EXHIBIT 1(j)
U.S. $5,000,000
THE BEAR STEARNS COMPANIES INC.
Accelerated Market Participation Securities
(Linked to the S&P 500 Index)
Expiring on October 21, 2004
UNDERWRITING AGREEMENT
July 17, 2003
U.S. $5,000,000
THE BEAR STEARNS COMPANIES INC.
Accelerated Market Participation Securities
(Linked to the S&P 500 Index)
Expiring on October 21, 2004
UNDERWRITING AGREEMENT
July 17, 2003
Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Dear Sirs:
The Bear Stearns Companies Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Bear, Stearns & Co. Inc. (the
"Underwriter") the principal amount of U.S. $5,000,000 Accelerated Market
Participation Securities (Linked to the S&P 500 Index) (the "AMPS").
The AMPS are to be issued pursuant to a Warrant Agreement, dated as
of July 9, 2003, (the "Original Warrant Agreement") between the Company and
JPMorgan Chase Bank, as Warrant Agent (the "Warrant Agent"), as supplemented by
the First Supplemental Warrant Agreement, dated as of July 17, 2003, by and
among the Company, Warrant Agent and Bear, Stearns & Co. Inc., as Calculation
Agent (the "Supplemental Warrant Agreement," together with the Original Warrant
Agreement, the "Warrant Agreement").
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Underwriter and its affiliates
as set forth below in this Section 1. Certain terms used in this Section 1 are
defined in paragraph (b) hereof.
(a) The Company meets the requirements for the use of Form S-3
under the U.S. Securities Act of 1933, as amended (the "1933 Act"), and has
prepared and filed with the U.S. Securities and Exchange Commission (the
"Commission") pursuant to the 1933 Act, and the rules and regulations
promulgated by the Commission thereunder (the "Regulations"), a registration
statement (File No. 333- 104455) on such Form S-3, including a basic prospectus,
for registration under the 1933 Act of the offering and sale of the AMPS. The
Company has filed no amendments to such registration statement through the date
hereof, and may have used a Preliminary Final Prospectus, each of which, if any,
has previously been furnished to you. Such registration statement has become
effective. The offering of the AMPS is a Delayed Offering and, accordingly, it
is not necessary that any further information with respect to the AMPS and the
offering thereof required by the 1933 Act and the Regulations thereunder to be
included in the Final Prospectus be included in an amendment to such
registration statement prior to the Effective Date. The Company will file with
the Commission pursuant to Rules 415 and 424(b)(2), (3) or (5) a final
supplement to the form of prospectus included in such registration statement
relating to the AMPS and the offering thereof. As filed, such final prospectus
supplement shall include all required information with respect to the AMPS and
the offering thereof and, except to the extent the Underwriter shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any Preliminary
Final Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
(b) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term the "Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date and
time that this Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the basic prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date including any
Preliminary Final Prospectus. "Preliminary Final Prospectus" shall mean any
preliminary prospectus supplement (including any information appendixed thereto)
to the Basic Prospectus which describes the AMPS and the offering thereof and is
used prior to filing of the Final Prospectus. "Final Prospectus" shall mean any
and all prospectus supplements relating to the AMPS (including any information
appendixed thereto) that is filed pursuant to Rule 424(b) after the Execution
Time, together (unless the context otherwise requires) with the Basic
Prospectus. "Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including all exhibits, documents and
financial statements incorporated by reference, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Time (as such term is hereinafter defined), shall
also mean such registration statement as so amended. "Rule 415," "Rule 424" and
"Regulation S-K" refer to such Regulations under the 1933 Act. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the U.S. Securities Exchange Act of 1934, as amended (the
"1934 Act"), on or before the effective date of the Registration Statement, or
the issue date of the Basic Prospectus, any Preliminary Final Prospectus, or the
Final Prospectus, as the case may be; and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
the Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
1934 Act after the Effective Date of the Registration Statement or the issue
date of the Basic Prospectus, any Preliminary Final Prospectus, or the Final
Prospectus, as the case may be, deemed to be incorporated therein by reference.
A "Delayed Offering" shall mean an offering of securities pursuant to Rule 415
which does not commence promptly after the effective date of a registration
statement, with the result that only information required pursuant to Rule 415
need be included in such registration statement at the effective date thereof
with respect to the securities so offered.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Final Prospectus and
any amendment or supplement thereto; and the Company is duly qualified as a
foreign corporation to transact business, and is in good standing, in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a material adverse effect on the
operations, business or properties of the Company and its subsidiaries
considered as one enterprise (any such material adverse effect being hereinafter
referred to as a "Material Adverse Effect").
