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EXHIBIT 1.1
7,200,000 SHARES
XXXXXX XXXXXXX LIVING OMNIMEDIA, INC.
CLASS A COMMON STOCK $.01 PAR VALUE
UNDERWRITING AGREEMENT
October __, 1999
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October __, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Banc of America Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
Bank of America International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Xxxxxx Xxxxxxx Living Omnimedia, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters (as defined
below) 7,200,000 shares of its Class A Common Stock, $.01 par value (the "FIRM
SHARES").
The Company is a recently organized Delaware corporation. On or shortly
prior to the Closing Date (as defined herein), the Company will merge with
Xxxxxx Xxxxxxx Living Omnimedia LLC (the "LLC") and succeed to all of the
business and operations of the LLC pursuant to the terms and conditions of the
merger agreement (the "MERGER AGREEMENT") dated as of October __, 1999 between
the Company and the LLC (the "MERGER"). The Merger will occur prior to the
closing of the sale of the Firm Shares to the Underwriters. The Company and the
LLC are collectively referred to herein as the "MSLO COMPANIES".
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It is understood that, subject to the conditions hereinafter stated,
5,760,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the several U.S.
Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in connection
with the offering and sale of such U.S. Firm Shares in the United States and
Canada to United States and Canadian Persons (as such terms are defined in the
Agreement Between U.S. and International Underwriters of even date herewith),
and 1,440,000 Firm Shares (the "INTERNATIONAL SHARES") will be sold to the
several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Bear, Xxxxxxx, & Co. Inc.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Banc of America
Securities LLC shall act as representatives (the "U.S. REPRESENTATIVES") of the
several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited,
Xxxxxxx Xxxxx International, Bear, Xxxxxxx International Limited, Xxxxxxxxx,
Xxxxxx & Xxxxxxxx International and Bank of America International Limited shall
act as representatives (the "INTERNATIONAL REPRESENTATIVES") of the several
International Underwriters. The U.S. Underwriters and the International
Underwriters are hereinafter collectively referred to as the "UNDERWRITERS".
The Company also proposes to issue and sell to the several U.S.
Underwriters an aggregate of not more than an additional 1,080,000 shares of the
Company's Class A Common Stock, $.01 par value (the "ADDITIONAL SHARES"), if and
to the extent that the U.S. Representatives shall have determined to exercise,
on behalf of the U.S. Underwriters, the right to purchase such shares of common
stock granted to the U.S. Underwriters in Section 3 hereof. The Firm Shares and
the Additional Shares are hereinafter collectively referred to as the "SHARES".
The shares of Class A Common Stock, $.01 par value, of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement
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at the time of effectiveness pursuant to Rule 430A under the Securities Act of
1933, as amended (the "SECURITIES ACT"), is hereinafter referred to as the
"REGISTRATION STATEMENT"; the U.S. prospectus and the international prospectus
in the respective forms first used to confirm sales of Shares are hereinafter
collectively referred to as the "PROSPECTUS." 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 herein to the term "REGISTRATION STATEMENT"
shall be deemed to include such Rule 462 Registration Statement. All references
to "SUBSIDIARY" or "SUBSIDIARIES" are to Xxxxxx Xxxxxxx, Inc., except as
otherwise set forth herein.
1. Representations and Warranties. The MSLO Companies jointly and
severally represent and warrant to and agree with each of the Underwriters that:
(a) The Registration Statement (other than any Rule 462
Registration Statement to be filed by the Company after the
effectiveness of this Agreement) 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, to
the knowledge of the Company, threatened by the Commission.
(b) (i) The Registration Statement (other than any Rule 462
Registration Statement to be filed by the Company after the
effectiveness of this Agreement), 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
(other than any Rule 462 Registration Statement to be filed by the
Company after the effectiveness of this Agreement) and the Prospectus
comply and, as amended or supplemented, if applicable, will comply in
all material respects with the 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 do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter
furnished to either of the MSLO Companies in writing by such
Underwriter through you expressly for use therein.
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(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware, and after giving effect to the Merger will (i) have the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus, (ii) be duly qualified to
transact business and (iii) be 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 subsidiary, taken as a
whole, after giving effect to the Merger.
