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EXHIBIT 1.1
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XXXXXX COMMUNICATIONS, INC.
(a Delaware corporation)
[_________] Shares of Common Stock
U.S. PURCHASE AGREEMENT
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Dated: May , 1998
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TABLE OF CONTENTS
U.S. PURCHASE AGREEMENT..................................................................................1
SECTION 1. Representations and Warranties.............................................4
(a) Representations and Warranties by the Company..............................4
(i) Compliance with Registration Requirements.........................4
(ii) Incorporated Documents............................................5
(iii) Independent Accountants...........................................6
(iv) Financial Statements..............................................6
(v) No Material Adverse Change in Business............................6
(vi) Good Standing of the Company......................................7
(vii) Good Standing of Subsidiaries.....................................7
(viii) Capitalization....................................................8
(ix) Authorization.....................................................8
(x) Authorization and Description of Securities.......................8
(xi) Absence of Defaults and Conflicts.................................8
(xii) Absence of Labor Dispute.........................................9
(xiii) Absence of Proceedings............................................9
(xiv) Accuracy of Exhibits.............................................10
(xv) Possession of Intellectual Property.............................10
(xvi) Absence of Further Requirements.................................10
(xvii) Possession of Licenses and Permits..............................11
(xviii) Title to Property...............................................11
(xix) Investment Company Act..........................................11
(xx) Environmental Laws..............................................12
(xxi) Registration Rights.............................................12
(xxii) Compliance with Laws............................................12
(xxiii) Taxes...........................................................12
(xxiv) Insurance........................................................13
(b) Representations, Warranties and Covenants by the
Selling Shareholders......................................................13
(i) Authorization of Agreements......................................13
(ii) Good and Valid Title.............................................14
(iii) Due Execution of Custody Agreement and Power
of Attorney......................................................14
(iv) Absence of Manipulation..........................................14
(v) Absence of Further Requirements..................................15
(vi) Certificates Suitable for Transfer; Instruments of
Transfer.........................................................15
(vii) No Association with NASD.........................................15
(c) Additional Representations and Warranties by the
Executive Selling Shareholders............................................15
(d) Officer's Certificates....................................................17
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing...........................17
i
(a) Initial Securities........................................................17
(b) Option Securities.........................................................17
(c) Payment...................................................................18
(d) Denominations; Registration...............................................19
SECTION 3. Covenants of the Company..................................................19
(a) Compliance with Securities Regulations and
Commission Requests.......................................................19
(b) Filing of Amendments......................................................19
(c) Delivery of Registration Statement........................................20
(d) Delivery of Prospectuses..................................................20
(e) Continued Compliance with Securities Laws.................................20
(f) Blue Sky Qualifications...................................................21
(g) Rule 158..................................................................21
(h) Use of Proceeds...........................................................22
(i) Listing...................................................................22
(j) Restriction on Sale of Securities.........................................22
(k) Reporting Requirements....................................................22
SECTION 4. Payment of Expenses.......................................................22
(a) Expenses..................................................................22
(b) Expenses of the Selling Shareholders......................................23
(c) Termination of Agreement..................................................23
(d) Allocation of Expenses....................................................24
SECTION 5. Conditions of U.S. Underwriters' Obligations..............................24
(a) Effectiveness of Registration Statement...................................24
(b) Opinion of Counsel for Company............................................24
(c) Opinions of Counsel for the Selling Shareholders..........................25
(d) Opinion of Counsel for U.S. Underwriters..................................25
(e) Officers' Certificate.....................................................26
(f) Certificate of Selling Shareholders.......................................26
(g) Accountant's Comfort Letter...............................................26
(h) Bring-down Comfort Letter.................................................27
(i) Approval of Listing.......................................................27
(j) No Objection..............................................................27
(k) Lock-up Agreements........................................................27
(l) Form W-9 and Form W-8.....................................................27
(m) Purchase of Initial International Securities..............................27
(n) Conditions to Purchase of U.S. Option Securities..........................27
(o) Additional Documents......................................................29
(p) Termination of Agreement..................................................29
SECTION 6. Indemnification...........................................................29
(a) Indemnification of U.S. Underwriters......................................29
(b) Indemnification of U.S. Underwriters by the Non-
Executive Selling Shareholders............................................32
ii
(c) Indemnification of Company, Directors and Officers
and Selling Shareholders..................................................33
(d) Actions against Parties; Notification.....................................33
(e) Settlement without Consent if Failure to Reimburse........................34
(f) Other Agreements with Respect to Indemnification..........................34
SECTION 7. Contribution..............................................................34
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery..................................................................36
SECTION 9. Termination of Agreement..................................................36
(a) Termination; General......................................................36
(b) Liabilities...............................................................37
SECTION 10. Default by One or More of the U.S. Underwriters...........................37
SECTION 11. Default by One or More of the Selling Shareholders or the
Company...................................................................38
SECTION 12. Notices...................................................................39
SECTION 13. Parties...................................................................39
SECTION 14. GOVERNING LAW AND TIME....................................................39
SECTION 15. Effect of Headings........................................................40
SCHEDULES
Schedule A - List of U.S. Underwriters...........................................Sch A-1
Schedule B - List of Selling Shareholders........................................Sch B-1
Schedule C - Pricing Information.................................................Sch C-1
Schedule D - List of Persons Subject to Lock-up..................................Sch D-1
Schedule E - List of Subsidiaries...............................................Sch E -1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.....................................A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel.........................B-1
Exhibit C- Form of Lock-up Letter...................................................C-1
Exhibit D - Form of Pledgee Lock-up Letter...........................................D-1
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XXXXXX COMMUNICATIONS, INC.
(a Delaware corporation)
[______________] Shares of Common Stock
(Par Value $.001 Per Share)
U.S. PURCHASE AGREEMENT
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May __, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx, Xxxxx & Co.
Bear, Xxxxxxx & Co. Inc.
NationsBanc Xxxxxxxxxx Securities LLC
as U.S. Representatives of the several U.S. Underwriters
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Xxxxxx Communications, Inc., a Delaware corporation (the "Company"), and
the persons listed in Schedule B hereto (collectively, the "Selling
Shareholders") confirm their respective agreements with Xxxxxxx Xxxxx & Co.,
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and each of
the other U.S. Underwriters named in Schedule A hereto (collectively, the "U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx, Goldman,
Sachs & Co., Bear, Xxxxxxx & Co. Inc. and NationsBanc Xxxxxxxxxx Securities LLC
are acting as representatives (in such capacity, the "U.S. Representatives"),
with respect to (i) the sale by the Company and the Selling Shareholders, acting
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severally and not jointly, and the purchase by the U.S. Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $.001 per share, of the Company ("Common Stock") set forth in
Schedules A and B
hereto and (ii) the grant by Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx
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(collectively, the "Executive Selling Shareholders") to the U.S. Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of [___________________] additional shares of Common
Stock to cover over-allotments, if any. The aforesaid [_____________________]
shares of Common Stock (the "Initial U.S. Securities") to be purchased by the
U.S. Underwriters and all or any part of the [__________________] shares of
Common Stock subject to the option described in Section 2(b) hereof (the "U.S.
Option Securities") are hereinafter called, collectively, the "U.S. Securities".