(d) The Company has the corporate power and authority to enter
into this underwriting agreement ("this Agreement"), to perform its obligations
hereunder and under the Warrant Agreement and to issue, sell and deliver the
AMPS. This Agreement has been duly and validly authorized, executed and
delivered by the Company, is a valid and binding agreement of the Company and is
enforceable as to the Company in accordance with its terms. The Warrant
Agreement has been duly and validly authorized, executed and delivered by the
Company, is a valid and binding agreement of the Company and is enforceable as
to the Company in accordance with its terms.
(e) (i) On the Effective Date, and at all times subsequent
thereto to and including the Closing Time, and during such longer period as the
Final Prospectus may be required to be delivered in connection with sales by the
Underwriter or a dealer, and during such longer period until any post effective
amendment to the Registration Statement shall become effective, the Registration
Statement (including any post-effective amendment) and the Final Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement to the Registration Statement or the Final
Prospectus and including any filing under the 1934 Act explicitly referenced as
to be filed under the caption "Where You Can Find More Information" in the Final
Prospectus) will contain all statements which are required to be stated therein
in accordance with the 1933 Act, the 1934 Act, and the Regulations, will comply
with the requirements of the 1933 Act, the 1934 Act, and the Regulations, and
will not 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 in which they were made not
misleading, and no event will have occurred which should have been set forth in
an amendment or supplement to the Registration Statement or the Final Prospectus
which has not then been set forth in such an amendment or supplement; and each
Basic Prospectus and each Preliminary Final Prospectus, as of the date filed
with the Commission, did not include 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 light of the circumstances in which they were
made not misleading; provided, however, that the Company makes no
representations and warranties as to information contained in or omitted from
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus, or the Final Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter expressly for
use in the Registration Statement or such Basic Prospectus, any Preliminary
Final Prospectus, or the Final Prospectus, as set forth in Section 6(b).
(ii) Without limiting the foregoing, on the date
hereof, and at all times subsequent thereto to and including the Closing Time,
and during such longer period as the Final Prospectus may be required to be
delivered in connection with sales by the Underwriter or a dealer, and during
such longer period until any post effective amendment to the Registration
Statement (comprising listing particulars or supplementary listing particulars)
shall become effective, the Final Prospectus (together with the Basic
Prospectus) contains all material information with respect to the Company and
its subsidiaries and the AMPS (including all information which, according to the
particular nature of the Company and its subsidiaries and the AMPS, is necessary
to enable investors and their professional advisers to make an informed
assessment of the assets and liabilities, financial position, profits and losses
and prospects of the Company and its subsidiaries and of the rights attaching to
the AMPS), the statements of intention, opinion, belief or expectation contained
therein are honestly and reasonably made or held and such documents will contain
all the information required and otherwise comply with the listing rules made by
the American Stock Exchange LLC (the "Listing Rules").
(f) Neither the Commission nor the "blue sky" or securities
authority of any jurisdiction (whether in the United States or elsewhere) has
issued an order or administrative proceeding (a "Stop Order") suspending (or the
effect of which is to suspend or otherwise limit) the effectiveness of the
Registration Statement, preventing, suspending or otherwise limiting the use of
the Basic Prospectus, any Preliminary Final Prospectus, the Final Prospectus,
the Registration Statement, or any amendment or supplement thereto, refusing to
permit the effectiveness of the Registration Statement, suspending the
registration or qualification of the AMPS, nor has any of such authorities
instituted or, to the knowledge of the Company, threatened to institute any
proceedings with respect to a Stop Order in any jurisdiction (whether in the
United States or elsewhere) in which the AMPS are to be sold, nor, with respect
to accuracy at the Closing Time, has there been any Stop Order issued or
proceedings with respect to a Stop Order instituted or, to the knowledge of the
Company, threatened on or after the effective date of the Registration Statement
in any jurisdiction.
(g) The documents incorporated by reference in the Final
Prospectus and any amendment or supplement thereto (the "Incorporated
Documents"), at the time they were or hereafter are filed with the Commission
(or to the extent amended at the time of filing of such amendment with the
Commission), complied, or when so filed will comply, in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations thereunder and on the Effective Date and through and
including the Closing Time, did not and will 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 are made, not misleading.
(h) Since the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, except as
otherwise stated therein or contemplated thereby, there has been no material
adverse change in, or any adverse development which materially affects, the
financial condition, results of operations, business or properties of the
Company and its subsidiaries considered as one enterprise.