(d) The LLC has been duly organized, is validly existing as a
limited liability company in good standing under the laws of the State
of Delaware, has the requisite power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and if applicable, 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 LLC and its subsidiary,
taken as a whole, or, after giving effect to the Merger, the Company
and its subsidiary, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by each of the MSLO Companies and is a valid and binding
agreement of each of the MSLO Companies; and the Merger Agreement has
been duly authorized, executed and delivered by each of the MSLO
Companies and is a valid and binding agreement of each of the MSLO
Companies.
(f) The authorized capital stock of the Company following the
Merger conforms as to legal matters to the description thereof
contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and, except for the
rights relating to the shares of Common Stock owned by Time Publishing
Ventures, Inc. described in the Prospectus or the Fourth Amended and
Restated Limited Liability Company Agreement of the LLC (the "LLC
AGREEMENT"), non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered in accordance with the terms
of this Agreement, will be validly issued, fully paid and
non-assessable, and
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the issuance of such Shares will not be subject to any preemptive or
similar rights.
(i) The membership interests of the LLC have been duly
authorized and are validly issued, fully paid and non-assessable.
(j) The execution and delivery by each of the MSLO Companies
of, and the performance by each of the MSLO Companies of their
respective obligations under, this Agreement and the Merger Agreement
will not contravene any provision of applicable law or the certificate
of formation of the LLC or the LLC Agreement, the certificate of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon either of the MSLO Companies or any of their
subsidiaries that is material to the LLC and its subsidiary, taken as a
whole, and after giving effect to the Merger, the Company and its
subsidiary, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over either of
the MSLO Companies or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any governmental body
or agency is required for the performance by either of the MSLO
Companies of their respective obligations under this Agreement or the
Merger Agreement, except (i) such as may be required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, or by
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares and (ii) registration under the
Act, approval of the National Association of Securities Dealers, Inc.
(the "NASD") and the New York Stock Exchange (the "NYSE") approval for
listing, all of which shall have been obtained by the Closing Date.
(k) Since the respective dates as of which information is
given in the Prospectus, other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), 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 either of the LLC and its subsidiary, taken
as a whole, or, after giving effect to the Merger, the Company and its
subsidiary, taken as a whole.
(l) There are no legal or governmental proceedings pending or,
to the knowledge of the respective MSLO Companies, threatened to which
either of the MSLO Companies or any of their subsidiaries is a party or
to which any of the properties of either of the MSLO Companies or any
of their subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so described
or any
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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.
(m) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(n) As of the date hereof, the LLC is not an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(o) The Company, after giving effect to the Merger, the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(p) Each of the MSLO Companies and their 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 as
presently conducted 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, reasonably be expected to have a material
adverse effect on the LLC and its subsidiary, taken as a whole, or
after giving effect to the Merger, on the Company and its subsidiary,
taken as a whole.
(q) There are no costs or liabilities arising out of any
Environmental Law (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,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
reasonably be expected to have a material adverse effect on the LLC and
its subsidiary, taken as a
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whole, or after giving effect to the Merger, on the Company and its
subsidiary, taken as a whole.
(r) Except as described in the Prospectus or attached as an
exhibit to the Registration Statement, there are no, and after giving
effect to the Merger there will not be any, contracts, agreements or
understandings between either of the MSLO Companies 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.
(s) Each of the MSLO Companies 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.
(t) The LLC and its subsidiary own or possess, or can acquire
on reasonable terms or have adequate license or other rights to use,
and after giving effect to the Merger, the Company and its subsidiary
will own or possess, will be able to acquire on reasonable terms or
will have adequate licenses or other rights to use all material
licenses, copyrights, know-how (including trade secrets and other
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 of the
MSLO Companies nor any of their subsidiaries has received any written
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, singly or in the aggregate,
would reasonably be expected to have a material adverse effect on the
LLC and its subsidiary, taken as a whole, or after giving effect to the
Merger, the Company and its subsidiary, taken as a whole.
