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EXHIBIT 1.1
$225,000,000
XXXXX ADVERTISING COMPANY
__% Senior Subordinated Notes due 2006
UNDERWRITING AGREEMENT
November ___, 1996
XXXXX XXXXXX INC.
CHASE SECURITIES INC.
CIBC WOOD GUNDY SECURITIES CORP.
c/o XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Advertising Company, a Delaware corporation (the
"Company"), proposes to issue and sell to you (the "Underwriters"),
$225,000,000 aggregate principal amount of its __% Senior Subordinated Notes
due 2006 (the "Notes") to be issued pursuant to the provisions of an Indenture
to be dated as of ___________, 1996 (the "Indenture") among the Company,
certain subsidiaries of the Company, as Guarantors (the "Guarantors"), and
State Street Bank and Trust Company, as trustee (the "Trustee"). Payment of
the principal, interest and premium, if any, on the Notes shall be guaranteed
on a senior subordinated basis by each of the Guarantors as provided and to the
extent set forth in the Indenture (the "Guarantees"). All references herein to
the Notes include the Guarantees. The Company and the Guarantors are
collectively referred to herein as the "Registrants".
As described in the Prospectus (as defined below) under the
caption "The Transactions - The Common Stock Offering", the Company and certain
selling stockholders intend to publicly offer, prior to or concurrently with
the public offering of the Notes, 2,800,000 shares of the Company's Class A
Common Stock, par value $.001 per share
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(the "Class A Common Stock"), and up to an additional 420,000 shares of such
Class A Common Stock pursuant to an over-allotment option (the "Common Stock
Offering").
The Registrants wish to confirm as follows their agreements
with you in connection with the several purchases of the Notes by you.
1. Registration Statement and Prospectus. The
Registrants have prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance in all material respects with the provisions
of the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-3 under the Act (the "registration statement"), including a prospectus
subject to completion relating to the Notes. The term "Registration Statement"
as used in this Agreement means the registration statement (including all
financial schedules and exhibits), as amended at the time it becomes effective,
or, if the registration statement became effective prior to the execution of
this Agreement, as supplemented or amended prior to the execution of this
Agreement. If it is contemplated, at the time this Agreement is executed, that
a post-effective amendment to the registration statement will be filed and must
be declared effective before the offering of the Notes may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post- effective amendment. The term "Registration
Statement" shall also include any registration statement relating to the Notes
that is filed pursuant to Rule 462(b) under the Act.
The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this
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Agreement means the prospectus in the form included in the Registration
Statement as supplemented by the addition of the Rule 430A information
contained in the prospectus filed with the Commission pursuant to Rule 424(b).
The term "Prepricing Prospectus" as used in this Agreement means the prospectus
subject to completion in the form included in the registration statement at the
time of the initial filing of the registration statement with the Commission,
and as such prospectus shall have been amended from time to time prior to the
date of the Prospectus. Any reference in this Agreement to the Registration
Statement, Prospectus or any Prepricing Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein as of the date of
such Registration Statement, Prospectus or Prepricing Prospectus, as the case
may be, and any reference to any amendment or supplement to the Registration
Statement, Prospectus or any Prepricing Prospectus shall be deemed to refer to
and include any documents filed after such date under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") which, upon filing, are
incorporated by reference therein. As used herein, the term "Incorporated
Documents" means the documents which at the time are incorporated by reference
in the Registration Statement, Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto.
2. Agreements to Sell and Purchase. Upon the basis of
the representations, warranties and agreements contained herein and subject to
all the terms and conditions set forth herein, the Company hereby agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company the respective principal amount of Notes
set forth opposite the name of such Underwriter in Schedule I hereto (or such
principal amount of Notes increased as set forth in Section 11 hereof) at a
purchase price equal to _____% of the principal amount thereof.
3. Terms of Public Offering. The Registrants have been
advised by you that the Underwriters propose to
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make a public offering of their respective portions of the Notes as soon after
the Registration Statement and this Agreement have become effective as in your
judgment is advisable and initially to offer the Notes upon the terms set forth
in the Prospectus.
4. Delivery of the Notes and Payment Therefor. Delivery
to the Underwriters of and payment for the Notes shall be made at the office of
Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10:00 A.M., New
York City time, on November ____, 1996 (the "Closing Date"). The place of
closing for the Notes and the Closing Date may be varied by agreement between
you and the Company.
Payment for the Notes shall be made in immediately available
funds against delivery to you of one or more global certificates representing
the Notes registered in the name of Cede & Co., as custodian for The Depository
Trust Company ("DTC"), with any transfer tax payable in connection with the
transfer of the Notes to the Underwriters duly paid.
5. Agreements of the Registrants. The Registrants
jointly and severally agree with the several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Notes may
commence, the Registrants will endeavor to cause the Registration Statement or
such post-effective amendment to become effective as soon as possible and will
advise you promptly and, if requested by you, will confirm such advice in
writing, when the Registration Statement or such post-effective amendment has
become effective.
(b) The Registrants will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any request by
the Commission for amendment of or a supplement to the Registration Statement,
any
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Prepricing Prospectus or the Prospectus or for additional information; (ii) of
the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of the suspension of qualification of the
Notes for offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) within the period of time referred to in
paragraph (f) below, of any change in the Registrants' condition (financial or
other), business, prospects, properties, net worth or results of operations, or
of the happening of any event, which makes any statement of a material fact
made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act to be
stated therein or necessary in order to make the statements therein not
misleading, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply in all material respects with the Act or any
state securities law specified in Section 5(g). If at any time the Commission
shall issue any stop order suspending the effectiveness of the Registration
Statement, the Registrants will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible time.
(c) The Registrants will furnish to you, without
charge, four (4) signed copies (three (3) of which may be photocopies) of the
registration statement as originally filed with the Commission and of each
amendment thereto, including financial statements and all exhibits thereto, and
will also furnish to you, without charge, such number of conformed copies of
the registration statement as originally filed and of each amendment thereto,
but without exhibits and schedules, as you may reasonably request.
