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EXHIBIT 1.1
5,600,000 Shares
WATSON WYATT & COMPANY HOLDINGS
Class A Common Stock
($0.01 Par Value)
FORM OF UNDERWRITING AGREEMENT
September __, 2000
Deutsche Bank Securities Inc.
Banc of America Securities LLC
Robert W. Baird & Co. Incorporated
As Representatives of the
Several Underwriters
c/o Deutsche Bank Securities Inc.
One South Street
Baltimore, Maryland 21202
Ladies and Gentlemen:
Watson Wyatt & Company Holdings, a Delaware corporation (the "Company"),
and certain shareholders of the Company (the "Selling Shareholders") propose to
sell to the several underwriters (the "Underwriters") named in SCHEDULE I hereto
for whom you are acting as representatives (the "Representatives") an aggregate
of 5,600,000 shares of the Company's Class A common stock, $0.01 par value (the
"Common Stock"), of which __________ shares will be sold by the Company and
__________ shares will be sold by the Selling Shareholders (the "Firm Shares").
The respective amounts of the Firm Shares to be so purchased by the several
Underwriters are set forth opposite their names in SCHEDULE I hereto, and the
respective amounts to be sold by the Selling Shareholders are set forth opposite
their names in SCHEDULE II hereto. The Company and the Selling Shareholders are
sometimes referred to herein collectively as the "Sellers." The Company also
proposes to sell at the Underwriters' option an aggregate of up to 840,000
additional shares of the Common Stock (the "Option Shares") as set forth below.
The Company's class A common stock, class B-1 common stock and class B-2 common
stock, each having $0.01 par value, are collectively referred to herein as the
Company's "common stock."
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As the Representatives, you have advised the Company and the Selling
Shareholders (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in SCHEDULE I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."
In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE OPERATING COMPANY
AND THE SELLING SHAREHOLDERS.
(a) The Company and Watson Wyatt & Company, a Delaware corporation
and wholly-owned subsidiary of the Company (the "Operating Company"), each,
jointly and severally, represents and warrants to each of the Underwriters as
follows:
(i) A registration statement on Form S-3 (File No. 333-94973) with
respect to the Shares has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder and has been filed
with the Commission. The Company has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3. Copies of such
registration statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of the Rules and Regulations)
contained therein and the exhibits, financial statements and schedules, as
finally amended and revised, have heretofore been delivered by the Company
to you. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462(b) of the Act (a "Rule
462(b) Registration Statement"), herein referred to as the "Registration
Statement," which shall be deemed to include all information omitted
therefrom in reliance upon Rule 430A and contained in the Prospectus
referred to below, has become effective under the Act and no post-effective
amendment to the Registration Statement has been filed as of the date of
this Agreement. "Prospectus" means the form of prospectus first filed with
the Commission pursuant to Rule 424(b). Each preliminary prospectus
included in the Registration Statement prior to the time it becomes
effective is herein referred to as a "Preliminary Prospectus." Any
reference herein to the Registration Statement, any Preliminary Prospectus
or to the Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein, and, in the case of any reference herein
to any Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 424(b) or 430A, and prior to the termination of the
offering of the Shares by the Underwriters. The Registration Statement has
become effective (other than any Rule 462(b) Registration Statement to be
filed by the Company
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after the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date of this
Agreement; and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.
(ii) (A) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus, complied or
will comply, when so filed, in all material respects with the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); (B) the Registration
Statement (other than any Rule 462(b) Registration Statement to be filed by
the Company after the effectiveness of this Agreement), when it became
effective, did not contain and, as amended, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (C) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Act, (D) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become
effective (1) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (2) will comply in all
material respects with the Act and (E) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(iii) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein. 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 Form S-3 under the Act ("Incorporated Documents"), as of the
date of such preliminary prospectus or Prospectus, as the case may be. Any
document filed by the Company under the Exchange Act after the
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effective date of the Registration Statement or the date of the Prospectus
and incorporated by reference in the Prospectus shall be deemed to be
included in that Registration Statement and the Prospectus as of the date
of such filing. The Incorporated Documents, when filed with the Commission,
conformed or will conform in all material respects to the requirements for
the Exchange Act and none of such documents, as of the date of such
Incorporated Document, contained or will contain an untrue statement of a
material fact or omitted or will omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
(iv) Each of the Company, the Operating Company and its subsidiaries
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the business, prospects, financial condition or results of operations of
the Company, the Operating Company and its subsidiaries, taken as a whole.
(v) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries relating to or
entitling any person to purchase or otherwise to acquire any shares of the
capital stock of the Company or any of its subsidiaries, except as
otherwise disclosed in the Registration Statement.
(vi) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Shareholders) have been
duly authorized and validly issued and are fully paid, non-assessable and
not subject to any preemptive or similar rights; and the Shares to be
issued and sold by the Company have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as provided by
this Agreement, will be validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to any preemptive or
similar rights.
(vii) All of the outstanding shares of capital stock of the Operating
Company and each of its subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
directly or indirectly through one or more subsidiaries, free and clear of
any security interest, claim, lien, encumbrance or adverse interest of any
nature.
(viii) The terms of the authorized capital stock of the Company
conform in all material respects to the description thereof contained in
the Prospectus under the caption "Description of Capital Stock, Certificate
of Incorporation and Bylaws."
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(ix) None of the Company, the Operating Company nor any of its
subsidiaries is in violation of its respective charter or by-laws or in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company, the
Operating Company and its subsidiaries, taken as a whole, to which the
Company, the Operating Company or any of its subsidiaries is a party or by
which the Company, the Operating Company or any of its subsidiaries or
their respective property is bound.
(x) The execution, delivery and performance of this Agreement by
each of the Company and the Operating Company, the compliance by each of
the Company and the Operating Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (A)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various
states), (B) conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of the Company,
the Operating Company or any of its subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company, the Operating Company and its subsidiaries, taken
as a whole, to which the Company, the Operating Company or any of its
subsidiaries is a party or by which the Company, the Operating Company or
any of its subsidiaries or their respective property is bound, (C) violate
or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, the Operating Company, any of its
subsidiaries or their respective property or (D) result in the suspension,
termination or revocation of any Authorization (as defined below) of the
Company, the Operating Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization.
(xi) There are no legal or governmental proceedings pending or, to
their knowledge, threatened to which the Company, the Operating Company or
any of its subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required to be
described in the Registration Statement or the Prospectus and are not so
described; nor are there any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed as required.
(xii) None of the Company, the Operating Company nor any of its
subsidiaries has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), any provisions of the Employee
Retirement Income Security Act of 1974, as amended, or any provisions of
the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate,
would not have a material adverse effect on the
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business, prospects, financial condition or results of operation of the
Company, the Operating Company and its subsidiaries, taken as a whole.