(u) The LLC and its subsidiary maintain, and after giving
effect to the Merger, the Company and its subsidiary will maintain, a
system of 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 United States 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.
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(v) Each of the MSLO Companies has reviewed their operations
and that of their subsidiaries to evaluate the extent to which the
business or operations of the MSLO Companies or any of their
subsidiaries will be affected by the Year 2000 Problem (that is, any
significant risk that computer hardware or software applications used
by the MSLO Companies and their subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000); as a result of such review, (i) each of the
MSLO Companies has no reason to believe, and does not believe, that the
Year 2000 Problem will have a material adverse effect on the Company
and its subsidiary, taken as a whole, after giving effect to the
Merger, or result in any material loss or interference with the
business or operations of the Company and its subsidiary, taken as a
whole, after giving effect to the Merger; and (ii) each of the MSLO
Companies has no reason to believe that the suppliers, vendors,
customers or other material third parties directly used or served by
the LLC and its subsidiary, and to be used or served after the Merger
by the Company and its subsidiary, are not addressing or will not
address the Year 2000 Problem in a timely manner, such that failure to
address the Year 2000 Problem by any such supplier, vendor, customer or
material third party would have a material adverse effect on the
Company and its subsidiary, taken as a whole, after giving effect to
the Merger.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell
to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
hereto opposite its names at U.S.$_____ a share ("PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not jointly, up to 1,080,000
Additional Shares at the Purchase Price. If the U.S. Representatives, on behalf
of the U.S. Underwriters, elect to exercise such option, the U.S.
Representatives shall so notify the Company in writing not later than 30 days
after the date of this Agreement, which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each
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U.S. Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representatives may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of U.S. Firm
Shares set forth in Schedule I hereto opposite the name of such U.S. Underwriter
bears to the total number of U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 180 days after the date of the Prospectus, (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, (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, or (iii) file a registration statement
other than a registration statement on Form S-8 covering the shares of Common
Stock issuable pursuant to, or subject to outstanding options or options to be
issued under, the Company's employee benefit or stock option plans. The
foregoing sentence shall not apply to (A) the Shares to be sold hereunder, (B)
the granting of options to officers, directors, employees or consultants,
provided that these options are not generally exercisable prior to the period
ending 180 days after the date of the Prospectus, (C) the issuance by the
Company of shares of Common Stock upon the exercise of an option or warrant or
the conversion of a security outstanding (1) on the date hereof or (2) as of the
Closing Date pursuant to the Company's Employee Stock Purchase Plan, the Phantom
Stock Plan, the 1999 Stock Incentive Plan or the Non-Employee Director Stock and
Option Compensation Plan, of which the Underwriters have been advised in
writing, (D) transactions by any person other than the Company relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the offering of the Shares, (E) the completion of the
Company's call of the equity interest of Time Publishing Ventures, Inc. pursuant
to the LLC Agreement, (F) the exchange of shares of Class B common stock for
shares of Class A common stock of the Company pursuant to the Company's
certificate of incorporation and (G) the sale or other transfer of any shares of
Common Stock by the Company to any associate (as defined in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") if such
associate agrees to be bound by this Agreement.
3. Terms of Public Offering. The Company 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
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effective as in your judgment is advisable. The Company is further advised by
you that the Shares are to be offered to the public initially at U.S.$_____ a
share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at a
price that represents a concession not in excess of U.S.$____ a share under the
Public Offering Price, and that any Underwriter may allow, and such dealers may
reallow, a concession, not in excess of U.S.$____ a share, to any Underwriter or
to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on October __, 1999, or at such
other time on the same or such other date, not later than October __, 1999, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 3 or at such other time on the same or on such other
date, in any event not later than November __, 1999, as shall be designated in
writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and 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 or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several 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.
5. Conditions to the Underwriters' Obligations. The obligations of the
Company 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 _________ (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
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(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) 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 subsidiary, 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 an executive officer
of the Company, to the effect set forth in Section 6(a)(i) 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 in all material respects 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.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Merger shall have been consummated and the Company
shall have succeeded to all of the assets and liabilities of the LLC on
the terms set forth in the Merger Agreement.
