EXHIBIT 1
EXECUTION COPY
February 20, 2001
Danka Business Systems PLC
00000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
General Counsel and Senior Vice President
Ladies and Gentlemen:
Danka Business Systems PLC, an English public limited company (the
"Company") and Banc of America Securities LLC ("BAS") enter into this dealer-
------- ---
manager agreement (the "Agreement"). This Agreement confirms the understanding
---------
between the Company and BAS in accordance with which the Company has retained
BAS to act as its exclusive dealer manager, on the terms and subject to the
conditions set forth herein, in connection with the Company's proposed
refinancing of its:
$200 million principal amount of
6.75% Convertible Subordinated Notes Due 2002 (the "Notes")
-----
It is contemplated that the Company will offer to exchange cash and/or new
debt securities (the "New Notes") of the Company for the Notes. All new debt
securities will be registered under the Securities Act of 1933, as amended. The
offer shall be made upon the terms and subject to the conditions set forth in
the Prospectus (the "Prospectus") dated February 20, 2001 (including all
information incorporated by reference therein and exhibits, appendices and
attachments thereto, as amended, modified or supplemented from time to time)
(the "Offer").
-----
The holders of the Notes are hereinafter referred to as the "Holders."
-------
Capitalized terms used and not defined in this Agreement shall have the
meanings assigned to them in the Prospectus.
1. Engagement. Subject to the terms and conditions set forth herein:
----------
(a) The Company hereby exclusively retains BAS as the dealer manager
for the Company in connection with the Offer until the date on which the Offer
expires or is earlier terminated in accordance with Section 3 of this Agreement.
BAS will use reasonable efforts, in accordance with its customary practices, to
solicit tenders of Notes in the Offer and to perform in connection with the
Offer the services that are customarily performed by dealer managers in
connection with similar exchange offers. Without limitation to the foregoing,
BAS will advise the Company with respect to the
terms and timing of the Offer and assist the Company in preparing any documents
(including the Prospectus) to be delivered by the Company to the Holders or used
by the Company in connection with the Offer (collectively, the "Documents").
---------
(b) The Company acknowledges that BAS has been retained solely to
provide the services set forth in this Agreement. In rendering such services,
BAS shall act as an independent contractor, and any duties of BAS arising out of
its engagement hereunder shall be owed solely to the Company. The Company also
acknowledges that (i) the Documents have been or will be prepared and approved
by and are the sole responsibility of the Company, (ii) BAS shall not be deemed
to act as an agent of the Company or any of its affiliates (except that in any
jurisdiction in which the Offer is required to be made by a registered licensed
broker or dealer, it shall be deemed made by BAS on behalf of the Company) and
neither the Company nor any of its affiliates or representatives shall be deemed
to act as the agent of BAS, and (iii) no securities broker, dealer, bank or
trust company shall be deemed to act as the agent of BAS or as the agent of the
Company or any of its affiliates, and BAS shall not be deemed to act as the
agent of any securities broker, dealer, bank or trust company. The term
"affiliate" as used herein means, with respect to any party, any entity directly
or indirectly controlled by, controlling or under common control with such
party. BAS shall not have any liability in tort, contract or otherwise to the
Company or to any of its affiliates for any act or omission on the part of any
securities broker or dealer, any bank or trust company or any other person who
is not an affiliate of BAS, except to the extent that such liability arises out
of the gross negligence or willful misconduct of BAS. The Company authorizes
BAS, in accordance with its customary practices and consistent with industry
practice and all applicable laws, to communicate generally regarding the Offer
with the Holders and their authorized agents. BAS agrees that, subject to
Section 7(a) hereto, without the prior consent of the Company, it will not
disseminate any written material to beneficial owners or Holders of the Notes
for or in connection with the Offer other than the Documents on behalf of the
Company. XXX agrees not to make any representations to beneficial owners or
Holders in connection with the Offer that are inconsistent with written
information (including the information set forth in the Documents) that has been
approved in writing by the Company.
(c) It is contemplated that X.X. Xxxx & Co., Inc. will act as
information agent (the "Information Agent") in connection with the Offer and, as
-----------------
such, will advise BAS at least daily as to such matters relating to the Offer as
BAS may reasonably request. The Company shall arrange with HSBC Bank USA to act
as the depositary/exchange agent (the "Exchange Agent") in connection with the
--------------
Offer, and as such to advise BAS at least daily as to such matters relating to
the Offer as BAS may reasonably request. In addition, the Company hereby
authorizes BAS and its representatives to communicate with the Information
Agent, the Exchange Agent, The Depository Trust Company, and others as
appropriate with respect to matters relating to the Offer.
(d) The Company agrees to advise BAS promptly of the occurrence of
any event, of which it becomes aware, which could cause or require the Company
to withdraw, rescind or modify the Documents. In addition, if any event occurs
as a result
2
of which it shall be necessary to amend or supplement any Documents in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading in any material respect, the Company shall, promptly upon
becoming aware of any such event, advise BAS of such event and, as promptly as
practicable under the circumstances, prepare and furnish copies of such
amendments or supplements of any such Documents to BAS, so that the statements
in such Documents, as so amended or supplemented, will not, in light of the
circumstances under which they were made, be misleading in any material respect.
(e) The Company will not refer to BAS in any written material without
the prior written approval of BAS. The Company, upon receiving such approval,
will promptly furnish BAS with as many copies of such approved materials as BAS
may reasonably request. BAS will not refer to the Company in any written
material without the prior written approval of the Company; provided however, if
the Company has approved the materials, BAS may use the same or substantially
similar references in any other written materials without further consultation
or approval of the Company.
