CENDANT CORPORATION
(a Delaware corporation)
[_______________]
Preferred Stock
UNDERWRITING AGREEMENT
Dated:____________
CENDANT CORPORATION
(a Delaware corporation)
_______ Shares of Preferred Stock
Par Value $0.01 Per Share
UNDERWRITING AGREEMENT
[Date]
To the Underwriters named in Schedule I
Ladies and Gentlemen:
Cendant Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the underwriters named in Schedule I the number of shares
of Preferred Stock specified in Schedule II (the "Firm Shares") on the terms
and conditions stated herein and in Schedule II. The Company also grants to the
Underwriters, severally and not jointly, the option described in Section 2 to
purchase all or any part of the additional shares of Preferred Stock as set
forth in Schedule II to cover over-allotments (the "Additional Shares") on the
terms and conditions stated herein and in Schedule II. The Additional Shares
together with the Firm Shares are herein called the "Shares". As used herein,
unless the context otherwise requires, the term "Underwriters" shall mean the
firm or firms named as Underwriter or Underwriters in Schedule I and the term
"you" shall mean the Underwriter or Underwriters, if no underwriting syndicate
is purchasing the Shares, or the representative or representatives of the
Underwriters, if an underwriting syndicate is purchasing the Shares, as
indicated in Schedule I. The Shares may be sold pursuant to delayed delivery
contracts, a form of which is attached as Schedule IV (the "Delayed Delivery
Contracts"), as specified in Schedule II.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration
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statement on Form S-3 (Registration No. 333-_____) including a prospectus,
relating to certain of its debt securities, Common Stock and Preferred Stock,
and the offering thereof from time to time in accordance with Rule 415 under
the Securities Act of 1933, as amended (the "1933 Act"). Such registration
statement has been declared effective by the Commission. As provided in Section
3(a), a prospectus supplement reflecting the terms of the Shares, the terms of
the offering thereof and the other matters set forth therein has been prepared
and will be filed pursuant to Rule 424 under the 1933 Act. Such prospectus
supplement, in the form first filed after the date hereof pursuant to Rule 424,
is herein referred to as the "Prospectus Supplement". Such registration
statement, as amended at the date hereof, together with the Rule 462(b)
Registration Statement under the 1933 Act, including the exhibits thereto and
the documents incorporated by reference therein, is herein called the
"Registration Statement", and the basic prospectus included therein relating to
all offerings of debt securities and Preferred Stock under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus", except that, if such basic prospectus is amended or supplemented
on or prior to the date on which the Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus" shall refer to the basic
prospectus, as so amended or supplemented and as supplemented by the Prospectus
Supplement, in either case including the documents filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), that are incorporated by reference therein.
You have advised us that you and the other Underwriters, acting
severally and not jointly, desire to purchase the Firm Shares and that you have
been authorized by the other Underwriters to execute this Underwriting
Agreement ("this Agreement") on their behalf.
Section 1. Representations and Warranties. (a) The Company represents
and warrants to and agrees with each Underwriter that:
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(i) On the original effective date of the Registration Statement, on
the effective date of the most recent post-effective amendment thereto, if
any, on the date of the filing of any Rule 462(b) Registration Statement,
and on the date of the filing by the Company of any annual report on Form
10-K after the original filing of the Registration Statement, the
Registration Statement complied in all material respects with the
requirements of the 1933 Act and the rules and regulations of the
Commission thereunder (the "1933 Act Regulations") and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; on the date hereof, at the Closing Time (as defined below)
and at each Delivery Date (as defined below), if any, the Registration
Statement, and any amendments thereof, and the Prospectus, and any
amendments thereof and supplements thereto, comply and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations, and neither the Registration Statement nor any amendments
thereof include or will include an untrue statement of a material fact or
omit or will omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and neither the
Prospectus, nor any amendments thereof and supplements thereto, include or
will include an untrue statement of a material fact or omit or will omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no
representations or warranties as to statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of any Underwriter, directly or through you,
expressly for use in the Registration Statement or the Pro spectus.
