EXHIBIT 1.1
Wells Fargo & Company
341,000,000 Shares
of Common Stock (par value $1-2/3)
Underwriting
Agreement
May 8, 2009
To the Representatives
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Ladies and Gentlemen:
Wells Fargo & Company, a
Delaware corporation (the “Company”), proposes to issue
and sell to the several underwriters named in Schedule II hereto
(the “Underwriters”), for whom you are acting as
Representatives (the “Representatives”), an aggregate
of 341,000,000 shares of common stock, par value $1-2/3 per share
(“Common Stock”), of the Company (the
“Underwritten Shares”) and, at the option of the
Underwriters, up to an additional 51,150,000 shares of Common Stock
(the “Option Shares”). The Underwritten Shares and the
Option Shares are herein referred to as the “Shares”.
The shares of Common Stock to be outstanding after giving effect to
the sale of the Shares are referred to herein as the
“Stock”.
If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms “Underwriters” and
“Representatives”, as used herein, shall each be deemed
to refer to such firm or firms.
1.
Representations and Warranties . The Company represents and warrants
to, and agrees with, each Underwriter that:
(a) The Company meets the
requirements for use of Form S-3 under the Securities Act of 1933,
as amended (the “Act”) and has filed with the
Securities and Exchange Commission (the “Commission”)
an automatic shelf registration statement on such Form as defined
in Rule 405 under the Act (the file number of which is set forth in
Schedule I hereto) for the registration of the Shares under the
Act; and no notice of objection of the Commission to the use of
such registration statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Act has been received by the
Company. Such registration statement, including any amendments
thereto, became effective upon filing and no order suspending the
effectiveness of such registration statement has been issued by the
Commission and no proceeding for that purpose or pursuant to
Section 8A of
the Act against the Company or related to the offering has been
initiated or threatened by the Commission. The Company proposes to
file with the Commission pursuant to Rule 424 under the Act a
supplement to a form of prospectus included in such registration
statement relating to the Shares in the form heretofore delivered
to you. Such registration statement, including all exhibits
thereto, as amended at the date of this Agreement, and including
any prospectus supplement relating to the Shares that is filed with
the Commission pursuant to Rule 424(b) under the Act and deemed
part of such registration statement pursuant to Rule 430B under the
Act, is hereinafter called the “Registration
Statement”; such prospectus in the form in which it appears
in the Registration Statement is hereinafter called the
“Basic Prospectus” and such supplemented form of
prospectus, in the form in which it shall be filed with the
Commission pursuant to Rule 424(b) (including the Basic Prospectus
as so supplemented) is hereinafter called the “Final
Prospectus”. Any preliminary form of the Final Prospectus
which has been or will be filed pursuant to Rule 424 is hereinafter
called the “Preliminary Final Prospectus”. 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 Securities Exchange Act of 1934, as
amended (the “Exchange Act”) on or before the date of
this Agreement, 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 Exchange Act
after the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, as the case may be, and deemed to be incorporated
therein by reference.
(b) As of the date
hereof, when the Final Prospectus is first filed pursuant to Rule
424(b) under the Act, when, prior to the Closing Date (as
hereinafter defined), any amendment to the Registration Statement
becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Final Prospectus is filed with the Commission and
at the Closing Date, (i) the Registration Statement, as amended as
of any such time, and the Final Prospectus, as amended or
supplemented as of any such time, will comply in all material
respects with the applicable requirements of the Act and the
Exchange Act and the respective rules thereunder and (ii) neither
the Registration Statement, as amended as of any such time, nor the
Final Prospectus, as amended or supplemented as of any such time,
does or will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading;
provided, however, that the Company makes no representations
or warranties as to the information contained in or omitted from
the Registration Statement or the Final Prospectus or any amendment
thereof or supplement thereto in reliance upon and in conformity
with information
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furnished in
writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for use in connection with the
preparation of the Registration Statement and the Final Prospectus
(it being understood and agreed that the only such information
contained in the Registration Statement or Final Prospectus
furnished by any Underwriter consists of such information described
as such in a letter dated the Closing Date (the “Blood
Letter”) delivered by the Representatives to the
Company).
