EXHIBIT 1.B
900,000 Shares
CONVERSE INC.
Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
------------------------------------
May __, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇, READ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
As Lead Managers for the Several Managers
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Converse Inc., a Delaware corporation (the "Company"), proposes to
issue and sell an aggregate of 900,000 shares (the "Shares") of its common
stock, without par value, to the several Managers named in Schedule I hereto
(the "Managers"), for whom ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇, Read & Co. Inc. and
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation are acting as
representatives (the "Lead Managers"). The Company's common stock, without par
value, including the Shares and the U.S. Shares (as defined herein), is
hereinafter referred to as the "Common Stock."
It is understood that the Company is concurrently entering into a U.S.
Underwriting Agreement, dated the date hereof (the "U.S. Underwriting
Agreement"), providing for the sale of 3,600,000 shares of the Common Stock (the
"Firm U.S. Shares") (plus an option granted by the Company to purchase up to an
additional 675,000 shares of Common Stock (the "Additional U.S. Shares") solely
for the purpose of covering overallotments) through arrangements with certain
underwriters in the United States and Canada (the "U.S. Underwriters") , for
whom ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ▇▇▇▇▇▇, Read & Co. Inc. and ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation are
acting as representatives (the "Representatives"). All shares of Common Stock
proposed to be offered to the U.S. Underwriters pursuant to the U.S.
Underwriting Agreement including the Firm U.S. Shares and the Additional U.S.
Shares, are herein called the "U.S. Shares"; the U.S. Shares and the Shares,
collectively, are herein called the "Underwritten Shares."
The Company also understands that the Lead Managers and the
Representatives have entered into an agreement (the "Agreement Between U.S.
Underwriters and Managers") contemplating the coordination of certain
transactions between the Managers and the U.S. Underwriters and that, pursuant
thereto and subject to the conditions set forth therein, the Managers may
purchase from the U.S. Underwriters a portion of the U.S. Shares or sell to the
U.S. Underwriters a portion of the Shares. The Company understands that any
such purchases and sales between the Managers and the U.S. Underwriters shall be
governed by the Agreement Between U.S. Underwriters and Managers and shall not
be governed by the terms of this Agreement or the U.S. Underwriting Agreement.
The Company wishes to confirm as follows its agreement with you and
the other several Managers on whose behalf you are acting, in connection with
the several purchases of the Shares by the Managers.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has prepared
and filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3 under the Act (the "registration
statement"), including a prospectus subject to completion relating to the
Underwritten Shares. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and must be
declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. The term "Prospectuses"
as used in this Agreement means the prospectuses in the forms included in the
Registration Statement, or, if the prospectuses included in the Registration
Statement omit information in reliance on Rule 430A under the Act and such
information is included in prospectuses filed with the Commission pursuant to
Rule 424(b) under the Act, the term "Prospectuses" as used in this Agreement
means the prospectuses in the forms included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in the
prospectuses filed with the Commission pursuant to Rule 424(b). If an
abbreviated registration statement is prepared and filed with the Commission in
accordance with Rule 462(b) under the Act (an "Abbreviated Registration
Statement"), the term "Registration Statement" as used in this Agreement
includes the Abbreviated Registration Statement. The term "Prepricing
2
Prospectuses" as used in this Agreement means the prospectuses subject to
completion in the form included in the registration statement at the time of the
initial filing of the registration statement with the Commission, and as such
prospectuses shall have been amended from time to time prior to the date of the
Prospectuses. Any reference in this Agreement to the registration statement,
the Registration Statement, any Prepricing Prospectuses or the Prospectuses
shall be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date of the
registration statement, the Registration Statement, such Prepricing Prospectuses
or the Prospectuses, as the case may be, and any reference to any amendment or
supplement to the registration statement, the Registration Statement, any
Prepricing Prospectuses or the Prospectuses shall be deemed to refer to and
include any documents filed after such date under the Securities Exchange Act of
1934, as amended (the "Exchange Act") which, upon filing, are incorporated by
reference therein, as required by paragraph (b) of Item 12 of Form S-3. As used
herein, the term "Incorporated Documents" means the documents which at the time
are incorporated by reference in the registration statement, the Registration
Statement, any Prepricing Prospectuses, the Prospectuses, or any amendment or
supplement thereto.
