Exhibit 1.1
6,000,000 SHARES
THE ST. JOE COMPANY
COMMON STOCK, NO PAR VALUE
UNDERWRITING AGREEMENT
February 10, 2004
February 10, 2004
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
The Alfred I. duPont Testamentary Trust, a trust established under The
Last Will and Testament of Alfred I. duPont (the "SELLING SHAREHOLDER"),
proposes to sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS") an aggregate of 6,000,000 shares (the "SHARES") of the Common
Stock, no par value, of The St. Joe Company, a Florida corporation (the
"COMPANY"). The shares of Common Stock, no par value, of the Company (including
the Shares) are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
sale of Common Stock by the Selling Shareholder from time to time, and has filed
or transmitted for filing to, or shall promptly hereafter file with or transmit
for filing to, the Commission a prospectus supplement (the "PROSPECTUS
SUPPLEMENT") specifically relating to the sale of the Shares pursuant to Rule
424 under the Securities Act of 1933, as amended (the "SECURITIES ACT"). The
registration statement as amended at the time it becomes effective is
hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus in the
form included in the Registration Statement is hereinafter referred to as the
"BASE PROSPECTUS" and the Base Prospectus together with the Prospectus
Supplement used to confirm sales of Shares is hereinafter referred to as the
"PROSPECTUS" (including, in the case of all references to the Registration
Statement, the Base Prospectus, the Prospectus Supplement and the Prospectus,
documents incorporated therein by reference). If the Company has filed an
abbreviated registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION
STATEMENT"), then any reference
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herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; 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.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")
and incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Registration Statement, when it became effective, did 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 required
to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) 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 either Underwriter
furnished to the Company in writing by such Underwriter expressly for
use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the state of Florida
with the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and the Company is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) Each significant subsidiary of the Company as defined in
Rule 1-02(w) of Regulation S-X ( "SIGNIFICANT SUBSIDIARY") has been
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duly incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its business as
described in the Prospectus; and each Significant Subsidiary of the
Company is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to
the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued shares of capital
stock of each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
are owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The outstanding shares of Common Stock (including the
Shares to be sold by the Selling Shareholder) have been duly authorized
and are validly issued, fully paid and non-assessable.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene (i) any provision of applicable law or the
certificate of incorporation or by-laws of the Company, (ii) any
agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries,
taken as a whole or (iii) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company
or any subsidiary, except in the case of clauses (ii) and (iii) above
to the extent as would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth
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in the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement).
(j) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
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 described or filed as required.
(k) Each preliminary prospectus or prospectus supplement 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
Securities Act, complied when so filed in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder.
(l) The Company is not, and after giving effect to the
offering and sale of the Shares will not be, required to register as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(m) With respect to each income producing property, any
development or developable property identified in the Registration
Statement and any other property in excess of 1,000 acres owned by the
Company or one of its subsidiaries, whether such property is held for
development, sale, lease or any other purpose (the "PROPERTIES"), (i)
except as disclosed in the Prospectus, the Company or one of its
subsidiaries has good and marketable fee simple title to the land
underlying the Properties and good and marketable title to the
improvements thereon, subject to utility easements serving such
Properties, to zoning and similar governmental land use matters
affecting such Properties that are consistent with the current uses of
such Properties and to liens, encumbrances, defects and other matters
of title that would not have a material adverse effect on the value of
such Properties or materially interfere with their current or currently
anticipated future uses, (ii) all liens, charges, encumbrances, claims,
or restrictions on or affecting any of the Properties and the assets of
the Company which are required to be disclosed in the Prospectus are
disclosed therein; (iii) except as disclosed in the Prospectus, no
person has an option or right of first refusal to purchase all or part
of any Property or any interest therein; (iv) each of the Properties
complies with all applicable codes, laws and regulations (including,
without limitation, building and zoning codes, laws and regulations and
laws relating to access to the Properties), except to the
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extent disclosed in the Prospectus and except for such failures to
comply that would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole; and (v) the Company has no
knowledge of any pending or threatened condemnation proceedings, zoning
change, or other similar proceeding or action that would affect the
size of, use of, improvements on, construction on or access to any of
the Properties, except such proceedings, changes or actions that would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(n) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(o) Except as disclosed in the Prospectus, 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 permit, license or approval and any potential liabilities to
third parties) which would, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(p) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities 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.