(c) At the Applicable
Time (as defined in Section 1(g) below), the Disclosure Package (as
defined in Section 1(g) below) does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with
written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by
or on behalf of any Underwriter consists of the information
described as such in the Blood Letter.
(d) (i) At the time of
filing the Registration Statement, (ii) at the time of the most
recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective
amendment, incorporated report filed pursuant to Sections 13 or
15(d) of the Exchange Act or form of prospectus) and (iii) at the
time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c) under the Act) made
any offer relating to the Shares in reliance on the exemption in
Rule 163 under the Act, the Company was or is (as the case may be)
a “well-known seasoned issuer” as defined in Rule 405
under the Act. The Company agrees to pay the fees required by the
Commission relating to the Shares within the time required by Rule
456(b)(1) under the Act without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r) under the
Act.
(e) At the earliest
time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2) under the Act) of the
Shares, the Company was not and is not an Ineligible Issuer (as
defined in Rule 405 under the Act), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not
necessary that the Company be considered an Ineligible Issuer.
(f) Each Issuer Free
Writing Prospectus does not include any information that conflicts
with the information contained in the Registration Statement,
including any document incorporated therein and any prospectus
supplement deemed to be a part thereof that has not been superseded
or modified. The foregoing sentence does not apply to statements in
or omissions from any Issuer Free Writing Prospectus based upon and
in conformity with written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that
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the only such
information furnished by or on behalf of any Underwriter consists
of the information described as such in the Blood Letter.
(g) Certain Definitions.
For purposes hereof:
(i)
“Disclosure Package” shall mean (A) the Basic
Prospectus, as amended and supplemented to the Applicable Time, (B)
any Preliminary Final Prospectus, (C) the Issuer Free Writing
Prospectuses and any other information identified in Schedule III
hereto, and (D) any other Free Writing Prospectus that the parties
hereto shall hereafter expressly agree in writing to treat as part
of the Disclosure Package.
(ii) “Applicable
Time” shall mean the Applicable Time listed in Schedule I
hereto.
(iii) “Free Writing
Prospectus” shall mean a free writing prospectus, as defined
in Rule 405 under the Act.
(iv) “Issuer Free Writing
Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433 under the Act, that (A) is required to be filed
with the Commission by the Company or (B) is exempt from filing
pursuant to Rule 433(d)(5)(i) under the Act because it contains a
description of the Shares or the offering that does not reflect the
final terms.
(h) The financial
statements (including the related notes thereto) of the Company and
its consolidated subsidiaries included or incorporated by reference
in the Registration Statement, the Disclosure Package and the Final
Prospectus comply in all material respects with the applicable
requirements of the Act and the Exchange Act, as applicable, and
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results
of operations and the changes in cash flows for the periods
specified; such financial statements have been prepared in
conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods
covered thereby, and any supporting schedules included or
incorporated by reference in the Registration Statement present
fairly the information required to be stated therein; the other
financial information of the Company and its consolidated
subsidiaries included or incorporated by reference in the
Registration Statement, the Disclosure Package and the Final
Prospectus has been derived from the accounting records of the
Company and its consolidated subsidiaries and presents fairly the
information shown thereby; and the pro forma financial information and the related
notes thereto included or incorporated by reference in the
Registration Statement, the Disclosure Package and the Final
Prospectus have been prepared in accordance with the applicable
requirements of the Act and the Exchange Act, as applicable, and
the assumptions underlying such pro forma
financial information are
reasonable and are set forth in the Registration Statement, the
Disclosure Package and the Final Prospectus.