It is understood that two forms of Prepricing Prospectus and two forms
of Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
U.S. Shares that are to be offered and sold in the United States (as defined
herein) or Canada (as defined herein) to U.S. or Canadian Persons (as defined
herein) (the "U.S. Prepricing Prospectus" and the "U.S. Prospectus,"
respectively), and a Prepricing Prospectus and a Prospectus relating to the
Shares that are to be offered and sold outside the United States or Canada to
persons other than U.S. or Canadian Persons (the "International Prepricing
Prospectus" and the "International Prospectus," respectively). The U.S.
Prospectus and the International Prospectus are herein collectively called the
"Prospectuses," and the U.S. Prepricing Prospectus and the International
Prepricing Prospectus are herein called the "Prepricing Prospectuses." For
purposes of this Agreement: "Rules and Regulations" means the rules and
regulations adopted by the Commission under either the Act or the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as applicable; "U.S. or
Canadian Person" means any resident or national of the United States or Canada,
any corporation, partnership or other entity created or organized in or under
the laws of the United States or Canada or any estate or trust the income of
which is subject to United States or Canadian income taxation regardless of the
source of its income (other than the foreign branch of any U.S. or Canadian
Person), and includes any United States or Canadian branch of a person other
than a U.S. or Canadian Person; "United States" means the United States of
America (including the states thereof and the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction; and
"Canada" means Canada and its territories, its possessions and other areas
subject to its jurisdiction.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Manager and, upon the
3
basis of the representations, warranties and agreements of the Company herein
contained and subject to all the terms and conditions set forth herein, each
Manager agrees, severally and not jointly, to purchase from the Company, at a
purchase price of $______per share (the "purchase price per share"), the number
of Shares set forth opposite the name of such Manager in Schedule I hereto (or
such number of Shares increased as set forth in Section 10 hereof).
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Managers propose to make a public offering of their respective portions
of the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the International Prospectus.
4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Managers of and payment for the Shares shall be made at the office of ▇▇▇▇▇
▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, at 10:00 A.M., New York
City time, on May ____, 1997 (the "Closing Date"). The place of closing for
the Shares and the Closing Date may be varied by agreement between you and the
Company.
Certificates for the Shares shall be registered in such names and in
such denominations as you shall request prior to 9:30 A.M., New York City time,
on the second business day preceding the Closing Date. Such certificates shall
be made available to you in New York City for inspection and packaging not later
than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. The certificates evidencing the Shares to be purchased hereunder
shall be delivered to you on the Closing Date, against payment of the purchase
price therefor in immediately available funds.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the several
Managers as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
or any Abbreviated Registration Statement to be declared effective before the
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such post-
effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectuses or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii)
4
within the period of time referred to in paragraph (f) below, of any change in
the Company's condition (financial or other), business, prospects, properties,
net worth or results of operations, or of the happening of any event, which
makes any statement of a material fact made in the Registration Statement or the
Prospectuses (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectuses (as then amended or supplemented) in order to state a material fact
required by the Act or the regulations thereunder to be stated therein or
necessary in order to make the statements therein not misleading, or of the
necessity to amend or supplement the Prospectuses (as then amended or
supplemented) to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge (i) four signed
copies of the registration statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits to
the registration statement, (ii)such number of conformed copies of the
registration statement as originally filed and of each amendment thereto, but
without exhibits, as you may request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may request, and (iv) four
copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses or, prior to
the end of the period of time referred to in the first sentence in subsection
(f) below, file any document which upon filing becomes an Incorporated Document,
of which you shall not previously have been advised or to which, after you shall
have received a copy of the document proposed to be filed, you shall reasonably
object.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the International Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
with the securities or Blue Sky laws of the jurisdictions in which the Shares
are offered by the several Managers and by dealers, prior to the date of the
International Prospectus, of each International Prepricing Prospectus so
furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Managers an International Prospectus is required by the Act to
be delivered in connection with sales by any Manager or dealer, the Company will
expeditiously deliver to each Manager and each dealer, without charge, as many
copies of the International Prospectus (and of any amendment or supplement
thereto) as you may request. The Company consents to the use of the
International
5
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the Act and with the securities laws of the jurisdictions in which
the Shares are offered by the several Managers and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the International Prospectus is required by
the Act to be delivered in connection with sales by any Manager or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Managers is required to be set
forth in the International Prospectus (as then amended or supplemented) or
should be set forth therein in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
is necessary to supplement or amend the International Prospectus (or to file
under the Exchange Act any document which, upon filing, becomes an Incorporated
Document) in order to comply with the Act or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto (or to such
document), and will expeditiously furnish to the Managers and dealers a
reasonable number of copies thereof. In the event that the Company and you, as
Lead Managers for the several Managers, agree that the International Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Managers in connection with the registration or qualification of the Shares for
offering and sale by the several Managers and by dealers under the securities
laws of such jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in order to
effect such registration or qualification; provided that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale of the
Shares, in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years hereafter, the Company will
furnish to you (i) as soon as available, a copy of each report of the Company
mailed to stockholders or filed with the Commission, and (ii) from time to time
such other information concerning the Company as you may request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or
6
if this Agreement shall be terminated by the Managers because of any failure or
refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the Lead
Managers for all out-of-pocket expenses (including fees and expenses of counsel
for the Managers) incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectuses pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(m) The Company will not sell, contract to sell or otherwise dispose
of any Common Stock, or any securities convertible into or exercisable or
exchangeable for Common Stock or grant any options or warrants to purchase
Common Stock, for a period of 120 days after the date hereof, without the prior
written consent of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., except for sales to the Managers pursuant
to this Agreement and the U.S. Underwriters pursuant to the U.S. Underwriting
Agreement.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by each of its
current officers and directors and each of its stockholders designated by you.