(q) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
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(r) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly in all material respects the
consolidated financial position and results of operations of the
Company, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except
as otherwise stated therein.
(s) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, 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 currently employed by them in connection with the business
now operated by them, and neither the 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 the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(t) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company, is
imminent; and the Company is not aware of any existing, threatened or
imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that would have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(u) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; in the past five years, neither
the Company nor any such subsidiary has been refused any insurance
coverage sought or applied for; and neither the Company nor any such
subsidiary 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 as may be necessary to
continue its business at a cost that would not materially and adversely
affect the Company and its subsidiaries, taken as a whole, except as
described in or contemplated by the Prospectus.
(v) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
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foreign regulatory authorities necessary to conduct their respective
businesses, except for such certificates, authorizations and permits
the non-possession of which would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, and neither the
Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus.
(w) No relationship, direct or indirect, exists between or
among the Company on the one hand, and the directors, officers,
stockholders, customers, suppliers or contractors of the Company, on
the other hand, which is required to be described in the Prospectus
which is not so described.
2. Representations and Warranties of the Selling Shareholder. The
Selling Shareholder represents and warrants to and agrees with each of the
Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Shareholder.
(b) The execution and delivery by the Selling Shareholder of,
and the performance by the Selling Shareholder of its obligations
under, this Agreement and the consummation of the transactions
contemplated hereby will not contravene any provision of applicable
law, or the Last Will and Testament of Alfred I. duPont, by which the
Selling Shareholder was established, or any agreement or other
instrument binding upon the Selling Shareholder or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over the Selling Shareholder, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is
required for the performance by the Selling Shareholder of its
obligations under this Agreement, except such as may be required by the
securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares.
(c) The Selling Shareholder has, and on the Closing Date will
have, valid title to, or a valid "security entitlement" within the
meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by the Selling Shareholder free and
clear of all security interests, claims, liens, equities or other
encumbrances and the legal right and power, and all authorization and
approval required by law,
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to enter into this Agreement and to sell, transfer and deliver the
Shares or a security entitlement in respect of such Shares.
(d) Delivery of the Shares to be sold by the Selling
Shareholder and payment therefor pursuant to this Agreement will pass
valid title to such Shares, free and clear of any adverse claim within
the meaning of Section 8-102 of the New York Uniform Commercial Code,
to each Underwriter who has purchased such Shares without notice of an
adverse claim.
(e) The Selling Shareholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(f) (i)To the best of the knowledge of the Selling
Shareholder, after due inquiry, the Registration Statement, when it
became effective, did 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 required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) 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 2(g) do not apply to
statements or omissions in the Registration Statement or the Prospectus
based upon information relating to either Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein.
(g) the statements in the Base Prospectus under the caption
"Alfred I. duPont Testamentary Trust," and in the Prospectus Supplement
under the captions "Prospectus Summary and Recent Developments --
Alfred I. duPont Testamentary Trust" and "Selling Shareholder" insofar
as such statements constitute summaries 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 and fairly summarize the matters referred to therein.
3. Agreements to Sell and Purchase. The Selling Shareholder hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the basis
of
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the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Selling Shareholder at $38.80 a share (the "PURCHASE PRICE") the number
of Shares set firth in Schedule I hereto opposite the name of such Underwriter.
The Selling Shareholder hereby agrees that it will not, during the
period ending 120 days after the date of the Prospectus and the Company agrees
that it will not during the period ending 90 days after the date of the
Prospectus, in each case, without the prior written consent of Morgan Stanley &
Co. Incorporated on behalf of the Underwriters (i) 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, lend, 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 (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise.
The restrictions contained in the preceding paragraph shall not apply
to (A) the Shares to be sold hereunder, (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or a warrant or the
conversion of a security outstanding on the date of the Prospectus or the grant
or exercise of an option under any benefit plan of the Company described in the
Prospectus, (C) the issuance by the Company of shares of Common Stock (and the
filing of a registration statement with respect to such an issuance) in
connection with the acquisition of interests in other companies; provided that
the recipients of the shares agree in writing to be bound by the 90-day lock-up
described above, (D) the sale or transfer by the Selling Shareholder to one or
more third parties, provided that the recipients of the shares agree in writing
to be bound by the 120-day lock-up described above, (E) the sale by the Selling
Shareholder of shares of Common Stock to the Company, or (F) the issuance by the
Company of shares of Common Stock in connection with awards of restricted stock
under any benefit plan of the Company described in the Prospectus.