(d) The Registrants will not (i) file any amendment
to the Registration Statement or make any amendment or supplement to the
Prospectus (including the filing of any document which, upon filing, becomes an
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Incorporated Document) of which you shall not previously have been advised or
to which you shall reasonably object after being so advised and (ii) so long
as, in the opinion of counsel for the Underwriters, a prospectus is required to
be delivered in connection with sales by any Underwriter or dealer, subject to
the preceding clause (i), file any information, documents or reports pursuant
to the Exchange Act without delivering a copy of such information, documents or
reports to you prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this
Agreement, the Registrants have delivered to you, without charge, in such
quantities as you have requested, copies of each form of the Prepricing
Prospectus. The Registrants consent to the use, in accordance with the
provisions of the Act and with the securities or Blue Sky laws of the
jurisdictions within the United States in which the Notes are offered by the
several Underwriters and by dealers, prior to the date of the Prospectus, of
each Prepricing Prospectus so furnished by the Registrants.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer, the
Registrants will expeditiously deliver to each Underwriter and each dealer,
without charge, as many copies of the Prospectus (and of any amendment or
supplement thereto) as you may reasonably request. The Registrants consent to
the use of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions within the United States in which the Notes are
offered by the several Underwriters and by all dealers to whom Notes may be
sold, both in connection with the offering and sale of the Notes and for such
period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If during
such period of time any event shall occur
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that in the judgment of the Company or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Act or any state securities law specified in Section 5(g), the
Registrants will forthwith prepare and, subject to the provisions of paragraph
(d) above, file with the Commission an appropriate supplement or amendment
thereto, and will expeditiously furnish to the Underwriters and dealers
designated by you a reasonable number of copies thereof. Notwithstanding
anything herein to the contrary, after the expiration of nine months after the
effective date of the Registration Statement, the cost of preparing, delivering
and furnishing to the Underwriters any such amended or supplemented prospectus
shall be borne by the Underwriters. In the event that the Company and you
agree that the Prospectus should be amended or supplemented, the Company, if
reasonably requested by you and not prohibited by law, will promptly issue a
press release announcing or disclosing the matters to be covered by the
proposed amendment or supplement.
(g) The Registrants will cooperate with you and with
counsel for the Underwriters in connection with the registration or
qualification of the Notes for offering and sale by the several Underwriters
and by dealers under the securities or Blue Sky laws of such jurisdictions
within the United States as you may designate and will file such consents to
service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided that in no event shall any
Registrant be obligated 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 service
of process in suits, other than those arising out of the offering or sale of
the Notes, in any jurisdiction where it is not now so subject.
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(h) The Company will make generally available to its
security holders an earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement (as defined in Rule 158 under the Act) and ending not later than 15
months thereafter, as soon as practicable after the end of such period, which
earnings statement shall satisfy the provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the
Company will furnish to you promptly after they become available, a copy of
each report of the Company mailed to stockholders or filed with the Commission
(unless the Company has, in good faith, requested confidential treatment with
respect to such filing) or the New York Stock Exchange, and during the period
which is 18 months after the date hereof, such other information concerning the
Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by you pursuant to
Section 10 or Section 11 hereof) or if this Agreement shall be terminated by
the Underwriters because of any failure or refusal on the part of the
Registrants to comply in any material respect with the terms of this Agreement,
the Registrants jointly and severally agree to reimburse you for all
out-of-pocket expenses (including reasonable fees and expenses of counsel for
the Underwriters) incurred by you in connection herewith. If this Agreement
shall terminate or be terminated after execution pursuant to the second
paragraph of Section 10 hereof or by you pursuant to Section 10 or Section 11
hereof, the Registrants shall not then be under any liability to reimburse the
Underwriters, for any out-of-pocket expenses incurred by them in connection
herewith, except as provided in Section 9 hereof.
(k) The Company will apply the net proceeds from the
sale of the Notes to be sold by it hereunder
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substantially in accordance with the description set forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the
Registrants will timely file the Prospectus pursuant to Rule 424(b) under the
Act and will advise you of the time of such filing.
(m) Except as set forth in the Registration
Statement, during the period beginning on the date hereof and continuing to and
including the Closing Date, the Registrants will not, without the prior written
consent of Xxxxx Xxxxxx Inc., sell, offer to sell, solicit an offer to buy,
contract to sell, pledge or otherwise transfer or dispose of any debt
securities substantially similar to the Notes or securities exchangeable for,
or convertible into, debt securities substantially similar to the Notes.
(n) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, none of the Registrants has taken, nor
will any Registrant take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Notes to facilitate the sale or resale of the
Notes.
(o) The Company will use its best efforts to have
the Notes approved for listing, subject to notice of issuance, on the New York
Stock Exchange.
6. Representations and Warranties of the Registrants.
The Registrants jointly and severally represent and warrant to each Underwriter
that:
(a) Each Prepricing Prospectus included as part of
the registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.
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(b) The Registration Statement in the form in which
it became or becomes effective and also in such form as it may be when any
post-effective amendment thereto shall become effective, complied or will
comply in all material respects with the provisions of the Act and did not or
will not at any such times contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and the Prospectus and any
supplement or amendment thereto when filed with the Commission under Rule
424(b) under the Act complied or will comply in all material respects with the
provisions of the Act and did not or will not at any such times contain an
untrue statement of material fact or omit to state a material fact necessary in
order to make the statements, in light of the circumstances in which they are
made, not misleading, except that this representation and warranty does not
apply (i) to statements in or omissions from the Registration Statement or the
Prospectus made in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of any Underwriter
expressly for use therein, or (ii) to that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the Trustee
(the "Form T-1").
(c) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Delaware with
full corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered or qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify or be in good
standing does not, individually or in the aggregate, have a material adverse
effect on the condition (financial or other), business,
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properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined), taken as a whole (a "Material Adverse
Effect").
(d) All the Company's consolidated subsidiaries
(collectively, the "Subsidiaries") are listed in Exhibit A hereto. Each
Subsidiary, other than Missouri Logos, a partnership, is a Guarantor and has
guaranteed the Notes pursuant to its Guarantee. Each Subsidiary is a
corporation or partnership duly organized, validly existing and in good
standing in the jurisdiction of its organization, with full corporate or
partnership power and authority, as the case may be, to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered or qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of such
Subsidiary; all the outstanding shares of capital stock or other equity
interest of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and nonassessable, and, except as set forth in the
Registration Statement, are owned by the Company directly, or indirectly
through one of the other Subsidiaries and, except for the liens under, as the
case may be, the Existing Credit Agreement and the New Credit Agreement (each
as defined in the Registration Statement) as described in the Registration
Statement and the Prospectus, free and clear of any lien, adverse claim,
security interest, equity or other encumbrance except for any such lien,
adverse claim, security interest equity or other encumbrance which would not
reasonably be expected, individually or in the aggregate, to materially impair
the value of such shares or other equity interests.