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering by the Company
and the Selling Shareholders, acting severally and not jointly, of an aggregate
of [______________________] shares of Common Stock (the "Initial International
Securities") through arrangements with certain underwriters outside the United
States and Canada (the "International Managers") for which Xxxxxxx Xxxxx
International, Xxxxxxx Xxxxx International, Bear, Xxxxxxx International Limited
and NationsBanc Xxxxxxxxxx Securities LLC are acting as lead managers (the "Lead
Managers") and the grant by the Executive Selling Shareholders to the
International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of up
to [__________________] additional shares of Common Stock solely to cover over-
allotments, if any (the "International Option Securities" and, together with the
U.S. Option Securities, the "Option Securities"). The Initial International
Securities and the International Option Securities are hereinafter called the
"International Securities". It is understood that the Company and the Selling
Shareholders are not obligated to sell, and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all of the Initial
International Securities are contemporaneously purchased by the International
Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities". The Selling Shareholders
other than the Executive Selling Shareholders are hereinafter collectively
called the "Non-Executive Selling Shareholders".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
2
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-50929) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
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("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
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434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical
to the Form of U.S. Prospectus, except for the front cover and back cover pages
and the information under the caption "Underwriting". The information included
in any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
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430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
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"Rule 434 Information." Each Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto and the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, at the time it became effective and
including the Rule 430A Information and the Rule 434 Information, as applicable,
is herein called the "Registration Statement." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"Rule 462(b) Registration Statement," and after such filing the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The final Form of U.S. Prospectus and the final Form of International
Prospectus, including in each case the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated May 1, 1998 and preliminary
International Prospectus dated May 1, 1998, respectively, each together with the
applicable Term Sheet, and all references in this Agreement to the date of such
Prospectuses shall mean the date of the applicable Term Sheet. For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or
3
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectuses.
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b) hereof, and agrees with each U.S. Underwriter,
as follows:
(i) Compliance with Registration Requirements. The Company meets the
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requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a
4
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
of the Prospectuses nor any amendments or supplements thereto, at the time
the Prospectuses or any amendments or supplements thereto were issued and
at the Closing Time (and, if any U.S. Option Securities are purchased, at
the Date of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. If Rule 434 is used, the
Company will comply with the requirements of Rule 434 and the Prospectuses
shall not be "materially different", as such term is used in Rule 434, from
the prospectuses included in the Registration Statement at the time it
became effective. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or the U.S. Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
----------------------
be incorporated by reference in the Registration Statement and the
Prospectuses, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), and,
when read together with the other information in the Prospectuses, at the
time the Registration Statement became effective, at the time the
Prospectuses were issued and at the Closing Time (and if any Option
Securities are purchased, at the Date of Delivery), did not 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.
(iii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules included in the Registration
Statement are
5
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements included in the
--------------------
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included in the Registration
Statement present fairly in accordance with GAAP the information required
to be stated therein. The summary financial information included in the
Prospectuses present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The financial statements
have been prepared in accordance with the Commission's rules and guidelines
with respect to consolidated financial statements and have been properly
compiled on the bases described therein. The pro forma financial data
included in the Registration Statement and the Prospectuses present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since March 31, 1998 or
--------------------------------------
such later dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
-
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
-
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
-
dividend or distribution of any kind declared, paid or made by the Company
or any subsidiary on any class of its capital stock or any partnership
interest, as the case may be.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses
6
and to enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
listed on Schedule E hereto (each, a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation or partnership, as the case may be, in good standing under the
laws of the jurisdiction of its incorporation or organization, as the case
may be, has corporate or partnership, as the case may be, power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectuses and is duly qualified as a
foreign corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
all of the issued and outstanding capital stock of each corporate
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company directly or indirectly through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock or other equity interests, as the case may be, of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The only subsidiaries of the Company
are (a) the subsidiaries listed on Schedule E hereto and (b) certain other
subsidiaries which, considered in the aggregate as a single subsidiary, do
not constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock
of the Company, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been (or, in the case of
the Securities underlying options to be sold by certain former shareholders
of Blau Marketing Technologies, Inc. (the "Blau Option Securities"), prior
to the Closing Time will be) duly authorized and validly issued and are
(or, in the case of the Blau Option Securities, prior to the Closing Time
will be) fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company,
7
including the Securities to be purchased by the Underwriters from the
Selling Shareholders, was (or, in the case of the Blau Option Securities,
prior to the Closing Time will be) issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(ix) Authorization. This Agreement and the International Purchase
-------------
Agreement have been duly authorized, executed and delivered by the Company.
The performance of this Agreement and the International Purchase Agreement
and the consummation of the transactions contemplated in this Agreement,
the International Purchase Agreement and the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectuses
under the caption "Use Of Proceeds") and compliance by the Company with its
obligations under this Agreement and the International Purchase Agreement
have been duly authorized by the Company.
(x) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable; the
Common Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject
to personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of the Subsidiaries is in violation of its charter or by-laws or
partnership agreement, as the case may be, or in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or any
of the Subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the International Purchase Agreement and the consummation of
the transactions contemplated in this Agreement, the International Purchase
Agreement and in the Registration Statement (including the issuance and
sale of the Securities and the
8
use of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and compliance by the
Company with its obligations under this Agreement and the International
Purchase Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument of the Company or
any Subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any Subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any Subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, might reasonably be expected to result in a Material
Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement and the
International Purchase Agreement or the performance by the Company of its
obligations hereunder or thereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or of which any of their respective properties or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
9
(xiv) Accuracy of Exhibits. There are no contracts or documents which
--------------------
are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and the Company has not received any notice or is not
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of the
Subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required by or on behalf of the Company for the performance
by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities under this Agreement and the
International Purchase Agreement or the consummation of the transactions
contemplated by this Agreement and the International Purchase Agreement,
except such as have been already obtained or as may be required under the
1933 Act or the 1933 Act Regulations and foreign or state securities or
blue sky laws.
(xvii) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and the
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of
10
any such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Title to Property. The Company and the Subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
-
described in the Prospectuses, including those disclosed in the financial
statements and the related notes included therein, or (b) do not, singly or
-
in the aggregate, 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 or any of the Subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered
as one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectuses, are in full force and
effect, and the Company does not have any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xix) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the Registration
------------------
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the
-
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and
-
11
the Subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or threatened administrative,
-
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of the
Subsidiaries and (D) there are no events or circumstances that might
-
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of the
Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxi) Registration Rights. Except as described in the Registration
-------------------
Statement and the Prospectuses, there are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xxii) Compliance with Laws. Each of the Company and the
--------------------
Subsidiaries is in compliance with all applicable laws, statutes,
ordinances, rules or regulations of any applicable jurisdiction, the
enforcement of which, singly or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
(xxiii) Taxes. Each of the Company and the Subsidiaries has filed all
-----
material federal, state, local and foreign income and franchise tax returns
required to be filed by it and has paid all taxes shown as due thereon,
other than taxes which are being contested in good faith or state
withholding taxes and for both of which adequate reserves have been
established in accordance with GAAP; and the Company does not have
knowledge of any tax deficiency which has been or might be asserted or
threatened against the Company or any Subsidiary other than those for which
adequate reserves have been established in accordance with GAAP. Adequate
charges, accruals and reserves have been provided for in the financial
statements referred to in Section 1(a)(iv) hereof in respect of all
material federal, state, local and foreign taxes for all periods as to
which the tax liability of the Company or any Subsidiary has not been
finally determined or remains open to examination by applicable taxing
authorities.