4. Terms of Public Offering. The Selling Shareholder is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Selling
Shareholder is further advised by you that the Shares are to be offered to the
public initially at $39.20 a share (the "PUBLIC OFFERING PRICE").
5. Payment and Delivery. Payment for the Shares to be sold by the
Selling Shareholder shall be made to the Selling Shareholder in Federal or other
funds immediately available in New York City against delivery of such Shares for
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the respective accounts of the Underwriters at 10:00 a.m., New York City time,
on February 13, 2004. The time and date of such payment are hereinafter referred
to as the "CLOSING DATE."
The Shares shall be registered in such names and in such denominations
as you shall request in writing not later than one full business day prior to
the Closing Date. The Shares shall be delivered to you on the Closing Date, for
the respective accounts of the Underwriters, with any transfer taxes payable in
connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. Conditions to the Underwriters' Obligations. The several obligations
of the Selling Shareholder to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 4:00 p.m. (New York City time) on the
date hereof.
The obligations of the Underwriters are subject to the following
further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by each of the chief
executive officer and the chief financial officer of the Company, to
the effect set forth in Section 6(a) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
Each of the officers signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
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(c) The Underwriters shall have received on the Closing Date
an opinion of Christine M. Marx, Secretary and General Counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
state of Florida with the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and the Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(ii) each Significant Subsidiary of the Company has
been duly incorporated, and is an existing corporation in good
standing under the laws of the jurisdiction of its
incorporation, with the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and each Significant Subsidiary of the Company is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole;
(iii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iv) the outstanding shares of Common Stock
(including the Shares to be sold by the Selling Shareholder)
have been duly authorized and are validly issued, fully paid
and non-assessable;
(v) all of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
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(vii) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not result in a breach or violation of the
laws of the United States, the State of Florida, the State of
New York or the certificate of incorporation or by-laws of the
Company or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon the Company or any
of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court of the United States, the
State of Florida or the State of New York having jurisdiction
over the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency of the United States, the State of
Florida or the State of New York is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares; provided, however, for the
purposes of this Section 6(c)(vii), such counsel need not
express any opinion with respect to Federal or states
securities laws, other antifraud laws, fraudulent transfer
laws and bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights;
(viii) the statements (A) in the Base Prospectus
under the caption "Description of Capital Stock" and (B) in
the Registration Statement in Item 15, in each case insofar as
such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(ix) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its
subsidiaries is 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 described
or filed as required;
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(x) to the best of such counsel's knowledge, the
Company and its subsidiaries (A) are in material compliance
with any and all applicable Environmental Laws, (B) have
received all material permits, licenses or other approvals
required of them under applicable Environmental Laws to
conduct their respective businesses and (C) are in material
compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole;
(xi) the Company is not an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended; and
(xii) nothing has come to the attention of such
counsel that causes such counsel to believe that (A) each
document filed pursuant to the Exchange Act and incorporated
by reference in the Registration Statement and the Prospectus
(except for the financial statements and financial schedules
and other financial and statistical data included therein, as
to which such counsel need not express any belief) did not
comply as to form when filed in all material respects with the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (B) the Registration
Statement or the Prospectus (except for the financial
statements and financial schedules and other financial and
statistical data included therein, as to which such counsel
need not express any belief) do not comply as to form in all
material respects with the requirements of the Securities Act
and the applicable rules and regulations of the Commission
thereunder, (C) the Registration Statement or the Prospectus
included therein (except for the financial statements and
financial schedules and other financial and statistical data
included therein, as to which such counsel need not express
any belief) at the time the Registration Statement became
effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
(D) the Prospectus (except for the financial statements and
financial schedules and other financial and statistical data
included therein, as to which such counsel need not express
any belief) as of its date or as of the Closing Date contained
or contains an untrue statement of a
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material fact or omitted 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.