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(e) There are no legal or governmental proceedings
pending or, to the knowledge of the Registrants, threatened, against the
Company or any of the Subsidiaries, or to which the Company or any of the
Subsidiaries, or to which any of their respective properties is subject, that
are required to be described in the Registration Statement or the Prospectus
but are not so described as required; and all pending legal or governmental
proceedings to which the Company or any of the Subsidiaries is a party or that
affect any of their respective properties including ordinary routine litigation
incidental to the business, that are not described in the Prospectus and as to
which an adverse determination is not remote, would not, if determined
adversely to the Company or any of the Subsidiaries, individually or in the
aggregate, result in a Material Adverse Effect.
(f) There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement that are not described or filed as required by the Act.
(g) Neither the Company nor any of the Subsidiaries
is in violation (A) of its certificate or articles of incorporation or by-laws,
or other organizational documents, or (B) of any law, ordinance, administrative
or governmental rule or regulation applicable to the Company or any of the
Subsidiaries, including, without limitation, (i) any foreign, Federal, state or
local law or regulation relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) any Federal or state law relating to
discrimination in the hiring, promotion or pay of employees or any applicable
federal or state wages and hours laws, or (iii) any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder (collectively, "ERISA"), or of any decree of any court or
governmental agency or body having jurisdiction
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over the Company or any of the Subsidiaries except for, in the case of the
foregoing clause (B), such violations which would not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(h) Neither the Company nor any of the
Subsidiaries is in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any other agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, except for such defaults
which would not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(i) None of the issuance or sale of the Notes, the
execution, delivery or performance of this Agreement, the Indenture or the
Notes by the Registrants or the consummation by the Registrants of the
transactions contemplated hereby (A) requires any consent, approval,
authorization or other order of or registration or filing with, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may be required for the registration of the Notes
under the Act and the Exchange Act, the qualification of the Indenture under
Trust Indenture Act, compliance with the securities or Blue Sky laws of various
jurisdictions and compliance with the Conduct Rules of the National Association
of Securities Dealers, Inc. ("NASD"), all of which (except such compliance with
the Conduct Rules of the NASD) have been or will be effected in accordance with
this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (B) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, any agreement, indenture,
lease or other instrument to which the Company or any of the Subsidiaries is a
party or by which any of them
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or any of their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(j) KPMG Peat Marwick LLP, who have certified or
shall certify the financial statements of the Company and Outdoor East, L.P.
included in the Registration Statement and the Prospectus (or any amendment or
supplement thereto) are independent public accountants as required by the Act.
McGrail, Merkel, Xxxxx & Associates, who have certified or shall certify the
financial statements of FKM Advertising Co., Inc. included in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Act.
(k) The historical and pro forma financial
statements, together with related schedules and notes, included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) comply as to form in all material respects with the requirements of
the Act; such historical financial statements, together with related schedules
and notes, present fairly the consolidated financial position, results of
operations, cash flows and changes in financial position of the entities to
which they relate on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; such pro forma financial
statements, together with related notes, have been prepared on a basis
consistent with such
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historical statements, except for pro forma adjustments specified therein, and
give effect to assumptions made on a reasonable basis and present fairly the
historical and proposed transactions contemplated by the Registration Statement
and the Prospectus; and the other financial and statistical information and
data included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), historical and pro forma, are accurately
presented in all material respects and prepared on a basis consistent in all
material respects with such financial statements and the books and records of
the entities to which they relate.
(l) The execution and delivery of, and the
performance by the Registrants of their obligations under this Agreement have
been duly and validly authorized by the Registrants, and this Agreement has
been duly executed and delivered by the Registrants and constitutes the valid
and legally binding agreement of the Registrants, enforceable against the
Registrants in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws.
(m) The Indenture has been duly qualified under the
Trust Indenture Act. The execution and delivery of, and the performance by the
Registrants of their obligations under the Indenture have been duly and validly
authorized by the Registrants, and the Indenture has been duly executed and
delivered by the Registrants and constitutes the valid and legally binding
agreement of the Registrants, enforceable against each of them in accordance
with its terms, except (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the remedy
of specific performance and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which the
proceedings may be brought.
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(n) The Notes have been duly authorized and validly
issued by the Company, and when the Notes are executed and authenticated in
accordance with the provisions of the Indenture and delivered to you against
payment therefor in accordance with the terms of this Agreement, the Notes will
be entitled to the benefits of the Indenture and will constitute valid and
legally binding agreements of the Company, enforceable against the Company in
accordance with their terms, except (i) the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) the remedy of specific performance and other forms of equitable relief may
be subject to certain equitable defenses and to the discretion of the court
before which the proceedings may be brought.
(o) The Guarantees have been duly authorized and
validly issued by each of the Guarantors, and when the Notes are executed and
authenticated in accordance with the Indenture and delivered to you against
payment therefor in accordance with the terms of this Agreement, the Notes will
be entitled to the benefit of the Guarantees, and the Guarantees will
constitute valid and legally binding agreements of each of the Guarantors,
enforceable against each of the Guarantors in accordance with their terms set
forth in the Indenture, except (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which the proceedings may be brought.
(p) Except as disclosed in the Registration
Statement and the Prospectus (or any amendment or supplement thereto),
subsequent to the respective dates as of which such information is given in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto),
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neither the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries, taken as a whole, and there has not been any change in the
capital stock, or material increase in the short-term debt or long-term debt,
of the Company or any of the Subsidiaries, or any material adverse change, or
any development involving, or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
(q) Each of the Company and the Subsidiaries has
good and marketable title to all property (real and personal) described in the
Prospectus as being owned by it, free and clear of all liens, claims, security
interests or other encumbrances except such as are described in the
Registration Statement and the Prospectus or in a document filed as an exhibit
to the Registration Statement or which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
materially impair the value of such property to the Company or such Subsidiary,
as the case may be, and all the property described in the Prospectus as being
held under lease or sublease by each of the Company and the Subsidiaries is
held by it under valid, subsisting and enforceable leases or subleases with
such exceptions as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect or materially impair the value of
such leasehold estate to the Company or such Subsidiary, as the case may be,
and such leases and subleases are in full force and effect; neither the Company
nor any of the Subsidiaries has any notice of any claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any of the
Subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any
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such lease or sublease, which claim could reasonably be expected individually
or in the aggregate to have a Material Adverse Effect.
