S&C Draft of October 9, 1996
CUC INTERNATIONAL INC.
COMMON STOCK
PAR VALUE $.01 PER SHARE
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UNDERWRITING AGREEMENT
(U.S. VERSION)
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October , 1996
Xxxxxxx, Xxxxx & Co.,
Xxxxxx Xxxxxxx & Co. Incorporated,
Bear Xxxxxxx & Co. Inc.,
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation,
Xxxxx Xxxxxx Inc.,
As representatives of the several
Underwriters named in Schedule I hereto,
c/o Goldman, Xxxxx & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Dear Sirs:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of CUC International Inc., a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 13,200,000 shares (the "Firm Shares") and, at the election of
the Underwriters, up to 1,980,000 additional shares (the "Optional Shares")
of Common Stock, par value $.01 per share ("Stock"), of the Company (the Firm
Shares and the Optional Shares which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Selling
Stockholders of up to a total of 3,795,000 shares of Stock (the
"International Shares"), including the over-allotment option thereunder,
through arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Xxxxxxx Xxxxx International and
Xxxxxx Xxxxxxx & Co. International Limited are acting as lead managers.
Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement and the
International Underwriting Agreement are hereby expressly made conditional on
one another. The Underwriters hereunder and the International Underwriters
are simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Stock between the two
syndicates. Two forms of prospectus are to be used in connection with the
offering and sale of shares of Stock contemplated by the foregoing, one
relating to the Shares hereunder and the other relating to the International
Shares. The latter form of prospectus will be identical to the former except
for certain substitute pages. Except as used in Sections 2, 3, 4, 9 and 11
herein, and except as the context may otherwise require, references
hereinafter to the Shares shall include all the shares of Stock which may be
sold pursuant to either this Agreement or the International Underwriting
Agreement, and references herein to any prospectus whether in preliminary or
final form, and whether as amended or supplemented, shall include both the
U.S. and the international versions thereof.
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-13537) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement") filed pursuant to Rule 462(b) under the Securities
Act of 1933, as amended (the "Act"), which will become effective upon filing,
no other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule
462(b) Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act, being hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (i) the information contained in the form of
final prospectus filed with the Commission pursuant to Rule 424(b) under the
Act in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time it
was declared effective or such part of the Rule 462(b) Registration
Statement, if any, became or thereafter becomes effective; and (ii) the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, at the time such part of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, became effective, each as amended at
the time such part of the registration statement became effective, being
hereinafter called
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the "Registration Statement"; such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, being hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
date of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement);
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material respects
to the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not 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, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents 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; and any
further documents so filed and incorporated by reference in the Prospectus or
any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder and
will not 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;
(iv) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the
Act and the rules and
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regulations of the Commission thereunder and do not and
will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the applicable filing date as to
the Prospectus and any amendment or supplement thereto, 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;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through you expressly for
use therein or by a Selling Stockholder expressly for use in the preparation of
the answers therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
change in the capital stock (other than increases in the outstanding common
stock of the Company as a result of the issuance of stock pursuant to any of
the Company's existing stock option plans or employee stock purchase plans or
upon the conversion of convertible securities outstanding on the date of this
Agreement, in accordance with the descriptions of such plans and convertible
securities in the Prospectus) or long-term debt or (other than any increase
of less than $50,000,000 incurred in the ordinary course of business of the
Company and its subsidiaries, including for the purpose of financing
acquisitions, or any decrease) short-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business,
management, financial position, stockholders' equity or results of operations
of the Company and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for
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the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each of FISI*Madison Financial Company, Benefit
Consultants, Inc., Entertainment Publishing Corp. ("Entertainment"),
Entertainment Publications Inc., Interval International, Inc., Davidson &
Associates, Inc., Sierra On-Line, Inc. and Ideon Group, Inc. (each a
"Subsidiary" and collectively, the "Subsidiaries") has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation;
(viii) The Company has an authorized capitalization as set forth in the
Company's Quarterly Report on Form 10-Q for the six months ended July 31,
1996 as incorporated by reference in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and conform to the description
of the Stock contained in the Prospectus; and all of the issued shares of
capital stock of each Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(ix) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for such conflicts, breaches, violations or
defaults that will not have a material adverse effect on the Company and its
subsidiaries taken as a whole or on the transactions contemplated hereby or
by the International Underwriting Agreement, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters and the International
Underwriters;
(x) Neither the Company nor any of its Subsidiaries is in violation of
its Certificate of Incorporation or By-laws or in default in the performance
or observance of any material obligation, agreement, covenant or condition
contained in any
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indenture, mortgage, deed of trust, loan agreement lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound;
(xi) The statements set forth in the Prospectus under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources; Inflation; Seasonality",
"Selling Stockholders" and "Taxation", insofar as they purport to describe
the provisions of the laws and documents referred to therein and the
description of the capital stock of the Company contained in the Company's
Registration Statements on Form 8-A, as amended, referred to under the
caption "Incorporation of Certain Documents by Reference", insofar as they
purport to constitute summaries of the terms of the Stock and other capital
stock of the Company, are accurate, complete and fair;
(xii) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
material adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries taken as
a whole; and, to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(xiii) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes; and
(xiv) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, Deloitte & Touche LLP, who have certified
certain financial statements of Sierra On-Line Inc and its subsidiaries and
of Advance Xxxx Corporation and its subsidiaries, KPMG Peat Marwick LLP, who
have certified certain financial statements of Davidson & Associates, Inc.