(d) The Underwriters shall have received on the Closing Date
opinions of Sullivan & Cromwell, special counsel for the Company, dated
the Closing Date, to the effect that the Registration Statement as of
its effective date and the Base Prospectus, as supplemented by the
Prospectus Supplement, as of the date of such Prospectus Supplement,
appeared on their face to be appropriately responsive in all material
respects relevant to the offering of the Securities to the requirements
of the Act and the applicable rules and regulations of the Commission
thereunder; and nothing that came to such counsel's attention in the
course of their review of the Registration Statement and the Base
Prospectus as supplemented by the Prospectus Supplement has caused such
counsel to believe that, insofar as relevant to the offering of the
Securities, the Registration Statement as of such effective date, or
the Prospectus as supplemented by the Prospectus Supplement as of the
date of the Prospectus Supplement, respectively, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and nothing that has come to such counsel's
attention in the course of the limited procedures described in such
letter has caused them to believe that the Prospectus, as of the date
and time of delivery of such letter, contained any untrue statement of
a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel may state that
they do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus except for those made under the captions "Description of
Capital Stock" (excluding the description of Florida law under this
caption) in the Prospectus insofar as they relate to provisions of
documents therein described and that they do not express any opinion or
belief as to the financial statements or other financial data contained
in the Registration Statement or the Prospectus.
(e) The Underwriters shall have received on the Closing Date
opinions of McGuire Woods LLP, counsel for the Selling Shareholder,
dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of the Selling Shareholder;
(ii) the execution and delivery by the Selling
Shareholder of, and the performance by the Selling Shareholder
of
15
its obligations under this Agreement will not contravene
(A) any provision of applicable law, or The Last Will and
Testament of Alfred I. duPont, by which the Selling
Shareholder was established, (B) to the knowledge of such
counsel, any agreement or other instrument binding upon the
Selling Shareholder or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Selling Shareholder, and (C) no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Selling Shareholder of its obligations under this
Agreement except such as may be required by the securities or
Blue Sky laws of the various states in connection with offer
and sale of the Shares;
(iii) the Selling Shareholder has valid title to, or
a valid security entitlement in respect of, the Shares, and
the Selling Shareholder has the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and to sell, transfer and deliver the Shares or a
security entitlement in respect of such Shares;
(iv) upon payment for the Shares to be sold by the
Selling Shareholder pursuant to this Agreement, delivery of
such Shares, as directed by the Underwriters, to Cede or such
other nominee as may be designated by DTC, registration of
such Shares in the name of Cede or such other nominee and the
crediting of such Shares on the books of DTC to securities
accounts of the Underwriters (assuming that neither DTC nor
either Underwriter has notice of any adverse claim within the
meaning of Section 8-105 of the Uniform Commercial Code as in
effect on the date of such opinion in the State of New York
(the "UCC") to such Shares), (A) DTC shall be a "protected
purchaser" of such Shares within the meaning of Section 8-303
of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in
respect of such Shares and (C) no action based on any "adverse
claim" (within the meaning of Section 8-102 of the UCC) to
such Shares may be asserted against the Underwriters with
respect to such security entitlement; in giving this opinion,
counsel for the Selling Shareholder may assume that when such
payment, delivery and crediting occur, (w) such Shares will
have been registered in the name of Cede or another nominee
designated by DTC, in each case on the Company's share
registry in accordance with its certificate of incorporation,
bylaws and applicable law, (x) DTC will be registered as a
"clearing corporation" within the meaning
16
of Section 8-102 of the UCC and (y) appropriate entries to the
accounts of the several Underwriters on the records of DTC
will have been made pursuant to the UCC, and (z) DTC's
jurisdiction for purposes of Section 8-110(c) of the UCC is
the State of New York.
(v) the statements in the Base Prospectus under the
caption "Alfred I. duPont Testamentary Trust" (other than the
first sentence under the caption, "Stock Repurchase
Agreement") and in the Prospectus Supplement under the caption
"Prospectus Summary and Recent Developments -- Alfred I.
duPont Testamentary Trust" insofar as such statements
constitute summaries 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 and fairly summarize the matters
referred to therein.
(f) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date, 6(c)(viii) (but only as to the statements in
the Prospectus under "Underwriters") and 6(c)(xii) (B) and (C) above.