(r) The Company has not distributed and, prior to
the later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Notes, will not distribute any offering material in
connection with the offering and sale of the Notes other than the Registration
Statement, the Prepricing Prospectus, the Prospectus or other materials, if
any, permitted by the Act.
(s) The Company and each of the Subsidiaries has
such permits, licenses, franchises and authorizations including, without
limitation, under any applicable Environmental Laws, of governmental or
regulatory authorities ("permits") as are necessary to own its respective
properties and to conduct its business in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus and with such exceptions as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; the
Company and each of the Subsidiaries has fulfilled and performed all its
material obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time or both would allow, revocation
or termination thereof or results in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as described
in the Prospectus, none of such permits contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries.
(t) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity
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19
with generally accepted accounting principles and to maintain accountability
for assets; (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 existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(u) To the Registrants' knowledge, neither the
Company nor any of its Subsidiaries nor any employee or agent of the Company or
any Subsidiary has made any payment of funds of the Company or any Subsidiary
or received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
(v) The Company and each of the Subsidiaries have
filed all tax returns required to be filed, which returns are complete and
correct in all material respects, and neither the Company nor any Subsidiary is
in default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, except for such failures to
file or defaults in payment of a character not required to be disclosed in the
Prospectus and which would not reasonably be expected to have a Material
Adverse Effect.
(w) No holder of any security of the Company has
any right to require registration of any security of the Company because of the
filing of the Registration Statement or consummation of the transactions
contemplated by this Agreement.
(x) The Registrants have not taken, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes.
(y) The Company and the Subsidiaries own or
possess all patents, trademarks, trademark registrations,
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20
service marks, service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets and rights described in the Prospectus as being owned
by them or any of them or necessary for the conduct of their respective
businesses, and the Registrants are not aware of any claim to the contrary or
any challenge by any other person to the rights of the Company and the
Subsidiaries with respect to the foregoing.
(z) The Incorporated Documents heretofore filed,
when they were filed (or, if any amendment with respect to any such document
was filed, when such amendment was filed), conformed in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder, and any further Incorporated Documents so filed will, when they are
filed, conform in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder; no such document when it was
filed (or, if an amendment with respect to any such document was filed, when
such amendment was filed), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading; and no such further document, when it is filed,
will contain an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(aa) The Company is not now, and after sale of the
Notes to be sold by it hereunder and application of the net proceeds from such
sale as described in the Prospectus under the caption "Use of Proceeds" will
not be, an "investment company" within the meaning of the Investment Company
Act of 1940, as amended.
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21
(bb) The Company has complied with all provisions of
Florida Statutes, Section 517.075, relating to issuers doing business with
Cuba.
(cc) No labor problem exists with the employees of
the Company or any of the Subsidiaries or, to the knowledge of the Registrants,
is imminent that, in either case, could reasonably be expected individually or
in the aggregate to result in any Material Adverse Effect.
(dd) The Company and each of the Subsidiaries
maintain insurance of the types and in the amounts that are reasonable for the
businesses operated by them, including, but not limited to, insurance covering
real and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and liability, all of
which insurance is in full force and effect.
(ee) None of the Registrants is, nor will any of
them be, after giving effect to the issuance of the Notes and the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby including without limitation the issuance of
the Guarantees and the guarantee by the Guarantors of the Company's obligations
under the New Credit Agreement (as defined in the Registration Statement), (i)
insolvent, (ii) left with unreasonably small capital with which to engage in
its anticipated businesses or (iii) incurring debts beyond its ability to pay
such debts as they mature.
7. Indemnification and Contribution. (a) The
Registrants, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any
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22
Prepricing Prospectus or in the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or arising out of or based upon 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, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom and in
conformity with the information furnished in writing to the Company by or on
behalf of any Underwriter expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of
any such loss, claim, damage, liability or expense arising from the sale of the
Notes by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the
Company has delivered the Prospectus to such Underwriter in requisite quantity
on a timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which the Registrants may
otherwise have.
(b) If any action, suit or proceeding shall be
brought against any Underwriter or any person controlling any Underwriter in
respect of which indemnity may be sought against the Registrants, such
Underwriter or such controlling person shall promptly notify the parties
against whom indemnification is being sought (the "indemnifying parties"), and
such indemnifying parties shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Such Underwriter
or any such controlling person shall have the right to employ
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23
separate counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
indemnifying parties have agreed in writing to pay such fees and expenses, (ii)
the indemnifying parties have failed to assume the defense and employ counsel,
or (iii) the named parties to any such action, suit or proceeding (including
any impleaded parties) include both such Underwriter or such controlling person
and the indemnifying parties and such Underwriter or such controlling person
shall have been advised in writing by its counsel that representation of such
indemnified party and any indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (whether or
not such representation by the same counsel has been proposed) due to actual or
potential differing interests between them (in which case the indemnifying
party shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection with
any one such action, suit or proceeding or separate but substantially similar
or related actions, suits or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons
not having actual or potential differing interests with you or among
themselves, which firm shall be designated in writing by Xxxxx Xxxxxx Inc., and
that all such fees and expenses shall be reimbursed as they are incurred. The
indemnifying parties shall not be liable for any settlement of any such action,
suit or proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the plaintiff in any
such action, suit or proceeding, the indemnifying parties agree to indemnify
and hold harmless any Underwriter, to the extent provided in the preceding
paragraph, and any such controlling person from and against any loss, claim,
damage,
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24
liability or expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless each Registrant, its directors, its
officers who sign the Registration Statement, and any person who controls such
Registrant within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, to the same extent as the foregoing indemnity from the
Registrants to each Underwriter, but only with respect to information furnished
in writing by or on behalf of such Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Registrants, any of their directors, any such officer, or
any such controlling person based on the Registration Statement, the Prospectus
or any Prepricing Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Registrants by paragraph (b) above (except that if the Registrants shall
have assumed the defense thereof such Underwriter shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Registrants, their directors, any such officer,
and any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall
be in addition to any liability which any Underwriter may otherwise have.