and its subsidiaries and Price Waterhouse, LLP, who have certified certain
financial statements of Ideon Group, Inc. and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement, the
International Underwriting Agreement and the Power of Attorney (the "Power of
Attorney") and the Custody Agreement (the "Custody Agreement") hereinafter
referred to, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder and under the International Underwriting
Agreement, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the International
Underwriting Agreement, the Power of Attorney and the Custody
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Agreement and to sell, assign, transfer and deliver the Shares to be sold
by such Selling Stockholder hereunder and under the International
Underwriting Agreement;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and under the International Underwriting Agreement and the
compliance by such Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which such
Selling Stockholder is bound, or to which any of the property or assets of such
Selling Stockholder is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of such
Selling Stockholder if such Selling Stockholder is a corporation; or the
trust agreement of each Selling Stockholder if such Selling Stockholder is a
trust; or the partnership agreement of such Selling Stockholder if such
Selling Stockholder is a partnership; or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over such Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) such Selling Stockholder will have,
good and valid title to the Shares to be sold at such Time of Delivery by
such Selling Stockholder hereunder and under the International Underwriting
Agreement, free and clear of all liens, encumbrances, equities or claims;
and, upon delivery of such Shares and payment therefor pursuant hereto and
thereto, good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several Underwriters and
the International Underwriters;
(iv) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus, such Selling
Stockholder will not offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder or under the International underwriting
Agreement, any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities (other than pursuant to employee
stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent;
(v) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares; and
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or
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supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly
for use therein, such Preliminary Prospectus and the Registration Statement
did, and the Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus will, when they become effective or
are filed with the Commission, as the case may be, conform in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, each of the Selling Stockholders agrees to deliver to you prior
to or at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).
(viii) Certificates in negotiable form representing all of the Shares to
be sold by such Selling Stockholder hereunder and under the International
Underwriting Agreement have been placed in custody under a Custody Agreement,
in the form heretofore furnished to you, duly executed and delivered by such
Selling Stockholder to , as custodian (the "Custodian"), and that such
Selling Stockholder has duly executed and delivered a Power of Attorney, in
the form heretofore furnished to you, appointing the persons indicated in
Schedule II hereto, and each of them, as such Selling Stockholder's
attorneys-in-fact (the "Attorneys-in-Fact") with authority to execute and
deliver this Agreement on behalf of such Selling Stockholder, to determine
the purchase price to be paid by the Underwriters to the Selling Stockholders
as provided in Section 2 hereof, to authorize the delivery of the Shares to
be sold by such Selling Stockholder hereunder and otherwise to act on behalf
of such Selling Stockholder in connection with the transactions contemplated
by this Agreement, the International Underwriting Agreement and the Custody
Agreement.
(ix) The Shares represented by the certificates held in custody for such
Selling Stockholder under the Custody Agreement are subject to the interests
of the Underwriters hereunder and the International Underwriters under the
International Underwriting Agreement; the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder
of the Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of the Selling Stockholders hereunder and under
the International Underwriting Agreement shall not be terminated by operation
of law, whether by the death or incapacity of any individual Selling
Stockholder or, in the case of an estate or trust, by the death or incapacity
of any executor or trustee or the termination of such estate or trust, or in
the case of a partnership or corporation, by the dissolution of such
partnership or corporation, or by the occurrence of any other event; if any
individual Selling Stockholder or any such executor or trustee should die or
become incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or
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if any other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or on
behalf of the Selling Stockholders in accordance with the terms and conditions
of this Agreement, of the International Underwriting Agreement and of the
Custody Agreement; and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice
of such death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) each of the
Selling Stockholders agrees, severally and not jointly, to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders at a purchase
price per share of $ the number of Firm Shares (to be adjusted by you so
as to eliminate fractional shares) determined by multiplying the aggregate
number of Firm Shares to be sold by each of the Selling Stockholders as set
forth opposite their respective names in Schedule II hereto by a fraction,
the numerator of which is the aggregate number of Firm Shares to be purchased
by such Underwriter as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the aggregate number of
Firm Shares to be purchased by all the Underwriters from all the Selling
Stockholders hereunder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, each of the Selling Stockholders agrees, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from each of the Selling
Stockholders, at a purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares
by a fraction the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of the Optional Shares which all of the Underwriters are
entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the
right to purchase at their election up to 1,980,000 Optional Shares, at the
purchase price per share set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the
number of Optional Shares to be sold by each Selling Stockholder. Any such
election to purchase Optional Shares may be exercised by written notice from
you to the Attorneys-in-Fact, given on or prior to November 12, 1996 and
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you
but in no event earlier than the First Time of Delivery (as defined in
Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise agree in
writing, earlier than two business days after the date of such notice or
later than November 15, 1996.