(o) Except as stated in this Agreement and in the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and Prospectuses, the Company has
not taken, nor will it take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.
(p) The Company will use its best efforts to satisfy on or before the
Closing Date all conditions to the Managers' obligations to purchase the Shares.
(q) The Company will use its best efforts to have the shares of Common
Stock which it agrees to sell under this Agreement listed, subject to notice of
issuance, on the New York Stock Exchange on or before the Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Manager that:
(a) Each International Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the
7
Act. The Commission has not issued any order preventing or suspending the use of
any Prepricing Prospectus.
(b) The Company and the transactions contemplated by this Agreement
meet the requirements for using Form S-3 under the Act. The Registration
Statement in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall become
effective and the Prospectuses and any supplement or amendment thereto when
filed with the Commission under Rule 424(b) under the Act, complied or will
comply in all material respects with the provisions of the Act and will not at
any such times contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; except that this representation and warranty does not
apply to statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information relating
to any Manager furnished to the Company in writing by or on behalf of any
Manager through the Lead Managers expressly for use therein.
(c) The Incorporated Documents heretofore filed, when they were filed
(or, if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder, any further
Incorporated Documents so filed will, when they are filed, conform in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if an amendment
with respect to any such document was filed, when such amendment was filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading; and no such further document, when it is filed, will
contain an untrue statement of a material fact or will omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading.
(d) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Managers against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectuses.
(e) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectuses, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties,
8
net worth or results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole.
(f) All the Company's subsidiaries (collectively, the "Subsidiaries")
are listed in an exhibit to the Company's Annual Report on Form 10-K which is
incorporated by reference into the Registration Statement. Each Subsidiary is a
corporation duly organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Registration Statement and the Prospectuses, and is duly registered and
qualified to conduct its business and is in good standing in each jurisdiction
or place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where the failure so to
register or qualify does not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of operations
of such Subsidiary; all the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable, and are owned by the Company directly, or indirectly through one
of the other Subsidiaries, free and clear of any lien, adverse claim, security
interest, equity or other encumbrance.
(g) There are no legal or governmental proceedings pending or, to the
knowledge of the Company, threatened, against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries, or to which
any of their respective properties is subject, that are required to be described
in the Registration Statement or the Prospectuses but are not described as
required, and there are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectuses or to be filed as an exhibit to the Registration Statement or
any Incorporated Document that are not described or filed as required by the Act
or the Exchange Act.
(h) Neither the Company nor any of the Subsidiaries is in violation
of its certificate or articles of incorporation or by-laws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound.
(i) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or the U.S. Underwriting Agreement by
the Company nor the consummation by the Company of the transactions contemplated
hereby and thereby (i) requires any consent, approval, authorization or other
order of or registration or filing with, any court, regulatory body,
administrative agency or other governmental body, agency or official (except
such
9
as may be required for the registration of the Shares under the Act and
compliance with the securities or Blue Sky laws of various jurisdictions, all of
which have been or will be effected in accordance with this Agreement) or
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the Subsidiaries or
(ii) conflicts or will conflict with or constitutes or will constitute a breach
of, or a default under, any agreement, indenture, lease or other instrument to
which the Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, or violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their respective
properties, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(j) The accountants, Price Waterhouse LLP and KPMG Peat Marwick LLP,
who have certified or shall certify the financial statements included or
incorporated by reference in the Registration Statement and the Prospectuses (or
any amendment or supplement thereto) are independent public accountants as
required by the Act.
