreed to purchase under the Pricing
Agreement relating to such Shares, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such Shares
on the terms contained herein. If within thirty-six hours after such default by
any Underwriter the Representatives do not arrange for the purchase of such Firm
Shares or Optional Shares, as the case may be, then the Company shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to the Representatives to purchase such
Shares on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Shares, or the Company notifies the Representatives that it
has so arranged for the purchase of such Shares, the Representatives or the
Company shall have the right to postpone a Time of Delivery for such Shares for
a period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh of the number of Firm Shares or
Optional Shares, as the case may be, to be purchased at the respective Time of
Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the number of Firm Shares or Optional Shares, as the
case may be, which such Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Shares and, in addition, to require each
non-defaulting Underwriter to purchase its pro-rata share (based on the number
of Firm Shares or Optional Shares, as the case may be, which such Underwriter
agreed to purchase under such Pricing Agreement) of the Firm Shares or Optional
Shares, as the case may be, of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Company as provided
in subsection (a) above, the aggregate number of Firm Shares or Optional Shares,
as the case may be,
21
which remains unpurchased exceeds one-eleventh of the aggregate number of Firm
Shares or Optional Shares, as the case may be, to be purchased at the respective
Time of Delivery as referred to in subsection (b) above, or if the Company shall
not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase the Firm Shares of Optional Shares, as the
case may be, of a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Firm Shares or the Over-allotment Option relating to
such Optional Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 9 hereof, the Company shall not then be under any liability
to any Underwriter with respect to the Firm Shares or Optional Shares covered by
such Pricing Agreement except as provided in Sections 6 and 8 hereof; but, if
for any other reason, Designated Shares are not delivered by or on behalf of the
Company as provided herein, the Company will reimburse the Underwriters through
the Representatives for all out-of-pocket expenses approved in writing by the
Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Shares, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Shares
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to
22
the address of the Representatives as set forth in the Pricing Agreement; and if
to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by the Representatives upon request. Any
such statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Very truly yours,
THE XXXXX COMPANY
By:
---------------------------------
Name:
Title:
23
ANNEX 1
Pricing Agreement
-----------------
_________________, 199__
[Name(s) of Representative(s)]
As Representatives of the several
Underwriters-named in Schedule I hereto
Ladies and Gentlemen:
The Xxxxx Company, a Maryland corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated ____________, 199__ (the "Underwriting Agreement"), to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the
Shares specified in Schedule II hereto (the "Designated Shares" consisting of
Firm Shares and any Optional Shares the Underwriters may elect to purchase).
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein, and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of the Underwriters of the
Designated Shares pursuant to Section 12 of the Underwriting Agreement and the
address of the Representatives referred to in such Section 12 are set forth at
the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the
Underwriters set forth in Schedule II hereto, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and, (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares, as provided below, the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company at the purchase price to the
Underwriters set forth in Schedule II hereto that portion of the number of
Optional Shares as to which such election shall have been exercised.
The Company hereby grants to each of the Underwriters the right to purchase
at their election up to the number of Optional Shares set forth opposite the
name of such Underwriter in Schedule I hereto on the terms referred to in the
paragraph above for the sole purpose of covering over-allotments in the sale of
the Firm Shares. Any such election to purchase Optional Shares may be exercised
by written notice from the Representatives to the Company given within a period
of 30 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by the Representatives, but
in no event earlier than the First Time of Delivery or, unless the
Representatives and the Company otherwise agree in writing, no earlier than two
or later than ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and one for each of the Representatives plus
one for each counsel] counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company.
It is understood that your acceptance of this letter on behalf of each of
the Underwriters is or will be pursuant to the authority set forth in a form of
Agreement
I-2
among Underwriters, the form of which shall be submitted to the Company for
examination, upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
THE XXXXX COMPANY
By:
------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representatives]
By:
------------------------------
Name:
Title:
On behalf of each of the Underwriters
I-3
ANNEX 1
SCHEDULE I
----------
Maximum Number of
Number of Firm Optional Shares
Shares to Which May be
Underwriter be Purchased Purchased
----------- --------------- -----------------
--------------- -----------------
Total................. =============== =================
ANNEX 1
SCHEDULE II
-----------
Title of Designated Shares:
Number of Designated Shares:
Number of Firm Shares:
Maximum Number of Optional Shares:
Initial Offering Price to Public:
[$........ per Share] [Formula]
Purchase Price by Underwriters:
[$........ per Share] [Formula]
[Commission Payable to Underwriters:
$........ per Share in [specify same form of funds as in Specified Funds below]]
Form of Designated Shares:
Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]
Specified Funds for Payment of Purchase Price:
[New York] Clearing House (next day) funds
[Describe any blackout provisions with respect to the Designated Shares]
Time of Delivery:
......... a.m. (New York City time), .................., 19..
Closing Location:
Names and Addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]*:
----------
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Designated Shares should be set
forth, or referenced to an attached or accompanying description, if necessary,
to ensure agreement as to the terms of the Designated Shares to be purchased and
sold. Such a description might appropriately be in the form in which such
features will be described in the Prospectus Supplement for the offering.
ANNEX II
ANNEX II
Accountants' Letter
-------------------
Pursuant to Section 7(d) of the Underwriting Agreement, the Company's
independent certified public accountants shall furnish letters to the effect
that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of the Company for the periods specified in
such letter, as indicated in their reports thereon, copies of which have
been [separately] furnished to the Representatives [and are attached
hereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which [have been separately furnished to the
Representatives] [are attached hereto]; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the [Act and the Exchange] Act
and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the [Act and the
Exchange] Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
II-2
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis substantially
consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date (where practicable not more than
five days prior to the date of such letter), there have been any
changes in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the
date of the latest balance sheet included or incorporated by reference
in the Prospectus) or any increase in excess of 1% in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases
which the Prospectus discloses have occurred or may occur or which are
described in such letter; and
II-3
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated earnings before depreciation and deferred taxes from
operations or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
II-4