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3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such denominations and registered in such names as
Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Selling Stockholders, shall be delivered by or on behalf of the
Selling Stockholders to Xxxxxxx, Xxxxx & Co. for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks,
payable to the order of [the Custodian] in immediately available (same-day)
funds, all at the office of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. The time and date of such delivery and payment shall be,
with respect to the Firm Shares, 9:30 a.m., New York City time, on October
__, 1996 or such other time and date as you and the Selling Stockholders may
agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m.,
New York City time, on the date specified by you in the written notice given
by you of the Underwriters' election to purchase such Optional Shares, or
such other time and date as you and the Selling Stockholders may agree upon
in writing. Such time and date for delivery of the Firm Shares is herein
called the "First Time of Delivery", such time and date for delivery of the
Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery". Such certificates will be made available for
checking and packaging at least twenty-four hours prior to each Time of
Delivery at the office of Xxxxxxx, Xxxxx & Co.
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Closing Location"), and the Shares will be delivered at the Designated
Office, all at each Time of Delivery. A meeting will be held at the Closing
Location at 3:00 p.m., New York City time, on the New York Business Day next
preceding each Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section
4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New
York are generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior
to the last Time of Delivery unless approved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof, of
the time when the Registration Statement, or any
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amendment thereto, has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares;
to advise you, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws
of such jurisdictions in the United States as you may request and to comply
with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Shares, provided that in connection therewith the Company
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with copies of the Prospectus in New York City in such
quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering or
sale of the Shares and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would include
an 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 when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify you and upon your
request to file such document and to prepare and furnish without charge to
each Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a supplement
to the Prospectus which will correct such statement or omission or effect
such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectus, upon your request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many
-11-
copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)), an
earning statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including at the option of the
Company Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 90 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of any securities of the Company
(other than (i) pursuant to employee stock option and purchase plans existing,
or on the conversion or exchange of convertible or exchangeable securities
outstanding, on the date of this Agreement, or (ii) the issuance of Stock in
connection with the acquisition by the Company of the business, assets or
capital stock of another company or pursuant to a purchase, business
combination or merger agreement, pursuant to which, in any single transaction,
not more than 25,000,000 shares of Common Stock are issued or exchanged) which
are substantially similar to the Stock, or which are convertible or
exchangeable for securities which are substantially similar to the Stock,
without your prior written consent;
(f) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements
of income, stockholders' equity and cash flow of the Company and its
consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission);
-12-
(h) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Company shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
6. The Company covenants and agrees with each of the Selling Stockholders
and with the several Underwriters that the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the International Underwriting Agreement, the
Agreement between Syndicates, the Selling Agreements, the Blue Sky Memorandum
and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the
qualification of the Shares for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (iv) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the cost
of preparing stock certificates; (vi) the cost and charges of any transfer
agent or registrar; and (vii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. Each of the Selling Stockholders covenants and
agrees with the Company and the Several Underwriters that such Selling
Stockholder will pay or cause to be paid all costs and expenses incident to
the performance of such Selling Stockholder's obligations hereunder which are
not otherwise specifically provided for in this Section, including (i) any
fees and expenses of counsel for such Selling Stockholder, (ii) such Selling
Stockholder's pro rata share of the fees and expenses of the
Attorneys-in-Fact and the Custodian, and (iii) all expenses (including
discounts, commissions and fees of the Underwriters, selling brokers and
dealers) and taxes incident to the sale and delivery of the Shares to be sold
by such Selling Stockholder to the Underwriters hereunder. In connection
with clause (b)(iii) of the preceding sentence, Xxxxxxx, Xxxxx & Co. agree to
pay New York State stock transfer tax, and such Selling Stockholder agrees to
reimburse Xxxxxxx, Xxxxx & Co. for associated carrying costs if such tax
payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood, however, that, except as provided in
this Section, Section 8 and Section 11 hereof, the Underwriters will pay all
of their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such
Time of Delivery, true and correct, the condition
-13-
that the Company and the Selling Stockholders shall have performed all of its
and their obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on
the part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have furnished
to you such opinion or opinions, dated such Time of Delivery, with respect to
the incorporation of the Company, the validity of the Shares being delivered
at such Time of Delivery, the Registration Statement, the Prospectus, and
other related matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) (i) Xxx Xxxxxx, Esq., General Counsel of the Company, shall have
furnished to you her written opinion (a draft of each such opinion is