(d) The Underwriters shall have received on the Closing Date
an opinion of Wachtell, Lipton, Xxxxx & Xxxx, special counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has the
corporate power and
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authority to own its property and to conduct its business as
described in the Prospectus;
(ii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
contained in the Prospectus;
(iii) the shares of Common Stock outstanding prior to
the issuance of the Shares have been duly authorized and are
validly issued, fully paid and, except for the rights relating
to the shares of Common Stock owned by Time Publishing
Ventures Inc. described in the Prospectus or the LLC
Agreement, non-assessable;
(iv) the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment
therefor in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive
or, except as described in the Prospectus, similar rights
arising by operation of law, under the certificate of
incorporation or bylaws of the Company, and any agreement
known to such counsel to which the Company or its subsidiary
is a party;
(v) this Agreement has been duly authorized, executed
and delivered by each of the MSLO Companies; the Merger
Agreement has been duly authorized, executed and delivered by
each of the MSLO Companies and the Merger has been consummated
in accordance with the terms of the Merger Agreement and
applicable law;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not (A) contravene any provision of the
Subject Laws (as defined below) or the certificate of
incorporation or by-laws of the Company or any agreement or
other instrument known to such counsel and which is binding
upon the Company or its subsidiary that is, after giving
effect to the Merger, material to the Company and its
subsidiary, taken as a whole, or to the knowledge of such
counsel, but without having performed a docket search, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or its subsidiary,
and (B) with respect to the Subject Laws, no consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by
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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 by the U.S. Underwriters as to which no opinion is
expressed, which in the case of clauses (A) or (B) would
individually or in the aggregate, after giving effect to the
Merger, have a material adverse effect on the Company and its
subsidiary, taken as a whole, or impair the consummation of
the transactions contemplated hereby. "SUBJECT LAWS" means (W)
the laws of the state of New York, (X) the general corporation
law of the State of Delaware, (Y) the limited liability
company act of the State of Delaware, and (Z) the federal laws
of the United States normally applicable, in the experience of
such counsel, to transactions of the type contemplated by this
Agreement;
(vii) the execution and delivery by the LLC of, and
the performance by the LLC of its obligations under, this
Agreement will not (A) contravene any provision of the Subject
Laws or the certificate of formation or LLC Agreement of the
LLC or any agreement or other instrument known to such counsel
and which is binding upon the LLC or its subsidiary that is
material to the LLC and its subsidiary, taken as a whole, or,
to the knowledge of such counsel, but without having performed
a docket search, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the LLC or any subsidiary, and (B) with respect to the Subject
Laws, no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by the LLC 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 by the U.S.
Underwriters as to which no opinion is expressed, which in the
case of clauses (A) or (B) would individually or in the
aggregate have a material adverse effect on the LLC and its
subsidiary, taken as a whole or impair the consummation of the
transactions contemplated hereby;
(viii) the statements (A) in the Prospectus under the
captions "Management -- Executive Employment Agreements,"
"Certain Relationships and Related Transactions," "Description
of Capital Stock" and "Material U.S. Federal Income Tax
Considerations for Non-U.S. Holders" and (B) in the
Registration Statement in Items 14 and 15, in each case
insofar as such statements constitute summaries of the legal
matters, documents or
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15
proceedings referred to therein, fairly present in all
material respects the information called for by applicable law
with respect to such legal matters, documents and proceedings;
(ix) after due inquiry, but without having performed
a docket search or other independent investigation, such
counsel does not know of any legal or governmental proceedings
pending or threatened to which, after giving effect to the
Merger, the Company or its subsidiary is a party or to which,
after giving effect to the Merger, any of the properties of
the Company or its subsidiary is subject that are required to
be described in the Registration Statement or the Prospectus
and are not so described or of any statutes or regulations
that are required to be described in the Registration
Statement or the Prospectus that are not described as
required;
(x) the Company is not and, after giving effect to
the Merger, the offering and sale of the Shares and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
and
(xi) such counsel has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for the
Company, and representatives of and counsel to the
Underwriters, all of whom participated in the preparation of
the Registration Statement and the Prospectus, at which
conferences the contents of the Registration Statement and
Prospectus were discussed, and, although such counsel is not
passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement and Prospectus, and has not
otherwise verified or made independent investigation thereof,
no facts have come to its attention during the course of such
participation (relying as to materiality and for an
explanation of technical terms to an extent such counsel deems
appropriate upon the factual statements of officers and other
representatives of the Company) which leads such counsel to
believe that (A) the Registration Statement and Prospectus
(except for financial statements and supporting notes and
schedules and other financial and statistical data included
therein as to which such counsel does not express any belief)
do not comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder, (B) (x) the Registration
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Statement and the prospectus included therein (except for
financial statements and supporting notes and schedules and
other financial and statistical data included therein as to
which such counsel does not express any belief) at the time
the Registration Statement became effective contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; or (y) the
Prospectus (except as stated) as of its date and as of the
date hereof contained or contains any untrue statement of a
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.