(f) The Company acknowledges that BAS is a securities firm that is
engaged in securities trading and brokerage activities as well as in providing
investment banking and financial advisory services. In the ordinary course of
trading and brokerage activities, BAS and its affiliates may at any time hold
long or short positions, and may trade or otherwise effect transactions, for
their own account or the accounts of customers, in debt or equity securities of
the Company and its affiliates or other entities that may be involved in the
transactions contemplated hereby; provided, that BAS agrees to comply in all
material respects with all applicable laws, regulations and rules in connection
therewith.
(g) The Company will promptly inform BAS of any litigation or
administrative or similar proceeding (of which it becomes aware) which is
initiated or threatened with respect to the Offer.
(h) The Company acknowledges that its rights and obligations, and
those of its affiliates, under any credit or other agreement with BAS or any of
its affiliates that currently or hereafter may exist are, and shall be, separate
and distinct from the rights and obligations of the parties pursuant to this
Agreement. The term "affiliate" as used herein means, with respect to any party,
any entity directly or indirectly controlled by, controlling or under common
control with such party.
2. Fees and Expenses.
-----------------
(a) In consideration of services provided hereunder as the dealer
manager, the Company shall pay BAS the cash fees as set forth in that certain
engagement letter entered into by and between BAS and the Company dated as of
October 4, 2000, as amended on February, 20, 2001 (the "Engagement Letter"). The
provisions of the Engagement Letter regarding fees to be paid by the Company for
services of BAS are incorporated by reference herein as if restated herein in
full.
3
(b) Whether or not any Notes are tendered pursuant to the Offer or in
the event that this Agreement is terminated by either the Company or BAS in
accordance with the provisions contained herein, the Company shall pay (i) all
expenses of the preparation, printing, mailing and publishing of the Documents,
(ii) any and all amounts payable to securities brokers and dealers (including
BAS), commercial banks, trust companies and nominees as reimbursement of their
customary mailing and handling expenses incurred in forwarding the Documents to
their customers, and any forwarding agent, and all other expenses of the
Company, (iii) all reasonable fees and expenses of the Information Agent and the
Exchange Agent, (iv) all advertising charges, (v) all other expenses in
connection with the Offer, and (vi) shall reimburse BAS for all reasonable
expenses incurred by BAS in connection with its services as dealer manager under
this Agreement, including its reasonable out-of-pocket expenses and the
reasonable fees and expenses of its counsel.
3. Termination. Subject to Section 11 hereof, this Agreement may be
-----------
terminated by the Company or BAS at any time upon written notice to the other.
Upon termination by the Company, BAS shall be entitled to its full fees,
described in Section 2 of this Agreement, in the event that, at any time prior
to six months from such termination by the Company, the Company (or any of its
affiliates) consummates an offer to acquire Notes in a form substantially
similar to the Offer in a transaction or series of transactions in which BAS did
not act as dealer manager to the Company or its affiliates, as applicable.
4. Representations and Warranties by the Company. The Company
---------------------------------------------
represents and warrants to BAS, on the date hereof, on each date that any
Documents are published, sent, given or otherwise distributed, and on the date
of exchange of cash and/or New Notes for the existing Notes by the Company
pursuant to the Offer and upon the consummation of the Offer that:
(a) The Company (i) has been duly incorporated and is validly
existing as a public limited company organized under the laws of England and
Wales, (ii) has all necessary corporate power and authority (A) to execute and
deliver this Agreement, (B) to perform all of its obligations hereunder, (C) to
issue the New Notes, and (D) to consummate the Offer in accordance with its
terms, and (iii) shall use reasonable efforts to take on a timely basis all
actions necessary or required in relation to the Offer, provided failure to do
so would not have a material adverse effect on the Offer.
(b) The Company has taken all necessary corporate action to authorize
the making and consummation of the Offer and appointment of BAS as dealer
manager and the execution, delivery and performance by the Company of this
Agreement. This Agreement has been duly executed and delivered by the Company
and assuming due authorization, execution and delivery by BAS, constitutes a
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms subject to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium, arrangement and
similar laws now or hereafter affecting creditors' rights generally from time to
time in effect and to general equitable principles, as well as concepts of
materiality, reasonableness, good faith and fair dealing, and except
4
to the extent that rights to indemnity under this Agreement may be limited by
federal or state securities laws. The New Notes issuable in the Offer have been
duly authorized and duly and properly reserved for issuance, and upon issuance
in accordance with the terms of the Offer, such New Notes will be validly
issued, fully paid and non-assessable and not subject to any preemptive or
similar rights, contractual or otherwise.
(c) The Offer and the Documents (including the documents incorporated
or deemed to be incorporated by reference into the Documents) comply and (as
amended or supplemented, if amended or supplemented) will comply in all material
respects with all applicable requirements of the federal and state securities
laws; and the Documents (including the documents incorporated or deemed to be
incorporated by reference into the Documents) do not and (as amended or
supplemented, if amended or supplemented) will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(d) The Offer pursuant to the terms of the Documents, and the
execution, delivery and performance by the Company of this Agreement and the
transactions contemplated hereby (i) do not and will not conflict with, or
result in a breach or violation of, or constitute a default under, any of the
provisions of the indenture under which the Notes were issued dated as of March
13, 1995 (the "Indenture") or of the memorandum or articles of association of
the Company, or any other note, indenture, loan agreement, mortgage or other
agreement, instrument or undertaking to which the Company or any of its
subsidiaries or affiliates is a party or by which any of them is bound or to
which any of their properties or assets is subject, (ii) will not result in any
violation of any law, rule or regulation or any order of any court or of any
other governmental agency or instrumentality having jurisdiction over the
Company or any of its subsidiaries or affiliates or any of its or their
respective properties or assets, and (iii) will comply in all material respects
with the requirements of all applicable foreign, federal, local or state
securities laws, rules and regulations.