(i) Except for Bear, Stearns & Co. Inc. ("Bear Stearns"),
Bear, Stearns Securities Corp. ("BSSC"), Bear, Stearns International Limited
("BSIL") and Bear Stearns Holdings Limited, no subsidiary of the Company is a
"significant subsidiary" as defined in Rule 405 of Regulation C of the
Regulations. Each of Bear Stearns, BSSC and BSIL has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Final Prospectus and any amendment or supplement thereto and is duly qualified
as a foreign corporation to transact business, and is in good standing, in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not have a Material Adverse Effect; and all of the
issued and outstanding capital stock of Bear Stearns, BSSC and BSIL has been
duly authorized and validly issued and is fully paid and nonassessable and was
not issued in violation of or subject to pre-emptive rights, and, except for
directors' qualifying shares and shares of preferred stock of BSSC owned by
third party broker-dealers, is owned directly or indirectly by the Company free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or other defect of title whatsoever.
(j) The AMPS have been duly authorized (or will have been so
authorized prior to each issuance of the AMPS) and when the AMPS have been
executed and authenticated in the manner set forth in the Warrant Agreement and
are issued and delivered against payment therefor as provided in this Agreement,
such AMPS will have been duly executed, authenticated (assuming due
authentication by the Warrant Agent), issued and delivered, will constitute
valid and legally binding obligations of the Company entitled to the benefits
provided by the Warrant Agreement, and will be enforceable as to the Company in
accordance with their terms. The Warrant Agreement and the AMPS will conform to
the descriptions thereof contained in the Final Prospectus.
(k) The execution, delivery and performance of this Agreement,
the performance of the Warrant Agreement, the issuance, authentication, and sale
of the AMPS and the consummation by the Company of the transactions contemplated
hereby and thereby do not, as of the date hereof, and will not, as of the
Closing Time, (A) conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with notice or lapse
of time, or both, would constitute a default) or require consent under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant to, the
terms of any contract, agreement, indenture, mortgage, loan agreement, note,
lease or other instrument, franchise, license or permit to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective properties or assets may be bound or subject
and that is material to the Company and its subsidiaries considered as one
enterprise, or (B) violate or conflict with any provision of the certificate of
incorporation or by-laws of the Company or any of its subsidiaries, or any law,
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body or any arbitrator having jurisdiction
over the Company or any of its subsidiaries, or any of their respective
properties or assets. No consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any court or any public,
governmental or regulatory agency or body having jurisdiction over the Company
or any of its subsidiaries, or any of their respective properties or assets, is
required for the execution, delivery and performance of this Agreement, or the
performance of the Warrant Agreement and the consummation of the transactions
contemplated hereby and thereby, including the issuance, authentication, sale
and delivery of the AMPS, except for such as may be required under state and
foreign securities or "blue sky" laws in connection with the purchase and
distribution of the AMPS by the Underwriter.
(l) There are no holders of securities of the Company or any
subsidiary who, pursuant to any agreement, understanding or otherwise, have any
right to have securities of the Company or any subsidiary registered under the
1933 Act in connection with the offering contemplated by the Final Prospectus.
(m) Deloitte & Touche LLP, the accountants who certified the
financial statements included or incorporated by reference in the Company's most
recent Annual Report on Form 10-K which is included or incorporated by reference
in the Final Prospectus, were independent public accountants at the time such
statements were certified and during the periods covered by such statements as
required by the 1933 Act and the Regulations.
(n) The financial statements of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Final Prospectus, and any amendment or supplement
thereto, present fairly the consolidated financial position of the Company and
its consolidated subsidiaries as at the dates indicated and the consolidated
results of their operations for the periods specified; and said financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States (except to the extent that certain footnote
disclosures regarding any stub period may have been omitted in accordance with
the 1934 Act and the Regulations thereunder) applied on a consistent basis.
(o) Except as may be set forth or incorporated by reference in
the Final Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body or arbitrator, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or affecting,
the Company, Bear Stearns, BSSC or BSIL which is required to be disclosed in the
Registration Statement or the Final Prospectus or would have a Material Adverse
Effect or would otherwise be expected to materially and adversely affect the
consummation of the transactions contemplated hereby or by the Warrant
Agreement; and there are no contracts or documents of the Company, Bear Stearns,
BSSC or BSIL which are required to be filed as exhibits to, disclosed in or
summarized in the Registration Statement or the Final Prospectus by the 1933
Act, the Regulations, or the Listing Rules, which have not been (or which will
not be, as the case may be) so filed, disclosed or summarized.