(d) If the indemnification provided for in this
Section 7 is unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages, liabilities or expenses
referred to therein, then an indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such
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25
losses, claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Registrants on the
one hand and the Underwriters on the other hand from the offering of the Notes,
or (ii) if the allocation provided by clause (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 (i) above but also the relative fault
of the Registrants on the one hand and the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Registrants on
the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault of
the Registrants on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by a Registrant on the
one hand or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Registrants and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by a 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 paragraph (d) above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities and expenses referred
to in paragraph (d) above shall be deemed to
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26
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price of the Notes underwritten by it and distributed to the public exceeds the
amount of any damages which 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amounts of the Notes set forth opposite their names
in Schedule I hereto (or such principal amounts of the Notes increased as set
forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or 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 action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or
expenses for which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall be paid by the indemnifying party to
the indemnified party as such losses, claims, damages, liabilities or expenses
are incurred. The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Registrants set forth
in this Agreement shall remain operative and in full force and effect,
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27
regardless of (i) any investigation made by or on behalf of any Underwriter or
any person controlling any Underwriter, the Registrants, their directors or
officers or any person controlling the Registrants, (ii) acceptance of any
Notes and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Registrants, their directors or officers, or any person
controlling the Registrants, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7.
8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Notes hereunder are subject to
the following conditions:
(a) If, at the time this Agreement is executed
and delivered, it is necessary for the registration statement or a
post-effective amendment thereto to be declared effective before the offering
of the Notes may commence, the registration statement or such post-effective
amendment shall have become effective not later than 5:30 P.M. (or in the case
of a Registration Statement filed pursuant to Rule 462(b) under the Act, not
later than 10:00 P.M.), New York City time, on the date hereof, or at such
later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission.
(b) Subsequent to the effective date of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition (financial or
other), business, properties, net worth, or results of operations of the
Company or the Subsidiaries not contemplated by the Prospectus, which in your
reasonable opinion would
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28
materially, adversely affect the market for the Notes, or (ii) any event or
development relating to or involving the Company or any officer or director of
the Company which makes any material statement made in the Prospectus untrue in
any material respect or which, in the opinion of the Company and its counsel or
you and your counsel, requires the making of any addition to or change in the
Prospectus in order to state a material fact required by the Act or any other
law to be stated therein or necessary in order to make the statements therein
not misleading, if amending or supplementing the Prospectus to reflect such
event or development would, in your opinion materially adversely affect the
market for the Notes.
(c) You shall have received on the Closing Date,
an opinion of Xxxxxx & Dodge LLP, counsel for the Company, dated the Closing
Date and addressed to you to the effect that:
(i) The Company is a corporation duly
incorporated and validly existing in good standing under the laws of
the State of Delaware with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto);
(ii) The Notes (A) have been duly
authorized and (B) when issued and executed and authenticated in
accordance with the provisions of the Indenture and delivered to you
in accordance with the terms of this Agreement, will be entitled to
the benefits of the Indenture, and will constitute valid and legally
binding agreements of the Company in accordance with their terms
except that (i) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and other forms
of equitable relief may be
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29
subject to certain equitable defenses and to the discretion of the
court before which the proceedings may be brought;
(iii) The Registration Statement has
become effective under the Act and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) has been
made in accordance with Rule 424(b);
(iv) (A) The Company has the corporate
power and authority to enter into this Agreement and to issue, sell
and deliver the Notes to the Underwriters as provided herein, and (B)
this Agreement has been duly authorized, executed and delivered by the
Company;
(v) (A) The Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended, (B) the
Company has the corporate power and authority to enter into the
Indenture, and (C) the Indenture has been duly authorized, executed
and delivered by the Company and is a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms except that (a) the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) the remedy of specific performance
and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which the
proceedings may be brought;
(vi) The Notes, the Indenture and the
Guarantees conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus
under the caption "Description of Notes";
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30
(vii) Neither the issuance, sale or
delivery of the Notes, nor the execution, delivery or performance of
this Agreement or the Indenture, or compliance by the Company with all
provisions of this Agreement or the Indenture, nor consummation by the
Company of the transactions contemplated hereby or thereby constitutes
or will constitute a violation or breach of, or a default under, the
certificate of incorporation or bylaws or other organizational
documents of the Company or any of the Subsidiaries or any agreement,
indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their
respective properties is bound and that is an exhibit to the
Registration Statement, or will result in the creation or imposition
of any lien, charge or encumbrance pursuant to any such agreement,
indenture, lease or other instrument upon any property or assets of
the Company or any of the Subsidiaries, nor will any such action
result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel, to
be applicable to the Company, the Subsidiaries or any of their
respective properties;
(viii) No consent, approval, authorization
or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental body,
agency, or official is required on the part of the Company for the
valid issuance and sale of the Notes pursuant to this Agreement or the
Indenture, except where such have been obtained under the Act, the
Exchange Act and the Trust Indenture Act or such as may be required
under state securities or Blue Sky laws governing the purchase and
distribution of the Notes or such as may be required under the rules
of the NASD;
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31
(ix) Each of the Registration Statement,
as of its effective date, and the Prospectus, as of its date (except
for the financial statements and the notes thereto and the schedules
and other financial and statistical data included therein, as to which
such counsel need not express any opinion) comply as to form in all
material respects with the requirements of the Act; and
(x) the Incorporated Documents (other
than the financial statements (including the notes thereto) and
schedules and other financial and statistical data contained or
incorporated by reference therein, as to which such counsel need
express no opinion), when filed, or as amended or supplemented,
complied as to form in all material respects with the requirements of
the Exchange Act.
In rendering their opinion as aforesaid, counsel may
rely upon an opinion or opinions, each dated the Closing Date, of other counsel
retained by them or the Company as to laws of any jurisdiction other than the
United States or the State of Delaware, provided that (1) each such local
counsel is acceptable to you, (2) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is delivered to you and
is, in form and substance reasonably satisfactory to you and your counsel, and
(3) counsel shall state in their opinion that they believe that they and the
Underwriters are justified in relying thereon.
For purposes of the opinions in the foregoing clauses
(ii) and (v) insofar as such opinions relate to enforceability, such counsel
may assume that the applicable law chosen by the parties is the same as
applicable Massachusetts law.