(e) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxxx X. Xxxxx, general counsel for the Company, dated
the Closing Date, to the effect that:
(i) 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 subsidiary, taken as a whole;
(ii) the Company and its subsidiary own or possess,
or can acquire on reasonable terms, all material licenses,
copyrights, know-how (including trade secrets and other
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 its subsidiary
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, would have a material
adverse effect on the Company and its subsidiary, taken as a
whole;
(iii) the statements in the Prospectus under the
caption "Business -- Intellectual Property" insofar as such
statements constitute summaries of the legal matters,
documents or proceedings referred to therein, fairly present
in all material respects the information called for by
applicable law with respect to such legal matters, documents
and proceedings; and
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(iv) such counsel does not know of any contracts 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.
(f) The Underwriters shall have received on the Closing Date an opinion
of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in Sections 6(d)(iv), 6(d)(v) (but only as to
this Agreement) and 6(d)(xi) above. Xxxxx Xxxx & Wardwell's opinion will also
state that the statements in the Prospectus under the captions "Description of
Capital Stock" and "Underwriters," insofar as such statements constitute
summaries of the legal matters or documents referred to therein, fairly present
in all material respects the information called for by applicable law with
respect to such legal matters and documents.
With respect to Section 6(d)(xi) above, Wachtell, Lipton, Xxxxx & Xxxx
and Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification,
except as specified.
The opinions of Wachtell, Lipton, Xxxxx & Xxxx described in Section
6(d) and of Xxxxxxx X. Xxxxx described in Section 6(e) above shall be rendered
to the Underwriters at the request of the Company 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 Xxxxxx
Xxxxxxxx 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 certain shareholders, officers and directors of the
Company 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.
The several obligations of the U.S. Underwriters to purchase Additional
Shares hereunder are subject to the delivery to the U.S. Representatives on the
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Option Closing Date of such documents as they may reasonably request with
respect to the good standing of the Company, the due authorization and issuance
of the Additional Shares and other documents customarily required by the
Underwriters in such transactions.
6. 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 6 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) 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 Section 7(c) below, as many copies of the Prospectus and
any supplements and amendments thereto or to the Registration Statement
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
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.
(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 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 the Underwriters
and to any other dealers upon reasonable 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
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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 that the Company shall not be required to
qualify as a foreign corporation or file a general consent to service
of process in any such jurisdiction.
(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 December 31, 2000 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
7. 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 of the Company under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, 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, including any transfer or other taxes payable
thereon, (iii) the cost of printing or producing any Blue Sky 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 6(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 memorandum, (iv) all filing fees incurred in connection with the review
and qualification of the offering of the Shares by the NASD, (v) all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to listing the Shares on the NYSE, (vi) the cost of printing
certificates representing the Shares, (vii) the costs and charges of any
transfer agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged by the
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20
Company in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives and officers
of the Company and any such consultants, and the cost of any aircraft chartered
in connection with the road show, and (ix) all other costs and expenses incident
to the performance of the obligations of the Company hereunder for which
provision is not otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 8 entitled "Indemnity and
Contribution", and the last paragraph of Section 10 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.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
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, 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 any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting 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 amendment or supplement thereto) was not sent or given by or
on behalf of such Underwriter to such person, if required by law to have been so
delivered, at or prior to the written confirmation of the sale of the Shares
sold by the Company 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.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the directors of the Company, the officers of the
company who sign the Registration Statement and each person, if any, who
controls the Company 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,
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21
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 through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) 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 8(a) or 8(b) 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 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 reasonable fees and expenses of more than one separate
firm (in addition to any local counsel) for all Underwriters and all persons, if
any, who control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and (ii) reasonable 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 that all such reasonable 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 any Underwriters, such firm shall be designated in
writing by Xxxxxx Xxxxxxx & 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
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Company. 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 otherwise covered by this Section 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.