With respect to clauses (B), (C) and (D) of Section 6(c)(xii) and
Section 6 (d) above, Christine M. Marx and Sullivan & Cromwell, as applicable,
may state that their beliefs are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and documents incorporated therein by reference and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified. With respect to Section 6(f), Davis Polk &
Wardwell may state that their beliefs are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto (other than the documents incorporated by reference) and
upon review and discussion of the contents thereof (including documents
incorporated by reference), but are without independent check or verification,
except as specified. With respect to Section 6(d) above, Sullivan & Cromwell may
rely upon an opinion or opinions of McGuire Woods LLP, counsel for the Selling
Shareholder, and, with respect to factual matters and to the extent such counsel
deems appropriate, upon the representations of the Selling Shareholder contained
herein and in other documents and instruments; provided that (A) a copy of each
opinion so relied upon is delivered to you and is in form and substance
satisfactory to your counsel, (B) copies of any other documents and instruments
shall be delivered to you and shall be in form and substance satisfactory to
your counsel and (C) Sullivan & Cromwell shall state in their opinion that they
are justified in relying on each such other opinion.
17
The opinions of Christine M. Marx and McGuire Woods LLP described in
Sections 6(c) and 6(e) above shall be rendered to the Underwriters at the
request of the Company or the Selling Shareholder, as the case may be, and shall
so state therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from KPMG LLP, independent public accountants,
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and each of Peter Rummell and Kevin
Twomey relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before
the date hereof, shall be in full force and effect on the Closing Date.
(i) The "lock-up" agreements, each substantially in the form
of Exhibit B hereto, between you and directors of the Company listed on
Schedule II relating to sales and certain other dispositions of shares
of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the
Closing Date.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, five signed copies of
the Registration Statement (including exhibits thereto and documents
incorporated by reference) and for delivery to Legg Mason Wood Walker,
Incorporated a conformed copy of the Registration Statement (without
exhibits thereto but including documents incorporated by reference)
and, to furnish to you in New York City, without charge, prior to 10:00
a.m. New York City time on the business day next succeeding the date of
this Agreement and during the period mentioned in paragraph (c) below,
as many copies of the Prospectus, any documents incorporated therein by
reference and any supplements and amendments thereto as you may
reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
18
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule. The terms "supplement" and "amendment" or
"amend" as used in this Agreement shall include all documents
subsequently filed by the Company with the Commission pursuant to the
Exchange Act that are deemed to be incorporated by reference in the
Prospectus.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters, the
Selling Shareholder and to the dealers (whose names and addresses you
will furnish to the Company) to which Shares may have been sold by you
on behalf of Legg Mason Wood Walker, Incorporated and to any other
dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request, provided, however, that nothing herein shall
require the Company to qualify as a foreign corporation in any state,
to execute a general consent to service of process in any state or to
subject itself to taxation in any jurisdiction in which it is otherwise
not so subject.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending January 31, 2005 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company agrees to
pay or cause to be paid all expenses incident to the performance of the
obligations, the Company and the Selling Shareholder under this Agreement,
19
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Shares under the Securities Act and all other fees or expenses in connection
with the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the mailing
and delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters (except any transfer or
other taxes payable thereon, which shall be paid by the Selling Shareholder),
(iii) the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification of the
Shares for offer and sale under state securities laws as provided in Section
7(d) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of counsel to the Underwriters
incurred in connection with the review and qualification of the offering of the
Shares by the National Association of Securities Dealers, Inc., (v) the cost of
printing certificates representing the Shares, (vi) the costs and charges of any
transfer agent, registrar or depositary, (vii) the document production charges
and expenses associated with printing this Agreement and (viii) all other costs
and expenses incident to the performance of the obligations of the Company and
the Selling Shareholder hereunder for which provision is not otherwise made in
this Section, except that the Selling Shareholder shall pay all fees,
disbursements and expenses of its counsel and its financial advisors and any
transfer or other similar taxes payable on transfer of the Shares to the
Underwriters. It is understood, however, that except as provided in this
Section, Section 9 entitled "Indemnity and Contribution", and the last paragraph
of Section 11 below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer taxes payable
on resale of any of the Shares by them and any advertising expenses connected
with any offers they may make.
The provisions of this Section shall not supersede or otherwise affect
any agreement that the Company and the Selling Shareholder may otherwise have
for the allocation of such expenses among themselves.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter, each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material
20
fact contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to either Underwriter furnished to the Company in
writing by such Underwriter expressly for use therein; provided, however, that
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of either Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased Shares, or
any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 7(a) hereof.