(ii) The documents incorporated by reference in the Prospectus, at the
time they were filed with the
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Commission, complied 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 Prospectus, do not and will not, on the date hereof, at the Closing
Time and at each Delivery Date, if any, include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(iii) Deloitte & Touche LLP, who has reported upon the audited
financial statements and schedules included or incorporated by reference
in the Registration Statement, is an independent public accountant as
required by the 1933 Act and the 1933 Act Regulations with respect to the
Company and each corporation whose financial statements have been included
in the Registration Statement for each of the years reported on by such
accountant.
(iv) This Agreement has been duly authorized, executed and delivered
by the Company.
(v) The consolidated financial statements included or incorporated by
reference in the Registration Statement present fairly the consolidated
financial position and stockholders' equity and the consolidated results of
operations and consolidated statements of cash flows of the entities
purported to be shown thereby at the indicated dates and for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The financial statement schedules, if any,
included or incorporated by reference in the Registration Statement present
fairly the information required to be stated therein. The selected
financial data included or incorporated by reference in the Prospectus
present fairly the information shown therein and have been
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compiled on a basis consistent with that of the audited consolidated
financial statements incorporated by reference in the Registration
Statement. The pro forma financial statements and other pro forma financial
information included or incorporated by reference in the Prospectus 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, have been properly compiled on the pro forma bases described
therein, and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(vi) The Company is duly organized and is validly existing in good
standing as a corporation under the laws of the State of Delaware with
corporate power and corporate authority under such laws to own, lease and
operate its properties and conduct its business as described in the
Prospectus. The Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise.
(vii) The Company's only subsidiaries are listed in Schedule III
hereto (each a "Company Subsidiary" and collectively hereinafter referred
to as the "Company Subsidiaries"). Each Subsidiary is duly organized and is
validly existing and in good standing under the laws of the jurisdiction of
its incorporation with corporate power and corporate authority under such
laws to own, lease and operate its properties and conduct its business.
Each Subsidiary is duly qualified to transact business as a foreign
corporation and is in good standing in
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each other jurisdiction in which it owns or leases property of a nature, or
transacts business of a type, that would make such qualification necessary,
except to the extent that the failure to so qualify or be in good standing
would not have a material adverse effect on the Company and its
Subsidiaries, considered as one enterprise. All of the outstanding shares
of capital stock of each Company Subsidiary have been duly authorized and
validly issued and are fully paid and nonassessable and are owned by the
Company, directly or through one or more Company Subsidiaries, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind (each, a "Lien") except for such Liens as are not,
individually or in the aggregate, material to the Company and its
Subsidiaries, considered as one enterprise.
(viii) The authorized capital stock of the Company conforms to the
description thereof under the caption "Description of Capital Stock"
contained in the Prospectus and such description conforms to the rights set
forth in the instruments defining the same.
(ix) The Shares have been duly authorized and, when issued and paid
for in accordance with this Agreement, will be validly issued, fully paid
and non-assessable. All corporate action required to be taken for the
authorization, issuance and delivery of such Shares has been validly taken.
The issuance of the Shares is not subject to any preemptive rights of any
stockholder of the Company.
[(x) In the event that any of the Shares are purchased pursuant to
Delayed Delivery Contracts, each of such Delayed Delivery Contracts has
been duly authorized by the Company and, when executed and delivered on
behalf of the Company and duly authorized, executed and delivered on behalf
of the purchaser thereunder, will constitute a valid and
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binding obligation of the Company enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).]
(xi) All of the other outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; no holder thereof is or will be subject to personal
liability by reason of being such a holder; and none of the outstanding
shares of capital stock of the Company was issued in violation of the
preemptive rights of any stockholder of the Company.
(xii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, there has not been (A) any material
adverse change in the condition (financial or otherwise), earnings or
business affairs of the Company and its Subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B)
any transaction entered into by the Company or any Subsidiary, other than
in the ordinary course of business, that is material to the Company and its
Subsidiaries, considered as one enterprise, or (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock.