(e) No consent, approval, authorization or order of, or registration,
qualification or filing with, any court or regulatory authority or other
governmental agency or instrumentality or third party is or will be required in
connection with the making or consummation of the Offer or the execution,
delivery or performance by the Company of this Agreement and the transactions
contemplated hereby, except (i) as such may be stated in the Prospectus, (ii)
the Offer must comply in all respects with the provisions of the Securities Act
of 1933, as amended (the "Act"), the Securities Exchange Act of 1934 (the
---
"Exchange Act"), and the rules and regulations under the Act and the Exchange
------------
Act (the "Rules and Regulations"), and the various state securities (or "blue
---------------------
sky") laws, (iii) the credit agreement between the Company and various other
parties dated as of December 5, 1996, as it has been amended as of December 5,
2000 and as it may be amended from time to time (the "Credit Agreement"), (iv)
the tax retention operating leases of the Company or (v) such as individually or
in the aggregate would not have a material adverse effect on the financial
condition of the Company and its subsidiaries taken as a whole (a "Material
Adverse Effect").
5
(f) There is no action, suit or proceeding before or by any court or
governmental agency or body now pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries which
would adversely affect the Offer pursuant to the terms of the Documents or the
effectiveness of this Agreement except as such may be stated in the Prospectus
or such as would not have a Material Adverse Effect.
(g) The New Notes have been duly authorized by the Company for
issuance and exchange pursuant to the Offer and, when duly executed,
authenticated, issued and delivered in accordance with the terms of the
respective indenture for the relevant New Notes against payment of the
consideration therefor as contemplated by the Offer, will constitute valid and
binding obligations on the Company which are enforceable in accordance with
their terms, except as (i) the enforceability thereof may be limited by
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium,
arrangement or similar laws now or hereafter affecting creditors' rights
generally and (ii) rights of acceleration, if applicable, and the availability
of equitable remedies may be limited by equitable principles of general
applicability (regardless of whether such enforceability is considered in a
proceeding in equity or law), as well as concepts of materiality,
reasonableness, good faith and fair dealing. The Holders of the New Notes shall
be entitled to the rights and benefits of the respective indenture for the
relevant New Notes, unless such Holder expressly has waived such rights.
The representations and warranties set forth in this Section 4 shall
remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Indemnified Person (as defined in
Annex A attached hereto), or (ii) any termination of this Agreement. Nothing
herein shall constitute an agreement by BAS or its affiliates to purchase or
underwrite the Notes or any other financing.
5. Conditions and Obligations. The obligations of BAS to act as a dealer
--------------------------
manager hereunder shall at all times be subject, in its discretion, to the
conditions that:
(a) All representations and warranties of the Company contained
herein or in any certificate or writing delivered hereunder at all times during
the Offer shall be true and correct in all material respects.
(b) The Company at all times during the Offer shall have performed,
in all material respects, all of its obligations hereunder required as of such
time to have been performed by it.
(c) Counsel for the Company shall have delivered to BAS an opinion,
on the date of closing of the Offer, reasonably acceptable to BAS, dated such
date and substantially in the form attached hereto as Annex B.
-------
(d) BAS has been paid its fees and expenses in full simultaneous with
the date of closing of the Offer.
6. Registration Statement Offering Circular/Prospectus and Offering
----------------------------------------------------------------
Materials.
---------
6
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), under the Act, and the applicable Rules
----------
and Regulations, a Registration Statement on Form S-4, including an Offering
Circular/Prospectus (including all exhibits thereto or Incorporated Documents
therein), covering the registration of the New Notes issuable in exchange for
the existing Notes pursuant to the Offer.
(i) The term "Registration Statement" as used in this Agreement
----------------------
shall mean such registration statement, including financial statements,
schedules and exhibits, in the form in which it became or becomes, as the case
may be, effective and, in the event of any amendment thereto or the filing of
any abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations relating thereto after the effective date of such registration
statement, shall also mean (from and after the effectiveness of such amendment
or the filing of such abbreviated registration statement) such registration
statement as so amended, together with any such abbreviated registration
statement.
(ii) The term "Offering Circular/Prospectus" as used in this
----------------------------
Agreement shall mean the final offering circular/prospectus included in the
Registration Statement. Notwithstanding the foregoing, if any revised offering
circular/prospectus shall be provided to BAS by the Company for use in
connection with the Exchange Offer that differs from the offering
circular/prospectus referred to in the immediately preceding sentence (whether
or not such revised prospectus is required to be filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations relating thereto), the term
"Offering Circular/Prospectus" shall refer to such revised offering
circular/prospectus from and after the time it is first provided to BAS for such
use. Any reference to the Registration Statement or the Offering
Circular/Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 11 of Form S-4 under the Act,
as of the date of the Registration Statement or the Offering
Circular/Prospectus, as the case may be, and any reference to any amendment or
supplement to the Registration Statement or the Offering Circular/Prospectus
shall be deemed to refer to and include any documents filed after such date
under the Exchange Act, and the Rules and Regulations, which, upon filing, are
incorporated by reference therein, as required by Item 11 of Form S-4.