attached as Xxxxx X(a) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(A) The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any business,
so as to require such qualification, or is subject to no material liability
or disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect of matters of
fact upon certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and she are justified in relying
upon such opinions and certificates and shall attach executed copies of each
such opinion or certificate to such counsel's opinion);
(B) Each Subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and all of the issued shares of capital stock
of each such Subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and (except for directors' qualifying shares)
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel and in
respect of matters of fact upon certificates of officers of the Company or
its subsidiaries, provided that
-14-
such counsel shall state that she believe that both you and they are
justified in relying upon such opinions and certificates and shall attach
executed copies of each such opinion or certificate to such counsel's
opinion);
(C) To the best of such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and, to the
best of such counsel's knowledge, no such proceedings are overtly threatened
or contemplated by governmental authorities (it being understood that such
counsel need make no inquiry or independent investigation of such
governmental authorities as to such matters) or overtly threatened by others;
(D) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation known
to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties;
(E) The documents incorporated by reference in the Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and the notes thereto and the
other financial data included in the Registration Statement or the Prospectus
as to which such counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission thereunder;
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 statements contained in the documents incorporated by reference in the
Prospectus, no facts have come to such counsel's attention which lead such
counsel to believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue
statement of a material fact, or omitted to state a material fact
-15-
required to be stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under the
Exchange Act with the Commission, an 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 when
such documents were so filed, not misleading (other than the financial
statements and notes thereto and the other financial data included in the
documents incorporated by reference in the Prospectus as to which counsel
need express no opinion or belief);
(F) The statements made in the Prospectus under the captions "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources; Inflation; Seasonality", and "Selling
Stockholders" insofar as they purport to constitute summaries of the
provisions of the documents therein described are accurate and correct in all
material respects, and the description of capital stock of the Company
contained in the Company's Registration Statements on Form 8-A, as amended,
referred to under the caption "Incorporation of Certain Documents by
Reference", insofar as they purport to constitute summaries of the terms of
the Stock and other capital stock of the Company, are accurate and correct in
all material respects;
(G) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and the notes thereto and the
other financial data included in the Registration Statement or the
Prospectus, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the rules
and regulations thereunder, although such counsel has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those covered by her
opinion in subsection (F) of this Section 7(c); no facts have come to such
counsel's attention which lead such counsel to believe that, as of its
effective date, the Registration Statement or any further amendment thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and the notes thereto and the other financial data included in the
Registration Statement or the Prospectus, as to which such counsel need
express no opinion or belief) 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 that, as of its
date, the Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and the notes thereto and the other financial data included in the
Registration Statement or the Prospectus, as to which such counsel need
express no opinion or belief) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading or that, as of such Time of Delivery,
-16-
either the Registration Statement or the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of Delivery
(other than the financial statements and the notes thereto and the other
financial data included in the Registration Statement or the Prospectus, as
to which such counsel need express no opinion or belief) contains an untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading; and they do not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or required to
be described in the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required (other than the
financial statements and notes thereto and the other financial data included
in the documents incorporated by reference in the Prospectus as to which
counsel need express no opinion or belief); and
(H) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound.
In rendering such opinion, such counsel may state that she expresses no
opinion as to the laws of any jurisdiction other than the laws of the State
of New York and Illinois, the corporate laws of the State of Delaware and the
federal laws of the United States;
(d) Xxxxxx X. Xxxxxx, Esq., Secretary of the Company, shall have furnished
to you his written opinion (a draft of each such opinion is attached as
Xxxxx X(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(A) The Company has an authorized capitalization as set forth in the
Company's Quarterly Report on Form 10-Q for the six months ended July 31,
1996 as incorporated by reference in the Prospectus, and all of the shares of
capital stock of the Company (including the Shares being delivered at such
Time of Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Shares conform to the description of
the Stock contained in the Company's Registration Statements on Form 8-A,
as amended, referred to under the caption "Incorporation of Certain Documents
by Reference" in the Prospectus;
(e) (i) Xxxx, Gotshal & Xxxxxx LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of each such opinion is
attached as
-17-
Annex I(c) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(A) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business
as described in the Prospectus;
(B) The Company has an authorized capitalization as set forth in the
Company's Quarterly Report on Form 10-Q for the six months ended July 31,
1996 as incorporated by reference in the Prospectus, and all of the Shares
being delivered at such Time of Delivery have been duly and validly
authorized and issued and are fully paid and non-assessable; and the Shares