(xiii) Each of the Company, the Operating Company and its
subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization") of, and has
made all filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts and other
tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure
to have any such Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company, the Operating Company and its subsidiaries, taken as a whole. Each
such Authorization is valid and in full force and effect and each of the
Company, the Operating Company and its subsidiaries is in compliance with
all the terms and conditions thereof and with the rules and regulations of
the authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows
or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after
notice or lapse of time or both, would result in any other impairment of
the rights of the holder of any such Authorization; and such Authorizations
contain no restrictions that are burdensome to the Company, the Operating
Company or any of its subsidiaries; except where such failure to be valid
and in full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or in
the aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company, the Operating
Company and its subsidiaries, taken as a whole.
(xiv) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company, the Operating Company and its subsidiaries, taken as a whole.
(xv) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Operating Company.
(xvi) PricewaterhouseCoopers LLP are, or for the period relevant to
their audit report incorporated by reference in the Registration Statement,
were, independent public accountants with respect to the Company, the
Operating Company and its subsidiaries as required by the Act.
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(xvii) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared
in accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein; the
supporting schedules, if any, included in the Registration Statement
present fairly in accordance with generally accepted accounting principles
the information required to be stated therein; and the other financial and
statistical information and data set forth in the Registration Statement
and the Prospectus (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent
with such financial statements and the books and records of the Company.
(xviii) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(xix) There are no contracts, agreements or understandings between
the Company or the Operating Company and any person granting such person
the right to require the Company or the Operating Company to file a
registration statement under the Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement.
(xx) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (A) there has not occurred any material adverse change or any
development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, business, management or
operations of the Company, the Operating Company and its subsidiaries,
taken as a whole, (B) there has not been any material adverse change or any
development involving a prospective material adverse change in the capital
stock or in the long-term debt of the Company, the Operating Company or any
of its subsidiaries and (C) none of the Company, the Operating Company nor
any of its subsidiaries has incurred any material liability or obligation,
direct or contingent.
(xxi) Each certificate signed by any officer of the Company or the
Operating Company and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a joint and several representation and
warranty by each of the Company and the Operating Company to the
Underwriters as to the matters covered thereby.
(xxii) The Company, the Operating Company and its subsidiaries own
or possess, or can acquire on reasonable terms, all patents, patent rights,
licenses, inventions,
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copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names ("intellectual
property") currently employed by them in connection with the business now
operated by them except where the failure to own or possess or otherwise be
able to acquire such intellectual property would not, singly or in the
aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operation of the Company, the Operating
Company and its subsidiaries, taken as a whole; and none of the Company,
the Operating Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with respect
to any of such intellectual property which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company, the Operating Company and its
subsidiaries, taken as a whole.
(xxiii) The Company, the Operating Company and each of its
subsidiaries are insured against such losses and risks and in such amounts
as are prudent and customary in the businesses in which they are engaged;
and none of the Company, the Operating Company nor any of its subsidiaries
(A) has received notice from any insurer or agent of such insurer that
substantial capital improvements or other material expenditures will have
to be made in order to continue such insurance or (B) has any reason to
believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from
similar insurers at a cost that would not have a material adverse effect on
the business, prospects, financial condition or results of operations of
the Company, the Operating Company and its subsidiaries, taken as a whole.
(xxiv) All material tax returns required to be filed by the Company,
the Operating Company and each of its subsidiaries in any jurisdiction have
been filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due pursuant to such returns or
pursuant to any assessment received by the Company, the Operating Company
or any of its subsidiaries have been paid, other than those being contested
in good faith and for which adequate reserves have been provided.
(xxv) Each of the Company, the Operating Company and WW Merger
Subsidiary, Inc., a Delaware corporation (the "Merger Subsidiary"), had or
has all corporate power and authority to carry out the merger of the Merger
Subsidiary with and into the Operating Company, including the exchange
therewith of each share of capital stock of the Operating Company for _____
shares of Common Stock, _____ shares of class B-1 common stock, par value
$0.01 per share, of the Company and _____ shares of class B-2 common stock,
par value $0.01 per share, of the Company (the "Merger"), and each of the
Company, the Operating Company, the Merger Subsidiary and the stockholders
of each of them have taken all action required by law, their respective
charter and bylaws or otherwise to approve the Merger.
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(xxvi) The consummation of the Merger did not or will not contravene
any provision of applicable law or the respective charter or bylaws of the
Company, the Operating Company or the Merger Subsidiary or, except to the
extent the Operating Company or the Company has obtained the requisite
consent, any provision of any material agreement or other material
instrument binding upon the Company or the Operating Company or any order,
writ, injunction or decree of any jurisdiction, court or governmental body,
and no consent, approval, authorization or order of any court or
governmental agency or body is or was required in connection with the
Merger, except such as have been obtained.
(xxvii) The Merger constitutes a reorganization within the meaning
of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not result in the recognition of any material
liability under the Code or otherwise for taxes for the Company or the
Operating Company.
(b) Each of the Selling Shareholders severally represents and
warrants as follows:
(i) Such Selling Shareholder is the lawful owner of the Shares to be
sold by such Selling Shareholder pursuant to this Agreement and has, and on
the Closing Date will have, good and clear title to such Shares, free of
all restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever.
(ii) Such Selling Shareholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement and the Power of Attorney and
Custody Agreement of such Selling Shareholder (the "Power of Attorney and
Custody Agreement"), relating to the deposit of the Shares to be sold by
such Selling Shareholder and appointing certain individuals as such Selling
Shareholder's attorneys-in-fact (the "Attorneys") to the extent set forth
therein, relating to the transactions contemplated hereby and by the
Registration Statement and to sell, assign, transfer and deliver the Shares
to be sold by such Selling Shareholder in the manner provided herein and
therein.
(iii) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(iv) The Power of Attorney and Custody Agreement of such Selling
Shareholder has been duly authorized, executed and delivered by such
Selling Shareholder and is a valid and binding instrument of such Selling
Shareholder, enforceable in accordance with its terms, and, pursuant to
such Power of Attorney and Custody Agreement, such Selling Shareholder has,
among other things, authorized the Attorneys, or any one of them, to
execute and deliver on such Selling Shareholder's behalf this Agreement and
any other document that they, or any one of them, may deem necessary or
desirable in connection with the
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transactions contemplated hereby and thereby and to deliver the Shares to
be sold by such Selling Shareholder pursuant to this Agreement.
(v) The Lockup Agreement (as defined in Section 4(a)(x)(B) below)
of such Selling Shareholder has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder and is a valid and
binding agreement of such Selling Shareholder, enforceable in accordance
with its terms.
(vi) Upon delivery of and payment for the Shares to be sold by such
Selling Shareholder pursuant to this Agreement, good and clear title to
such Shares will pass to the Underwriters, free of all restrictions on
transfer, liens, encumbrances, security interests, equities and claims
whatsoever.