(iii) As used in this Agreement, the term "Incorporated
------------
Documents" means the documents which at the time are incorporated by reference
---------
in the Registration Statement, the Offering Circular/Prospectus or any amendment
or supplement thereto. The terms "supplement" and "amendment" or "supplemented"
and "amended" as used herein with respect to the Offering Circular/Prospectus
shall include all documents deemed to be incorporated by reference in the
Offering Circular/Prospectus that are filed subsequent to the date of the
Offering Circular/Prospectus and prior to the termination of the Offer by the
Company with the Commission pursuant to the Exchange Act and the Rules and
Regulations.
(b) The Registration Statement, Offering Circular/Prospectus and the
related letters from BAS to securities brokers, dealers, commercial banks, trust
companies and other nominees, letters to beneficial owners of Notes, the Letter
of
7
Transmittal and any newspaper announcements, if any, press releases and other
offering materials and information the Company may use or prepare, approve or
authorize for use in connection with the Offer, the registration statements or
prospectuses relating to the Distributions (as defined in the Registration
Statement) and related documents relating to the Offer are herein collectively
referred to as the "Exchange Offer Materials."
------------------------
7. Use of Exchange Offer Material.
------------------------------
(a) The Exchange Offer Materials have been or will be prepared and
approved by, and are the sole responsibility of, the Company. The Company shall,
to the extent permitted by law, use its reasonable efforts to disseminate the
Exchange Offer Materials to each registered holder of any Notes, as soon as
practicable after the Commencement Date, pursuant to Rule 13e-4 under the
Exchange Act, and comply with its obligations thereunder. Thereafter, to the
extent practicable until three days prior to the expiration date of the Offer,
including through any extension of the expiration date, the Company shall use
its reasonable efforts to cause copies of such Exchange Offer Materials and a
return envelope to be mailed to each person who becomes a Holder of record of
any Notes. The Company acknowledges and agrees that BAS may use the Exchange
Offer Materials as specified herein without assuming any responsibility for
independent verification on the part of BAS other than the information supplied
by BAS in writing about BAS. The Company represents and warrants to BAS that BAS
may rely on the accuracy and completeness of any information delivered to them
by or on behalf of the Company without assuming any responsibility for
independent verification of such information and without performing or receiving
any appraisal or evaluation of the assets or liabilities of the Company.
(b) The Company agrees to provide BAS with as many copies as may be
reasonably requested of the Exchange Offer Materials. The Company agrees that
within a reasonable time prior to using or filing with the Commission or any
governmental or regulatory entity or agency (an "Other Agency"), including the
------------
National Association of Securities Dealers, Inc. (the "NASD"), of any Exchange
----
Offer Materials, it will submit copies of such materials to BAS and its counsel
and will give reasonable consideration to any comments from BAS and its counsel,
thereon. The Company agrees prior to the termination of the Offer, before
amending or supplementing the Registration Statement or the Offering
Circular/Prospectus, to furnish copies of drafts to, and consult with, BAS and
its counsel within a reasonable time in advance of filing with the Commission of
any amendment or supplement to the Registration Statement, the Offering
Circular/Prospectus or the other Exchange Offer Materials and will give
reasonable consideration to BAS and its counsel's comments, if any, thereon.
(c) The Company has furnished or shall use its reasonable efforts to
furnish to BAS, or cause the transfer agents or registrars for the Notes to
furnish to BAS, as soon as practicable after the date hereof (to the extent not
previously furnished), cards or lists in reasonable quantities or copies thereof
showing the names of persons who were the Holders of record or, to the extent
available, the beneficial owners of the Notes, as of a recent date, together
with their addresses and the aggregate principal amount at maturity of the Notes
held by them. Additionally, the Company shall update, or cause the transfer
8
agents or registrars referred to above to update, such information from time to
time during the term of this Agreement as may be reasonably requested by BAS.
Except as otherwise provided herein, XXX agrees to use such information only in
connection with the Offer.
(d) The Company authorizes BAS to use the Exchange Offer Materials in
connection with the Offer and for such period of time as any such materials are
required by law to be delivered in connection therewith. BAS shall not have any
obligation to cause any Exchange Offer Materials to be transmitted generally to
the Holders of the Notes.
(e) The Company authorizes BAS to communicate with the Information
Agent or Exchange Agent appointed by the Company to act in such capacity in
connection with the Offer. The Company will arrange for the Exchange Agent to
advise BAS, as necessary and at least daily, as to such matters relating to the
Offer as BAS may reasonably request.
(f) The Company agrees that any reference to BAS in any Exchange
Offer Materials or in any newspaper announcement or press release or other
public document or written communication prepared by or on behalf of the Company
is subject to BAS's prior consent, which shall not be unreasonably withheld. XXX
agrees that any reference to the Company in any newspaper announcement or press
release or other public document or written communication prepared by or on
behalf of BAS is subject to the Company's prior written consent, which shall not
be unreasonably withheld; provided however, if the Company has approved the
materials, BAS may use the same or substantially similar references in any other
written materials without further consultation or approval of the Company.