(xiii) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may
8
be bound or to which any of its properties may be subject, except for such
defaults that would not have a material adverse effect on the condition
(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise. The execution and delivery
by the Company of this Agreement [and any Delayed Delivery Contracts,] the
issuance and delivery of the Shares, the consummation by the Company of the
transactions concerning the Shares contemplated herein and in the
Registration Statement and compliance by the Company with the terms of this
Agreement [and any Delayed Delivery Contracts] have, in each case, been
duly authorized by all necessary corporate action on the part of the
Company and do not and will not result in any violation of the certificate
of incorporation or by-laws of the Company, and do not and will not
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default 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 under (A) any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any Subsidiary is a party or by which it may be bound or to
which any of its properties may be subject (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not have
a material adverse effect on the condition (financial or otherwise),
earnings or business affairs of the Company and its Subsidiaries,
considered as one enterprise) or (B) any existing applicable law, rule,
regulation (other than state securities, foreign securities or Blue Sky
laws, rules and regulations), judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their respective
properties (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not have a material adverse effect on
the condition (financial or otherwise), earnings or business affairs of the
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Company and its Subsidiaries, considered as one enterprise).
(xiv) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the 1933 Act and the 1934 Act and the securities or Blue
Sky laws of the various states and foreign securities laws), is required
for the valid authorization, issuance, sale and delivery of the Shares or
for the compliance with the transactions contemplated in this Agreement.
(xv) Except as disclosed in the Prospectus, there is no action, suit
or proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary that
is required to be disclosed in the Prospectus or that could reasonably be
expected to result in any material adverse change in the condition
(financial or otherwise), earnings or business affairs of the Company and
its Subsidiaries, considered as one enterprise, or that could reasonably be
expected to materially and adversely affect the properties or assets of the
Company and its Subsidiaries, considered as one enterprise, or that could
reasonably be expected to adversely affect the consummation of the
transactions contemplated in this Agreement. The aggregate of all pending
legal or governmental proceedings to which the Company or its Subsidiaries
is a party or to which any of its or their respective properties is subject
that are not described in the Prospectus, including ordinary routine
litigation incidental to its or their business, could not reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise.
(xvi) There are no statutes, regulations, contracts or other documents
of a character required
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to be described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described and
filed as required.
(xvii) The Company and each Subsidiary have good and marketable title
to all properties and assets, including, without limitation, intangible
property rights described in the Prospectus as owned by it, free and clear
of all liens, charges, encumbrances, restrictions (other than as described
in paragraph 1(a)(ix) hereof) or defects, except such as (A) are described
(1) in the Indenture dated as of October 1, 1994, between the
Company and Bank of America, Illinois, as trustee, (2) in the Indenture and
the Supplemental Indenture No. 1 dated as of February 28, 1996, between the
Company and First Trust of Illinois, National Association, as trustee,
(3) in the 364 Day Credit Agreement, dated as of March 4, 1997, among PHH
Corporation, PHH Vehicle Management Services Inc., the Lenders thereunder
and The Chase Manhattan Bank, (4) in the Five Year Credit Agreement, dated
as of March 4, 1997, among PHH Corporation, the Lenders and The Chase
Manhattan Bank, (5) in the Five Year Revolving Credit and Competitive
Advance Facility Agreement, dated as of October 2, 1996, among the Company,
the lenders thereunder and The Chase Manhattan Bank, (6) in the 364 Day
Revolving Credit and Competitive Advance Facility Agreement, dated as of
October 2, 1996, among the Company, the lenders thereunder and The Chase
Manhattan Bank, (7) in the Indenture dated as of June 5, 1997, between PHH
Corporation and The First National Bank of Chicago and (8) in the Amended
and Restated Pooling and Servicing Agreement dated as of October 5, 1994,
as amended, among Cendant Mobility Funding Corporation, Cendant Mobility
Services, Inc., Citicorp North America, Inc. and Bankers Trust Company, the
Amended and Restated Purchase Agreement dated as of October 5, 1994, as
amended, between Cendant Mobility Services, Inc. and Cendant Mobility
Funding Corporation and the Amended and Restated Investor Funding Agreement
dated as of October 5, 1994, as amended, among Cendant Mobility Funding
Corporation, Bankers Trust Company, Citicorp North America, Inc., as agent,
Bank of America Illinois, as co-agent, and the investors named therein, (B)
are leases of real
11
property in which the Company or its Subsidiaries have good title and that
would be marketable but for the requirement that the landlord consent to an
assignment of the lease or (C) are neither material in amount nor
materially significant in relation to the business of the Company and its
Subsidiaries, considered as one enterprise; all of the leases and subleases
material to the business of the Company and the Subsidiaries, considered as
one enterprise, and under which the Company or any Subsidiary holds
properties described in the Prospectus, are in full force and effect, and
neither the Company nor any Subsidiary has 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 such corporation to the
continued possession or use of the leased or subleased properties under any
such lease or sublease.