(p) The Company, Bear Stearns, BSSC and BSIL possess such
certificates, authorities or permits issued by the appropriate state, federal or
national regulatory agencies or bodies in the United States and elsewhere
necessary to conduct the business now operated by them, except where the failure
to obtain such certificates, authorities or permits, individually or in the
aggregate, would not have a Material Adverse Effect. None of the Company, Bear
Stearns, BSSC or BSIL has received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit which,
singly or in the aggregate, if the subject of any unfavorable decision, ruling
or finding, would materially and adversely affect the financial condition,
results of operations, business or properties of the Company and its
subsidiaries considered as one enterprise.
2. Purchase, Sale and Delivery of the AMPS. On the basis of the
representations, warranties, covenants, and agreements of the Company herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to sell to the Underwriter, and the Underwriter, agrees to purchase from
the Company, at a purchase price of $5.00 per AMPS, 1,000,000 AMPS, the
principal amount of the AMPS set forth opposite the Underwriter's name in
Schedule I hereto; provided, however, that the Company shall have no obligation
to sell any of the Underwriter's AMPS unless the Underwriter purchases all of
the Underwriter's AMPS. The AMPS to be purchased by the Underwriter are herein
sometimes called the "Underwriter's AMPS."
Except as otherwise provided in this Section 2, payment of the
purchase price for, and delivery of, the Underwriter's AMPS to be purchased by
the Underwriter as set forth on Schedule I attached hereto shall be made at the
offices of Bear Stearns or at such other place in the New York City metropolitan
area as you shall determine and advise the Company in writing at least two
business days prior to the Closing Time, on July 23, 2003 (unless postponed in
accordance with the provisions of Section 8), or such other time and date as
shall be agreed upon by you and the Company (such time and date being referred
to as the "Closing Time"). Payment shall be made to the Company by wire transfer
of same day funds payable to the account of the Company specified by it against
delivery to you of the Underwriter's AMPS to be purchased by the Underwriter.
Such AMPS shall be represented by one or more global certificates (in the form
provided in the Warrant Agreement) which will be deposited with a custodian for,
and registered in the name of Cede & Co. ("Cede") as nominee of, The Depository
Trust Company; beneficial interests in such global certificates will be shown on
the records maintained by The Depository Trust Company for the accounts of its
participants.
3. Covenants of the Company. The Company covenants and agrees with
the Underwriter and its affiliates as follows:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, to become
effective as promptly as possible. The Company will notify you immediately, and
confirm such notice in writing, (i) when the Registration Statement (including
any amendments thereto) becomes effective, (ii) of any request by the Commission
for any amendment of or supplement to the Registration Statement or the Final
Prospectus or for any additional information, (iii) of the issuance by the
Commission of a Stop Order suspending (or the effect of which is to suspend or
otherwise limit) the effectiveness of the Registration Statement (including any
post-effective amendment thereto) or of the initiation, or the threatening, of
any proceedings therefor, (iv) of the receipt of any comments from the
Commission and (v) of the receipt by the Company of any notification with
respect to the suspension or limitation of the qualification of the AMPS for
sale in any jurisdiction (whether in the United States or elsewhere) or the
initiation, or threatening, of any proceeding for that purpose. If the
Commission or other authority shall propose or enter a Stop Order at any time,
the Company will make every reasonable effort to prevent the issuance of any
such Stop Order and, if issued, to obtain the withdrawal of such Stop Order as
soon as possible. The Company will not file any amendment to the Registration
Statement or any supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus before or after the Effective Date
unless the Company has furnished you with a copy for your review prior to filing
and will not file any such proposed amendment or supplement to which you
reasonably object.
(b) During the time when a prospectus relating to the AMPS is
required to be delivered hereunder or under the 1933 Act or the Regulations, the
Company will comply with all requirements imposed upon it by the 1933 Act, as
now existing and as hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of, or
dealing in, the AMPS in accordance with the provisions thereof and the Final
Prospectus. If at any time when a prospectus relating to the AMPS is required to
be delivered under the 1933 Act any event shall have occurred as a result of
which, in the judgment of the Company, you or your counsel, the Final Prospectus
as then amended or supplemented includes an untrue statement of a material fact
or omits 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, or if it shall be necessary at any time to amend
or supplement the Final Prospectus or Registration Statement to comply with the
1933 Act or the Regulations, or if there shall occur any material change
affecting any of the representations and warranties in Section 1, the Company
will notify you promptly and prepare and file with the Commission, the American
Stock Exchange LLC and all other applicable bodies an appropriate amendment or
supplement (in form and substance satisfactory to you) which will correct such
statement or omission and will use its best efforts to have any amendment to the
Registration Statement declared effective as soon as possible and will deliver
to the Underwriter, without charge, such number of copies thereof as may be
reasonably requested by the Underwriter; provided that the Company will promptly
notify you if such judgment has been reached by it.