(d) To the extent the indemnification provided for in Section 8(a) or
8(b) would be applicable but 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 the applicable 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 8(d)(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 8(d)(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 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 Company 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
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
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fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company 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 8 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 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 8(d). 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 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 8, 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 8 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.
(f) The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company
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 any Underwriter or any person controlling any Underwriter or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
9. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) 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 National Association
of Securities Dealers, Inc., 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
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over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) 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 (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters 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 Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I or Schedule II bears to the
aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any 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, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
the Company 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. If, on the Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Shares or (ii)
purchase not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in
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the absence of such default. Any action taken under this paragraph shall not
relieve any 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 any of
them, because of a breach by the Company of any of the terms of this Agreement
that results in a failure or refusal on the part of the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement (unless such inability results from a breach by the Underwriters of
any of the terms of this Agreement), the Company will reimburse the Underwriters
or such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the reasonable
fees and disbursements of their counsel) incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
11. 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.
12. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
13. 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.
Very truly yours,
XXXXXX XXXXXXX LIVING
OMNIMEDIA, INC.
By:
----------------------------------------
Name:
Title:
XXXXXX XXXXXXX LIVING
OMNIMEDIA LLC
By:
----------------------------------------
Name:
Title
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Accepted as of the date hereof
XXXXXX XXXXXXX & CO.
INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule
I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
----------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO.
INTERNATIONAL LIMITED
XXXXXXX XXXXX INTERNATIONAL
BEAR, XXXXXXX INTERNATIONAL
LIMITED
XXXXXXXXX, XXXXXX & XXXXXXXX
INTERNATIONAL
BANK OF AMERICA INTERNATIONAL
LIMITED
Acting severally on behalf of themselves and the
several International Underwriters named in
Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
----------------------------------------
Name:
Title:
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SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated.............................
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..................................................
Bear, Xxxxxxx & Co. Inc.......................................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation........................................
Banc of America Securities LLC................................
---------
Total U.S. Firm Shares.................................. 5,760,000
=========
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SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited....................
Xxxxxxx Xxxxx International...................................
Bear, Xxxxxxx International Limited...........................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International....................
Bank of America International Limited.........................
---------
Total International Firm Shares......................... 1,440,000
=========
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
____________, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
Banc of America Securities LLC
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Bear, Xxxxxxx International Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
Bank of America International Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") and Xxxxxx Xxxxxxx & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with Xxxxxx Xxxxxxx Living Omnimedia, Inc., a Delaware corporation (the
"COMPANY") providing for the public offering (the "PUBLIC OFFERING") by the
several Underwriters, including Xxxxxx Xxxxxxx and MSIL (the "UNDERWRITERS") of
7,200,000 shares (the "SHARES") of the Class A Common Stock, $.01 par value, of
the Company (the "COMMON STOCK").
30
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 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) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement, (b)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering, (c) the
completion of the Company's call of the equity interest of Time Publishing
Ventures, Inc. pursuant to the Fourth Amended and Restated Limited Liability
Company Agreement of Xxxxxx Xxxxxxx Living Omnimedia LLC, (d) the exchange of
shares of Class B Common Stock for shares of Class A Common Stock of the Company
pursuant to the Company's certificate of incorporation, (e) the exercise of
options received pursuant to the Company's stock and incentive plans or (f) the
sale or other transfer of any shares of Common Stock to an associate (as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) if such
associate agrees to be bound by this letter agreement.
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,
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Name
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Address
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