(b) The Selling Shareholder agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls such
Underwriter within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only with reference to
information relating to the Selling Shareholder furnished in writing by
or on behalf of the Selling Shareholder expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto, provided, however, that the
foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of either Underwriter from
whom the person asserting any such losses, claims, damages or
liabilities purchased Shares, or any person controlling such
Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or
21
given by or on behalf of such Underwriter to such person, if required
by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Company with Section 7(a)
hereof.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholder, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(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 Section 9(a), 9(b) or 9(c),
such person (the "INDEMNIFIED PARTY") shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay 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, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (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
22
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be liable
for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Underwriters and all persons, if
any, who control either Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act,
(ii) the fees and expenses of more than one separate firm (in addition
to any local counsel) for the Company, its directors, its officers who
sign the Registration Statement and each person, if any, who controls
the Company within the meaning of either such Section and (iii) the
fees and expenses of more than one separate firm (in addition to any
local counsel) for the Selling Shareholder and all persons, if any, who
control the Selling Shareholder within the meaning of either such
Section, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of either Underwriter, such firm
shall be designated in writing by Morgan Stanley & Co. Incorporated. In
the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate
firm for the Selling Shareholder and such control persons of the
Selling Shareholder, such firm shall be designated in writing by the
Selling Shareholder. 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. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are
the subject matter of such proceeding.
23
(e) To the extent the indemnification provided for in Section
9(a), 9(b) or 9(c) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause 9(e)(i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause 9(e)(i)
above but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by
the Company or the Selling Shareholder on the one hand and the
Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Shares (before deducting
expenses) received by the Selling Shareholder and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus,
bear to the aggregate Public Offering Price of the Shares. The relative
fault of the Company or the Selling Shareholder on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company or the Selling
Shareholder or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 9 are several in proportion to the
respective number of Shares they have purchased hereunder, and not
joint.
(f) The Company, the Selling Shareholder and the Underwriters
agree that it would not be just or equitable if contribution pursuant
to this Section 9 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 that does not take account of the equitable
considerations referred to in Section 9(e). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any
legal or
24
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section
9 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in
equity.
(g) The indemnity and contribution provisions contained in
this Section 9 and the representations, warranties and other statements
of the Company and the Selling Shareholder contained in this Agreement
shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on
behalf of either Underwriter, any person controlling either
Underwriter, the Selling Shareholder or any person controlling the
Selling Shareholder, or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for
any of the Shares.
10. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
11. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
25
If, on the Closing Date, either one of the Underwriters shall fail or
refuse to purchase Shares that it has agreed to purchase hereunder on such date,
and the aggregate number of Shares which such defaulting Underwriter agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the Shares to be purchased on such date, the other Underwriter shall be
obligated in the proportion that the number of Shares set forth opposite its
respective name in Schedule I bears to the aggregate number of Shares set forth
opposite the name of such non-defaulting Underwriter, or in such other
proportions as you may specify, to purchase the Shares which such defaulting
Underwriter agreed but failed or refused to purchase on such date; provided that
in no event shall the number of Shares that either Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 11 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, either Underwriter shall
fail or refuse to purchase Shares and the aggregate number of Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling Shareholder for the purchase of such Shares are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of the non-defaulting Underwriter, the Company or the
Selling Shareholder. In any such case either you or the Selling Shareholder
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve the defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or either of
them, because of any failure or refusal on the part of the Company or the
Selling Shareholder to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company or the Selling Shareholder
shall be unable to perform its obligations under this Agreement, the Company or
Selling Shareholder as the case may be will reimburse the Underwriters or such
Underwriter as has so terminated this Agreement with respect to itself, for all