conform to the description of the Stock contained in the Company's
Registration Statements on Form 8-A referred to under the caption
"Incorporation of Certain Documents by Reference" in the Prospectus;
(C) This Agreement and the International Underwriting Agreement have been
duly authorized, executed and delivered by the Company;
(D) The compliance by the Company with all of the provisions of this
Agreement and the International Underwriting Agreement and the consummation
by the Company of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any New York,
Delaware corporate or U.S. Federal law, rule or regulation (other than
foreign and state securities or Blue Sky laws, as to which such counsel need
not express any opinion, and other than Federal securities laws, as to which
such counsel need not express any opinion except as otherwise set forth
herein), or any judgment, writ, injunction, decree, order or ruling of any
court or governmental authority binding on the Company or any of its
Subsidiaries of which such counsel is aware;
(E) No consent, approval, authorization, order, registration or
qualification of or with any New York, Delaware corporate or U.S. Federal
governmental authority is required for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement and the International
Underwriting Agreement, except for the registration under the Act of the
Shares, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or Blue
Sky laws as to which such counsel need not express any opinion;
(F) The documents filed by the Company with the Commission and referred to
under the caption "Certain Documents Incorporated by Reference" in the
Prospectus or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements and
schedules and the notes thereto and the other financial and accounting
-18-
data included in the Registration Statement or the Prospectus or any further
amendment or supplement thereto as to which such counsel need express no
opinion or belief), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder. Such counsel shall
additionally state that it has participated in conferences with directors,
officers and other representatives of the Company, representatives of the
Selling Shareholders, representatives of the independent public accountants
for the Company, representatives of the Underwriters and representatives of
counsel for the Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters 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 statements contained in such documents, no facts have come to such
counsel's attention which lead such counsel to believe that any of such
documents, when such documents became effective or were so filed, as the case
may be, contained, in the case of a registration statement which became
effective under the Act, 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, in the case of other documents
which were filed under the Exchange Act with the Commission, an 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 when such documents were so filed, not misleading (other
than the financial statements and schedules and notes thereto and the other
financial and accounting data included in the documents incorporated by
reference in the Prospectus as to which counsel need express no opinion or
belief);
(G) The description of the Stock of the Company, contained in the Company's
Registration Statements on Form 8-A, as amended, referred to under the
caption "Incorporation of Certain Documents by Reference", insofar as they
purport to constitute summaries of the terms of the Stock, and the statements
set forth in the International Prospectus under the caption "Certain United
States Federal Tax Consequences to Non-U.S. Stockholders" insofar as they
purport to summarize the provisions of the laws referred to therein, are
accurate and correct in all material respects; and
(H) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and schedules and related notes
thereto and the other financial and accounting data included in the
Registration Statement or the Prospectus, as to which such counsel need
express no opinion or belief) comply as to form in all material respects with
the requirements of the Act and the rules and regulations thereunder. Such
counsel shall additionally state that it has participated in conferences with
directors, officers and other representatives of the Company, representatives
of the
-19-
Selling Stockholders, representatives of the independent public accountants
for the Company, representatives of the Underwriters and representatives of
counsel for the Underwriters, at which conferences the contents of the
Registration Statement and the Prospectus and related matters 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 statements contained in the Registration Statement or the Prospectus,
except for those covered by their opinion in subsection (G) of this Section
7(d); no facts have come to such counsel's attention which lead such counsel
to believe that the Registration Statement, as of its effective date, or any
further amendment thereto made by the Company prior to such Time of Delivery
(other than the financial statements and schedules and the related notes
thereto and the other financial and accounting data included in the
Registration Statement or the Prospectus, as to which such counsel need
express no opinion or belief) 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 that the
Prospectus, as of its date, or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and schedules and the related notes thereto and the other
financial and accounting data included in the Registration Statement or the
Prospectus, as to which such counsel need express no opinion or belief)
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, in light of the circumstances in which they were made,
not misleading (it being understood that such counsel express no view with
respect to the financial statements and related notes, and the other
financial and accounting data included in the Registration Statement or
Prospectus) or that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and the notes thereto and the other financial data included in the
Registration Statement or the Prospectus, as to which such counsel need
express no opinion or belief) contains an untrue statement of a material fact
or omits to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading (it
being understood that such counsel express no view with respect to the
financial statements and related notes, and the other financial and
accounting data included in the Registration Statement or Prospectus); and to
such counsel's knowledge, there are no contracts or other documents of a
character required to be filed or incorporated by reference as an exhibit to
the Registration Statement or required to be described or incorporated by
reference in the Registration Statement or the Prospectus which were not
filed, incorporated by reference or described as required (other than the
financial statements and notes thereto and the other financial data included
in the documents incorporated by reference in the Prospectus as to which
counsel need express no opinion or belief).