(xviii) (a) The Company and each Subsidiary own, possess or have
obtained all material governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations necessary to own or
lease, as the case may be, and to operate its or their properties and to
carry on its or their business as presently conducted; (b) neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to revocation or modification of any such licenses, permits,
certificates, consents, orders, approvals or authorizations which could
result in a material adverse change of the condition (financial or
otherwise), earnings or financial affairs of the Company and its
Subsidiaries, considered as one enterprise; and (c) the Company and each
Subsidiary are in all respects complying with each license, permit,
certificate, consent, order, approval and other authorization, except where
the failure to do so would not have a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise.
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(xix) Subject to each of the franchise and license agreements entered
into by the Company or any of its Subsidiaries, the Company and each of the
Subsidiaries own or have the unrestricted right to use such patents, patent
licenses, trademarks, trademark licenses, service marks, service xxxx
licenses and trade names and registrations thereof as are necessary to
carry on their respective businesses as described in the Prospectus and as
currently conducted, except where the failure to own or possess any of the
Marks or the Ramada Marks would not have a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise. Neither of the
Company nor any of its Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any of the
Marks or the Ramada Marks, or any applications therefor or registrations
thereof, that in the aggregate would materially and adversely affect the
condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise. In addition to,
and not in limitation of, anything else contained in this paragraph
(xviii), the Company or a Subsidiary (y) is the exclusive owner of all
rights, title and interest (subject to all existing franchise and license
agreements referred to above) in and to the Marks within the United States
and outside the United States is the owner of the registrations and
applications as are necessary to carry on its business as described in the
Prospectus and as currently conducted, except where the failure to be such
owner would not have a material adverse effect on the condition (financial
or otherwise), earnings or business affairs of the Company and its
Subsidiaries, considered as one enterprise and (z) is the exclusive
licensee in the United States of the Ramada Marks. Such intellectual
property with respect to the Company's Century 21, Coldwell Banker and ERA,
Days Inns of America, Inc. ("Days Inn"), Super 8 Motels, Inc. ("Super 8"),
the Villager Lodge
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Franchise Systems, Inc. ("Villager Lodge"), the Knights Franchise Systems,
Inc. ("Knights Inn"), Xxxxxx Xxxxxxx and Travelodge Hotels, Inc.
("Travelodge") businesses (each as described in the Prospectus and as
currently conducted) is referred to herein as the "Marks" and such
intellectual property with respect to the Company's Ramada business (as
described in the Prospectus and as currently conducted) is hereinafter
referred to as the "Ramada Marks".
(xx) To the best knowledge of the Company, no labor problem exists
with its employees, with employees of any Subsidiary or, to the best
knowledge of the Company without having made any inquiry or independent
investigation, with the employees of any party which licenses a franchise,
directly or indirectly, from a Subsidiary (a "Franchisee") or is imminent
that could reasonably be expected to materially adversely affect the
Company and its Subsidiaries, considered as one enterprise.
(xxi) To the best knowledge of the Company, no dispute exists or is
imminent with any Franchisee or with the Franchisees that could reasonably
be expected to materially adversely affect the Company and the
Subsidiaries, considered as one enterprise.
(xxii) Neither the Company nor any of its Subsidiaries has taken or
will take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of
the price of the Preferred Stock.
(xxiii) The Company and each Subsidiary are in material compliance
with all applicable existing federal, state and local laws and regulations
relating to protection of human health or the environment and have no
liability or alleged liability under any such law which is required to be
disclosed in the Registration Statement that is not so disclosed.