8. Further Agreements of the Company. The Company agrees with BAS that:
---------------------------------
(a) The Company will use its reasonable efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible. The Company will use its reasonable
efforts to cause any abbreviated registration statement pursuant to Rule 462(b)
of the Rules and Regulations as may be required subsequent to the date that the
Registration Statement is declared effective to become effective as promptly as
possible. The Company will notify BAS, promptly after it shall receive notice
thereof, of the time when the Registration Statement, any subsequent amendment
to the Registration Statement or any abbreviated registration statement has
become effective or any supplement to the Offering Circular/Prospectus or
additional Exchange Offer Materials has been filed. If for any reason the filing
of the final form of Offering Circular/Prospectus is required under Rule
424(b)(3) of the Rules and Regulations, the Company will provide evidence
reasonably satisfactory to BAS that the Offering Circular/Prospectus contains
such information and has been filed with the Commission within the time period
prescribed. The Company will notify BAS promptly of any request by the
Commission for the amending or supplementing of the Registration
9
Statement or the Offering Circular/Prospectus or other Exchange Offer Materials
or for additional information relating to the Offer. Promptly upon the request
of BAS, the Company will prepare and file with the Commission any amendments or
supplements to the Registration Statement or Offering Circular/Prospectus or
other Exchange Offer Materials which, in the reasonable opinion of BAS's
counsel, may be necessary or advisable in connection with the Offer so long as
each amendment or supplement complies with all applicable laws. Where reasonably
practicable, the Company will promptly prepare and file with the Commission, and
promptly notify BAS of the filing of, any amendments or supplements to the
Registration Statement of Offering Circular/Prospectus or other Exchange Offer
Materials which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Offer is required to be delivered
under the Act and the Exchange Act, any event shall have occurred as a result of
which the Offering Circular/Prospectus or any other prospectus relating to the
Offer as then in effect would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Company will file no amendment or supplement to the Registration Statement or
Offering Circular/Prospectus or other Exchange Offer Materials or the
Incorporated Documents, or, prior to the end of the period of time in which the
Exchange Offer Materials relating to the Offer are required to be delivered
under the Act and the Exchange Act, file any document which upon filing becomes
an Incorporated Document, which shall not previously have been submitted to BAS
and its counsel a reasonable time prior to the proposed filing thereof and will
give reasonable consideration to BAS or its counsel's comments, if any, thereon,
subject, however, to compliance with the (i) Act, (ii) Exchange Act, (iii) Rules
and Regulations, and (iv) provisions of this Agreement.
(b) The Company will advise BAS, promptly after it shall receive
notice or obtain knowledge, of the issuance of any stop order by the Commission
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and the Company will promptly use
its reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal at the earliest possible moment if such stop order should be
issued.
(c) The Company will use its reasonable efforts to qualify the New
Notes issuable pursuant to the Exchange Offer under the securities laws of such
jurisdictions as BAS may reasonably designate (including without limitation
listing the Notes a stock exchange which constitutes a "recognized stock
exchange" for purposes of the United Kingdom Income Corporation Taxes Act 1988)
and to continue such qualifications in effect for so long as may be required for
purposes of the Exchange Offer, except that the Company shall not be required to
execute a general consent to service of process in any jurisdiction in which it
is not otherwise required to be so qualified or to so execute a general consent
to service of process. In each jurisdiction in which the Notes shall have been
qualified as above provided, the Company will make and file such statements and
reports in each year as are or may be required by the laws of such jurisdiction.
10
(d) The Company will make generally available to its security holders
and to BAS as soon as practicable an earnings statement covering a twelve-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of the Registration Statement that satisfies
the provisions of Section 11(a) of the Act and the Rules and Regulations.
(e) The Company will use its reasonable efforts to advise or cause
the Exchange Agent to advise BAS at 5:00 P.M., New York City time, or promptly
thereafter, daily (or more frequently if requested), by telephone or facsimile
transmission, with respect to Notes tendered as follows: (i) the aggregate
principal amount of Notes validly tendered and represented by certificates
physically held by the Exchange Agent or confirmations of receipt of book-entry
transfer of Notes pursuant to the procedures set forth in the Offer on such day;
(ii) the aggregate principal amount of any Notes properly withdrawn on such day;
and (iii) the cumulative totals of the principal amount of Notes in categories
(i) through (ii), inclusive, above.
(f) The Company agrees to reasonably and actively assist XXX in
consummating the Offer on a basis satisfactory to the Company. The Company
agrees that, during the terms of this Agreement, none of the Company or its
affiliates, officers or directors will directly or indirectly offer to purchase
any Notes from, or solicit any offer to sell any Notes by, any person or persons
other than through BAS.
(g) Without limiting Sections 2 and 3 of this Agreement, if the Offer
is not consummated by reason of any failure, refusal or inability on the part of
the Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of BAS's obligations hereunder, the Company will reimburse
BAS for all out-of-pocket expenses (including fees and disbursements of its
counsel) incurred by BAS in connection with the Offer.
9. Indemnification. In consideration of the engagement hereunder, the
---------------
Company shall indemnify and hold BAS harmless, and BAS shall indemnify and hold
the Company harmless, in each case to the extent set forth in Annex A hereto,
-------
which provisions are incorporated by reference herein and constitute a part
hereof.
10. Confidentiality. (a) BAS and its affiliates shall use all information
---------------
provided to it by or on behalf of the Company hereunder solely for the purpose
of providing the services which are the subject of this Agreement and the
transactions contemplated hereby and shall treat confidentially all such
information, provided that nothing herein shall prevent BAS from disclosing any
such information (i) pursuant to the order of any court or administrative or
similar proceeding, (ii) upon the request or demand of any regulatory authority
having jurisdiction over BAS or any of its affiliates, (iii) to the extent that
such information is or becomes publicly available other than by reason of
disclosure by BAS in contravention of this Agreement, or (iv) to its employees,
legal counsel, independent auditors and other experts or agents who need to know
such information and are informed of the confidential nature of such
information. With respect to clause (i) or (ii) above, prior to making any such
disclosure, BAS shall notify the Company of such order or request and use
commercially reasonable efforts to
11
cooperate with the Company, at the Company's expense, in seeking a protective
order or taking such action as the Company may reasonably request, consistent
with applicable law. Notwithstanding the foregoing provisions of this Section
10, BAS may share any information or matters relating to the Company, the Offer
and the transactions contemplated hereby, with its affiliates, and such
affiliates may likewise share information relating to the Company with BAS. BAS
shall be responsible for compliance by its affiliates with this Section 10.