-20-
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State
of New York, the corporate laws of the State of Delaware and the federal laws
of the United States;
(e) Xxxxxx, Xxxx & Xxxxxxxx, counsel for the Selling Stockholders, as
indicated in Schedule II, shall have furnished to you their written opinion
with respect to each of the Selling Stockholders (a draft of each such
opinion is attached as Annex I(d) hereto), dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) A Power of Attorney and a Custody Agreement have been duly executed
and delivered by such Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholder in accordance with their terms;
(ii) This Agreement and the International Underwriting Agreement have been
duly authorized, executed and delivered by such Selling Stockholder; and the
sale of the Shares to be sold by such Selling Stockholder hereunder and
thereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement and the International Underwriting Agreement,
the Power of Attorney and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or result
in a breach or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to
which any of the property or assets of such Selling Stockholder is subject,
except for such conflicts, breaches, violations or defaults that will not
have a material adverse effect on the Company and its subsidiaries taken as a
whole or on the transactions contemplated hereby or by the International
Underwriting Agreement, nor will such action result in any violation of the
provisions of or the trust agreement of such Selling Stockholder if such
Selling Stockholder is a trustee, or the Articles of Partnership of such
Selling Stockholder if such Selling Stockholder is a partnership, or any
statute or any order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder;
(iii) No consent, approval, authorization or order of any court known to
such counsel or governmental agency or body is required for the consummation
of the transactions contemplated by this Agreement and the International
Underwriting Agreement in connection with the Shares to be sold by such
Selling Stockholder hereunder and under the International Underwriting
Agreement, except such as have been obtained under the Act (as to which such
counsel need express no opinion) and such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution
of such Shares by the Underwriters and the International Underwriters (as to
which such counsel need express no opinion); and
-21-
(iv) Upon payment for and delivery of the Shares in accordance with the
terms of this Agreement and the International Underwriting Agreement, the
Underwriters and the International Underwriters shall have acquired such
Shares, free and clear of all liens, encumbrances, equities or claims,
assuming the Underwriters and International Underwriters are acquiring such
Shares in good faith and without notice of any such lien, encumbrance, equity
or claim or any other adverse claim within the meaning of the Uniform
Commercial Code.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State
of California, the corporate laws of the State of Delaware and the federal
laws of the United States and in rendering the opinion in subparagraphs (ii)
and (iii) such counsel may rely upon a certificate of such Selling Stockholder
in respect of matters of fact as to (i) ownership of and liens, encumbrances,
equities or claims on the Shares sold by such Selling Stockholder,
(ii) indentures, mortgages, deeds of trust, loan agreements or other agreements
or instruments to which such Selling Stockholder is a party or to which the
Shares are subject and (iii) the existence of any order, writ or injunction to
which the Selling Stockholder or the Shares are subject, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such certificate and shall attach an executed copy of such
certificate to such opinion;
(f) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 10:00 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to
the date of this Agreement and also at each Time of Delivery, Ernst & Young
LLP shall have furnished to you a letter or letters, dated the respective
date of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex II(a) hereto; on the date of the Prospectus at a
time prior to the execution of this Agreement, at 10:00 a.m., New York City
time, on the effective date of any post-effective amendment to the
Registration Statement filed subsequent to the date of this Agreement and
also at each Time of Delivery, Deloitte & Touche LLP, KPMG Peat Marwick LLP
and Price Waterhouse LLP shall have furnished to you letters, dated such
date, in form and substance satisfactory to you, to the effect set forth in
Annexes II(b), (c) and (d), respectively, hereto; the executed copies of the
letters delivered prior to the execution of this Agreement are attached as
Xxxxx XXX(a), (b), (c) and (d) hereto, respectively, and a draft of the form
of letters to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery are
attached as Annexes IV(a), (b), (c) and (d) hereto, respectively;
(g)(i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information is
given in the Prospectus, there shall not have been any change in the
-22-
capital stock (other than increases in the outstanding common stock of the
Company as a result of the issuance of stock pursuant to any of the Company's
existing stock option plans or employee stock purchase plans or upon the
conversion of convertible securities outstanding on the date of this
Agreement, in accordance with the descriptions of such plans and convertible
securities in the Prospectus) or long-term debt or (other than any increase
of less than $20,000,000 incurred in the ordinary course of business of the
Company and its subsidiaries or any decrease) short-term debt of the Company
or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the business, management, financial
position, stockholders' equity or results of operations of the Company and
its subsid-iaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities in New York declared by either Federal or New
York State authorities; or (iii) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
clause (iii) in your judgment makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated by the Prospectus;
(i) The Shares to be sold by the Selling Stockholders at such Time of
Delivery shall have been duly listed on the New York Stock Exchange;
(j) The Company and the Selling Stockholder shall have furnished or caused
to be furnished to you at such Time of Delivery certificates of officers of
the Company and of the Selling Stockholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company
and the Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholders
of all of their respective obligations hereunder to be performed at or prior
to such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of this
Section, and as to such other matters as you may reasonably request; and
(k) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may
-23-
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. expressly for use therein or by a Selling
Stockholder expressly for use in the preparation of answers therein to
Item 7 of Form S-3.