(vii) The execution, delivery and performance of this Agreement and
the Power of Attorney and Custody Agreement and Lockup Agreement of such
Selling Shareholder by or on behalf of such Selling Shareholder, the
compliance by such Selling Shareholder with all the provisions hereof and
thereof and the consummation of the transactions contemplated hereby and
thereby will not (A) require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws of
the various states), (B) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the organizational documents of
such Selling Shareholder, if such Selling Shareholder is not an individual,
or any indenture, loan agreement, mortgage, lease or other agreement or
instrument to which such Selling Shareholder is a party or by which such
Selling Shareholder or any property of such Selling Shareholder is bound or
(C) violate or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental body or agency
having jurisdiction over such Selling Shareholder or any property of such
Selling Shareholder.
(viii) The information in the Registration Statement under the
caption "Selling Stockholders" which specifically relates to such Selling
Shareholder does not, and will not on the Closing Date, 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, in the light
of the circumstances under which they were made, not misleading.
(ix) Each certificate signed by or on behalf of such Selling
Shareholder and delivered to the Underwriters or counsel for the
Underwriters shall be deemed to be a representation and warranty by such
Selling Shareholder to the Underwriters as to the matters covered thereby.
2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Sellers
agree to sell to the Underwriters
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and each Underwriter agrees, severally and not jointly, to purchase, at a price
of $_____ per share, the number of Firm Shares set forth opposite the name of
each Underwriter in SCHEDULE I hereof, subject to adjustments in accordance with
Section 9 hereof. The number of Firm Shares to be purchased by each Underwriter
from each Seller shall be as nearly as practicable in the same proportion to the
total number of Firm Shares being sold by each Seller as the number of Firm
Shares being purchased by each Underwriter bears to the total number of Firm
Shares to be sold hereunder. The obligations of the Company and of each of the
Selling Shareholders shall be several and not joint.
(b) The Shares to be sold hereunder by the Selling Shareholders have
been placed in custody with the Attorneys as custodians (each, a "Custodian")
pursuant to the Power of Attorney and Custody Agreement executed by each Selling
Shareholder for delivery of all Firm Shares to be sold hereunder by the Selling
Shareholders. Each of the Selling Shareholders specifically agrees that the Firm
Shares held in custody for the Selling Shareholders under the Power of Attorney
and Custody Agreement are subject to the interests of the Underwriters
hereunder, that the arrangements made by the Selling Shareholders for such
custody are to that extent irrevocable, and that the obligations of the Selling
Shareholders hereunder shall not be terminable by any act or deed of the Selling
Shareholders (or by any other person, firm or corporation including the Company,
the Operating Company, the Custodian or the Underwriters) or by operation of law
(including the death of an individual Selling Shareholder or the dissolution of
a corporate Selling Shareholder) or by the occurrence of any other event or
events, except as set forth in the Power of Attorney and Custody Agreement. If
any such event should occur prior to the delivery to the Underwriters of the
Firm Shares hereunder, certificates for the Firm Shares shall be delivered by
the Custodian in accordance with the terms and conditions of this Agreement as
if such event has not occurred. The Custodian is authorized to receive and
acknowledge receipt of the proceeds of sale of the Shares held by it against
delivery of such Shares.
(c) Payment for the Firm Shares to be sold hereunder is to be made
in Federal (same day) funds to an account designated by the Company for the
shares to be sold by it and to an account designated by the Custodian for the
shares to be sold by the Selling Shareholders, in each case against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made through the facilities of
the Depository Trust Company at 10:00 a.m., New York time, on the third business
day after the date of this Agreement or at such other time and date not later
than five business days thereafter as you and the Company shall agree upon, such
time and date being herein referred to as the "Closing Date." (As used herein,
"business day" means a day on which the New York Stock Exchange is open for
trading and on which banks in New York are open for business and not permitted
by law or executive order to be closed.)
(d) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in
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part by giving written notice (i) at any time before the Closing Date and (ii)
only once thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company, setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option, the names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to be delivered.
The time and date at which certificates for Option Shares are to be delivered
shall be determined by the Representatives but shall not be earlier than three
nor later than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein referred to
as the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the Closing
Date as the Option Closing Date. The number of Option Shares to be purchased by
each Underwriter shall be in the same proportion to the total number of Option
Shares being purchased as the number of Firm Shares being purchased by such
Underwriter bears to the total number of Firm Shares, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in the
sale of the Firm Shares by the Underwriters. You, as Representatives of the
several Underwriters, may cancel such option at any time prior to its exercise
or expiration by giving written notice of such cancellation to the Company. To
the extent, if any, that the option is exercised, payment for the Option Shares
shall be made on the Option Closing Date in Federal (same day) funds drawn to
the order of the Company against delivery of certificates therefor through the
facilities of the Depository Trust Company, New York, New York.
(e) If on the Closing Date any Selling Shareholder fails to sell the
Firm Shares which such Selling Shareholder has agreed to sell on such date as
set forth in SCHEDULE II hereto, the Company agrees that it will sell or arrange
for the sale of that number of shares of Common Stock to the Underwriters which
represents Firm Shares which such Selling Shareholder has failed to so sell, as
set forth in SCHEDULE II hereto, or such lesser number as may be requested by
the Representatives.
3. OFFERING BY THE UNDERWRITERS.
It is understood that the several Underwriters are to make a public
offering of the Firm Shares as soon as the Representatives deem it advisable to
do so. The Firm Shares are to be initially offered to the public at the initial
public offering price set forth in the Prospectus. The Representatives may from
time to time thereafter change the public offering price and other selling
terms. To the extent, if at all, that any Option Shares are purchased pursuant
to Section 2 hereof, the Underwriters will offer them to the public on the
foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. COVENANTS OF THE COMPANY, THE OPERATING COMPANY AND THE SELLING
SHAREHOLDERS.
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(a) The Company and the Operating Company each, jointly and
severally, covenant and agree with the several Underwriters that:
(i) The Company will (A) use its best efforts to cause the
Registration Statement to become effective or, if the procedure in Rule
430A of the Rules and Regulations is followed, to prepare and timely file
with the Commission under Rule 424(b) of the Rules and Regulations a
Prospectus in a form approved by the Representatives containing information
previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A of the Rules and Regulations, (B) not
file any amendment to the Registration Statement or supplement to the
Prospectus or document incorporated by reference therein of which the
Representatives shall not previously have been advised and furnished with a
copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations and
(C) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the
termination of the offering of the Shares by the Underwriters. If the
Registration Statement at the time of the effectiveness of this Agreement
does not cover all of the Shares, the Company will file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York city time,
on the date of this Agreement and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing
thereof or to give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act.