In addition to the matters set forth above, such
opinion shall also contain a statement to the effect that, although counsel has
not undertaken, except as otherwise indicated in their opinion, to determine
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32
independently, and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof (including
a review and discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused it to believe
(i) that the Registration Statement (including the Incorporated Documents), and
any amendment thereto, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) that the Prospectus (including the Incorporated Documents), or any
amendment or supplement to the Prospectus, as of its respective date and as of
the Closing Date, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included or incorporated by reference in the
Registration Statement or the Prospectus).
(d) You shall have received on the Closing Date,
an opinion of Kean, Miller, Hawthorne, X'Xxxxxx, XxXxxxx & Xxxxxx, L.L.P.,
counsel to the Company, dated the Closing Date and addressed to you to the
effect that:
(i) The Company is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify does not have,
individually or in the aggregate, a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of
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33
operations of the Company and the Subsidiaries taken as a whole;
(ii) Each of the Subsidiaries is a
corporation or partnership duly organized and validly existing in good
standing under the laws of the jurisdiction of its organization, with
full corporate or partnership power and authority, as the case may be,
to own, lease, and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto); and all the outstanding shares of
capital stock or other equity interests of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company, except as disclosed in
the Registration Statement and the Prospectus, directly, or indirectly
through one of the other Subsidiaries free and clear of any perfected
security interest, or, to the best knowledge of such counsel after
reasonable inquiry, any other security interest, lien, adverse claim,
equity or other encumbrance;
(iii) The authorized and outstanding
capital stock of the Company is as set forth under the caption
"Capitalization" in the Prospectus; and the authorized capital stock
of the Company conforms in all material respects as to legal matters
to the description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
(iv) All the outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, and are fully paid and nonassessable and free of any pre-
emptive or to the best knowledge of such counsel, similar rights;
(v) To the best knowledge of such
counsel (A) other than as described or contemplated in the Prospectus
(or any supplement thereto), there are no legal or governmental
proceedings pending or
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34
threatened against the Company or any of the Subsidiaries, or to which
the Company or any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto) and
(B) there are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto)
or to be filed as an exhibit to the Registration Statement that are
not described or filed as required, as the case may be;
(vi) Neither the issuance or sale of the
Guarantees, nor the execution, delivery or performance of this
Agreement, or the Indenture, or compliance by the Guarantors with all
the provisions of this Agreement or the Indenture, nor consummation by
the Guarantors of the transactions contemplated hereby or thereby
constitutes or will constitute a violation or breach of, or a default
under, the certificate of incorporation or bylaws or other
organizational documents of the Guarantors or any agreement,
indenture, lease or other instrument to which they are a party or by
which any of them or any of their respective properties is bound and
that is an exhibit to the Registration Statement, or will result in
the creation or imposition of any lien, charge or encumbrance pursuant
ot any such agreement, indenture, lease or other instrument upon any
property or assets of any of the Guarantors, nor will any such action
result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky
laws), judgment, injunction, order or decree known to such counsel, to
be applicable to the Guarantors or any of their respective properties;
(vii) No consent, approval, authorization
or other order of, or registration or filing with, any
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35
court, regulatory body, adminstirative agency or other governmental
body, agency, or official is required to be obtained or made by any
Guarantor for the valid issuance and sale of the Guarantees pursuant
to this Agreement or the Indenture, except where such have been
obtained under the Act, the Exchange Act and the Trust Indenture Act
or such as may be required under state securities or Blue Sky laws
governing the purchase and distribution of the Notes;
(viii) The Guarantees have been duly
authorized and validly issued by each of the Guarantors, and when the
Notes are executed and authenticated in accordance with the Indenture
and delivered to you in accordance with the terms of this Agreement,
the Notes will be entitled to the benefits of the Guarantees, and the
Guarantees will constitute valid and legally binding agreements of
each of the Guarantors in accordance with their terms set forth in the
Indenture except that (i) the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) the remedy of specific
performance and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before
which the proceedings may be brought;
(ix) (A) Each of the Guarantors has the
corporate or partnership power and authority, as the case may be, to
enter into this Agreement and to issue its Guarantee as provided
herein, and (B) this Agreement has been duly authorized, executed and
delivered by each of the Guarantors; and
(x) (A) Each of the Guarantors has the
corporate or partnership power and authority, as the case may be, to
enter into the Indenture, and (B) the Indenture has been duly
authorized, executed and
- 35 -
36
delivered by each of the Guarantors and is a legal, valid and binding
agreement of each of the Guarantors, enforceable against each of them
in accordance with its terms except that (a) enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) the remedy of
specific performance and other forms of equitable relief may be
subject to certain equitable defenses and to the discretion of the
court before which the proceedings may be brought.
In addition to the matters set forth above, such
opinion shall also contain a statement to the effect that, although counsel has
not undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof (including
a review and discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused it to believe
(i) that the Registration Statement (including the Incorporated Documents), and
any amendment thereto, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) that the Prospectus (including the Incorporated Documents), or any
amendment or supplement to the Prospectus, as of its respective date and as of
the Closing Date, contained any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial and
- 36 -
37
statistical data included or incorporated by reference in the Registration
Statement or the Prospectus).