(k) The historical and pro forma financial statements, together with
related schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectuses (and any amendment or supplement
thereto), comply as to form in all material respects with the requirements of
the Act. Such historical financial statements present fairly the consolidated
financial position, results of operations and cash flows of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the respective
dates or for the respective periods to which they apply. Such historical
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein. The pro forma financial
statements included or incorporated by reference in the Registration Statement
and the Prospectuses (and any amendment or supplement thereto), have been
prepared on a basis consistent with such historical financial statements, except
for the pro forma adjustments specified therein, and give effect to assumptions
made on a reasonable basis and present fairly the historical and proposed
transactions contemplated by this Agreement and the Prospectuses (and any
amendment or supplement thereto). The other financial and statistical
information and data included or incorporated by reference in the Registration
Statement and the Prospectuses (and any amendment or supplement thereto) are
accurately presented and prepared on a basis consistent with such financial
statements and the books and records of the Company and the Subsidiaries.
(l) The execution and delivery of, and the performance by the Company
of its obligations under this Agreement and the U.S. Underwriting Agreement have
been duly and validly authorized by the Company, and each of this Agreement and
the U.S. Underwriting Agreement has
10
been duly executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder or thereunder may be limited by federal or state securities laws.
(m) Except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition (financial or other),
business, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
(n) Each of the Company and the Subsidiaries has good and marketable
title to all property (real and personal) described in the Prospectuses as being
owned by it, free and clear of all liens, claims, security interests or other
encumbrances except such as are described in the Registration Statement and the
Prospectuses or in a document filed as an exhibit to the Registration Statement
and all the property described in the Prospectuses as being held under lease by
each of the Company and the Subsidiaries is held by it under valid, subsisting
and enforceable leases.
(o) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectuses, the Prospectuses or other materials, if any, permitted by the Act.
(p) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its business in the manner described in the Prospectuses, subject to
such qualifications as may be set forth in the Prospectuses; the Company and
each of the Subsidiaries has fulfilled and performed all its material
obligations with respect to such permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any other material impairment of the rights of the holder of any
such permit, subject in each case to such qualification as may be set forth in
the Prospectuses; and, except as described in the Prospectuses, none of such
permits contains any restriction that is materially burdensome to the Company or
any of the Subsidiaries.
(q) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's
11
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(r) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any Subsidiary has made
any payment of funds of the Company or any Subsidiary or received or retained
any funds in violation of any law, rule or regulation, which payment, receipt or
retention of funds is of a character required to be disclosed in the
Prospectuses.
(s) The Company and each of the Subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct, and
neither the Company nor any Subsidiary is in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with respect
thereto.
(t) No holder of any security of the Company has any right to require
registration of shares of Common Stock or any other security of the Company
because of the filing of the Registration Statement or consummation of the
transactions contemplated by this Agreement or the U.S. Underwriting Agreement.
(u) The Company and the Subsidiaries own or possess all patents,
trademarks, trademark registrations, service marks, service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectuses as being owned by them or any of them or necessary
for the conduct of their respective businesses, and the Company is not aware of
any claim to the contrary or any challenge by any other person to the rights of
the Company and the Subsidiaries with respect to the foregoing.
(v) The Company has complied with all provisions of Florida Statutes,
Section 517.075, relating to issuers doing business with Cuba.
(w) The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged; all
policies of insurance and fidelity or surety bonds insuring the Company or any
of the Subsidiaries or their respective businesses, assets, employees, officers
and directors are in full force and effect; the Company and the Subsidiaries are
in compliance with the terms of such policies and instruments in all material
respects; and there are no claims by the Company or any of the Subsidiaries
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause.
12
(x) To the Company's knowledge, no labor problem exists with its
employees or with employees of any Subsidiary or is imminent that could
adversely affect the Company and the Subsidiaries, taken as a whole, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its or the Subsidiaries' principal suppliers, contractors or
customers that could be expected to materially adversely affect the condition
(financial or other), business, properties, net worth or results of operations
of the Company and the Subsidiaries, taken as a whole.