(xxiv) Insurance. Each of the Company and the Subsidiaries carries
---------
or is entitled to the benefits of insurance in such amounts and covering such
risks as it reasonably believes are sufficient to cover potential losses or
damages, and all such insurance is in full force and effect.
(b) Representations, Warranties and Covenants by the Selling Shareholders.
Each Selling Shareholder severally and not jointly represents and warrants to
each U.S.
12
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling U.S. Option Securities on a Date of Delivery, as of each
such Date of Delivery, and agrees with each U.S. Underwriter, as follows:
(i) Authorization of Agreements. Each Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and a Custody
Agreement and Power of Attorney (the "Custody Agreement and Power of
Attorney") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement, the International Purchase Agreement and the Custody Agreement
and Power of Attorney and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation by such Selling
Shareholder of the transactions contemplated herein, in the International
Purchase Agreement and in the Registration Statement and compliance by such
Selling Shareholder with its obligations hereunder have been duly
authorized by each Selling Shareholder that is not an individual and do not
and will not, whether with or without the giving of notice or passage of
time or both, result in the creation or imposition of any tax, lien, charge
or encumbrance upon the Securities to be sold by such Selling Shareholder,
nor will such action result in any violation of the provisions of the
charter or by-laws or other organizational instrument of such Selling
Shareholder, if applicable, or, to the best of such Selling Shareholder's
knowledge, any applicable treaty, law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over such Selling
Shareholder or any of its properties.
(ii) Good and Valid Title. Such Selling Shareholder has (or, in the
--------------------
case of a holder of Blau Option Securities, prior to the Closing Time will
have) and will at the Closing Time and, if any U.S. Option Securities are
purchased, such Executive Selling Shareholder will on the Date of Delivery
have good and valid title to the Securities to be sold by such Selling
Shareholder hereunder, free and clear of any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement or the Custody Agreement and Power of Attorney;
and upon delivery of such Securities and payment of the purchase price
therefor as herein contemplated, assuming each such U.S. Underwriter has no
notice of any adverse claim, each of the U.S. Underwriters will receive
good and valid title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind created, directly or
indirectly, by or through such Selling Shareholder.
(iii) Due Execution of Custody Agreement and Power of Attorney. Such
--------------------------------------------------------
Selling Shareholder has duly executed and delivered, in the forms
heretofore furnished to the U.S. Representatives, the Custody Agreement and
Power of
13
Attorney with Xxxxxx X. Xxxxxx, X. Xxxxxxx Xxxxxxx and Xxxx Xxxxxxx, or any
of them, as attorneys-in-fact (the "Attorneys-in-Fact") and American Stock
Transfer & Trust Company, as custodian (the "Custodian"); the Custodian is
authorized to deliver the Securities to be sold by such Selling Shareholder
hereunder and to accept payment therefor, pursuant to the Custody Agreement
and Power of Attorney; and each Attorney-in-Fact is authorized to execute
and deliver this Agreement and the certificate referred to in Section 5(f)
or that may be required pursuant to Sections 5(n) (in the case of any
Executive Selling Shareholder) and 5(o) on behalf of such Selling
Shareholder, to sell, assign and transfer to the U.S. Underwriters the
Securities to be sold by such Selling Shareholder hereunder, subject to the
provisions thereof, to determine the purchase price to be paid by the U.S.
Underwriters to such Selling Shareholder, as provided in Section 2 hereof,
to authorize the delivery of the Securities to be sold by such Selling
Shareholder hereunder, to accept payment therefor, and otherwise to act on
behalf of such Selling Shareholder in connection and in accordance with
this Agreement and the Custody Agreement and Power of Attorney.
(iv) Absence of Manipulation. Such Selling Shareholder 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 a violation of Regulation M of the 1934 Act Regulations with
respect to any security of the Company.
(v) Absence of Further Requirements. To the best of such Selling
-------------------------------
Shareholder's knowledge, no filing with, or consent, approval,
authorization, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, is necessary or
required by such Selling Shareholder for the performance by such Selling
Shareholder of its obligations hereunder or in the Custody Agreement and
Power of Attorney, or in connection with the offering, sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement and the International Purchase Agreement,
except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(vi) Certificates Suitable for Transfer; Instruments of Transfer.
-----------------------------------------------------------
Certificates for all of the Securities sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank, or, in the case of uncertificated stock, duly executed stock
powers, in each case with signatures guaranteed (or notarized, in the case
of any such Selling Shareholder not resident in the United States), have
been placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities or stock powers to
14
the U.S. Underwriters pursuant to this Agreement and the Custody Agreement
and Power of Attorney.
(vii) No Association with NASD. Except as described in the
------------------------
Registration Statement and the Prospectuses, neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the NASD), any member firm of the
NASD, except that each of 3i Group plc and NatWest Ventures Investments
Limited may be affiliated or associated with certain member firms of the
NASD.
(c) Additional Representations and Warranties by the Executive Selling
Shareholders. Each Executive Selling Shareholder further severally represents
and warrants to each U.S. Underwriter as of the date hereof, as of the Closing
Time, and, if the Executive Selling Shareholder is selling U.S. Option
Securities on a Date of Delivery, as of each such Date of Delivery, and agrees
with each U.S. Underwriter, as follows:
(i) During a period of 90 days from the date of the Prospectuses,
such Executive Selling Shareholder will not, without the prior written
consent of the Global Coordinator, (i) offer, pledge, sell, contract to
-
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
--
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided that any Executive Selling
--------
Shareholder may, at any time after 30 days from the date of the Closing
Time, pledge as security for borrowed money up to 50% of the shares of
Common Stock then owned by such Executive Selling Shareholder to any
commercial banking institution that is a member of the Federal Reserve
System or any institutional lender that makes loans secured by margin
securities in the ordinary course of business having combined capital and
surplus in excess of $500,000,000 (a "Pledgee") as long as such Pledgee
shall have agreed in writing to be bound by the obligations and
restrictions applicable to the Common Stock under this Section 1(c) and the
U.S. Representatives shall have received an agreement substantially in the
form of Exhibit D hereto signed by such Pledgee. The foregoing sentence
shall not apply to the Securities to be sold hereunder.
15
(ii) To the best of such Executive Selling Shareholder's knowledge,
the representations and warranties of the Company contained in Section 1(a)
hereof are true and correct; such Executive Selling Shareholder has
reviewed and is familiar with the Registration Statement and the
Prospectuses and the Prospectuses do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; and such person is not prompted to sell the
Securities to be sold by it, he or she, as the case may be, hereunder by
any information concerning any of the Company or any of its subsidiaries
which is not set forth in the Prospectuses. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the U.S. Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any U.S. Underwriter through the U.S. Representatives expressly for use
in the Registration Statement or the U.S. Prospectus.