(ii) The Company will advise the Representatives promptly (A) when
the Registration Statement or any post-effective amendment thereto shall
have become effective, (B) of receipt of any comments from the Commission,
(C) of any request of the Commission for amendment of the Registration
Statement or for supplement to the Prospectus or for any additional
information, (D) if the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, when the
Rule 462(b) Registration Statement has become effective, and (E) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the use of the Prospectus or of the
institution of any proceedings for that purpose. The Company will use its
best efforts to prevent the issuance of any such stop order preventing or
suspending the use of the Prospectus and to obtain as soon as possible the
lifting thereof, if issued.
(iii) The Company will cooperate with the Representatives in
endeavoring to qualify the Shares for sale under the securities laws of
such jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
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
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where it is not now so qualified or required to file such a consent. The
Company will, from time to time, prepare and file such statements, reports,
and other documents, as are or may be required to continue such
qualifications in effect for so long a period as the Representatives may
reasonably request for distribution of the Shares.
(iv) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, four signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies of
the exhibits filed therewith that may reasonably be requested), including
documents incorporated by reference therein, and of all amendments thereto,
as the Representatives may reasonably request.
(v) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of the
Commission thereunder, so as to permit the completion of the distribution
of the Shares as contemplated in this Agreement and the Prospectus. If
during the period in which a prospectus is required by law to be delivered
by an Underwriter or dealer, any event shall occur as a result of which, in
the judgment of the Company or in the reasonable opinion of the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
existing at the time the Prospectus is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will either (i)
prepare and file with the Commission an appropriate amendment to the
Registration Statement or supplement to the Prospectus or (ii) prepare and
file with the Commission an appropriate filing under the Securities
Exchange Act of 1934 which shall be incorporated by reference in the
Prospectus so that the Prospectus as so amended or supplemented will not,
in the light of the circumstances when it is so delivered, be misleading,
or so that the Prospectus will comply with the law.
(vi) The Company will make generally available to its security
holders, as soon as it is practicable to do so, an earning statement (which
need not be audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, which earning statement shall satisfy the requirements of
Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.
(vii) Prior to the Closing Date, the Company will furnish to the
Underwriters, as soon as they have been prepared by or are available to the
Company, a copy of any
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unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements
appearing in the Registration Statement and the Prospectus.
(viii) No offering, sale, short sale or other disposition of any
shares of common stock of the Company or other securities convertible into
or exchangeable or exercisable for shares of common stock or derivative of
common stock (or agreement for such) will be made for a period of 180 days
after the date of this Agreement, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of Deutsche Bank
Securities Inc. ("DBSI").
(ix) The Company will use its best efforts to list, subject to notice
of issuance, the Shares on the New York Stock Exchange (the "NYSE") and to
maintain the listing of the Shares on the NYSE.
(x) (A) The Company agrees not to (A) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of
common stock or any securities convertible into or exercisable or
exchangeable for common stock or (B) enter into any swap or other
arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any common stock (regardless of whether
any of the transactions described in clause (A) or (B) is to be settled by
the delivery of common stock, or such other securities, in cash or
otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior
written consent of DBSI. Notwithstanding the foregoing, during such period
(1) the Company may grant stock options pursuant to the Company's existing
stock option plan and (2) the Company may issue shares of common stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof. The Company also agrees not to waive any
transfer restrictions applicable to its equity securities or to file any
registration statement with respect to any shares of common stock or any
securities convertible into or exercisable or exchangeable for common stock
for a period of 180 days after the date of the Prospectus without the prior
written consent of DBSI.
(B) The Company and (1) each employee executive officer and employee
director of the Company and the Operating Company and (2) each employee
shareholder beneficially owning 50,000 shares or more of the outstanding
common stock of the Operating Company, have entered into, on or prior to
the date of this agreement, a letter agreement substantially in the form
attached hereto as EXHIBIT A (each, a "Lockup Agreement" and, collectively,
the "Lockup Agreements"), pursuant to which each such officer, director or
shareholder shall agree not to offer, sell, sell short or otherwise dispose
of any shares of common stock of the Company beneficially owned by it as of
the date of this Agreement (the "Restricted Shares"), or any other
securities convertible, exchangeable or exercisable for Restricted Shares
or derivative of Restricted Shares owned by such
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<PAGE>
person or request the registration for the offer or sale of any of the
foregoing (or as to which such person has the right to direct the
disposition of) for a period of four years after the Closing Date, PROVIDED
that such restrictions shall terminate as to 25% of such Restricted Shares
on each of the first, second, third and fourth anniversaries of the Closing
Date. The Company will use its best efforts to enforce the Lockup
Agreements in a manner consistent with their overall objective.
(xi) The Company shall apply the net proceeds of its sale of the
Shares as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of
the proceeds therefrom as may be required in accordance with Rule 463 under
the Act.
(xii) The Company shall not invest, or otherwise use the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Subsidiaries to register as an
investment company under the 1940 Act.
(xiii) The Company will maintain a transfer agent and, if necessary
under the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.
(xiv) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation (as such terms
are defined in Regulation M, promulgated under the Act) of the price of any
securities of the Company.
(xv) Each of the Company and the Operating Company will use its best
efforts to do and perform all things required or necessary to be done and
performed under this Agreement by the Company or the Operating Company
prior to the Closing Date or any Option Closing Date, as the case may be,
and to satisfy all conditions precedent to the delivery of the Shares.
(b) Each of the Selling Shareholders covenants and agrees with the
several Underwriters that:
(i) No offering, sale, short sale or other disposition of any
shares of common stock of the Company or other capital stock of the Company
or other securities convertible, exchangeable or exercisable for common
stock or derivative of common stock owned by the Selling Shareholder or
request the registration for the offer or sale of any of the foregoing (or
as to which the Selling Shareholder has the right to direct the disposition
of) will be made for the periods specified in the Lockup Agreement,
directly or indirectly, by such Selling Shareholder otherwise than
hereunder or with the prior written consent of DBSI.
(ii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 and the
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Interest and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, each of the Selling Shareholders agrees
to deliver to you prior to or at the Closing Date a properly completed and
executed United States Treasury Department Form W-8 or W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(iii) Such Selling Shareholder will not take, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any securities of the Company.