(b) The Company agrees that it will not disclose this Agreement, the
contents hereof or the activities of BAS pursuant hereto, to any person without
the prior approval of BAS, except that the Company may disclose this Agreement
and the contents hereof (i) to its respective affiliates, employees, legal
counsel, independent auditors and other experts or agents who need to know such
information and are informed of the confidential nature of such information, or
(ii) as required by applicable law, regulation or compulsory legal process or in
the course of any legal or regulatory proceedings.
11. Survival. The agreements contained in Sections 1(b), 2, 9, 10, this
--------
Section 11 and Section 12 and the representations and warranties of the Company
set forth in Section 4 hereof shall survive any termination or cancellation of
this Agreement, any completion of the engagement provided by this Agreement and
any investigation made by or on behalf of the Company, BAS or any Indemnified
Person (as defined in Annex A) and shall survive the termination or consummation
-------
of the Offer.
12. Governing Law. This Agreement is governed by and shall be construed in
-------------
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within that State. THE COMPANY AND XXX IRREVOCABLY
AGREE TO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
13. Notices. Except as otherwise expressly provided in this Agreement,
-------
whenever notice is required by the provisions of this Agreement to be given to
(i) the Company, such notice shall be in writing addressed to Danka Business
Systems PLC, 00000 Xxxxx Xxxxxx Xxxxx, Xx. Xxxxxxxxxx, XX 00000, Attention:
Xxxxx X. Xxxxxx, facsimile number: (000) 000-0000 with a copy to Altheimer &
Gray, 00 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxx X. Xxxx,
facsimile number: (000) 000-0000, and (ii) BAS, such notice shall be in writing
addressed to BAS, Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, XX0-
000-00-00 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx,
facsimile number: (000) 000-0000, with a copy to Xxxxxx, Xxxxxx & Xxxxxxxxx,
0000 X Xxxxxx, Xxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxx, facsimile
number: (000) 000-0000.
14. Miscellaneous. This Agreement contains the entire agreement between
-------------
the parties relating to the subject matter hereof and supersedes all oral
statements and prior writings with respect thereto. This Agreement may not be
amended or modified except by a writing executed by each of the parties hereto.
Section headings herein are
12
for convenience only and are not part of this Agreement. This Agreement,
including any right to indemnification or contribution hereunder, is solely for
the benefit of the Company and BAS, and no other person (except for Indemnified
Persons, to the extent set forth in Annex A hereto) shall acquire or have any
-------
rights under or by virtue of this Agreement. If any term, provision, covenant or
restriction contained in this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable or against public policy, the
remainder of the terms, provisions, covenants and restrictions contained herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. The Company and BAS shall endeavor in good faith negotiations to
replace the invalid, void or unenforceable provisions with valid provisions, the
economic effect of which comes as close as possible to that of the invalid, void
or unenforceable provisions. Neither the failure nor any delay by any party in
exercising any right, power or privilege under this Agreement will operate as a
waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege. This Agreement may be executed in counterparts, each of which will be
deemed an original, but all of which, taken together, will constitute one and
the same instrument.
If the foregoing correctly sets forth your understanding, please indicate
your acceptance of the terms hereof by signing in the appropriate space below
and returning to BAS the enclosed duplicate originals hereof, whereupon this
letter shall become a binding agreement between us.
Very truly yours,
BANC OF AMERICA SECURITIES LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
By: /s/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Managing Director
Accepted and agreed to as of
the date first written above:
DANKA BUSINESS SYSTEMS PLC
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
13
ANNEX A
-------
to that certain Dealer Manager Agreement (the "Agreement")
----------------------------------------------------------
dated as of February 20, 2001
-----------------------------
between Banc of America Securities LLC and Danka Business Systems PLC
---------------------------------------------------------------------
The Company shall indemnify and hold harmless BAS and its affiliates and
officers, directors, employees, legal counsel, independent auditors, agents and
controlling persons (each a "BAS Indemnified Person") from and against any and
----------------------
all losses, claims, damages, liabilities and reasonable expenses, joint or
several, to which any such BAS Indemnified Person may become subject arising out
of or based upon (A) any untrue or alleged untrue statement of a material fact
contained in the Documents or any of the documents incorporated by reference
therein or in any amendment or supplement to any of the foregoing, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (except for information provided to the Company
in writing by BAS expressly for inclusion in the Documents as specified herein),
(B) any withdrawal, termination, rescission or modification of, or failure to
purchase Notes properly tendered pursuant to, the Offer, in each case except as
permitted in accordance with terms of the Offer, (C) any breach by the Company
of any representation or warranty or failure to comply with any of the
agreements set forth in the Agreement to which this Annex A is attached, or (D)
the transactions contemplated by the Agreement or the performance by BAS
thereunder in accordance with the terms thereof, or any claim, litigation,
investigation or proceedings relating to the foregoing (collectively, "BAS
---
Proceedings"), regardless of whether any of such BAS Indemnified Persons is a
-----------
party thereto, and to reimburse such BAS Indemnified Persons for any reasonable
legal or other reasonable out-of-pocket expenses as they are incurred in
connection with investigating or defending any of the foregoing, provided that
the foregoing indemnification will not, as to any BAS Indemnified Person, apply
to losses, claims, damages, liabilities or expenses to the extent that they are
judicially determined to have resulted from the gross negligence or willful
misconduct of such BAS Indemnified Person or from any material breach by BAS of
its obligations under the Agreement, and any such BAS Indemnified Person shall
promptly repay any legal or other expenses previously reimbursed to such BAS
Indemnified Person by the Company hereunder which are found to have resulted
from such gross negligence, willful misconduct or material breach.