(d) Officer's Certificates. Any certificate signed by any officer of the
Company delivered to the Global Coordinator, the U.S. Representatives or to
counsel for the U.S. Underwriters shall be deemed a representation and warranty
by the Company to each U.S. Underwriter as to the matters covered thereby; and
any certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Global Coordinator, the U.S. Representatives or to counsel for
the U.S. Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to each U.S. Underwriter
as to matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
-----------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and the Selling Shareholders, severally and not jointly, agree to sell
to each U.S. Underwriter, severally and not jointly, and each U.S. Underwriter,
severally and not jointly, agrees to purchase from the Company and the Selling
Shareholders, at the price per share set forth in Schedule C, that proportion of
the number of U.S. Securities set forth in Schedule B opposite the name of the
Company or the Selling Shareholders, as the case may be, which the number of
Initial U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter, plus any additional number of Initial U.S. Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial U.S. Securities,
subject, in each case, to such adjustments among the U.S. Underwriters as the
U.S. Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
16
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Option Selling Shareholders, acting severally and not jointly,
hereby grant an option to the U.S. Underwriters, severally and not jointly, to
purchase up to an additional [_____________] shares of Common Stock, as set
forth in Schedule B, at the price per share set forth in Schedule C. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Initial U.S. Securities upon notice by the Global Coordinator to the Company
and the Executive Selling Shareholders setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery for the U.S. Option Securities (a
"Date of Delivery") shall be determined by the Global Coordinator, but shall not
be later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the U.S. Option Securities, each of the
U.S. Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of U.S. Option Securities then being purchased
which the number of Initial U.S. Securities set forth in Schedule A opposite the
name of such U.S. Underwriter bears to the total number of Initial U.S.
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Global Coordinator and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company and the Executive Selling
Shareholders.
17
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Custody
Agreement and Power of Attorney against delivery to the U.S. Representatives for
the respective accounts of the U.S. Underwriters of certificates for the U.S.
Securities to be purchased by them. It is understood that each U.S. Underwriter
has authorized the U.S. Representatives, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for, the Initial U.S.
Securities and the U.S. Option Securities, if any, which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the U.S.
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial U.S. Securities or the U.S. Option Securities, if any, to
be purchased by any U.S. Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b) hereof, will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i) when
-
any post-effective amendment to the Registration Statement, shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
--
from the Commission, (iii) of any request by the Commission for any
---
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
--
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the
18
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of the Company's intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Global Coordinator with copies of
any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which the Global Coordinator or counsel for the U.S.
Underwriters shall object.
(c) Delivery of Registration Statement. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters will be
19
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement, the International
Purchase Agreement and in the Prospectuses. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as
a result of which it is necessary, in the opinion of counsel for the U.S.
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement any Prospectus in order that the Prospectuses will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement any Prospectus in order to comply with the requirements of
the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare
and file with the Commission, subject to Section 3(b) hereof, such
amendment or supplement as may be necessary to correct such statement or
omission or to make the Registration Statement or the Prospectuses comply
with such requirements, and the Company will furnish to the U.S.
Underwriters such number of copies of such amendment or supplement as the
U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for such period
after the effective date of the Registration Statement and any Rule 462(b)
Registration Statement as the Prospectuses are required by the 1933 Act or
such state securities laws to be delivered in connection with sales of the
Securities by any underwriter or dealer; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for the period specified above.
20
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by the Company from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, the Company will not, without the prior
written consent of the Global Coordinator, (i) directly or indirectly,
-
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
--
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(A) the Securities to be sold hereunder or under the International Purchase
Agreement, (B) any options to purchase shares of Common Stock granted or
shares of Common Stock sold pursuant to any employee benefit plan of the
Company whether existing at the date of this Agreement or adopted
subsequent hereto and the filing of any registration statement on Form S-8
related thereto or (C) any option or warrant to purchase shares of Common
Stock or shares of Common Stock issued or sold in connection with an
acquisition by the Company and the filing of any registration statement on
Form S-4 in connection therewith as long as all executive officers,
directors and other affiliates of the person being acquired have agreed in
writing to be bound by the obligations and restrictions of the foregoing
sentence of this Section 3(j).
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the
21
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay
-------------------
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing (or reproduction) and filing
-
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
--
(or reproduction) and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters and the transfer of the Securities between the
U.S. Underwriters and the International Managers, (iv) the fees and
--
disbursements of the Company's counsel, accountants and other advisors, (v) the
-
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of each
--
preliminary prospectus, any Term Sheets and of the Prospectuses and any
amendments or supplements thereto, (vii) the preparation, printing (or
---
reproduction) and delivery to the Underwriters of copies of the Blue Sky Survey
and any supplement thereto, (viii) the fees and expenses of any transfer agent
----
or registrar for the Securities, (ix) the filing fees incident to, and the
--
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the NASD of the terms of the sale of the Securities and (x)
-
the fees and expenses incurred in connection with the listing of the Securities
on the New York Stock Exchange.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
-
and stock transfer taxes, if any, payable upon the sale of the Securities to the
U.S. Underwriters, and their transfer between Underwriters pursuant to any
agreement between Underwriters, and (ii) the fees and disbursements of their
--
respective counsel and accountants, except in each case (as between the Company
and any Selling Shareholder) as otherwise provided in any agreement between the
Company and any Selling Shareholder.
(c) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 (other than
Section 5(j)), Section 9(a)(i) or Section 11 hereof, the Company and each of the
Selling Shareholders,
22
severally and not jointly, shall reimburse the U.S. Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters, except (as between the Company and any
Selling Shareholder) as otherwise provided in any agreement between the Company
and any Selling Shareholder.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
--------------------------------------------
of the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or by or on behalf of any Selling Shareholder delivered pursuant to the
provisions hereof, to the performance by the Company of its covenants and other
obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion and letter, in
each case dated as of Closing Time, of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx,
counsel for the Company, in form and substance satisfactory to counsel for
the U.S. Underwriters, together with signed or reproduced copies of such
opinion and letter for each of the other U.S. Underwriters to the effect
set forth in Exhibit A-1 and Exhibit A-2, respectively, hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws
of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the U.S.
23
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinions of Counsel for the Selling Shareholders. At Closing
Time, the U.S. Representatives shall have received the favorable opinions,
dated as of the Closing Time, of the several counsel of the Selling
Shareholders in each case in form and substance satisfactory to counsel for
the U.S. Underwriters, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters, to the effect set forth in
Exhibit B hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law and the Revised Uniform Limited Partnership Act of
Delaware, as applicable, upon the opinions of counsel satisfactory to the
U.S. Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of the Selling Shareholders or officers of the
Company and its subsidiaries and certificates of public officials.
(d) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & Xxxxxxxx, counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters with respect to the matters set forth in clauses 1,
2, 4 (as to the third clause thereof), 5 (solely as to preemptive or other
similar rights arising by operation of law or under the charter or by-laws
of the Company), 8 through 10, inclusive, 12 and Exhibit A-2 hereto. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising
24
in the ordinary course of business, and the U.S. Representatives shall have
received a certificate of each of the Chairman of the Board, the President
or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company dated as of Closing Time and to the
effect that (i) there has been no such material adverse change, (ii) the
- --
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
---
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
--
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At the Closing Time, the
U.S. Representatives shall have received a certificate of an Attorney-in-
Fact on behalf of each Selling Shareholder, dated as of Closing Time, to
the effect that (i) the representations and warranties of each Selling
-
Shareholder contained in Section 1(b) and 1(c) hereof are true and correct
in all respects with the same force and effect as though expressly made at
and as of Closing Time and (ii) each Selling Shareholder has complied in
--
all material respects with all agreements and all conditions on its part to
be performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from Xxxxxx
Xxxxxxxx LLP a letter dated such date, in form and substance satisfactory
to the U.S. Representatives, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from Xxxxxx Xxxxxxxx LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
25
(j) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule D hereto.