5. COSTS AND EXPENSES.
The Company will pay all costs, expenses and fees incident to the
performance of the obligations of the Sellers under this Agreement, including,
without limiting the generality of the foregoing, the following: accounting fees
of the Company; the fees and disbursements of counsel for the Company; the cost
of printing and delivering to, or as requested by, the Underwriters copies of
the Registration Statement, Preliminary Prospectuses, the Prospectus, this
Agreement, the Underwriters' Selling Memorandum, the Underwriters' Invitation
Letter, the Listing Application, the Blue Sky Survey and any supplements or
amendments thereto; the filing fees of the Commission; the filing fees and
expenses (including legal fees and disbursements) incident to securing any
required review by the NASD of the terms of the sale of the Shares; the Listing
Fee of the New York Stock Exchange; and the expenses, including the fees and
disbursements of counsel for the Underwriters, incurred in connection with the
qualification of the Shares under State securities or Blue Sky laws. Any
transfer taxes imposed on the sale of the Shares to the several Underwriters
will be paid by the Company or the Selling Shareholders, as the case may be. The
Company shall not, however, be required to pay for any of the Underwriters
expenses (other than those related to qualification under NASD regulation and
State securities or Blue Sky laws) except that, if this Agreement shall not be
consummated because the conditions in Section 6 hereof are not satisfied, or
because this Agreement is terminated by the Representatives pursuant to Section
11 hereof, or by reason of any failure, refusal or inability on the part of the
Company or the Selling Shareholders to perform any undertaking or satisfy any
condition of this Agreement or to comply with any of the terms hereof on their
part to be performed, unless such failure to satisfy said condition or to comply
with said terms be due to the default or omission of any Underwriter, then the
Company shall reimburse the several Underwriters for reasonable out-of-pocket
expenses, including fees and disbursements of counsel, reasonably incurred in
connection with investigating, marketing and proposing to market the Shares or
in contemplation of performing their obligations hereunder; but the Company and
the Selling Shareholders shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.
6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy,
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as of the Closing Date or the Option Closing Date, as the case may be, of the
representations and warranties of the Company and the Selling Shareholders
contained herein, and to the performance by the Company and the Selling
Shareholders of their covenants and obligations hereunder and to the following
additional conditions:
(a) The Registration Statement and all post-effective amendments thereto
shall have become effective and any and all filings required by Rule 424 and
Rule 430A of the Rules and Regulations shall have been made, and any request of
the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company or the Operating Company, shall be contemplated
by the Commission and no injunction, restraining order, or order of any nature
by a Federal or state court of competent jurisdiction shall have been issued as
of the Closing Date which would prevent the issuance of the Shares.
(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be,
(i) the opinion of Cadwalader Wickersham & Taft, counsel for the
Company, dated the Closing Date or the Option Closing Date, as the case may
be, addressed to the Underwriters (and stating that it may be relied upon
by counsel to the Underwriters) to the effect that:
(A) each of the Company, the Operating Company and
its subsidiaries is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation
and has the corporate power and authority to carry on its
business as described in the Prospectus and to own, lease and
operate its properties;
(B) the Shares to be issued and sold by the Company
hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;
(C) this Agreement has been duly authorized, executed
and delivered by each of the Company and the Operating
Company;
(D) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(E) the Registration Statement has become effective
under the Act, no stop order suspending its effectiveness has
been issued and no proceedings for that
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<PAGE>
purpose are, to the best of such counsel's knowledge after
due inquiry, pending before or contemplated by the Commission;
(F) the statements under the captions "Long Term
Incentive Plan", "Common Stock Purchase Arrangements Before
the Public Offering", "Corporate Reorganization", "Description
of Capital Stock, Certificate of Incorporation and Bylaws",
"Shares Eligible for Future Sale" and "Underwriting" in the
Prospectus and Item 15 of Part II of the Registration
Statement, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to
therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(G) the execution, delivery and performance of this
Agreement by the Company and the Operating Company, the
compliance by the Company and the Operating Company with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not (1) require any consent,
approval, authorization or other order of, or qualification
with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky laws of the
various states), (2) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the
charter or by-laws of the Company, the Operating Company or
any of its subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company, the Operating Company and its
subsidiaries, taken as a whole, to which the Company, the
Operating Company or any of its subsidiaries is a party or by
which the Company, the Operating Company or any of its
subsidiaries or their respective property is bound, (3)
violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Company, the Operating Company, any of its subsidiaries or
their respective property or (4) result in the suspension,
termination or revocation of any Authorization of the Company,
the Operating Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such
Authorization;
(H) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(I) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings
between the Company or the Operating Company and any person
granting such person the right to require the Company or the
Operating Company to file a registration statement under the
Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement;
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(J) (1) each document, if any, filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus
(except for financial statements and other financial data
included therein as to which no opinion need be expressed)
complied when so filed as to form with the Exchange Act, (2)
the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial
statements and other financial data included therein as to
which no opinion need be expressed) comply as to form with the
Act, (3) such counsel has no reason to believe that at the
time the Registration Statement became effective or on the
date of this Agreement, the Registration Statement and the
prospectus included therein (except for the financial
statements and other financial data as to which such counsel
need not express any belief) contained any 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, (4) such counsel has no reason to
believe that the Prospectus, as amended or supplemented, if
applicable (except for the financial statements and other
financial data, as aforesaid) contains any untrue statement of
a material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading and
(5) such counsel has no reason to believe that any of the
documents incorporated by reference in the Prospectus, 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; such counsel need express no
opinion as to the financial statements or other financial or
statistical data contained in any such document incorporated
by reference in the Prospectus; and
(K) the consummation of the Merger did not or will
not contravene (1) any provision of applicable law, (2) the
respective charter or bylaws of the Company, the Operating
Company or the Merger Subsidiary or (3) to such counsel's
knowledge and except to the extent the Company has obtained
the requisite consent, any provision of any material agreement
or other material instrument binding upon the Company or the
Operating Company or any order, writ, injunction or decree of
any jurisdiction, court or governmental body, and no consent,
approval, authorization or order of any court or governmental
agency or body is or was required in connection with the
Merger, except such as have been obtained.