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(xxiv) All United States federal income tax returns of the Company and
each Subsidiary required by law to be filed have been filed and all taxes
shown on such returns or otherwise assessed which are due and payable have
been paid, except tax assessments being contested in good faith and as to
which adequate reserves have been provided. All other tax returns of the
Company and each Subsidiary required to be filed pursuant to applicable
foreign, state, local or other law have been filed, except insofar as the
failure to file such returns would not have a material adverse effect on
the condition (financial or otherwise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise, and all taxes
shown on such returns or otherwise assessed which are due and payable have
been paid, except for such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of any income and corporate franchise tax liability for any years
not finally determined are believed to be adequate to meet any assessments
or reassessments for additional income or corporate franchise tax for any
years not finally determined, except to the extent of any inadequacy that
would not have a material adverse effect on the condition (financial or
otherwise), earnings or business affairs of the Company and its
Subsidiaries considered as one enterprise.
(xxv) Each Franchisee is such by virtue of being a party to a
franchise contract with either the Company or a Subsidiary and assuming
each such contract has been duly authorized, executed and delivered by the
parties thereto, other than the Company or a Subsidiary, each such contract
constitutes a valid, legal and binding obligation of each party thereto,
enforceable against the Company or a Subsidiary in accordance with its
terms, except (A) for any one or more of such franchise contracts as would
not have a material adverse effect on the
15
condition (financial or other wise), earnings or business affairs of the
Company and its Subsidiaries, considered as one enterprise, and (B) to the
extent that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in
a proceeding in equity or at law).
(xxvi) The Company and each Subsidiary have complied and are currently
complying in all material respects with the rules and regulations of the
United States Federal Trade Commission and the comparable laws, rules and
regulations of each state or state agency applicable to the franchising
business of the Company and such Subsidiary in each state in which the
Company or such Subsidiary is doing business. The Company and each
Subsidiary have complied and are currently complying in all material
respects with the Federal Real Estate Settlement Procedures Act and the
real estate brokerage laws, rules and regulations of each state or state
agency applicable to the real estate franchising business of the Company
and such Subsidiary in each state in which the Company or such Subsidiary
is doing business.
(xxvii) The Shares will, upon notice of issuance, be listed on the New
York Stock Exchange (the "NYSE").
(xxviii) The Company is not 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.
(b) Any certificate signed by any officer of the Company or any
Subsidiary and delivered to you or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company or by a Subsidiary, as
applicable, to each Underwriter as to the matters covered thereby.
16
Section 2. Purchase and Sale. (a) On the basis of the representations
and warranties herein contained (except as may be otherwise specified in
Schedule II hereto) and subject to the terms and conditions herein set forth,
the Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
per share for the Firm Shares set forth in Schedule II hereto, the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
(b) In addition, on the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth,
the Company hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional [ ] of Additional Shares as set
forth in Schedule II hereto at the same purchase price as shall be
applicable to the Firm Shares. The option hereby granted will expire 30
days after the date hereof, and may be exercised, in whole or from time to
time in part (but not more than twice), only for the purpose of covering
over-allotments that may be made in connection with the offering and
distribution of the Firm Shares upon notice by you to the Company setting
forth the number of Additional Shares as to which the several U.S.
Underwriters are exercising this option, and the time and date of payment
and delivery thereof. Such time and date of delivery (each, a "Delivery
Date") shall be determined by you but shall not be later than seven full
business days after the exercise of such option, nor in any event prior to
the Closing Time. If the option is exercised as to all or any portion of
the Additional Shares, each of the Underwriters, acting severally and not
jointly, will purchase from the Company that portion of the aggregate
number of Additional Shares being purchased which the number of Firm Shares
set forth opposite the name of such Underwriter bears to the total number
of Firm Shares (such proportion is hereinafter referred to as such
Underwriter's
17
"underwriting obligation proportion").
(c) Payment of the purchase price for, and delivery of, the Firm
Shares shall be made at the date, time and location specified in Schedule
II hereto, or at such other date, time or location as shall be agreed upon
by the Company and you, or as shall otherwise be provided in Section 11
(such date and time of payment and delivery being herein called the
"Closing Time"). Unless otherwise specified in Schedule II, payment shall
be made to the Company by you by wire or bank transfer of same day funds
payable to the account of the Company, against delivery to you for the
respective accounts of the several Underwriters of the Firm Shares.