(l) Form W-9 and Form W-8. At or prior to Closing Time, the U.S.
Representatives shall have received from each Selling Shareholder a
properly completed and executed United States Treasury Form W-9 or Form W-
8, as applicable.
(m) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase
Agreement.
(n) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company and the Executive Selling
Shareholders contained herein and the statements in any certificates
furnished by any of them hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, and the U.S.
Representatives shall have received:
(i) Officers' Certificates. A certificate, dated such Date of
----------------------
Delivery, of each of the Chairman of the Board, President or a Vice
President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct as of such Date of Delivery.
(ii) Certificate of the Executive Selling Shareholders. A
-------------------------------------------------
certificate, dated such Date of Delivery, of an Attorney-in-Fact on
behalf of each Executive Selling Shareholder confirming that the
certificate delivered at Closing Time pursuant to Section 5(f) hereof
remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of Xxxx
------------------------------
Xxxxxxx Xxxxx & Xxxxxxxxxx, counsel for the Company, in form and
26
substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Executive Selling Shareholders. The
------------------------------------------------------
favorable opinion of Xxxx Xxxxxxx Xxxxx & Xxxxxxxxxx, counsel for the
Executive Selling Shareholders, in form and substance satisfactory to
counsel for the U.S. Underwriters, dated such Date of Delivery,
relating to the U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the respective opinions
required by Section 5(c) hereof.
(v) Opinion of Counsel for U.S. Underwriters. The favorable opinion
----------------------------------------
of Debevoise & Xxxxxxxx, counsel for the U.S. Underwriters, dated such
Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Xxxxxx Xxxxxxxx LLP, in
-------------------------
form and substance satisfactory to the U.S. Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the U.S. Representatives pursuant to Section
5(g) hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company and the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be satisfactory
in form and substance to the U.S. Representatives and counsel for the U.S.
Underwriters.
(p) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after Closing Time, the obligations of
the several U.S. Underwriters to purchase the
27
relevant Option Securities, may be terminated by the U.S. Representatives by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company and the Executive
Selling Shareholders, jointly and severally, agree to indemnify and hold
harmless each U.S. Underwriter, its directors, officers and employees, and each
person, if any, who controls any U.S. Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) hereof) any such settlement is effected with the written consent of
the Company and the Executive Selling Shareholders; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any
28
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (a) this indemnity agreement shall not apply to any
-------- ------- -
loss, liability, claim, damage or expense (x) to the extent arising out of any
-
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) and
(y) with respect to any preliminary prospectus to the extent that any such loss,
-
liability, claim, damage or expense of such U.S. Underwriter results solely from
the fact that such U.S. Underwriter sold Securities to a person as to whom the
Company shall establish that there was not sent by commercially reasonable
means, at or prior to the written confirmation of such sale, a copy of the U.S.
Prospectus in any case where such delivery is required by the 1933 Act, if the
Company has previously furnished copies thereof in sufficient quantity to such
U.S. Underwriter and the loss, claim, damage or liability of such U.S.
Underwriter results from an untrue statement or omission of a material fact
contained in the preliminary prospectus that was corrected in the U.S.
Prospectus, and (b) each Executive Selling Shareholder's aggregate liability
-
under this Section 6 shall be limited to an amount equal to such Executive
Selling Shareholder's net proceeds (after deducting the underwriting discount,
but before deducting expenses) from the sale of such Executive Selling
Shareholder's Securities pursuant to this Agreement.
In making a claim for indemnification under this Section 6 (other than
pursuant to clause (a)(iii) of this Section 6), or contribution under Section 7,
by the Company or the Executive Selling Shareholders, the indemnified parties
may proceed against either (i) the Company and the Executive Selling
-
Shareholders or (ii) the Company only, but may not proceed solely against the
--
Executive Selling Shareholders. In the event that the indemnified parties are
entitled to seek indemnity or contribution hereunder against any loss,
liability, claim, damage and expense incurred with respect to a final judgment
from a trial court, then, as a precondition to any indemnified party obtaining
indemnification or contribution from any Executive Selling Shareholder, the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution under this
Agreement with respect to such loss, liability, claim, damage or expense (the
"Final Judgment") from the Company and the Executive Selling Shareholder and
shall seek to satisfy such Final Judgment in full from the Company by making a
written demand upon the Company for such satisfaction. Only in the event such
Final Judgment shall remain unsatisfied in whole or in part 45 days following
the date of receipt by the Company of such demand shall any indemnified party
have the right to take action to satisfy such Final Judgment by making demand
directly on any Executive Selling
29
Shareholder (but only if and to the extent the Company has not already satisfied
such Final Judgment, whether by settlement, release or otherwise). The
indemnified parties may exercise this right to first seek to obtain payment from
the Company and thereafter obtain payment from any Executive Selling Shareholder
without regard to the pursuit by any party of its rights to the appeal of such
Final Judgment. The indemnified parties shall, however, be relieved of their
obligation to first obtain a Final Judgment, seek to obtain payment from the
Company with respect to such Final Judgment or, having sought such payment, to
wait such 45 days after failure by the Company to satisfy immediately any such
Final Judgment if (i) the Company files a petition for relief under the United
-
States Bankruptcy Code (the "Bankruptcy Code"), (ii) an order for relief is
--
entered against the Company in an involuntary case under the Bankruptcy Code,
(iii) the Company makes an assignment for the benefit of its creditors, or (iv)
--- --
any court orders or approves the appointment of a receiver or custodian for the
Company or a substantial portion of either of their assets. The foregoing
provisions of this paragraph are not intended to require any indemnified party
to obtain a Final Judgment against the Company or any Executive Selling
Shareholder before obtaining reimbursement of expenses pursuant to clause
(a)(iii) of this Section 6. However, the indemnified parties shall first seek
to obtain such reimbursement in full from the Company by making a written demand
upon the Company for such reimbursement. Only in the event such expenses shall
remain unreimbursed in whole or in part 45 days following the date of receipt by
the Company of such demand shall any indemnified party have the right to receive
reimbursement of such expenses from any Executive Selling Shareholder by making
written demand directly on such Executive Selling Shareholder (but only if and
to the extent the Company has not already satisfied the demand for
reimbursement, whether by settlement, release or otherwise). The indemnified
parties shall, however, be relieved of their obligation to first seek to obtain
such reimbursement in full from the Company or, having made written demand
therefor, to wait such 45 days after failure by the Company to reimburse
immediately such expenses if (i) the Company files a petition for relief under
-
the Bankruptcy Code, (ii) an order for relief is entered against the Company in
--
an involuntary case under the Bankruptcy Code, (iii) the Company makes an
---
assignment for the benefit of its creditors, or (iv) any court orders or
--
approves the appointment of a receiver or custodian for the Company or a
substantial portion of its assets.