(ii) the opinion of Walter W. Bardenwerper, counsel for the
Company, the Operating Company and the Selling Shareholders, dated the
Closing Date or the Option Date, as the case may be, addressed to the
Underwriters (and stating that it may be relied upon by counsel to the
Underwriters) to the effect that:
(A) each of the Company, the Operating Company and
its subsidiaries has been duly incorporated, is validly
existing as a corporation in good standing under
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the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as
described in the Prospectus and to own, lease and operate its
properties;
(B) each of the Company, the Operating Company and
its subsidiaries is duly qualified and is in good standing as
a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial
condition or results of operations of the Company, the
Operating Company and its subsidiaries, taken as a whole;
(C) all the outstanding shares of capital stock of
the Company (including the Shares to be sold by the Selling
Shareholders) have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any
preemptive or similar rights;
(D) the Shares to be issued and sold by the Company
hereunder have been duly authorized and, when issued and
delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;
(E) all of the outstanding shares of capital stock of
the Operating Company and each of its subsidiaries have been
duly authorized and validly issued and are fully paid and
non-assessable, and, upon consummation of the Merger, will be
owned by the Company, directly or indirectly through one or
more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature;
(F) this Agreement has been duly authorized, executed
and delivered by each of the Company and the Operating Company
and by or on behalf of each Selling Shareholder;
(G) none of the Company, the Operating Company nor
any of its subsidiaries is in violation of its respective
charter or by-laws and, to the best of such counsel's
knowledge after due inquiry, none of the Company, the
Operating Company nor any of its subsidiaries is in default in
the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company, the Operating Company and its
subsidiaries, taken as a whole, to which the Company, the
Operating Company or any of its subsidiaries is a party or by
which the Company, the Operating Company or any of its
subsidiaries or their respective property is bound;
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(H) the execution, delivery and performance of this
Agreement by the Company and the Operating Company, the
compliance by the Company and the Operating Company with all
the provisions hereof and the consummation of the transactions
contemplated hereby will not (1) require any consent,
approval, authorization or other order of, or qualification
with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky laws of the
various states), (2) conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the
charter or by-laws of the Company, the Operating Company or
any of its subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company, the Operating Company and its
subsidiaries, taken as a whole, to which the Company, the
Operating Company or any of its subsidiaries is a party or by
which the Company, the Operating Company or any of its
subsidiaries or their respective property is bound, (3)
violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Company, the Operating Company, any of its subsidiaries or
their respective property or (4) result in the suspension,
termination or revocation of any Authorization of the Company,
the Operating Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such
Authorization;
(I) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company, the Operating Company or any of its
subsidiaries is or could be a party or to which any of their
respective property is or could be subject that are required
to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not so described or filed as required;
(J) none of the Company, the Operating Company nor
any of its subsidiaries has violated any Environmental Law,
any provisions of the Employee Retirement Income Security Act
of 1974, as amended, or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a material adverse effect on the
business, prospects, financial condition or results of
operation of the Company, the Operating Company and its
subsidiaries, taken as a whole;
(K) each of the Company, the Operating Company and
its subsidiaries has such Authorizations of, and has made all
filings with and notices to, all governmental or regulatory
authorities and self-regulatory organizations and all courts
and other tribunals, including, without limitation, under any
applicable
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Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its
business, except where the failure to have any such
Authorization or to make any such filing or notice would
not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or
results of operations of the Company, the Operating Company
and its subsidiaries, taken as a whole; each such
Authorization is valid and in full force and effect and each
of the Company, the Operating Company and its subsidiaries
is in compliance with all the terms and conditions thereof
and with the rules and regulations of the authorities and
governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation,
the receipt of any notice from any authority or governing
body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of
any such Authorization or results or, after notice or lapse
of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome
to the Company, the Operating Company or any of its
subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence
of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a material
adverse effect on the business, prospects, financial
condition or results of operations of the Company, the
Operating Company and its subsidiaries, taken as a whole;
(L) to the best of such counsel's knowledge after
due inquiry, there are no contracts, agreements or
understandings between the Company or the Operating Company
and any person granting such person the right to require the
Company or the Operating Company to file a registration
statement under the Act with respect to any securities of
the Company or to require the Company to include such
securities with the Shares registered pursuant to the
Registration Statement;
(M) (1) such counsel has no reason to believe that at
the time the Registration Statement became effective or on
the date of this Agreement, the Registration Statement and
the prospectus included therein (except for the financial
statements and other financial data as to which such counsel
need not express any belief) contained any 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, (2) such counsel has no
reason to believe that the Prospectus, as amended or
supplemented, if applicable (except for the financial
statements and other financial data, as aforesaid) contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading and (3) such counsel has no reason
to believe that any of the documents incorporated by
reference in the Prospectus, when they were so filed,
contained an untrue statement of a material fact or omitted
to state a material fact
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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; such counsel
need express no opinion as to the financial statements or
other financial or statistical data contained in any such
document incorporated by reference in the Prospectus;
(N) each Selling Shareholder is the lawful owner of
the Shares to be sold by such Selling Shareholder pursuant
to this Agreement and has good and clear title to such
Shares, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims
whatsoever;
(O) each Selling Shareholder has full legal right,
power and authority, and all authorization and approval
required by law, to enter into this Agreement and each of
the Power of Attorney and Custody Agreement and the Lockup
Agreement of such Selling Shareholder and to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Shareholder in the manner provided herein and therein;
(P) each of the Power of Attorney and Custody
Agreement and the Lockup Agreement of each Selling
Shareholder has been duly authorized, executed and delivered
by such Selling Shareholder and is a valid and binding
instrument of such Selling Shareholder, enforceable in
accordance with its terms, and, pursuant to such Power of
Attorney and Custody Agreement, such Selling Shareholder
has, among other things, authorized the Attorneys, or any
one of them, to execute and deliver on such Selling
Shareholder's behalf this Agreement and any other document
they, or any one of them, may deem necessary or desirable in
connection with the transactions contemplated hereby and
thereby and to deliver the Shares to be sold by such Selling
Shareholder pursuant to this Agreement;
(Q) upon delivery of and payment for the Shares to be
sold by each Selling Shareholder pursuant to this Agreement,
good and clear title to such Shares will pass to the
Underwriters, free of all restrictions on transfer, liens,
encumbrances, security interests, equities and claims
whatsoever;
(R) the execution, delivery and performance of this
Agreement and each of the Power of Attorney and Custody
Agreement and the Lockup Agreement of each Selling
Shareholder by such Selling Shareholder, the compliance by
such Selling Shareholder with all the provisions hereof and
thereof and the consummation of the transactions
contemplated hereby and thereby will not (1) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue
Sky laws of the various states), (2) conflict with or
constitute a breach of any of the terms or provisions of, or
a default under, the organizational documents of such
Selling Shareholder, if such Selling Shareholder is not an
individual, or any indenture, loan agreement, mortgage,
lease or other agreement or instrument to
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<PAGE>
which such Selling Shareholder is a party or by which any
property of such Selling Shareholder is bound or (3) violate
or conflict with any applicable law or any rule, regulation,
judgment, order or decree of any court or any governmental
body or agency having jurisdiction over such Selling
Shareholder or any property of such Selling Shareholder; and
(S) the consummation of the Merger did not or will
not contravene (1) any provision of applicable law, (2) the
respective charter or bylaws of the Company, the Operating
Company or the Merger Subsidiary or (3) to such counsel's
knowledge and except to the extent the Company has obtained
the requisite consent, any provision of any material
agreement or other material instrument binding upon the
Company or the Operating Company or any order, writ,
injunction or decree of any jurisdiction, court or
governmental body, and no consent, approval, authorization
or order of any court or governmental agency or body is or
was required in connection with the Merger, except such as
have been obtained.
In rendering such opinions, counsel may rely as to matters governed by the
laws of states other than the General Corporation Law of the state of Delaware
or Federal laws on local counsel in such jurisdictions, provided that in each
case counsel shall state that they believe that they and the Underwriters are
justified in relying on such other counsel.