The Company shall not be liable for any settlement of any lawsuit, claim or
proceeding effected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with such consent, the Company
agrees, subject to the provisions of this Annex A, to indemnify the BAS
-------
Indemnified Person from and against any loss, damage, liability or expense by
reason of such settlement.
BAS shall indemnify and hold harmless the Company and its affiliates and
officers, directors, employees, legal counsel, independent auditors, agents and
controlling persons (each a "Company Indemnified Person") from and against any
--------------------------
and all losses, claims, damages, liabilities and reasonable expenses, joint or
several, to which any such
Company Indemnified Person may become subject arising out of or based upon the
transactions contemplated by the Agreement to which this Annex A is attached or
the performance by the Company thereunder, or any claim, litigation,
investigation or proceedings relating to the foregoing ("Company Proceedings")
-------------------
regardless of whether any of such Company Indemnified Persons is a party
thereto, and to reimburse such Company Indemnified Persons for any reasonable
legal or other reasonable out of pocket expenses as they are incurred in
connection with investigating or defending any of the foregoing, but only to the
extent such losses, claims, damages, liabilities or expenses are judicially
determined to have resulted from (x) the gross negligence or willful misconduct
of any BAS Indemnified Person, or (y) any material misstatement or omission that
is made in reliance upon and in conformity with information relating to BAS
furnished in writing to the Company by BAS expressly for inclusion in the
Documents. The Company acknowledges that such information in (y) above refers
solely to the penultimate line on the cover page and the last line on the back
cover page of the Prospectus (and elsewhere in the Documents) specifying the
identity, address and phone number of BAS. The terms "BAS Indemnified Person"
and "Company Indemnified Person" are herein collectively referred to as an
"Indemnified Person" and the terms "BAS Proceedings" and "Company Proceedings"
are herein collectively referred to as "Proceedings."
BAS shall not be liable for any settlement of any lawsuit, claim or
proceeding effected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with such consent, BAS agrees,
subject to the provisions of this Annex A, to indemnify the Company Indemnified
-------
Person from and against any loss, damage or liability by reason of such
settlement.
Promptly after receipt by an Indemnified Person of notice of the
commencement of any Proceedings, such Indemnified Person will, if a claim in
respect thereof is to be made against the Company or BAS, as the case may be, as
Indemnifying Person (the "Indemnifying Person") for indemnification hereunder,
-------------------
notify such Indemnifying Person in writing of the commencement thereof; provided
that (i) the omission so to notify the Indemnifying Person will not relieve any
Indemnifying Person from any liability which it may have hereunder except to the
extent it has been materially prejudiced by such failure, and (ii) the omission
so to notify such Indemnifying Person will not relieve it from any liability
which it may have to such Indemnified Person otherwise than on account of the
Agreement or this Annex A. In case any such Proceedings are brought against any
-------
Indemnified Person and it notifies the applicable Indemnifying Person of the
commencement thereof, such Indemnifying Person will be entitled to participate
therein, and, to the extent that it may elect by written notice delivered to
such Indemnified Person, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person, provided that if the defendants in any
such Proceeding include both such Indemnified Person and the Indemnifying Person
and counsel to such Indemnified Person shall have reasonably concluded that
there may be legal defenses available to it which are different from or
additional to those available to the Indemnifying Person, such Indemnified
Person shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such Proceedings on
behalf of such Indemnified Person. Upon receipt of notice from the Indemnifying
Person to such
2
Indemnified Person of its election so to assume the defense of such Proceedings
and approval by such Indemnified Person of counsel, the Indemnifying Person
shall not be liable to such Indemnified Person for expenses incurred by such
Indemnified Person in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) such Indemnified Person shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the Indemnifying Person shall not be liable for the expenses of
more than one separate counsel, approved by the Indemnified Person, representing
the Indemnified Persons who are parties to such Proceedings), (ii) the
Indemnifying Person shall not have employed counsel reasonably satisfactory to
such Indemnified Person to represent such Indemnified Person within a reasonable
time after notice of commencement of the Proceedings, or (iii) the Indemnifying
Person shall have authorized in writing the employment of counsel for such
Indemnified Person; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). The Indemnifying Person shall not effect, without the prior written
consent of the Indemnified Person, any settlement of any pending or threatened
Proceedings unless such settlement includes an unconditional release from the
party bringing such Proceedings of such Indemnified Person and does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Person.