(e) You shall have received on the Closing Date,
an opinion of Xxxxxxx X. Xxxxx, III, Esq., general counsel of the Company,
dated the Closing Date and addressed to you to the effect that:
(i) The Company and each of the
Subsidiaries has full corporate power and authority, and all necessary
governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental
regulatory officials and bodies (except where the failure so to have
any such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not
have a material adverse effect on the business, properties, operations
or financial condition of the Company and the Subsidiaries taken as a
whole), to own their respective properties and to conduct their
respective businesses as now being conducted, as described in the
Prospectus;
(ii) To the best of his knowledge, other
than as described or contemplated in the Prospectus (or any supplement
thereto), there are no legal or governmental proceedings pending or
threatened against the Company or any of the Subsidiaries, or to which
the Company or any of the Subsidiaries, or any of their property, is
subject, which are required to be described in the Registration
Statement or Prospectus (or any amendment or supplement thereto);
(iii) To the bests of his knowledge, there
are no agreements, contracts, indentures, leases or other instruments,
that are required to be described in the Registration Statement or the
Prospectus (or any amendment or supplement thereto) or to be filed as
an exhibit to the Registration Statement that are not described or
filed as required, as the case may be;
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38
(iv) Neither the Company nor any of the
Subsidiaries (A) is in violation of its respective certificate or
articles of incorporation or bylaws, or other organizational
documents, (B) to the best knowledge of such counsel after reasonable
inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other
evidence of indebtedness, except as may be disclosed in the Prospectus
or (C) is in violation any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of
the Subsidiaries or of any decree of any court or governmental agency
or body having jurisdiction over the Company or any of the
Subsidiaries which default or violation in the case of either clause
(ii) or (iii), either individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect;
(v) Except as described in the
Prospectus, there are no outstanding options, warrants or other rights
calling for the issuance of, and such counsel does not know of any
commitment, plan or arrangement to issue, any shares of capital stock
of the Company or any security convertible into or exchangeable or
exercisable for capital stock of the Company;
(vi) Except as described in the
Prospectus, there is no holder of any security of the Company or any
other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, the Notes or the right to have any securities
of the Company included in the registration statement or the right, as
a result of the filing of the registration statement, to require
registration under the Act of any securities of the Company; and
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39
(vii) The statements in the Prospectus
under the captions "Risk Factors -- Regulation of Outdoor Advertising"
and "Business -- Regulation", insofar as such statements constitute a
summary of regulatory matters relating to the outdoor advertising
industry, fairly describe the regulatory matters relating to such
industry.
In addition to the matters set forth above, such opinion shall
also contain a statement to the effect that nothing has come to the attention
of such counsel that has caused it to believe (i) that the Registration
Statement (including the Incorporated Documents), and any amendment thereto, at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or (ii) that the Prospectus
(including the Incorporated Documents), or any amendment or supplement to the
Prospectus, as of its respective date, and as of the Closing Date, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included or incorporated by reference in the Registration
Statement or the Prospectus).
(f) You shall have received on the Closing Date
an opinion of Xxxxxxxxxx & Xxxxx LLP, counsel for the Underwriters, dated the
Closing Date and addressed to you, with respect to the matters referred to in
clauses (ii), (iii), (iv) (with respect to paragraph (B) only), (v) (with
respect to paragraphs (A) and (C) only), and (ix) of the foregoing clause (c),
the matters referred to in clause (viii), (ix) (with respect to paragraph (B)
only) and (x) (with respect to paragraph (B) only) of the foregoing clause (d)
and such other related matters as you may request.
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40
In addition to the matters set forth above, such opinion shall
also contain a statement to the effect that, although such counsel has not
undertaken, except as otherwise indicated in their opinion, to determine
independently, and does not assume any responsibility for, the accuracy or
completeness of the statements in the Registration Statement, such counsel has
participated in the preparation of the Registration Statement and the
Prospectus, including review and discussion of the contents thereof (including
a review and discussion of the contents of all Incorporated Documents), and
nothing has come to the attention of such counsel that has caused it to believe
(i) that the Registration Statement (including the Incorporated Documents), and
any amendment thereto, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) that the Prospectus (including the Incorporated Documents), any amendment
or supplement to the Prospectus, as of its respective date and as of the
Closing Date, contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and the notes thereto and the schedules and other
financial and statistical data included or incorporated by reference in the
Registration Statement or the Prospectus).
(g) You shall have received letters addressed to
you and dated the date hereof and the Closing Date from (i) KPMG Peat Marwick
LLP and (ii) McGrail, Merkel, Xxxxx & Associates, each independent certified
public accountants, substantially in the forms heretofore approved by you.
(h)(i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been
- 40 -
41
taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectus (or any amendment or supplement thereto); (iii) there shall
not have been, since the respective dates as of which information is given in
the Registration Statement and the Prospectus (or any amendment or supplement
thereto), except as may otherwise be stated in the Registration Statement and
Prospectus (or any amendment or supplement thereto), any material adverse
change in the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries taken as
a whole; (iv) the Company and the Subsidiaries shall not have any liabilities
or obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Registration Statement or the
Prospectus (or any amendment or supplement thereto); and (v) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 8(h) and in Section
8(i) hereof.
(i) The Registrants shall not have failed at or
prior to the Closing Date to have performed or complied with any of their
agreements herein contained and required to be performed or complied with by
them hereunder at or prior to the Closing Date in any material respect.
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42
(j) The Notes shall have been listed or approved
for inclusion upon notice of issuance on the New York Stock Exchange.
(k) The Company shall have consummated the Common
Stock Offering with net cash proceeds to the Company of at least $40 million.
(l) The Registrants shall have furnished or
caused to be furnished to you such further certificates and documents as you
shall have reasonably requested.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.
Any certificate or document signed by an officer of any of the
Registrants and delivered to you, or to your counsel, shall be deemed a
representation and warranty by such Registrant to each Underwriter as to the
statements made therein.
9. Expenses. The Registrants jointly and severally
agree to pay the following costs and expenses and all other costs and expenses
incident to the performance by them of their obligations hereunder: (i) the
preparation, printing or reproduction, and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto),
each Prepricing Prospectus, the Prospectus, and each amendment or supplement to
any of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the registration statement, each Prepricing Prospectus, the
Prospectus, and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Notes; (iii) the preparation, printing, authentication, issuance and delivery
of the Notes, including any stamp taxes in connection with the original
issuance and sale of the Notes; (iv) the printing (or
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43
reproduction) and delivery of this Agreement, the Indenture, the preliminary
and supplemental Blue Sky Memoranda, the Master Agreement Among Underwriters
and dealer contracts; (v) the registration of the Notes under the Exchange Act
and the listing of the Notes on the New York Stock Exchange; (vi) the
registration or qualification of the Notes for offer and sale under the
securities or Blue Sky laws of the several states as provided in Section 5(g)
hereof (including the reasonable fees, expenses and disbursements of counsel
for the Underwriters relating to the preparation, printing or reproduction, and
delivery of the preliminary and supplemental Blue Sky Memoranda and such
registration and qualification); (vii) the filing fees in connection with any
filings required to be made with the NASD; (viii) the transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Notes (excluding any such
expenses incurred by the Underwriters for their representatives); and (ix) the
fees and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company. Except as
provided by this Section 9 or Section 5(j) hereof, the Underwriters will pay
all of their own costs and expenses, including fees of their counsel, taxes on
resales of the Notes by them and any advertising expenses in connection with
any offers they make.