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(i) Since the date
of the most recent financial statements of the Company and its
consolidated subsidiaries included or incorporated by reference in
the Registration Statement, the Disclosure Package and the Final
Prospectus, (i) there has not been any change in the capital stock
(other than the issuance of shares of Common Stock upon exercise of
stock options and warrants described as outstanding in, and the
grant of options and awards under existing equity incentive plans
described in, the Registration Statement, the Disclosure Package
and the Final Prospectus), material increase in the long-term debt
of the Company or any of its subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock, or any material
adverse change in or affecting the business, properties,
management, financial condition, stockholders’ equity,
results of operations or business prospects of the Company and its
subsidiaries taken as a whole; (ii) neither the Company nor any of
its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) that is
material to the Company and its subsidiaries taken as a whole or
incurred any liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries taken as a whole,
other than in the ordinary course of business; and (iii) neither
the Company nor any of its subsidiaries has sustained any loss or
interference with its business that is material to the Company and
its subsidiaries taken as a whole and that is either from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action,
order or decree of any court or arbitrator or governmental or
regulatory authority, except, in each case, as otherwise disclosed
in the Registration Statement, the Disclosure Package and the Final
Prospectus.
(j) KPMG LLP, who have
certified certain financial statements of the Company and its
subsidiaries are an independent registered public accounting firm
with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the
Public Company Accounting Oversight Board (United States) and as
required by the Act.
(k) The Company has
an authorized capitalization as set forth in the Registration
Statement, the Disclosure Package and the Final Prospectus; all the
outstanding shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and
non-assessable and are not subject to any pre-emptive or similar
rights; except pursuant to plans discussed in, or except as
otherwise described in or expressly contemplated by, the Disclosure
Package and the Final Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or
options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the
Company or any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such
subsidiary, any such convertible or exchangeable securities or any
such rights, warrants or options; the capital stock of the Company
conforms in all material respects to the description thereof
contained in the Registration Statement, the Disclosure Package and
the Final
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Prospectus; and
all the outstanding shares of capital stock or other equity
interests of each Significant Subsidiary (as hereinafter defined)
owned, directly or indirectly, by the Company have been duly and
validly authorized and issued, are fully paid and (except as
provided in 12 U.S.C. § 55 in the case of Wells Fargo Bank,
N.A.) non-assessable and are owned directly or indirectly by the
Company, free and clear of any lien, charge, encumbrance, security
interest, restriction on voting or transfer or any other claim of
any third party.
(l) The Shares to be
issued and sold by the Company hereunder have been duly authorized
and, when issued and delivered and paid for as provided herein,
will be duly and validly issued, will be fully paid and
nonassessable and will conform to the descriptions thereof in the
Registration Statement, the Disclosure Package and the Final
Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights.
(m) Except as
described in the Registration Statement, the Disclosure Package and
the Final Prospectus, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to
which the Company or any of its subsidiaries is a party or to which
any property of the Company or any of its subsidiaries is the
subject that, individually or in the aggregate would reasonably be
expected to have a material adverse effect upon the business,
condition or properties of the Company and its subsidiaries, taken
as a whole; except as described in the Registration Statement, the
Disclosure Package and the Final Prospectus, no such
investigations, actions, suits or proceedings are threatened or, to
the knowledge of the Company, contemplated by any governmental or
regulatory authority or threatened by others; and (i) there are no
current or pending legal, governmental or regulatory actions, suits
or proceedings that are required under the Act to be described in
the Registration Statement, the Disclosure Package or the Final
Prospectus that are not so described in the Registration Statement,
the Disclosure Package and the Final Prospectus and (ii) there are
no contracts or other documents that are required under the Act to
be filed as exhibits to the Registration Statement or described in
the Registration Statement, the Disclosure Package or the Final
Prospectus that are not so filed as exhibits to the Registration
Statement or described in the Registration Statement, the
Disclosure Package and the Final Prospectus.
(n) The Company maintains
an effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange
Act) that complies with the requirements of the Exchange Act and
that has been designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission’s rules
and forms, including controls and procedures designed to ensure
that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company has carried out
evaluations of the effectiveness of its disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.