(c) (i) The Company shall make an application for the AMPS to
be listed on the American Stock Exchange LLC. In connection with such
application, the Company shall use its best efforts to obtain such listing as
promptly as practicable and the Company shall furnish any and all documents,
instruments, information and undertakings that may be necessary or advisable in
order to obtain or maintain the listing.
(ii) If the AMPS cease to be listed or are not
listed on the American Stock Exchange LLC, the Company shall use its best
efforts promptly to list the AMPS on another stock exchange to be agreed between
the Company and the Underwriter.
(d) The Company will promptly deliver to you a copy of the
Registration Statement, including exhibits and all amendments thereto, and the
Company will promptly deliver without charge to you such number of copies of the
Basic Prospectus, any Preliminary Final Prospectus, the Final Prospectus, the
Registration Statement, and all amendments of and supplements to such documents
(including any listing particulars and supplementary listing particulars), if
any, as may be reasonably requested by the Underwriter.
(e) The Company will endeavor in good faith, in cooperation
with you to timely qualify the AMPS for offering and sale under the securities
and other applicable laws of such jurisdictions as you may designate and to
maintain such qualification in effect for so long as required for the
distribution thereof; provided that in no event shall the Company be obligated
to qualify to do business in any jurisdiction where it is not now so qualified
or to take action which would subject it to general service of process in any
jurisdiction where it is not now so subject or to conduct its business in a
manner in which it is not currently so conducting its business.
(f) The Company will make generally available (within the
meaning of Section 11(a) of the 1933 Act and Rule 158 of the Regulations) to its
security holders and to you as soon as practicable an earnings statement which
need not be audited but which shall satisfy the provisions of Section 11(a) of
the 1933 Act and Rule 158 of the Regulations.
(g) The Company, during the period when the Final Prospectus
is required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13 or 14 of the
1934 Act.
(h) During the period of one year after the date hereof, the
Company will furnish to you (i) as soon as publicly available, a copy of each
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on
Form 8-K, annual report to stockholders and definitive proxy statement of the
Company filed with the Commission under the 1934 Act or mailed to stockholders
and (ii) from time to time, such other information concerning the Company as you
may reasonably request.
(i) The Company will apply the proceeds from the sale of the
AMPS as set forth under the caption "Use of Proceeds and Hedging" in the Final
Prospectus.
(j) Prior to the Closing Time, the Company shall furnish to
you, as soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company and its subsidiaries, for any
periods subsequent to the periods covered by the financial statements appearing
or incorporated by reference in the Registration Statement and the Final
Prospectus.
(k) The Company will comply with all provisions of all
undertakings contained in the Registration Statement.
(l) The Company consents to the use of the Final Prospectus or
any amendment or supplement thereto by you and by all dealers to whom the AMPS
may be sold, both in connection with the offering or sale of the AMPS and for
such period of time thereafter as the Final Prospectus is required by law to be
delivered in connection therewith.
4. Payment of Expenses. Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
hereby covenants and agrees with the Underwriter that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
AMPS under the 1933 Act, the listing of the AMPS on the American Stock Exchange
LLC and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus, the Final Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriter and dealers;
(ii) all costs and expenses related to the issuance, authentication, transfer
and delivery of the AMPS to the Underwriter, including any transfer or other
taxes payable thereon; (iii) the cost of printing or producing this Agreement,
the Warrant Agreement, any Blue Sky and legal investment memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
AMPS; (iv) all expenses in connection with the qualification of the AMPS for
offering and sale under state securities laws or the securities or other
applicable laws of any other country as provided in Section 3(e) hereof,
including the fees and disbursements of counsel for the Underwriter (including,
where necessary, local counsel) in connection with such qualification and in
connection with the Blue Sky and legal investment memoranda; (v) any fees
charged by securities rating agencies for rating the AMPS, if the AMPS are so
rated; (vi) any filing fees incidental to any required reviews by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the AMPS; (vii) the costs and expenses of any qualified independent underwriter
which may be required by the rules and regulations of the NASD; (viii) all costs
and expenses incidental to listing the AMPS on the American Stock Exchange LLC
or other U.S. national securities exchange (if applicable); (ix) the cost of
preparing certificates for the AMPS and the costs and charges of The Depository
Trust Company and its nominee for acting as depository for the AMPS and
otherwise effecting any book entry ownership system for the AMPS; (x) the costs
and charges of the Warrant Agent, any transfer agent, calculation agent,
registrar, paying agent or disbursing agent; (xi) advertising and travel costs
and expenses incurred in connection with any roadshows; and (xii) all other
costs and expenses incident to the performance of the Company's obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section and in Sections
6 and 7 hereof, the Underwriter will pay all of its own costs and expenses,
including the fees of their counsel, transfer taxes on the resale of any of the
AMPS by them and any advertising expenses connected with any offers they may
make.