10. Effective Date of Agreement. This Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Notes may commence, when
notification of the effectiveness of the Registration Statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Registrants, by notifying you, or by you by notifying the Company.
- 43 -
44
If any one or more of the Underwriters shall fail or refuse to
purchase Notes which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate principal amount of the Notes which such
defaulting Underwriter or Underwriters are obligated but fail or refuse to
purchase is not more than one-tenth of the aggregate principal amount of the
Notes which the Underwriters are obligated to purchase on the Closing Date,
each non-defaulting Underwriter shall be obligated, severally, in the
proportion which the principal amount of the Notes set forth opposite its name
in Schedule I hereto bears to the aggregate principal amount of the Notes set
forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify in accordance with Section 20 of the Master
Agreement Among Underwriters of Xxxxx Xxxxxx Inc., to purchase the Notes which
such defaulting Underwriter or Underwriters are obligated, but fail or refuse,
to purchase. If any one or more of the Underwriters shall fail or refuse to
purchase Notes which it or they are obligated to purchase on the Closing Date
and the aggregate principal amount of the Notes with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of the
Notes which the Underwriters are obligated to purchase on the Closing Date and
arrangements satisfactory to you and the Company for the purchase of such Notes
by one or more non-defaulting Underwriters or other party or parties approved
by you and the Company are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case which does not result in
termination of this Agreement, 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 the
Prospectus or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any such default of any such Underwriter under this
Agreement. The term "Underwriter" as used in this Agreement includes, for all
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45
purposes of this Agreement, any party not listed in Schedule I hereto who, with
your approval and the approval of the Company, purchases Notes which a
defaulting Underwriter is obligated, but fails or refuses, to purchase.
Any notice under this Section 10 may be given by telegram,
telecopy or telephone but, if by telephone, shall be subsequently confirmed in
writing.
11. Termination of Agreement. This Agreement shall be
subject to termination in your absolute discretion, without liability on the
part of any Underwriter to the Registrants, by notice to the Company, if prior
to the Closing Date, (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either federal or
New York State authorities, or (iii) there shall have occurred any outbreak or
escalation of hostilities or other international or domestic calamity, crisis
or material adverse change in political, financial or economic conditions, the
effect of which on the financial markets of the United States is such as to
make it, in your reasonable judgment, impracticable to market the Notes on the
terms and in the manner contemplated in the Prospectus or to enforce contracts
for the resale of the Notes by the Underwriters. Notice of such termination
may be given to the Company by telegram, telecopy or telephone and, if by
telephone, shall be subsequently confirmed in writing.
12. Information Furnished by the Underwriters. The
statements set forth in the last paragraph on the cover page, the stabilization
legend on the inside cover page, and the statements in the first and third
paragraphs under the caption "Underwriting" in any Prepricing Prospectus and in
the Prospectus, constitute the only information furnished by or on behalf of
the Underwriters through you as such information is referred to in Sections
6(b) and 7 hereof.
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46
13. Miscellaneous. Except as otherwise provided in
Sections 5, 10 and 11 hereof, notice given pursuant to any provision of this
Agreement shall be in writing and shall be delivered (i) if to any Registrant,
at the office of the Company at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx,
Xxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, III, General Counsel; or (ii) if
to you, care of Xxxxx Xxxxxx Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of
the several Underwriters, the Registrants, their directors and officers, and
the other controlling persons referred to in Section 7 hereof and their
respective successors and assigns, to the extent provided herein, and no other
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Underwriter of any of the
Notes in his status as such purchaser.
14. Applicable Law; Counterparts. This Agreement shall
be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed within the State of New
York.
This Agreement may be signed in various counterparts which
together constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among the Registrants and the several Underwriters.
Very truly yours,
XXXXX ADVERTISING COMPANY
By:
---------------------------------
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47
Name:
--------------------------
Title:
-------------------------
THE LAMAR CORPORATION
INTERSTATE LOGOS, INC.
XXXXX ADVERTISING OF COLORADO
SPRINGS, INC.
XXXXX ADVERTISING OF XXXXXXX,
INC.
XXXXX ADVERTISING OF MOBILE,
INC.
XXXXX ADVERTISING OF SOUTH
GEORGIA, INC.
XXXXX ADVERTISING OF SOUTH
MISSISSIPPI, INC.
XXXXX ADVERTISING OF
TALLAHASSEE, INC.
TLC PROPERTIES, INC.
MISSOURI LOGOS, INC.
NEBRASKA LOGOS, INC.
OKLAHOMA LOGO SIGNS, INC.
UTAH LOGOS, INC.
OHIO LOGOS, INC.
GEORGIA LOGOS, INC.
KANSAS LOGOS, INC.
LAMAR AIR, LLC
LAMAR PENSACOLA TRANSIT, INC.
LAMAR TENNESSEE LIMITED
PARTNER, INC.
LAMAR TENNESSEE LIMITED
PARTNERSHIP
LAMAR TENNESSEE LIMITED
PARTNERSHIP II
LAMAR TEXAS GENERAL PARTNER, INC.
LAMAR TEXAS LIMITED
PARTNERSHIP
MICHIGAN LOGOS, INC.
MINNESOTA LOGOS, INC.
- 47 -
48
MINNESOTA LOGOS, A PARTNERSHIP
MISSISSIPPI LOGOS, INC.
NEW JERSEY LOGOS, INC.
SOUTH CAROLINA LOGOS, INC.
TENNESSEE LOGOS, INC.
TEXAS LOGOS, INC.
TLC PROPERTIES II, INC.
VIRGINIA LOGOS, INC.
By:
--------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned.
- 48 -
49
XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
CIBC WOOD GUNDY SECURITIES CORP.
By: XXXXX XXXXXX INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
- 49 -
50
SCHEDULE I
XXXXX ADVERTISING COMPANY
Principal Amount
Underwriter of Notes
------------------------------------------------------ ----------------------
Xxxxx Xxxxxx Inc. . . . . . . . . . . . . . . . . . .
Chase Securities Inc. . . . . . . . . . . . . . . . .
CIBC Wood Gundy Securities Corp. . . . . . . . . . .
------------
Total $225,000,000
============
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51
Exhibit A
---------
Subsidiaries of Xxxxx Advertising Company
-----------------------------------------
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