(c) The Representatives shall have received from Winston & Strawn, counsel
for the Underwriters, an opinion dated the Closing Date or the Option Closing
Date, as the case may be, substantially to the effect specified in subparagraphs
(B), (E), (G)(2) and (I) of Paragraph (b)(i) of this Section 6, and that the
Company is a duly organized and validly existing corporation under the laws of
the State of Delaware. In rendering such opinion, Winston & Strawn may rely as
to all matters governed other than by the laws of the State of New York or
Federal laws on the opinion of counsel referred to in Paragraph (b) of this
Section 6. In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration Statement, or any
amendment thereto, as of the time it became effective under the Act (but after
giving effect to any modifications incorporated therein pursuant to Rule 430A
under the Act) as of the Closing Date or the Option Closing Date, as the case
may be, 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 (ii) the Prospectus, or any supplement thereto, on
the date it was filed pursuant to the Rules and Regulations and as of the
Closing Date or the Option Closing Date, as the case may be, contained an untrue
statement of a material fact or omitted to state a material fact, necessary in
order to make the statements, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement, Winston & Strawn may state that their belief is based
upon the procedures set forth therein, but is without independent check and
verification.
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<PAGE>
(d) The Representatives shall have received at or prior to the Closing
Date from Winston & Strawn a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the qualification for
offering and sale by the Underwriters of the Shares under the State
securities or Blue Sky laws of such jurisdictions as the Representatives may
reasonably have designated to the Company.
(e) You shall have received, on each of the dates hereof, the Closing Date
and the Option Closing Date, as the case may be, a letter dated the date hereof,
the Closing Date or the Option Closing Date, as the case may be, in form and
substance satisfactory to you, from PricewaterhouseCoopers LLP, confirming that
they are independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating that in their
opinion the financial statements and schedules examined by them and included in
the Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published Rules
and Regulations; and containing such other statements and information as is
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial and statistical
information contained in the Registration Statement and Prospectus.
(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates signed by
John J. Haley and Carl D. Mautz, in their respective capacities as President and
Chief Financial Officer and Chief Financial Officer to the effect that, as of
the Closing Date or the Option Closing Date, as the case may be, each of them
severally represents as follows:
(i) The Registration Statement has become effective under the Act and
no stop order suspending the effectiveness of the Registration Statement
has been issued, and no proceedings for such purpose have been taken or
are, to his knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the Option
Closing Date, as the case may be;
(iii) All filings required to have been made pursuant to Rules 424 or
430A under the Act have been made;
(iv) He or she has carefully examined the Registration Statement and
the Prospectus and, in his or her opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement were true and correct, and such Registration Statement and
Prospectus did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, and since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement to or
an amendment of the Prospectus which has not been so set forth in such
supplement or amendment; and
26
<PAGE>
(v) Since the respective dates as of which information is given in the
Registration Statement and Prospectus, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business.
(g) The Company and the Selling Shareholders shall have furnished to
the Representatives such further certificates and documents confirming the
representations and warranties, covenants and conditions contained herein and
related matters as the Representatives may reasonably have requested.
(h) The Lockup Agreements described in Section 4(a)(x)(B) are in full
force and effect.
The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Winston & Strawn, counsel
for the Underwriters.
If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.
In such event, the Selling Shareholders, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. CONDITIONS OF THE OBLIGATIONS OF THE SELLERS.
The obligations of the Sellers to sell and deliver the portion of the
Shares required to be delivered as and when specified in this Agreement are
subject to the conditions that at the Closing Date or the Option Closing Date,
as the case may be, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and in effect or proceedings
therefor initiated or threatened.
8. INDEMNIFICATION.
(a) The Company and the Operating Company each, jointly and severally,
agree:
(1) to indemnify and hold harmless each Underwriter and each person,
if any, who controls any Underwriter within the meaning of the Act, against
any losses, claims, damages or liabilities to which such Underwriter or any
such
27
<PAGE>
controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading any act or failure
to act, or (iii) any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares 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 Operating Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be
taken by such Underwriter through its gross negligence or willful
misconduct); PROVIDED, HOWEVER, that the Company and the Operating Company
will 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 the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company or the Operating Company by or
through the Representatives specifically for use in the preparation
thereof.
(2) to reimburse each Underwriter and each such controlling person
upon demand for any legal or other out-of-pocket expenses reasonably
incurred by such Underwriter or such controlling person in connection with
investigating or defending any such loss, claim, damage or liability,
action or proceeding or in responding to a subpoena or governmental inquiry
related to the offering of the Shares, whether or not such Underwriter or
controlling person is a party to any action or proceeding. In the event
that it is finally judicially determined that the Underwriters were not
entitled to receive payments for legal and other expenses pursuant to this
subparagraph, the Underwriters will promptly return all sums that had been
advanced pursuant hereto.
(b) The Selling Shareholders agree to indemnify the Underwriters and each
person, if any, who controls any Underwriter within the meaning of the Act,
against any losses, claims, damages or liabilities to which such Underwriter or
controlling person may become subject under the Act or otherwise to the same
extent as indemnity is provided by the Company pursuant to Section 8(a) above.
In no event, however, shall the liability of any Selling Shareholder for
indemnification under this Section 8(a) exceed the proceeds received by such
Selling Shareholder
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<PAGE>
from the Underwriters in the offering. This indemnity obligation will be in
addition to any liability which the Company or the Operating Company may
otherwise have.
(c) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, the Operating Company, each of their directors, each of
their officers who have signed the Registration Statement, the Selling
Shareholders, and each person, if any, who controls the Company or the Operating
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company, the Operating Company or any such director,
officer, Selling Shareholder or controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances under
which they were made; and will reimburse any legal or other expenses reasonably
incurred by the Company, the Operating Company or any such director, officer,
Selling Shareholder or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission has been made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Company by or through the Representatives specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(d) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 8, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing. No indemnification provided for in Section 8(a), (b) or (c)
shall be available to any party who shall fail to give notice as provided in
this Section 8(d) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was materially prejudiced
by the failure to give such notice, but the failure to give such notice shall
not relieve the indemnifying party or parties from any liability which it or
they may have to the indemnified party for contribution or otherwise than on
account of the provisions of Section 8(a), (b) or (c). In case any such
proceeding 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 and shall
pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred (or within 30 days of presentation) the
reasonable fees and expenses of the counsel retained by the indemnified party in
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<PAGE>
the event (i) the indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel, (ii) the named parties to any
such proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them or (iii) the indemnifying party shall have failed to assume the
defense and employ counsel acceptable to the indemnified party within a
reasonable period of time after notice of commencement of the action. It is
understood that the indemnifying party shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by you in the case
of parties indemnified pursuant to Section 8(a) or (b) and by the Company in the
case of parties indemnified pursuant to Section 8(c). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. In addition, the indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or proceeding
of which indemnification may be sought hereunder (whether or not any indemnified
party is an actual or potential party to such claim, action or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action
or proceeding.