(b) Indemnification of U.S. Underwriters by the Non-Executive Selling
Shareholders. Each Non-Executive Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each U.S. Underwriter, its
directors, officers and employees, and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, with respect to any untrue statement or omission, or
alleged untrue statement or omission, contained in the Registration Statement
(or any amendment thereto), including the Rule 430 Information
30
and the Rule 434 Information, if applicable, or any preliminary prospectus or
the Prospectuses (or any amendment or supplement thereto) in reliance upon and
in conformity with information furnished to the Company in writing by or on
behalf of such Non-Executive Selling Shareholder expressly for use therein;
provided, however, that (x) this indemnity agreement shall not apply to any
-------- ------- -
loss, liability, claim, damage or expense (i) to the extent arising out of any
-
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) and
(ii) with respect to any preliminary prospectus to the extent that any such
--
loss, liability, claim, damage or expense of such U.S. Underwriter results
solely from the fact that such U.S. Underwriter sold Securities to a person as
to whom the Company shall establish that there was not sent by commercially
reasonable means, at or prior to the written confirmation of such sale, a copy
of the U.S. Prospectus in any case where such delivery is required by the 1933
Act, if the Company has previously furnished copies thereof in sufficient
quantity to such U.S. Underwriter and the loss, claim, damage or liability of
such U.S. Underwriter results from an untrue statement or omission of a material
fact contained in the preliminary prospectus that was corrected in the U.S.
Prospectus, and (y) each Non-Executive Selling Shareholder's aggregate liability
-
under this Section 6(b) shall be limited to an amount equal to the net proceeds
(after deducting the underwriting discount, but before deducting expenses)
received by such Non-Executive Selling Shareholder from the sale of Securities
pursuant to this Agreement.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary U.S. prospectus or the U.S.
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
31
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or (b)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
-
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
--
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested in accordance with this Agreement an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
-
days after receipt by such indemnifying party of the aforesaid request, (ii)
--
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
---
in accordance with such request prior to the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
32
SECTION 7. Contribution. If the indemnification provided for in Section
------------
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
-
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
--
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the U.S. Underwriters on the other
hand in connection with the statements or omissions, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the U.S. Underwriters on the other hand in connection with
the offering of the U.S. Securities pursuant to this Agreement shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the U.S. Securities pursuant to this Agreement (after deducting the
underwriting discount, but before deducting expenses) received by the Company
and the Selling Shareholders and the total underwriting discount received by the
U.S. Underwriters, in each case as set forth on the cover of the U.S.
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the U.S.
Securities as set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the one
hand and the U.S. Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company or by the Selling
Shareholders in writing or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company, the Selling Shareholders and the U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the U.S. 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 Section 7. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
7 shall be deemed to include any legal or other expenses
33
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, (x) no U.S. Underwriter
-
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission, and (y) no
-
Non-Executive Selling Shareholder shall be required to contribute any amount in
excess of such Non-Executive Selling Shareholder's net proceeds (after deducting
the underwriting discount, but before deducting expenses) from the sale of
Securities pursuant to this Agreement or on a basis other than as specified in
Section 6(b).
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or the Selling Shareholders submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company or any controlling person or the
Selling Shareholders, and shall survive delivery of the Securities to the U.S.
Underwriters.
34
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
-
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
--
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
---
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
--
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or more
-----------------------------------------------
of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full
35
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all non-
defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the
---------------------------------------------------------
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
-------
of Delivery to sell and deliver the number of Securities that such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, the
remaining Selling Shareholders shall have the right to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number of Securities to be sold by all Selling Shareholders as set forth in
Schedule B hereto. In the event that a Selling Shareholder or Selling
Shareholders shall so fail, and the remaining Selling Shareholders do not
exercise such right to increase the number of Securities to be sold by them, and
the Company does not exercise the right hereby granted to sell the Securities
that the defaulting Selling Shareholders are obligated to sell hereunder, then
the U.S. Underwriters may, at the option of the U.S. Representatives, by notice
from the U.S. Representatives to the Company and the non-defaulting Selling
Shareholders, either (i) terminate this Agreement without any liability on the
-
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (ii) elect to purchase the
--
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any,
36
in respect of such default. If the remaining Selling Shareholders exercise the
right to sell the Securities that such defaulting Selling Shareholder is
obligated to sell hereunder, as used herein the term "Selling Shareholder" shall
not include such defaulting Selling Shareholder for purposes of determining
compliance with all agreements and conditions to be performed by the Selling
Shareholders hereunder.
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the U.S. Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectuses or in any other documents
or arrangements.
(b) If the Company shall fail at Closing Time to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
Provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain
-------- -------
in full force and effect. No action taken pursuant to this Section shall
relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations; notices to the Company shall be directed to the Company at Two
Democracy Center, 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx
00000, attention of X. Xxxxxxx Xxxxxxx; and notices to the Selling Shareholders
shall be directed to the Selling Shareholders care of the Company at the
foregoing address, attention of X. Xxxxxxx Xxxxxxx.
SECTION 13. Parties. This Agreement shall each inure to the benefit of and
-------
be binding upon the U.S. Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser
37
of Securities from any U.S. Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
38
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
XXXXXX COMMUNICATIONS, INC.
By__________________________________________
Name:
Title:
Xxxxxx X. Xxxxxx
By__________________________________________
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
XXXXXXX, XXXXX & CO.
BEAR, XXXXXXX & CO. INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
39
By: XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By _________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
40
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ------------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated........................
Xxxxxxx, Xxxxx & Co..............................
Bear, Xxxxxxx & Co. Inc..........................
NationsBanc Xxxxxxxxxx Securities LLC............ _________
Total............................................ [ ]
===========
Sch A-1
SCHEDULE B
Maximum Number of
Number of Initial U.S. U.S. Option
Securities to be Sold Securities to be Sold
---------------------- ---------------------
---------------------- ---------------------
Total...........====================== =====================
SchB-1
SCHEDULE C
XXXXXX COMMUNICATIONS, INC.
[__________] Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[_____________].
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $[_____________], being an amount
equal to the initial public offering price set forth above less $[_______]
per share.
Sch C-1
SCHEDULE X
Xxxxxx Communications, Inc.
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
USN College Marketing, L.P.
MBZ Trust of 1996
Xxxxxxxx X. Xxxxxxxxx
Xxxx Xxxxxxx
X. Xxxxxxx Xxxxxxx
Xxxxxx Xxxxxxxxx
Xxxx X. Xxxxxxxx
Sch D-1
SCHEDULE E
X.X. Xxxxxx Marketing Services, Inc.
Xxxxxx Marketing Services, Inc.
Xxxxxx Direct Services, Inc.
Xxxxxx Complete Target Marketing Solutions, Inc.
MMD, Inc.
Sampling Corporation of America
American List Corporation
American Student List Co., Inc.
Xxxxx Holdings Limited
Xxxxx Limited
Bounty Group Holdings Limited
Bounty Holdings Limited
Xxxxxxxx Xxxxx Sales Limited
GEM Communications Inc.
Rapid Deployment Group Limited
Rapid Deployment Limited
PharmFlex, Inc.
Xxxxxx Communications Holdings (UK) Ltd.
Blau Marketing Technologies, Inc.
Xxxxxx Communications, Inc.
Xxxxxx Retail Operation Services Limited
Health Products Research, Inc.
Healthcare Promotions, LLC
Publimed Promotion S.A.
CLI Pharma S.A.