(y) The Company, and the Subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business, properties, net
worth or results of operations of the Company and the Subsidiaries, taken as a
whole. Neither the Company nor any of the Subsidiaries have been named as a
"potentially responsible party" under the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA").
(z) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on its and its Subsidiaries
business, operations and properties, in the course of which it identifies and
evaluates associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of properties
or compliance with Environmental Laws, or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Manager and each person,
if any, who controls any Manager within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any International Prepricing Prospectus or in the
Registration Statement or the International Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated
13
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or expenses arise out of or
are based upon any untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon and
in conformity with the information relating to such Manager furnished in writing
to the Company by or on behalf of such Manager through you expressly for use in
connection therewith; provided, however, that the indemnification contained in
this paragraph (a) with respect to any International Prepricing Prospectus shall
not inure to the benefit of any Manager (or to the benefit of any person
controlling such Manager) on account of any such loss, claim, damage, liability
or expense arising from the sale of the Shares by such Manager to any person if
a copy of the International Prospectus shall not have been delivered or sent to
such person within the time required by the Act and the regulations thereunder,
and the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such International Prepricing
Prospectus was corrected in the International Prospectus, provided that the
Company has delivered the International Prospectus to the several Managers in
requisite quantity on a timely basis to permit such delivery or sending. The
foregoing indemnity agreement shall be in addition to any liability that the
Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Manager or any person controlling any Manager in respect of which indemnity may
be sought against the Company, such Manager or such controlling person shall
promptly notify the Company and the Company shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Manager or any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Manager or such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such Manager or
such controlling person and the Company and such Manager or such controlling
person shall have been advised by its counsel that representation of such
indemnified party and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company shall not have the
right to assume the defense of such action, suit or proceeding on behalf of such
Manager or such controlling person). It is understood, however, that the
Company shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Managers and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company shall not be liable for any
settlement of any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action,
14
suit or proceeding, the Company agrees to indemnify and hold harmless any
Manager, to the extent provided in the preceding paragraph, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Manager agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Manager, but only with respect to
information relating to such Manager furnished in writing by or on behalf of
such Manager through you expressly for use in the Registration Statement, the
International Prospectus or any International Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer or any such
controlling person based on the Registration Statement, the International
Prospectus or any International Prepricing Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Manager pursuant to this paragraph (c), such Manager shall have the rights and
duties given to the Company by paragraph (b) above (except that if the Company
shall have assumed the defense thereof such Manager shall not be required to do
so, but may employ separate counsel therein and participate in the defense
thereof, but the fees and expenses of such counsel shall be at such Manager's
expense), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to the Managers by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability that the Managers may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Managers on the other hand from the Offerings,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Managers on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Managers
on the other shall be deemed to be in the same proportion as the total net
proceeds from the Offerings (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Managers, in each case as set forth in the table on the cover page of the
International Prospectus. The relative fault of the Company on the one hand and
the Managers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Managers on the
15
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
(e) The Company and the Managers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation (even if the Managers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Manager shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Manager has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Managers' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective numbers
of Shares set forth opposite their names in Schedule I hereto (or such number of
Shares increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Manager or any person controlling any
Manager, the Company, its directors or officers or any person controlling the
Company, (ii) acceptance of any Shares and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor to any Manager or any person
controlling any Manager, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7.
16
8. CONDITIONS OF MANAGERS' OBLIGATIONS. The several obligations of
the Managers to purchase the Shares hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
(or an Abbreviated Registration Statement) to be declared effective before the
offering of the Shares may commence, the Registration Statement or such post-
effective amendment or Abbreviated Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the registration
statement shall have been issued and no proceeding for that purpose shall have
been instituted or, to the knowledge of the Company or any Manager, threatened
by the Commission, and any request of the Commission for additional information
(to be included in the Registration Statement or the International Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectuses, which in your opinion, as
Lead Managers of the several Managers, would materially, adversely affect the
market for the Shares, or (ii) any event or development relating to or involving
the Company or any officer or director of the Company which makes any statement
made in the Prospectuses untrue or which, in the opinion of the Company and its
counsel or the Managers and their counsel, requires the making of any addition
to or change in the Prospectuses in order to state a material fact required by
the Act or any other law to be stated therein or necessary in order to make the
statements therein not misleading, if amending or supplementing the Prospectuses
to reflect such event or development would, in your opinion, as Lead Managers
for the several Managers, materially adversely affect the market for the Shares.