If at any time an Indemnified Person shall have requested an Indemnifying
Person to reimburse the Indemnified Party for reasonable fees and expenses of
counsel, such Indemnifying Person agrees that it shall be liable for any
settlement of the nature contemplated by the preceding paragraphs effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such Indemnifying Person of the aforesaid request, (ii)
such Indemnifying Person shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into, and
(iii) such Indemnifying Person shall not have reimbursed such Indemnified Person
in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
Indemnified Person shall have requested an Indemnifying Person to reimburse the
Indemnified Person for fees and expenses of counsel, an Indemnifying Person
shall not be liable for any settlement of the nature contemplated by the
preceding paragraphs effected without its consent if such Indemnifying Person
(a) reimburses such Indemnified Person in accordance with such request to the
extent it considers such request to be reasonable, and (b) provides written
notice to the Indemnified Person substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the applicable
Indemnifying Person shall contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Person on the one hand and such Indemnified Person
on the other hand, but also the relative fault of Indemnifying Person on the one
hand, and such Indemnified Person, on the other hand, as well as any relevant
equitable considerations. It is hereby agreed that the relevant benefits to the
Company
3
(including its affiliates, officers, directors, employees, legal counsel,
independent auditors, agents and controlling persons) on the one hand and BAS
(including its affiliates, officers, directors, employees, agents and
controlling persons) on the other hand shall be deemed to be in the same
proportion as (i) the aggregate principal amount of the Notes outstanding bears
to (ii) the fee paid or proposed to be paid to BAS pursuant to Section 2 of the
Agreement. The relative fault of the Indemnifying Person on the one hand and the
Indemnified Person on the other hand relating to an untrue or alleged untrue
statement of material fact or the omission or alleged omission to state a
material fact 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, or
relating to, the Indemnifying Person and its affiliates or the Indemnified
Person and its affiliates and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity, reimbursement and contribution obligations of an
Indemnifying Person under this Annex A shall be in addition to any liability
-------
which such Indemnifying Person may otherwise have to an Indemnified Person and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of such Indemnifying Person and any such
Indemnified Person. Notwithstanding the foregoing, in no event shall BAS be
liable under the foregoing indemnity, reimbursement and contribution provisions
in an amount in excess of the fees actually received by BAS pursuant to the
Agreement.
Capitalized terms used but not defined in this Annex A have the meanings
-------
assigned to such terms in the Agreement.
4
ANNEX B
-------
to that certain Dealer-Manager Agreement (the "Agreement"
---------------------------------------------------------
dated as of February 20, 2001
-----------------------------
between Banc of America Securities LLC and Danka Business Systems PLC
---------------------------------------------------------------------
Form of Company's Counsel Opinion
---------------------------------
Counsel for the Company shall deliver to BAS an opinion, on the date of
closing of the Offer, as defined herein, reasonably acceptable to BAS, dated
such date and covering substantially the following matters:
(a) The Company has been duly incorporated and is validly existing as
a public limited company under the laws of England and Wales;
(b) (i) The Company has duly taken all necessary corporate action to
authorize the making and consummation of the Offer pursuant to the terms of the
Documents and the execution, delivery and performance by the Company of this
Agreement, (ii) this Agreement has been duly executed and delivered by the
Company, and (iii) the New Notes issuable in the Offer have been duly authorized
and duly and properly reserved for issuance, and upon issuance in accordance
with the terms of the Offer, such New Notes will be validly issued, fully paid
and non-assessable and not subject to any preemptive or similar rights of the
holders of any class or series of securities of the Company under its memorandum
and articles of association;
(c) Assuming the due authorization, execution and delivery of this
Agreement by BAS, this Agreement constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, arrangement and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally, by general equitable
principles (whether considered in a proceeding in equity or at law) as well as
concepts of materiality, reasonableness, good faith and fair dealing, and except
to the extent that rights to indemnity under the Agreement may be limited by
federal or state securities laws.
(d) The Offer pursuant to the terms of the Documents, and the
execution, delivery and performance by the Company of this Agreement, the
Documents and the transactions related hereto and thereto (i) do not and will
not conflict with, or result in a breach or violation of, or constitute a
default under, or of the memorandum and articles of association of the Company,
(ii) to such counsel's knowledge, of any material note, indenture, loan
agreement, mortgage or other agreement, instrument or undertaking to which the
Company or any of its subsidiaries is a party or by which any of them is bound
or any of their respective subsidiaries is a party or by which any of them is
bound or their respective properties or assets is bound or (iii) will not result
in a violation of any United States federal securities laws or English corporate
law;
(e) To such counsel's knowledge, no consent, approval, authorization,
order of, or registration, qualification or filing with any court or regulatory
authority or governmental agency or instrumentality is or will be required in
connection with the making and consummation of the Offer pursuant to the terms
of the Documents or the execution, delivery and performance by the Company of
this Agreement and the transactions contemplated hereby except (i) the
Securities and Exchange Commission must approve the effectiveness of the Offer
and the Offer must be registered under and comply with the various state
secruities or "blue sky" laws, (ii) as may be required under the credit
agreement between the Company and various other parties dated as of December 5,
1996, as it has been amended as of December 5, 2000 and as it may be amended
from time to time, (iii) as may be required under the tax retention operating
leases of the Company or (iv) such as individually or in the aggregate would not
have a material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect");
(f) Such counsel shall additionally state that such counsel has
participated in conferences and discussions with the Company, BAS, BAS's counsel
and others in the course of the preparation by the Company of the Offer, at
which conferences the contents of the Prospectus and other related documents
were discussed, and , although such counsel has not independently verified and
is not passing upon and assumes no responsibility for the accuracy, completeness
or fairness of the information contained in the Registration Statement or the
Prospectus, no facts have come to such counsel's attention which lead such
counsel to believe that the Registration or the Prospectus contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances, under which they were made, not misleading (it being understood
that such counsel shall express no view with respect to the financial statements
and the related scheduling thereto, contained or incorporated by reference in
the Registration Statement or Prospectus); and
(g) Except as disclosed in the Prospectus, such counsel does not know
of any action, suit or proceeding before or by any court or governmental agency
or body now pending or, to the knowledge of such counsel, threatened against or
affecting the Company or any of its subsidiaries which would adversely affect
the Offer pursuant to the terms of the Documents or the effectiveness of this
Agreement.
Such counsel's opinion will include the customary qualifications and
exceptions of Altheimer & Gray.
2