Sch E-1
Exhibit A-1
FORM OF OPINION OF XXXX XXXXXXX XXXXX & XXXXXXXXXX
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement.
3. The Company is in good standing in each jurisdiction that issued a
Company Good Standing Certificate.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to the U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectuses or pursuant to the exercise of
convertible securities or options referred to in the Prospectuses); the
shares of issued and outstanding capital stock of the Company
outstanding prior to the issuance of the Company Shares have been duly
authorized and validly issued and are fully paid and non-assessable and
no holder of the Company Shares is or will be subject to personal
liability by reason of being such a holder; the Company Shares have been
duly authorized and, when issued and delivered to the U.S. Underwriters
and the International Managers in accordance with the terms of the U.S.
Purchase Agreement and the International Purchase Agreement, will be
validly issued, fully paid and nonassessable; and none of the
outstanding shares of capital stock of the Company was issued in
violation of any preemptive rights under the General Corporation Law of
the State of Delaware.
5. To our knowledge, when issued and delivered to the U.S. Underwriters and
the International Managers against payment therefor in accordance with
the terms of the U.S. Purchase Agreement and the International Purchase
Agreement, the issuance and sale of the Company Shares by the Company
will not be subject to any preemptive or other similar contractual
A-1-1
rights that would entitle any person to acquire any of the Company
Shares upon the issuance and sale by the Company.
6. Each Subsidiary is validly existing as a corporation or partnership, as
the case may be, in good standing under the laws of the jurisdiction of
incorporation, has corporate or partnership, as the case may be, power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectuses and is duly qualified as a
foreign corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction that issued a
Subsidiary Good Standing Certificate.
7. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and, based upon our review of the capital stock records of
the Subsidiaries, is owned by the Company directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity. None of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary.
8. The U.S. Purchase Agreement and the International Purchase Agreement
have been duly authorized, executed and delivered by the Company. The
performance by the Company of its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement and the consummation
of the transactions contemplated therein and compliance by the Company
with its obligations under the U.S. Purchase Agreement and the
International Purchase Agreement have been duly authorized by the
Company.
9. The Registration Statement was declared effective under the 1933 Act on
May , 1998, the U.S. Prospectus was filed with the Commission pursuant
to Rule 424(b) of the 1933 Act Regulations on May , 1998 and, to our
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose is pending or threatened by the Commission.
10.The Registration Statement and the Prospectuses, excluding the
documents incorporated by reference therein, as of their respective
effective or issue dates (except for the financial statements and the
notes thereto and the supporting schedules and other financial data
included therein, as to which
A-1-2
we express no opinion) comply as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
11. The documents incorporated by reference in the Prospectuses (except
for the financial statements and the notes thereto and the supporting
schedules included therein and other financial data included therein,
as to which we express no opinion), when they became effective or at
the time they were filed with the Commission, complied as to form in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder.
12. The form of certificate used to evidence the Common Stock complies in
all material respects with the requirements of the General Corporation
Law of the State of Delaware, any applicable requirements of the
Certificate of Incorporation and Bylaws of the Company and the
requirements of the New York Stock Exchange.
13. To our knowledge, except as set forth in the Prospectuses, there is
not pending any action, suit, proceeding, inquiry or investigation to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets of the Company and its
subsidiaries considered as one enterprise, or the consummation of the
transactions contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement or the Exchange Agreement or the
performance by the Company of its obligations thereunder.
14. The information in the Prospectuses under "Risk Factors - Government
Regulation," "Risk Factors - Shares Eligible For Future Sale and
Registration Rights," "Risk Factors - Effect of Certain Charter and
Bylaw Provisions," "Shares Eligible for Future Sale," and
"Considerations for Non-United States Holders" and in the Registration
Statement under Item 15, to the extent that it describes matters of
law, summaries of legal matters, the Company's Certificate of
Incorporation or Bylaws, or legal proceedings, or legal conclusions,
has been reviewed by us and is correct in all material respects.
A-1-3
15. To our knowledge, there are no statutes or regulations that are
required to be described in the Prospectuses that are not
described as required.
16. The descriptions in the Prospectuses of contracts and other legal
documents to which the Company or any subsidiary is a party are
accurate in all material respects. To our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or
referred to in the Prospectuses or to be filed as exhibits
thereto other than those described or referred to in the
Prospectuses or filed or as exhibits to the Registration
Statement, and the descriptions thereof or references thereto are
accurate in all material respects.
17. To our knowledge, neither the Company nor any Subsidiary is in
violation of its charter or bylaws or other organizational
instrument and no default by the Company or any Subsidiary exists
in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed as an exhibit
to the Registration Statement.
18. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any domestic
court or governmental authority or agency (other than under the
1933 Act and the 1933 Act Regulations and the Securities Exchange
Act of 1934, which have been obtained, or as may be required
under the securities or blue sky laws of the various states, as
to which we express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of
the U.S. Purchase Agreement and the International Purchase
Agreement by the Company, or for the offering, issuance, sale or
delivery by the Company of the Company Shares to the U.S.
Underwriters and the International Managers in accordance with
the U.S. Purchase Agreement and the International Purchase
Agreement.
19. The execution, delivery and performance of the U.S. Purchase
Agreement and the International Purchase Agreement by the
Company, and the consummation of the transactions contemplated
therein by the Company, and the compliance by the Company with
its obligations under the U.S. Purchase Agreement and the
International Purchase Agreement, do not and will not, whether
with or without the giving of notice or lapse of time or
A-1-4
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined in Section 1(a)(x) of the Purchase Agreements) under
or, to our knowledge, result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any Subsidiary under any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their properties is
or may be bound, or to which any of them or their properties may be
subject, that is filed as an exhibit to the Registration Statement or
which is otherwise known to us, except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or bylaws or other organizational
document, as the case may be, of the Company or any Subsidiary or any
applicable law, statute, rule, regulation (other than the blue sky or
securities laws or regulations of the various states, as to which we
express no opinion), judgment, order, writ or decree, known to us, of
any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any
of their respective properties, assets or operations.
20. To our knowledge, other than as described in the Prospectuses, there
are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the 1933 Act (other than
rights which have been waived or satisfied).
21. The Company is not and immediately after receiving the proceeds
from the sale of the Company Shares, will not be an "investment
company" or an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act of 1940, as amended.
22. Each Selling Shareholder is the sole registered owner of the
Securities to be sold by it pursuant to the U.S. Purchase Agreement
and the International Purchase Agreement.
A-1-5
Exhibit A-2
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or accounting matters and
because of the wholly or partially non-legal character of many of the statements
contained in the Registration Statement or the Prospectuses, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectuses and we make no representation that we have independently verified
the accuracy, completeness or fairness of such statements. Without limiting the
foregoing, we assume no responsibility for, and have not independently verified,
the accuracy, completeness or fairness of the financial statements and the notes
thereto and the schedules and other financial data included in the Registration
Statement and we have not examined the accounting or financial records from
which such financial statements, notes, schedules and data are derived.