(b) Each of the Selling Stockholders will indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly
for use therein; and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that such Selling Stockholder shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Xxxxxxx,
Xxxxx & Co. expressly for use therein; provided, however that the liability
of each of the Selling Shareholders pursuant to this subsection (b) shall not
exceed the product of the number of Shares sold by such Selling Shareholder
(including any Optional Shares) and the initial public offering price as set
forth in the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities
to which the Company or such Selling Stockholder may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based
-24-
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through you expressly for use therein; and will reimburse the
Company and each Selling Stockholder for any legal or other expenses
reasonably incurred by the Company or such Selling Stockholder in connection
with investigating or defending any such action or claim as such expenses
are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
an indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to an y indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (which shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party, and, in addition, if each indemnifying party is a Selling
Stockholder, the Company, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportions as is
appropriate to reflect not only (i) the relative benefits received by the
Selling Stockholders on the one hand and the Underwriters on the other from
the offering of the Shares but also (ii) the relative fault of the Company,
the Selling Stockholders and the Underwriters in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Selling
Stockholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, in each case as set forth in the table
on the cover page of
-25-
the Prospectus. The relative fault shall be determined
by reference to, among other things, whether the indemnified party failed to
give notice required under subsection (d) above and whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this subsection (e) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this subsection
(e). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages 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 in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and
the respective Selling Stockholders may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
(including any person who, with his consent, is named in the Registration
Statement as about to become a director of the Company) and to each person,
if any, who controls the Company or any Selling Stockholder within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery,
you may in your discretion arrange for you or another party or other parties
to purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the
purchase of such Shares, then the Selling Stockholders shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In
the event that, within the respective prescribed periods, you notify the
Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Selling Stockholders notify you that they have so arranged for
the purchase of such Shares, you or the Selling Stockholders shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in
the Registration Statement or
-26-
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of shares which such
Underwriter agreed to purchase hereunder (at such Time of Delivery) and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to
purchase hereunder) of the Shares of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of
such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, or if the
Selling Stockholders shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Selling Stockholders to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholders, except for the
expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any of the Selling Stockholders, or any
officer or director or controlling person of the Company, or any controlling
person of any Selling Stockholder, and shall survive delivery of and payment
for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Section 6 and Section 8
hereof; but, if for any other reason any Shares are not delivered by or on
behalf of the Selling Stockholders as provided herein, each of the Selling
Stockholders pro rata (based on the number of Shares to be sold by such
Selling Stockholder hereunder) will reimburse the Underwriters through you
for all out-of-pocket
-27-
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for
the purchase, sale and delivery of the Shares not so delivered, but the Company
and the Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder,
you and the Company shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of such Selling Stockholder made or
given by any or all of the Attorneys-in-Fact for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Xxxxxxx,
Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Registration Department; if to any Selling Stockholder shall be delivered or
sent by mail, telex or facsimile transmission to counsel for such Selling
Stockholder at its address set forth in Schedule II hereto; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission
to the address of the Company set forth in the Registration Statement,
Attention: Secretary; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company or the Selling Stockholders by you
upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and,
to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company, any
Selling Stockholder or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser
of any of the Shares from any Underwriter shall be deemed a successor or
assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
-28-
If the foregoing is in accordance with your understanding, please sign
and return to us eight (8) counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters (U.S. Version), the form of which shall be furnished to
the Company and the Selling Stockholders for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
-29-
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
CUC International Inc.
By:______________________
Name: Xxx X. Xxxxxx
Title: Sr. VP & General Counsel
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx Charitable
Remainder Unitrust
Xxxxxx X. Xxxxxxxx Charitable
Remainder Unitrust
The Xxxx X. Xxxxxxxx Trust
The Xxxxxxxxx Xxxxxxxx Trust
The Xxxxxx X. Xxxxxxxx Trust
By:_________________________
Name:
Title: Attorney-in-Fact
As Attorney-in-Fact acting on behalf
of each of the Selling Stockholders
named in Schedule II to this Agreement.
Accepted as of the date hereof
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co, Incorporated
Bear Xxxxxxx & Co. Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation,
Xxxxx Xxxxxx Inc.,
By:________________________________
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
-30-
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares to Maximum Option
be Purchased Exercised
Underwriter ---------------- -------------
Xxxxxxx, Xxxxx & Co. .....................
Xxxxxx Xxxxxxx & Co, Incorporated ........
Bear Xxxxxxx & Co. Inc. ..................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.............................
Xxxxx Xxxxxx Inc. ........................