If this Agreement is entered into and the purchase of AMPS by the
Underwriter pursuant to this Agreement is not consummated because any condition
to the obligations of the Underwriter set forth in Section 5 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Underwriter, the Company will reimburse the Underwriter upon
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the AMPS.
5. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase and pay for the AMPS, as provided herein, shall be
subject to the continuing accuracy of the representations and warranties of the
Company, herein contained, as of the date hereof and at the Closing Time, to the
absence from any certificates, opinions, written statements or letters furnished
to you pursuant to this Section 5 of any misstatement or omission, to the
performance by the Company of its obligations hereunder in all material respects
and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, the Registration Statement shall have become
effective not later than 6:00 p.m., New York City time, on the date of this
Agreement or such later date and time as shall be consented to in writing by
you, and, if filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by Rule
424(b).
(b) At the Closing Time (i) no Stop Order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued under the 1933 Act or other applicable law, and no proceeding under the
1933 Act or the 1934 Act therefor shall have been initiated or threatened by the
Commission, or, with respect to the filing of any Form 8-A under the 1934 Act,
by any U.S. national securities exchange; and all requests for additional
information on the part of the Commission shall have been complied with or such
requests shall have been otherwise satisfied; (ii) the rating assigned by any
U.S. nationally recognized securities rating agency to any debt securities,
preferred stock or other obligations of the Company as of the date of this
Agreement shall not have been lowered since the execution of this Agreement and
no such agency shall have publicly announced since the execution of this
Agreement that it has under surveillance or review, with possible negative
implications, its rating of any of the debt securities or preferred stock of the
Company; and (iii) since the respective dates as of which information is given
in the Registration Statement and the Final Prospectus, except as otherwise
stated therein or contemplated thereby, there shall not have been any material
adverse change in, or any adverse development which materially affects, the
financial condition, results of operations, business or properties of the
Company and its subsidiaries considered as one enterprise, the effect of which
is in your reasonable judgment so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the delivery
of the AMPS on the terms and in the manner contemplated in the Final Prospectus.
(c) The Company will promptly make application for the AMPS to
be listed on the American Stock Exchange LLC.
(d) All proceedings taken in connection with the sale of the
AMPS as contemplated herein shall be satisfactory in form and scope to you, and
prior to the Closing Time, the Company shall have furnished to you such further
information, certificates and documents as you may reasonably request.
(e) The NASD, upon review of the terms of the public offering
of the AMPS, shall have no objections to the fairness of the underwriting terms
and arrangements of the offering.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, or if any of the
certificates, opinions, written statements or letters furnished to you pursuant
to this Section 5 shall not be in all material respects reasonably satisfactory
in form and scope to you, all your obligations hereunder may be cancelled by you
at, or at any time prior to, the Closing Time. Notice of such cancellation shall
be given to the Company in writing, or by telephone, telex or telecopy,
confirmed in writing.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter, its affiliates (if any) and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20(a) of
the 1934 Act, against any and all losses, liabilities, claims, damages and
out-of-pocket expenses whatsoever (including but not limited to attorneys' fees
and any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation), to which you or any such person may become subject under the 1933
Act, the 1934 Act or otherwise, insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any related Basic Prospectus,
Preliminary Final Prospectus, or Final Prospectus, or in any supplement thereto
or amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, in light of the
circumstances under which they were made) not misleading or (ii) any breach or
alleged breach of any representation, warranty, covenant or agreement of the
Company contained in this Agreement; provided, however, that the Company will
not be liable to the Underwriter or any person so controlling the Underwriter in
any such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon (x) any such
untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Underwriter through you
expressly for use therein, such written information being as set forth in the
penultimate sentence of subsection (b) below or (y) any failure of the
Underwriter to deliver the Final Prospectus to a purchaser of AMPS as required
by applicable law. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including under this Agreement.