However, on the basis of our participation, as counsel to the Company,
with representatives of the Company and its subsidiaries in the preparation of
the Registration Statement and the Prospectuses, and our participation with
representatives of the Company, its independent public accountants and the
Underwriters at meetings in which the contents of the Registration Statement and
the Prospectuses and related matters were discussed and the examination by us of
such corporate records, statutes, documents and questions of law as we deemed
necessary, but without independent verification by us of the accuracy,
completeness and fairness of the statements contained in the Registration
Statement and the Prospectuses, and without commenting as to the financial
statements and the notes thereto and the schedules and other financial data
included therein, nothing has come to our attention that would lead us to
believe that the Registration Statement, at the time it became effective under
the Securities Act, contained an untrue statement of 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 Prospectuses, or any amendment or
supplement thereto (except for the financial statements and the notes thereto
and the schedules and other financial data included or incorporated or deemed to
be incorporated by reference therein or omitted therefrom, as to which we make
no statement), as of its date and as of the Closing Time, contained or contains
any untrue statement of material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
A-2-1
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
1. No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, other than
the issuance of the order of the Commission declaring the
Registration Statement effective and such authorizations, approvals
or consents as may be necessary under state securities laws (as to
which we need express no opinion), is necessary or required to be
obtained by the Selling Shareholders for the performance by each
Selling Shareholder of its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement or in the
Custody Agreement and Power of Attorney, or in connection with the
offer, sale or delivery of the Securities.
2. Each Custody Agreement and Power of Attorney has been duly executed
and delivered by the respective Selling Shareholder named therein
and constitutes the legal, valid and binding agreement of such
Selling Shareholder, enforceable in accordance with its terms,
subject to the qualification that the enforceability of such
Selling Shareholder's obligations under the Custody Agreement and
Power of Attorney may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally, and by
general equitable principles (whether applied by a court of law or
equity).
3. The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by or
on behalf of each Selling Shareholder.
4. American Stock Transfer & Trust Company has been duly authorized by
each Selling Shareholder to deliver the Securities on behalf of
such Selling Shareholder in accordance with the terms of the U.S.
Purchase Agreement and the International Purchase Agreement and the
Custody Agreement and Power of Attorney.
B-1
5. The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement and the Custody
Agreement and Power of Attorney and the sale and delivery of the
Securities and the consummation of the transactions contemplated in
the U.S. Purchase Agreement and the International Purchase
Agreement and in the Registration Statement and compliance by each
Selling Shareholder with its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement have been duly
authorized by all necessary action on the part of such Selling
Shareholder and, to the best of our knowledge, (i) do not and will
not, whether with or without the giving of notice or passage of
time or both, result in the creation or imposition of any tax,
lien, charge or encumbrance upon the Securities to be sold by such
Selling Shareholder nor (ii) will such action result in any
violation of the provisions of the charter or by-laws of any
Selling Shareholder, if applicable, or any law, administrative
regulation, judgment or order of any governmental agency or body or
any administrative or court decree having jurisdiction over such
Selling Shareholder or any of its properties.
6. Each Selling Shareholder is the sole registered owner of the
Securities to be sold by such Selling Shareholder pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement
and has full right, power and authority to sell, transfer and
deliver such Securities pursuant to the U.S. Purchase Agreement and
the International Purchase Agreement. Upon delivery of such
Securities, such Selling Shareholder will transfer to the
Underwriters who have purchased such Securities pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement
(without notice of any adverse claim of such Selling Shareholder
and who are otherwise bona fide purchasers for purposes of the
Uniform Commercial Code) good and valid title to such Securities,
free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind.
B-2
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
SHAREHOLDERS PURSUANT TO SECTION 5(k)
May , 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated,
XXXXXXX, XXXXX & CO.
BEAR, XXXXXXX & CO. INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by Xxxxxx Communications, Inc.
-------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder and an officer and/or director/*/ of Xxxxxx
Communications, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Xxxxxxx, Xxxxx & Co., Bear, Xxxxxxx & Co. Inc. and
NationsBanc Xxxxxxxxxx Securities LLC propose to enter into a U.S. Purchase
Agreement (the "U.S. Purchase Agreement") with the Company and the other parties
named therein providing for the public offering of shares (the "Securities") of
the Company's common stock, par value $.001 per share (the "Common Stock"). In
recognition of the benefit that such an offering
______________________
* Delete or revise language as appropriate
C-1
will confer upon the undersigned as a stockholder and an officer and/or
director/*/ of the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter to be named in the U.S. Purchase Agreement that, during a
period of 90 days from the date of the U.S. Purchase Agreement, the undersigned
will not, without the prior written consent of Xxxxxxx Xxxxx, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
-
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
--
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of owner-
ship of the Common Stock, whether any such swap or transaction is to be settled
by delivery of Common Stock or other securities, in cash or otherwise.
[Notwithstanding the foregoing, the undersigned may, at any time after 30
days from the date of the Closing Time (as defined in the U.S. Purchase
Agreement), pledge as security for borrowed money up to [50%]/**/ [all]/***/ of
the shares of Common Stock then owned by the undersigned to any commercial
banking institution that is a member of the Federal Reserve System or any
institutional lender that makes loans secured by margin securities in the
ordinary course of business having combined capital and surplus in excess of
$500,000,000 (a "Pledgee") as long as such Pledgee shall have agreed in writing
to be bound by the obligations and restrictions applicable to the Common Stock
under Section 1(c) of the U.S. Purchase Agreement and the U.S. Representatives
shall have received an
_______________________
* Delete or revise language as appropriate.
[** Include in the case of lock-up agreement of Xxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxxxx.
[*** Include in the case of lock-up agreement of USN College Marketing, L.P.
C-2
agreement substantially in the form of Exhibit D to the U.S. Purchase Agreement
signed by such Pledgee.]*
Very truly yours,
Signature:_______________
Print Name:______________
_____________________
[* Include in the case of lock-up agreement of Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxxx and USN College Marketing, L.P.]
C-3
Exhibit D
FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 1(c)
___________, 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated,
XXXXXXX, XXXXX & CO.
BEAR, XXXXXXX & CO. INC.
NATIONSBANC XXXXXXXXXX SECURITIES LLC
as U.S. Representatives of the several
U.S. Underwriters named in the
within-mentioned U.S. Purchase Agreement
c/x Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Public Offering by Xxxxxx Communications, Inc.
----------------------------------------------
Dear Sirs:
The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of Xxxxxx Communications, Inc., a Delaware
corporation (the "Company"), understands that Xxxxxxx Xxxxx & Co., Xxxxxxx
Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxx, Xxxxx &
Co., Bear, Xxxxxxx & Co. Inc. and NationsBanc Xxxxxxxxxx Securities LLC and have
entered into a U.S. Purchase Agreement, dated May __, 1998 (the "U.S. Purchase
Agreement"), with the Company and the other parties named therein providing for
the public offering of shares of the Company's Common Stock. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the undersigned agrees with each underwriter named in the U.S.
Purchase Agreement that, during a period of 90 days from the date of the U.S.
Purchase Agreement, the undersigned will not, without the prior written consent
of Xxxxxxx Xxxxx, directly or indirectly, (i) offer, pledge, sell, contract to
-
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant
D-1
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any Pledged Shares or any securities convertible into or exchangeable
or exercisable for any Pledged Shares, whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
--
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of any Pledged Shares, whether any such swap or transaction is to be settled by
delivery of any Pledged Shares or other securities, in cash or otherwise.
Very truly yours,
Name of Pledgee
By:_____________________
Name:
Title:
D-2