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(o) The Company maintains
a system of “internal control over financial reporting”
(as defined in Rule 13a-15(f) of the Exchange Act) that complies
with the requirements of the Exchange Act and has been designed by,
or under the supervision of, its principal executive and principal
financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, including, but not limited to, internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted
only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Registration Statement, the Disclosure Package
and the Final Prospectus, there are no material weaknesses in the
Company’s internal controls.
(p) Except as described
in the Registration Statement, the Disclosure Package and the Final
Prospectus, the operations of the Company and its Significant
Subsidiaries are and have been conducted at all times in accordance
with the policies and procedures that are reasonably designed to
ensure compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions in which the Company conducts operations, and any
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
(q) The execution
and delivery of, and the performance by the Company of its
obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly
executed and delivered by the Company.
2. Purchase
and Sale . Subject to
the terms and conditions and in reliance upon the representations
and warranties herein set forth, the Company agrees to issue and
sell to each Underwriter, and each Underwriter agrees, severally
and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto, the number of Underwritten
Shares set forth opposite such Underwriter’s name in Schedule
II hereto.
In addition, the Company agrees to
issue and sell the Option Shares to the several Underwriters as
provided in this Agreement, and the Underwriters, subject to the
terms and conditions and in reliance upon the representations and
warranties herein set forth, shall have the
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option to purchase, severally and not
jointly, from the Company the Option Shares at the purchase price
set forth on Schedule I hereto.
If any Option Shares are to be
purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the
same ratio to the aggregate number of Option Shares being purchased
as the number of Underwritten Shares set forth opposite the name of
such Underwriter in Schedule II hereto (or such number increased as
set forth in Section 8 hereof) bears to the aggregate number of
Underwritten Shares being purchased from the Company by the several
Underwriters, subject, however, to such adjustments to eliminate
any fractional Shares as the Representatives in their sole
discretion shall make.
The Underwriters may exercise the
option to purchase Option Shares at any time in whole, or from time
to time in part (but in no event shall the Underwriters exercise
such option more than twice), on or before the thirtieth day
following the date of the Final Prospectus, by written notice from
the Representatives to the Company. Such notice shall set forth the
aggregate number of Option Shares as to which the option is being
exercised and the date and time when the Option Shares are to be
delivered and paid for, which may be the same date and time as the
Closing Date but shall not be earlier than the Closing Date or
later than the tenth full business day (as hereinafter defined)
after the date of such notice (unless such time and date are
postponed in accordance with the provisions of Section 8 hereof).
Any such notice shall be given at least five business days prior to
the date and time of delivery specified therein.
The Company understands that the
Underwriters intend to make a public offering of the Shares as soon
after the effectiveness of this Agreement as in the judgment of the
Representatives is advisable, and initially to offer the Shares on
the terms set forth in the Final Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell
Shares to or through any affiliate of an Underwriter.
3. Delivery and
Payment . Delivery
of, and payment for, the Shares shall be made, in the case of the
Underwritten Shares, at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be
postponed by agreement between the Representatives and the Company
or as provided in Section 8 hereof (such date and time of delivery
and payment for the Underwritten Shares being herein called the
“Closing Date”) or, in the case of the Option Shares,
on the date and at the time and place specified by the
Representatives in the written notice of the Underwriters’
election to purchase the Option Shares (such date and time of
delivery and payment for the Option Shares being herein called an
“Additional Closing Date”). Delivery of the Shares to
be purchased on the Closing Date or any Additional Closing Date, as
the case may be, shall be made to the Representatives for the
respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the sale of such Shares duly paid
by the Company, against payment by the several Underwriters through
the Representatives of the purchase price thereof in the manner set
forth in Schedule I hereto. Delivery of the Shares will be made
through the facilities of The Depository Trust Company
(“DTC”) unless the Representatives shall otherwise
instruct.