(c) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the Company, dated the Closing Date and
addressed to you, as Lead Managers for the several Managers, to the effect that:
(i) The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Delaware with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectuses (and
any amendment or supplement thereto), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the
17
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole;
(ii) Each of the Subsidiaries is a corporation duly organized and
validly existing in good standing under the laws of the jurisdiction of its
organization, with full corporate power and authority to own, lease, and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectuses (and any amendment or supplement thereto), and
all the outstanding shares of capital stock of each of the Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable, and
are owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any perfected security interest, or, to the best
knowledge of such counsel after reasonable inquiry, any other security interest,
lien, adverse claim, equity or other encumbrance;
(iii) The authorized and outstanding capital stock of the Company is
as set forth under the caption "Capitalization" in the Prospectuses; and the
authorized capital stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the Prospectuses under the
caption "Description of Capital Stock";
(iv) All the shares of capital stock of the Company outstanding prior
to the issuance of the Shares have been duly authorized and validly issued, and
are fully paid and nonassessable;
(v) The Underwritten Shares have been duly authorized and, when issued
and delivered to the Managers and the U.S. Underwriters against payment therefor
in accordance with the terms of the International Underwriting Agreement and the
U.S. Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive, or to the best knowledge of such
counsel after reasonable inquiry, similar rights that entitle or will entitle
any person to acquire any Shares upon the issuance thereof by the Company;
(vi) The form of certificates for the Shares conforms to the
requirements of the Delaware General Corporation Law;
(vii) The Registration Statement and all post-effective amendments,
if any, have become effective under the Act and, to the best knowledge of such
counsel after reasonable inquiry, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any required filing of
the Prospectuses pursuant to Rule 424(b) has been made in accordance with Rule
424(b);
(viii) The Company has corporate power and authority to enter into
the International Underwriting Agreement and the U.S. Underwriting Agreement and
to issue, sell and deliver the Underwritten Shares to the Managers and the U.S.
Underwriters as provided therein, and each of the International Underwriting
Agreement and the U.S. Underwriting Agreement has been
18
duly authorized, executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement of rights to indemnity and contribution
thereunder may be limited by Federal or state securities laws or principles of
public policy and subject to the qualification that the enforceability of the
Company's obligations thereunder 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;
(ix) Neither the Company nor any of the Subsidiaries is in violation
of its respective certificate or articles of incorporation or bylaws, or other
organizational documents, or to the best knowledge of such counsel after
reasonable inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness, except as may be disclosed in the Prospectuses;
(x) Neither the offer, sale or delivery of the Underwritten Shares,
the execution, delivery or performance of the International Underwriting
Agreement or the U.S. Underwriting Agreement, compliance by the Company with the
provisions of the International Underwriting Agreement or the U.S. Underwriting
Agreement, nor consummation by the Company of the transactions contemplated by
the International Underwriting Agreement or by the U.S. Underwriting Agreement
conflicts or will conflict with or constitutes or will constitute a breach of,
or a default under, the certificate or articles of incorporation or bylaws, or
other organizational documents, of the Company or any of the Subsidiaries or any
agreement, indenture, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them or any of their respective
properties is bound that is an exhibit to the Registration Statement or to any
Incorporated Document, or is known to such counsel after reasonable inquiry, or
will result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries, nor will
any such action result in any violation of any existing law, regulation, ruling
(assuming compliance with all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree known to such counsel after reasonable
inquiry, applicable to the Company, the Subsidiaries or any of their respective
properties;
(xi) No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company (except as have been obtained under the Act or such as may be required
under state securities or Blue Sky laws governing the purchase and distribution
of the Shares) for the valid issuance and sale of the Shares to the Managers as
contemplated by the International Underwriting Agreement;
(xii) The Registration Statement and the Prospectuses and any
supplements or amendments thereto (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act; and each
of
19
the Incorporated Documents (except for the financial statements and the notes
thereto and the schedules and other financial and statistical data included
therein, as to which counsel need not express any opinion) complies as to form
in all material respects with the Exchange Act and the rules and regulations of
the Commission thereunder;
(xiii) To the best knowledge of such counsel after reasonable
inquiry, (A) other than as described or contemplated in the Prospectuses (or any
supplement thereto), there are no legal or governmental proceedings pending or
threatened against the Company or any of the Subsidiaries, or to which the
Company or any of the Subsidiaries, or any of their property, is subject, which
are required to be described in the Registration Statement or Prospectuses (or
any amendment or supplement thereto) and (B) there are no agreements, contracts,
indentures, leases or other instruments, that are required to be described in
the Registration Statement or the Prospectuses (or any amendment or supplement
thereto) or to be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required, as the case
may be;
(xiv) To the best knowledge of such counsel after reasonable inquiry,
neither the Company nor any of the Subsidiaries is in violation of any law,
ordinance, administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or governmental
agency or body having jurisdiction over the Company or any of the Subsidiaries;
(xv) The statements in the Registration Statement and Prospectuses,
insofar as they are descriptions of contracts, agreements or other legal
documents or refer to statements of law or legal conclusions, are accurate and
present fairly the information required to be shown; and
(xvi) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectuses, including review and discussion of
the contents thereof (including review and discussion of the contents of all
Incorporated Documents), and nothing has come to the attention of such counsel
that has caused them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement became effective,
or the Prospectuses, as of their respective dates and as of the Closing Date,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that any amendment or supplement to the Prospectuses, as of
its respective date, and as of the Closing Date, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no
opinion with respect to the financial statements and the notes thereto and the
schedules and
20
other financial and statistical data included in the Registration Statement or
the Prospectuses or any Incorporated Document).