-------------- ------------
Total ...................... 13,200,000 1,980,000
=============== ============
-31-
SCHEDULE II
Number of Optional
Total Number of Shares to be Sold
Firm Shares to if Maximum
be Sold Option Exercised
--------------- -------------------
The Selling Stockholder(s):
Xxxxxx X. Xxxxxxxx 240,000 0
Xxxxxx X. Xxxxxxxx 240,000 0
Xxxxxx X. Xxxxxxxx Charitable Remainder
Unitrust 6,000,000 990,000
Xxxxxx X. Xxxxxxxx Charitable Remainder
Unitrust 6,000,000 990,000
The Xxxx X. Xxxxxxxx Trust 240,000 0
The Xxxxxxxxx Xxxxxxxx Trust 240,000 0
The Xxxxxx X. Xxxxxxxx Trust 240,000 0
Total ........................... 13,200,000 1,980,000
========== =========
------------
(a) This Selling Stockholder is represented by Xxxxxx, Xxxx & Xxxxxxxx,
and has appointed [NAME OF ATTORNEYS-IN-FACT (NOT LESS THAN TWO)], and each of
them, as the Attorneys-in-Fact for such Selling Stockholder.
-32-
ANNEX I(a)
[Form of Opinion of Xxx Xxxxxx, Esq.]
ANNEX I(b)
[Form of Opinion of Xxxxxx X. Xxxxxx, Esq.]
ANNEX I(c)
[Form of Opinion of Weil, Gotshal & Xxxxxx]
ANNEX I(d)
[Form of Opinion of Xxxxxx, Xxxx & Xxxxxxxx]
XXXXX XX(a)
Pursuant to Section 7(f) of the Underwriting Agreement, Xxxxx &
Young LLP shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they have
made a review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements;
(iii) They have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows or included in the Company's Quarterly
Report on Form 10-Q incorporated by reference into the Prospectus; and on the
basis of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A) below comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act as it applies to
Form 10-Q and the related published rules and regulations, nothing came to
their attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange Act as
it applies to Form 10-Q and the related published rules and regulations;
(iv) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis
of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to believe
that this information does not conform in all material respects with the
disclosure requirements of Item 301 of Regulation S-K;
(v) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements, a reading of the latest
available minutes of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference in
the Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included or
incorporated by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Exchange
Act as it applies to Form 10-Q and the related published rules and
regulations thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with the
basis for the audited consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(B) as of a specified date not more than five days prior to the date of such
letter, there have been any changes in the consolidated capital stock (other
than issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by reference in
the Prospectus) or any increase in the consolidated long-term debt or
short-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or net assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(C) for the period from the date of the latest financial statements included
or incorporated by reference in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net income
or other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in each case
for increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vi) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference) or
in Part II of, or in
-2-
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.
-3-
XXXXX XX(b)
Pursuant to Section 7(f) of the Underwriting Agreement, Deloitte
& Touche LLP shall furnish letters to the Underwriters to the effect that:
(i) As of , 1996, and during the period covered by the financial
statements on which they reported, they were independent certified public
accountants with respect to Sierra On-Line, Inc. and subsidiaries
("Sierra") within the meaning of the Act and the applicable published rules
and regulations thereunder.
(ii) They have audited the financial statements of Xxxxxx that Ernst &
Young LLP rely on or reference in Ernst & Young LLP's letters delivered
pursuant to Section 7(e) and their report dated October , 1996.]
(iii) As of , 1996, and during the period covered by the
financial statements on which they reported, they were independent certified
public accountants with respect to Advance Xxxx Corporation and subsidiaries
("Advance") within the meaning of the Act and the applicable published
rules and regulations thereunder.
(iv) They have audited the financial statements of Advance that Xxxxx &
Young LLP rely on or reference in Ernst & Young LLP's letters delivered
pursuant to Section 7(e) and their report dated October , 1996.
XXXXX XX(c)
Pursuant to Section 7(f) of the Underwriting Agreement, KPMG Peat
Marwick LLP shall furnish letters to the Underwriters to the effect that:
(i) As of , 1996, and during the period covered by the financial
statements on which they reported, they were independent certified public
accountants with respect to Davidson & Associates, Inc. ("Davidson") within
the meaning of the Act and the applicable published rules and regulations
thereunder.
(ii) They have audited the financial statements of Xxxxxxxx that Xxxxx &
Young LLP rely on or reference in Ernst & Young LLP's letters delivered
pursuant to Section 7(e) and their report dated October , 1996.
XXXXX XX(d)
Pursuant to Section 7(f) of the Underwriting Agreement, Price
Waterhouse LLP shall furnish letters to the Underwriters to the effect that:
(i) As of , 1996, and during the period covered by the financial
statements on which they reported, we were independent certified public
accountants with respect to Ideon Group, Inc. ("Ideon") within the meaning
of the Act and the applicable published rules and regulations thereunder.
(ii) They have audited the financial statements of Ideon that Xxxxx &
Young LLP rely on or reference in Ernst & Young LLP's letters delivered
pursuant to Section 7(e) and their report dated October , 1996.