(e) To the extent the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings 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 or proceedings in respect thereof) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law 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 Company and the Selling Shareholders on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company and the Selling Shareholders
bear to the total underwriting discounts and commissions received by the
Underwriters, 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, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Operating Company or the Selling Shareholders on
the
30
<PAGE>
one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
8(f) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 8(f). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 8(f) 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 (f), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) 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, and (iii) no Selling Shareholder
shall be required to contribute any amount in excess of the proceeds received by
such Selling Shareholder from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(f) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(g) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.
(h) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company, the Operating Company and the
Selling Shareholders set forth in this Agreement shall remain operative and in
full force and effect, regardless of (i) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter, the Company, the
Operating Company, their directors or officers, the Selling Shareholders or any
persons controlling the Company or the Operating Company, (ii) acceptance of any
Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter, or to the Company, the Operating
Company. their directors or officers, or any person controlling the Company or
the Operating Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
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<PAGE>
9. DEFAULT BY UNDERWRITERS.
If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for the portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company, the Operating Company or a
Selling Shareholder), you, as Representatives of the Underwriters, shall use
your reasonable efforts to procure within 36 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholders such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 36
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not exceed 10% of the Firm Shares or Option
Shares, as the case may be, covered hereby, the other Underwriters shall be
obligated, severally, in proportion to the respective numbers of Firm Shares or
Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company or you
as the Representatives of the Underwriters will have the right, by written
notice given within the next 36-hour period to the parties to this Agreement, to
terminate this Agreement without liability on the part of the non-defaulting
Underwriters or of the Company, the Operating Company or of the Selling
Shareholders except to the extent provided in Section 8 hereof. In the event of
a default by any Underwriter or Underwriters, as set forth in this Section 9,
the Closing Date or Option Closing Date, as the case may be, may be postponed
for such period, not exceeding seven days, as you, as Representatives, may
determine in order that the required changes in the Registration Statement or in
the Prospectus or in any other documents or arrangements may be effected. The
term "Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. NOTICES.
All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to Deutsche Bank Securities Inc.,
One South Street, Baltimore, Maryland 21202. Attention: ; with a copy to
Deutsche Bank Securities Inc., 31 West 52nd Street, New York, New York 10019,
Attention: General Counsel; if to the Company, the Operating Company or the
Selling Shareholders, to
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Watson Wyatt & Company Holdings
6707 Democracy Boulevard
Suite 800
Bethesda, Maryland 20817
Attention: Secretary
and after November 1, 2000, to
Watson Wyatt & Company Holdings
1717 H Street, NW
Washington, DC 20006
Attention: Secretary
11. TERMINATION.
(a) This Agreement may be terminated by you by notice to the Company
at any time prior to the Closing Date if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any material adverse change or any development
involving a prospective material adverse change in or affecting the condition,
financial or otherwise, of the Company, the Operating Company and their
Subsidiaries taken as a whole or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects of
the Company, the Operating Company and their Subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, (ii) any outbreak or
escalation of hostilities or declaration of war or national emergency or other
national or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, escalation, declaration, emergency,
calamity, crisis or change on the financial markets of the United States would,
in your reasonable judgment, make it impracticable or inadvisable to market the
Shares or to enforce contracts for the sale of the Shares, or (iii) suspension
of trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or limitation on prices (other than limitations on hours
or numbers of days of trading) for securities on either such Exchange, (iv) the
enactment, publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which in your opinion
materially and adversely affects or may materially and adversely affect the
business or operations of the Company or the Operating Company, (v) declaration
of a banking moratorium by United States or New York State authorities, (vi) any
downgrading, or placement on any watch list for possible downgrading, in the
rating of the Company's debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Exchange Act); (vii) the suspension of trading of the Company's common stock
by the New York Stock Exchange, the Commission, or any other governmental
authority or, (viii) the taking of any action by any governmental body or agency
in respect of its monetary or fiscal affairs which in your reasonable opinion
has a material adverse effect on the securities markets in the United States; or
(b) as provided in Sections 6 and 9 of this Agreement.
33
<PAGE>
12. SUCCESSORS.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company, the Operating Company and the Selling Shareholders
and their respective successors, executors, administrators, heirs and assigns,
and the officers, directors and controlling persons referred to herein, and no
other person will have any right or obligation hereunder. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign merely
because of such purchase.
13. INFORMATION PROVIDED BY UNDERWRITERS.
The Company, the Operating Company, the Selling Shareholders and the
Underwriters acknowledge and agree that the only information furnished or to be
furnished by any Underwriter to the Company for inclusion in any Prospectus or
the Registration Statement consists of the information set forth in the last
paragraph on the front cover page (insofar as such information relates to the
Underwriters), legends required by Item 502(d) of Regulation S-K under the Act
and the information under the caption "Underwriting" in the Prospectus.
14. MISCELLANEOUS.
The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations, warranties and covenants in this
Agreement shall remain in full force and effect regardless of (a) any
termination of this Agreement, (b) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company,
the Operating Company or their directors or officers and (c) delivery of and
payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholders, the
Company, the Operating Company and the several Underwriters in accordance with
its terms.
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Shareholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Shareholder pursuant to a validly existing and
binding Power of Attorney which authorizes such Attorney-in-Fact to take such
action.
[signature page follows]
34
<PAGE>
Very truly yours,
WATSON WYATT & COMPANY HOLDINGS
By _____________________________
Name:
Title:
WATSON WYATT & COMPANY
By ____________________________
Name:
Title:
Selling Shareholders listed on
SCHEDULE II
By _____________________________
Attorney-in-Fact
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
DEUTSCHE BANK SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
ROBERT W. BAIRD & CO. INCORPORATED
As Representatives of the several
Underwriters listed on SCHEDULE I
By: Deutsche Bank Securities Inc.
By: _____________________________
Authorized Officer
<PAGE>
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
UNDERWRITER TO BE PURCHASED
----------- ---------------------
Deutsche Bank Securities Inc.
Banc of America Securities LLC
Robert W. Baird & Co. Incorporated
__________
Total __________
<PAGE>
SCHEDULE II
SCHEDULE OF SELLING SHAREHOLDERS
Number of Firm Shares
SELLING SHAREHOLDER TO BE SOLD
------------------- ---------------------
__________
Total __________
<PAGE>
SCHEDULE III
SCHEDULE OF OPTION SHARES
Maximum Number Percentage of
of Option Shares Total Number of
NAME OF SELLER TO BE SOLD OPTION SHARES
-------------- ---------------- ----------------
______ ______
Total ______ 100%
------