In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or the State of New York, provided that (1) each such local counsel is
acceptable to the Lead Managers, (2) such reliance is expressly authorized by
each opinion so relied upon and a copy of each such opinion is delivered to the
Lead Managers and is, in form and substance satisfactory to them and their
counsel, and (3) counsel shall state in their opinion that they believe that
they and the Managers are justified in relying thereon.
(d) You shall have received on the Closing Date an opinion of ▇▇▇▇ ▇.
▇▇▇▇▇, Esq., General Counsel to the Company, dated the Closing Date and
addressed to you, as Lead Managers of the several Managers, to the effect that:
(i) The Company and each of the Subsidiaries has full corporate power
and authority, and all necessary governmental authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all governmental
regulatory officials and bodies (except where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or permits
would not, singly or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole), to own their
respective properties and to conduct their respective businesses as now being
conducted, as described in the Prospectuses;
(ii) Except as disclosed in the Prospectuses, the Company owns of
record, directly or indirectly, all the outstanding shares of capital stock of
each of the Subsidiaries free and clear of any lien, adverse claim, security
interest, equity, or other encumbrance;
(iii) Other than as described or contemplated in the Prospectuses (or
any supplement thereto), there are no legal or governmental proceedings pending
or threatened against the Company or any of the Subsidiaries, or to which the
Company or any of the Subsidiaries, or any of their property, is subject, which
are required to be described in the Registration Statement or Prospectuses (or
any amendment or supplement thereto);
(iv) There are no agreements, contracts, indentures, leases or other
instruments, that are required to be described in the Registration Statement or
the Prospectuses (or any amendment or supplement thereto) or to be filed as an
exhibit to the Registration Statement or any Incorporated Document that are not
described or filed as required, as the case may be;
(v) The Company and the Subsidiaries own all patents, trademarks,
trademark registrations, service marks, service ▇▇▇▇ registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectuses as being owned by them or any of them or necessary for the conduct
of their respective businesses, and such counsel is not aware
21
of any claim to the contrary or any challenge by any other person to the rights
of the Company and the Subsidiaries with respect to the foregoing;
(vi) Neither the Company nor any of the Subsidiaries is in violation
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or any of the Subsidiaries or of any decree of any
court or governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries;
(vii) Except as described in the Prospectuses, there are no
outstanding options, warrants or other rights calling for the issuance of, and
such counsel does not know of any commitment, plan or arrangement to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company; and
(viii) Except as described in the Prospectuses, there is no holder of
any security of the Company or any other person who has the right, contractual
or otherwise, to cause the Company to sell or otherwise issue to them, or to
permit them to underwrite the sale of, the Shares or the right to have any
Common Stock or other securities of the Company included in the Registration
Statement or the right, as a result of the filing of the Registration Statement,
to require registration under the Act of any shares of Common Stock or other
securities of the Company.
(e) You shall have received on the Closing Date an opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Managers, dated the Closing Date and addressed to
you, as Lead Managers for the several Managers, with respect to the matters
referred to in clauses (v), (vii), (viii), (xii) and (xvi) of the foregoing
paragraph (c) and such other related matters as you may request.