(b) The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who shall have signed the
Registration Statement, and each other person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934
Act against any losses, liabilities, claims, damages and out-of-pocket expenses
whatsoever (including but not limited to attorneys' fees and any and all
out-of-pocket expenses whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened, or any
claim whatsoever and any and all amounts paid in settlement of any claim or
litigation), to which they or any of them may become subject under the 1933 Act,
the 1934 Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any related Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus, in light of the circumstances under
which they were made) not misleading, in each case to the extent, but only to
the extent, that any such loss, liability, claim, damage or expense arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the
Underwriter through you expressly for use therein. For all purposes of this
Agreement, the identification of the name of, and the principal amount of AMPS
to be purchased by, the Underwriter, the amounts of the selling concession and
reallowance, and the stabilization language set forth under the heading
"Underwriting" in the Final Prospectus constitute the only information furnished
in writing by or on behalf of the Underwriter expressly for inclusion in any
Basic Prospectus or Preliminary Final Prospectus, the Final Prospectus, or the
Registration Statement (as from time to time amended or supplemented), or any
amendment or supplement thereto. This indemnity will be in addition to any
liability which the Underwriter may otherwise have, including under this
Agreement; provided, however, that in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by the Underwriter.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by one of the indemnifying parties in connection
with the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may be
defenses available to it or them which are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties, it being understood,
however, that the indemnifying party shall not, in connection with any one such
claim, action or proceeding or separate but substantially similar or related
claims, actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm (together with appropriate local counsel) at any
time for the indemnified party or parties, which firm shall be designated in
writing by the indemnified party or parties, unless such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the other indemnified party or parties (in which case the indemnifying
party shall be liable for the fees and expenses of only one additional separate
firm (together with appropriate local counsel) for such indemnified party or
parties at any time)), in any of which events such fees and expenses shall be
borne by the indemnifying parties. Anything in this Section 6 to the contrary
notwithstanding, an indemnifying party shall not be liable for any settlement of
any claim or action effected without its written consent; provided, however,
that such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 hereof is
for any reason held to be unavailable from the Company or is insufficient to
hold harmless a party indemnified thereunder, the Company and the Underwriter
shall contribute to the aggregate losses, claims, damages, liabilities and
out-of-pocket expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting in the case of losses,
claims, damages, liabilities and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Underwriter,
who may also be liable for contribution, including persons who control the
Company within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act, officers of the Company who signed the Registration Statement and
directors of the Company) to which the Company and the Underwriter may be
subject, in such proportions as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter on the other from
the offering of the AMPS or, if such allocation is not permitted by applicable
law or indemnification is not available as a result of the indemnifying party
not having received notice as provided in Section 6 hereof, in such proportion
as is appropriate to reflect not only the relative benefits referred to above
but also the relative fault of the Company on the one hand and the Underwriter
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriter on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
bear to the underwriting discounts and commissions received by the Underwriter,
respectively, in each case as set forth in the table on the cover page of the
Final Prospectus. The relative fault of the Company on the one hand and of the
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriter agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriter 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. Notwithstanding the
provisions of this Section 7, (i) in no case shall the Underwriter be liable or
responsible for any amount in excess of the underwriting discount applicable to
the AMPS purchased by the Underwriter hereunder, and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 7, each person,
if any, who controls an Underwriter within the meaning of Section 15 of the 1933
Act or Section 20(a) of the 1934 Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of the preceding sentence
of this Section 7. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission to so notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have under this Section 7 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its consent; provided, however, that such consent was not unreasonably
withheld.
8. Selling Restrictions and other Underwriter Undertakings.
(a) (i) No action has been (or will be) taken in any
jurisdiction by the Company or of the Underwriter that would, or is intended to,
permit a public offer of the AMPS or possession or distribution of the Final
Prospectus or the Basic Prospectus in any country or jurisdiction (except the
United States) where, or in any circumstances in which, any such action for that
purpose is required. Accordingly, the Underwriter undertakes that it will not,
directly or indirectly, offer or sell any AMPS or distribute or publish any
offering circular, prospectus, form of application, advertisement or other
document or information in any country or jurisdiction except under
circumstances that will to the best of its knowledge and belief, result in
compliance with any applicable securities laws and regulations and all offers
and sales of AMPS by the Underwriter will be made on the same terms.