out-of-pocket expenses (including the fees and disbursements of its counsel)
reasonably incurred by such Underwriter in connection with this Agreement or the
offering contemplated hereunder.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
26
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
27
Very truly yours,
THE ST. JOE COMPANY
By:
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Name:
Title:
The Alfred I. duPont Testamentary Trust
By:
------------------------------
Name:
Title:
28
Accepted as of the date hereof
MORGAN STANLEY & CO. INCORPORATED
Acting on behalf of itself and the other Underwriters
named in Schedule I hereto
By: Morgan Stanley & Co. Incorporated
By:
----------------------
Name:
Title:
29
SCHEDULE I
NUMBER OF FIRM SHARES TO BE
UNDERWRITER PURCHASED
Morgan Stanley & Co. Incorporated 5,950,000
Legg Mason Wood Walker, Incorporated 50,000
---------
Total 6,000,000
=========
30
SCHEDULE II
Hugh M. Durden
John S. Lord
Winfred L. Thornton
31
EXHIBIT A
February 10, 2004
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated and
Legg Mason Wood Walker, Incorporated (the "UNDERWRITERS") propose to enter into
an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with The St. Joe
Company, a Florida corporation (the "COMPANY"), and Alfred I. duPont
Testamentary Trust (the "TRUST"), providing for the public offering (the "PUBLIC
OFFERING") by the Underwriters of 6,000,000 shares (the "SHARES") of the Common
Stock, no par value, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue its effort in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of the Underwriters, it
will not, during the period commencing on the date of the Underwriting Agreement
and ending 90 days after the date of the final prospectus relating to the Public
Offering (the "PROSPECTUS"), (1) 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, lend, 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 (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the Public Offering, (b) shares of Common Stock sold pursuant to a
written plan contemplated by rule 10b5-1(c)(A)(3) under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") that was entered into by the undersigned prior
to the date hereof and disclosed in writing to the Underwriters prior to the
date hereof, (c) transfers of shares of Common Stock or any security convertible
into Common Stock as a bona fide gift or gifts, (d) transfers by the undersigned
of shares of Common Stock to the Company to (i) pay the exercise price for
Common Stock to be issued to the undersigned upon the exercise of vested options
to purchase
32
Common Stock and/or (ii) satisfy any tax liability due upon the exercise of such
vested options to purchase Common Stock or the vesting of restricted stock, and
(e) transfers to a Section 501(c)(3) charity by the undersigned and [ ] of up to
an aggregate of 10,000 shares of Common Stock or any security convertible into
Common Stock; provided, that in the case of any transfer pursuant to clause (d),
any shares of Common Stock received upon the exercise of such vested options
will be subject to the foregoing sentence; provided, further, that in the case
of any transfer pursuant to clause (c), (i) each donee shall execute and deliver
to the Underwriters a duplicate form of this Lock-Up Agreement and (ii) no
filing by any party (donor, donee, transferor or transferee) under Section 16(a)
of the Exchange Act, as amended, shall be required or shall be made voluntarily
in connection with such transfer or distribution (other than a filing on a Form
5 made after the expiration of the 90 day period referred to above).
In addition, the undersigned agrees that, without the prior written
consent of the Underwriters, it will not, during the period commencing on the
date of the Underwriting Agreement and ending 90 days after the date of the
final prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)
33
EXHIBIT B
February 10, 2004
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. Incorporated and
Legg Mason Wood Walker, Incorporated (the "UNDERWRITERS") propose to enter into
an Underwriting Agreement (the "UNDERWRITING AGREEMENT") with The St. Joe
Company, a Florida corporation (the "COMPANY"), and Alfred I. duPont
Testamentary Trust (the "TRUST"), providing for the public offering (the "PUBLIC
OFFERING") by the Underwriters, of 6,000,000 shares (the "SHARES") of the Common
Stock, no par value, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue its efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of the Underwriters, it
will not, during the period commencing on the date of the Underwriting Agreement
and ending 90 days after the date of the final prospectus relating to the Public
Offering (the "PROSPECTUS"), (1) 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, lend, 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 (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (a) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the Public Offering, (b) shares of Common Stock sold pursuant to a
written plan contemplated by rule 10b5-1(c)(A)(3) under the Securities Exchange
Act of 1934 (the "EXCHANGE ACT") that was entered into by the undersigned prior
to the date hereof and disclosed in writing to the Underwriters prior to the
date hereof and (c) transfers of shares of Common Stock or any security
convertible into Common
34
Stock as a bona fide gift or gifts; provided that in the case of any transfer
pursuant to clause (c), (i) each donee shall execute and deliver to the
Underwriters a duplicate form of this Lock-Up Agreement and (ii) no filing by
any party (donor, donee, transferor or transferee) under Section 16(a) of the
Exchange Act, as amended, shall be required or shall be made voluntarily in
connection with such transfer or distribution (other than a filing on a Form 5
made after the expiration of the 90 day period referred to above).
In addition, the undersigned agrees that, without the prior written
consent of the Underwriters, it will not, during the period commencing on the
date of the Underwriting Agreement and ending 90 days after the date of the
final prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
------------------------------------
(Name)
------------------------------------
(Address)
35