(f) You shall have received letters addressed to you, as Lead
Managers for the several Managers, and dated the date hereof and the Closing
Date from Price Waterhouse LLP and KPMG Peat Marwick LLP, independent certified
public accountants, substantially in the forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectuses (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectuses
(or any amendment or supplement thereto), except as may otherwise be stated in
the Registration Statement and Prospectuses (or any amendment or supplement
thereto), any material adverse change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of
22
the Company and the Subsidiaries taken as a whole; (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectuses (or any amendment or supplement
thereto); and (v) all the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the date
hereof and on and as of the Closing Date as if made on and as of the Closing
Date, and you shall have received a certificate, dated the Closing Date and
signed by the chief executive officer and the chief financial officer of the
Company (or such other officers as are acceptable to you), to the effect set
forth in this Section 8(g) and in Section 8(h) hereof.
(h) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(i) Prior to the Closing Date, the Shares shall have been listed,
subject to notice of issuance, on the New York Stock Exchange.
(j) The closing under the U.S. Underwriting Agreement shall have
occurred concurrently with the closing hereunder on the Closing Date.
(k) The Company shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Lead Managers for the several Managers, or to counsel for
the Managers, shall be deemed a representation and warranty by the Company to
each Manager as to the statements made therein.
9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectuses,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the registration statement, each
International Prepricing Prospectus, the International Prospectus, the
Incorporated Documents, and all amendments or supplements to any of them, as may
be reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp taxes in connection with the
original issuance and sale of the
23
Shares; (iv) the printing (or reproduction) and delivery of this Agreement, the
preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Shares; (v) the listing of the Shares on the New York Stock Exchange;
(vi) the registration or qualification of the Shares for offer and sale under
the securities laws of the several states as provided in Section 5(g) hereof
(including the reasonable fees, expenses and disbursements of counsel for the
Managers and the U.S. Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); (vii) the filing fees and
the fees and expenses of counsel for the Managers and the U.S. Underwriters in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses incurred
by or on behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; and (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, as Lead Managers for the several Managers, by
notifying the Company.
If any one or more of the Managers shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Manager or Managers are
obligated but fail or refuse to purchase is not more than one-tenth of the
aggregate number of Shares which the Managers are obligated to purchase on the
Closing Date, each non-defaulting Manager shall be obligated, severally, in the
proportion which the number of Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Shares set forth opposite the names of
all non-defaulting Managers or in such other proportion as you may specify in
accordance with the Agreement Among Managers of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., to purchase
the Shares which such defaulting Manager or Managers are obligated, but fail or
refuse, to purchase. If any one or more of the Managers shall fail or refuse to
purchase Shares which it or they are obligated to purchase on the Closing Date
and the aggregate number of Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Shares which the Managers are
obligated to purchase on the Closing Date and arrangements satisfactory to you
and the Company for the purchase of such Shares by one or more non-defaulting
Managers or other party or parties approved by you and the Company are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Manager or the Company. In any such
case which does not result in termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Date, but in no event for
24
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectuses or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Manager from liability in respect of any such default of
any such Manager under this Agreement. The term "Manager" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Manager is obligated, but fails or refuses,
to purchase.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Manager to the Company by notice to the Company, if prior to the Closing Date,
(i) trading in securities generally on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking activities
in New York or Massachusetts shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
International Prospectus or to enforce contracts for the resale of the Shares by
the Managers. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE MANAGERS. The statements set forth
in the last paragraph on the cover page, the stabilization legend on the inside
front cover page, and the statements in the first and fourth paragraphs under
the caption "Underwriting" in any International Prepricing Prospectus and in the
International Prospectus, constitute the only information furnished by or on
behalf of the Managers through you as such information is referred to in
Sections 6(b) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Company, at the office of the
Company at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇,
General Counsel; or (ii) if to you, as Lead Managers for the several Managers,
care of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Manager, Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Managers, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other
25
person shall acquire or have any right under or by virtue of this Agreement.
Neither the term "successor" nor the term "successors and assigns" as used in
this Agreement shall include a purchaser from any Manager of any of the Shares
in his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
26
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Managers.
Very truly yours,
CONVERSE INC.
By _________________________________
Chairman of the Board
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Managers named in Schedule I
hereto.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇, READ & CO. INC.
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
As Lead Managers for the several Managers
By ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By________________________________
Managing Director
27
SCHEDULE I
CONVERSE INC.
Number of
Manager International Shares
-------- --------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. .
▇▇▇▇▇▇, Read & Co. Inc.
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation
_______
Total 900,000
=======
28