(ii) Without prejudice to the generality of
subsection (i) above, the Underwriter agrees that it will obtain any consent,
approval or permission which is, to the best of its knowledge and belief,
required for the offer, purchase, sale or delivery by it of AMPS under the laws
and regulations in force in any jurisdiction to which it is subject or in which
it makes such offers, purchases, sales or deliveries and it will, to the best of
its knowledge and belief, comply with all such laws and regulations.
9. Survival of Representations and Agreements. All representations,
warranties, covenants and agreements of the Underwriter and the Company
contained in this Agreement, including the representations and warranties
contained in Section 1, the agreements contained in Section 4, the indemnity
agreements contained in Section 6 and the contribution agreements contained in
Section 7, shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
thereof or by or on behalf of the Company, any of its officers and directors or
any controlling person thereof, and shall survive delivery of and payment for
the AMPS to and by the several Underwriters. The representations contained in
Section 1 and the agreements contained in Sections 4, 6, 7, 9 and 13 hereof
shall survive the termination of this Agreement including pursuant to Section 10
hereof.
10. Termination.
(a) You shall have the right to terminate this Agreement at
any time prior to the Closing Time if, after the date hereof: (i) any domestic
or international event or act or occurrence has materially disrupted, or in your
opinion will in the immediate future materially disrupt, the securities markets
in the United States; (ii) a general suspension of, or a general limitation on
prices for, trading in securities on the New York Stock Exchange, the American
Stock Exchange LLC or in the over-the-counter market shall have occurred; (iii)
a banking moratorium shall have been declared either by Federal or New York
State authorities; (iv) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States or on the United States is such as to
make it, in the judgment of the Underwriter, impracticable to market the AMPS;
(v) any restriction materially adversely affecting the distribution of the AMPS
which was not in effect on the date hereof shall have become effective; or (vi)
there shall have been such change in the market for the securities of the
Company or securities in general or in national or international political,
financial or economic conditions or currency exchanges rates or exchange
controls as in your judgment makes it inadvisable to proceed with the offering,
sale and delivery of the AMPS on the terms contemplated by the Final Prospectus.
(b) Any notice of termination pursuant to this Section 10
shall be by telephone, telex, or telecopy, confirmed in writing by letter.
11. Stabilization. If the Underwriter, in connection with the
distribution of the AMPS or in order to facilitate the offering of the AMPS
offers the AMPS in excess of the aggregate principal amount to be issued or
effects transactions with a view to stabilizing, maintaining or otherwise
affecting the market price of the AMPS at levels higher than that which
otherwise prevail in the open market, it shall not in doing so be deemed to act
as an agent of the Company. The Company will not as a result of any action taken
by Underwriter, under this Section be obliged to issue the AMPS in excess of the
aggregate amount of the AMPS to be issued under this Agreement, nor shall the
Company be liable for any loss, or entitled to any profit, arising from any
excess offers or stabilization.
12. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and, if sent to you, shall be
mailed, delivered, or telexed or telecopied and confirmed in writing, to such
Underwriter c/o Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, NY
10179, Attention: Corporate Finance Department; and, if sent to the Company,
shall be mailed, delivered, or telexed or telecopied and confirmed in writing to
the Company, 383 Madison Avenue, New York, NY 10179, Attention: Chief Financial
Officer.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Underwriter, the Company and the controlling
persons, directors, officers, employees and agents referred to in Sections 6 and
7, and their respective successors and assigns, and no other person shall have
or be construed to have any legal or equitable right, remedy or claim under or
in respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of AMPS from the Underwriter.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Construction. This Agreement, in respect of which time shall be
of the essence, shall be construed in accordance with the laws of the State of
New York without regard to principles of conflict of law.
If the foregoing correctly sets forth the understanding between you
and the Company please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between us.
Very truly yours,
THE BEAR STEARNS COMPANIES INC.
By: /s/ Samuel L. Molinaro Jr.
-----------------------------
Executive Vice President and
Chief Financial Officer
Accepted as of the date first above written.
BEAR, STEARNS & CO. INC.
By: /s/ Harold Engelman
------------------------
Senior Managing Director
SCHEDULE I
Principal Amount
of the AMPS
Underwriter to be Purchased
- ----------- -----------------
Bear, Stearns & Co. Inc.............................................$5,000,000
Total.........................................................$5,000,000