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4.
Agreements . The Company agrees with the several
Underwriters that:
(a) The Company will
provide to counsel for the Underwriters one manually executed copy
of the Registration Statement, including all exhibits thereto, in
the form it became effective, and all amendments thereto. Prior to
the Closing Date, the Company will not file any amendment of the
Registration Statement or supplement (including the Final
Prospectus) to the Basic Prospectus unless the Company has
furnished you a copy for your review prior to filing and the
Company will not file any such proposed amendment or supplement to
which you reasonably object promptly after notice thereof. Neither
the Representatives’ consent to, nor the Underwriters’
delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 5 hereof.
Subject to the foregoing sentence, the Company will cause the Final
Prospectus to be filed pursuant to Rule 424(b) under the Act not
later than the close of business on the second business day
following the execution and delivery of this Agreement. The Company
will promptly advise the Representatives (i) when the Final
Prospectus shall have been filed with the Commission pursuant to
Rule 424(b), (ii) when any amendment to the Registration Statement
relating to the Shares shall have become effective, (iii) of any
request by the Commission for any amendment of the Registration
Statement or amendment of or supplement to the Final Prospectus or
for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement, or of any notice that would prevent its
use, or the institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. In the event of the issuance of
any stop order preventing or suspending the use of any Preliminary
Final Prospectus or Final Prospectus, the Company will promptly use
its best efforts to obtain the withdrawal of such stop order.
(b) If there occurs an
event or development as a result of which the Disclosure Package
would include an untrue statement of a material fact or would omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances then prevailing, not
misleading, the Company will promptly notify the Representatives so
that any use of the Disclosure Package may cease until it is
amended or supplemented and will, upon request of the
Representatives, amend or supplement the Disclosure Package to
correct such statement or omission.
(c) If, at any time when
a prospectus relating to the Shares is required to be delivered
under the Act (including in circumstances where such requirement
may be satisfied pursuant to Rule 172 under the Act), any event
occurs as a result of which the Final Prospectus as then amended or
supplemented would include any untrue statement of a material fact
or omit to state any material fact 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 to amend or
supplement the
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Final
Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, including in connection with use or
delivery of the Final Prospectus, the Company will promptly notify
you and will, upon your request, prepare and file with the
Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Representatives’ request for, nor the
Underwriters’ delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) As soon as
practicable, the Company will make generally available to its
security holders an earnings statement or statements of the Company
and its subsidiaries, which will satisfy the provisions of Section
11(a) of the Act.
(e) The Company will
furnish to the Representatives and counsel for the Underwriters,
without charge, copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date and, so long as delivery
of a prospectus by an Underwriter or dealer may be required by the
Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 under the Act), as many copies of
any Preliminary Final Prospectus, the Final Prospectus and each
Issuer Free Writing Prospectus included in the Disclosure Package
and any amendments thereof and supplements thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating
to the offering and the expenses incurred in distributing the Final
Prospectus to the Underwriters.
(f) The Company will
arrange for the qualification of the Shares for sale under the laws
of such jurisdictions as the Representatives may designate and will
maintain such qualifications in effect so long as required to
complete the distribution of the Shares; provided
, however ,
that the Company shall not be required to qualify to do business in
any jurisdiction where it is not now so qualified or to take any
action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject or
subject itself to taxation in any jurisdiction where it is not now
so subject.
(g) For a period of
90 days after the date of the Final Prospectus, the Company will
not (i) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into
or exercisable or exchangeable for Stock or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled
by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of J.P. Morgan
Securities Inc. The foregoing restriction shall not apply to (i)
the Shares to be issued and sold hereunder, (ii) the grant or
issuance of stock options or other securities pursuant to
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or in
connection with any employment contract, benefit plan or similar
arrangement with or for the benefit of employees, officers,
directors or consultants in effect on the date hereof or any
employment contract, benefit plan or similar arrangement adopted
after the date hereof to