Certificates for the Firm Shares shall be in such authorized denominations
and registered in such names as you may request in writing at least two
full business days before the Closing Time. Certificates for the Firm
Shares will be made available in New York City for examination and
packaging by you not later than 10:00 A.M. on the business day prior to the
Closing Time. In addition, in the event that any or all of the Additional
Shares are purchased by the Underwriters, payment of the purchase price
for, and delivery of, such Additional Shares shall be made at the same
location as set forth above, or at such other place as the Company and you
shall determine, on each Delivery Date as specified in the notice from you
to the Company. Payment for the Additional Shares shall be made by wire or
bank transfer of same day funds.
(d) If specified in Schedule II, the Underwriters may solicit offers
to purchase Shares from the Company pursuant to Delayed Delivery Contracts
substantially in the form of Schedule IV with such changes therein as the
Company may approve. Any Delayed Delivery Contracts are to be with
institutional investors of the types set forth in the Prospectus. If
Delayed Delivery Contracts are specified in Schedule II, at the Closing
Time, the Company will enter into Delayed Delivery Contracts (for the
minimum principal amount of Shares per
18
Delayed Delivery Contract specified in Schedule II) with all purchasers
proposed by the Underwriters and previously approved by the Company as
provided below, but not for an aggregate principal amount of Shares less
than or greater than the minimum and maximum aggregate principal amounts
specified in Schedule II. The Underwriters will not have any responsibility
for the validity or performance of Delayed Delivery Contracts.
(e) You are to submit to the Company, at least three business days
prior to the Closing Time, the names of any institutional investors with
which it is proposed that the Company enter into Delayed Delivery
Contracts, the number of Shares to be purchased by each of them and the
date of delivery thereof, and the Company will advise you, at least two
business days prior to the Closing Time, of the names of the institutions
with which the making of Delayed Delivery Contracts is approved by the
Company and the number of Shares to be covered by each such Delayed
Delivery Contract.
(f) As compensation for arranging Delayed Delivery Contracts, the
Company will pay (by wire or bank transfer of same day funds) to you at the
Closing Time, for the accounts of the Underwriters, a fee equal to that
percentage of the gross proceeds from the sale of the Shares for which
Delayed Delivery Contracts are made at the Closing Time as is specified in
Schedule II or the amount of such fee may be deducted from the payment
delivered pursuant to Section 2(b).
(g) The number of Shares agreed to be purchased by each Underwriter
shall be reduced by the number of Shares covered by Delayed Delivery
Contracts as to such Underwriter, as set forth in a notice delivered by you
to the Company; provided, however, that the total number of Shares to be
purchased by all Underwriters shall be the number of Shares covered by this
Agreement, less the number of Shares covered by all Delayed Delivery
Contracts.
19
It is understood that each Underwriter has authorized you, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Shares that it has agreed to purchase. You, individually and not
as Representatives, may (but shall not be obligated to) make payment of the
purchase price for the Firm Shares to be purchased by any Underwriter whose
payments shall not have been received by the Closing Time or each Delivery
Date, if any, as the case may be.
Section 3. Certain Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) If reasonably requested by you in connection with the offering of
the Shares, the Company will prepare a preliminary prospectus supplement
containing such information as you and the Company deem appropriate and,
immediately following the execution of this Agreement, the Company will
prepare a Prospectus Supplement that complies with the 1933 Act and the
1933 Act Regulations and that sets forth the number of Shares and their
terms, the name of each Underwriter participating in the offering and the
number of Shares that each severally has agreed to purchase, the name of
each Underwriter, if any, acting as representative of the Underwriters in
connection with the offering, the price at which the Shares are to be
purchased by the Underwriters from the Company, any initial public offering
price, any selling concession and reallowance and [any delayed delivery
arrangements, and] such other information as you and the Company deem
appropriate in connection with the offering of the Shares. The Company will
promptly transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 under the 1933 Act and will furnish to the
Underwriters as many copies of any preliminary prospectus supplement and
the Prospectus as you shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933 Act to
be delivered in
20
connection with sales of the Shares, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or counsel for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement 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
either such counsel, at any such time to amend the Registration Statement
or amend or supplement the 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(f),
such amendment or supplement as may be necessary to correct such untrue
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements.
(c) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Shares, the Company will,
subject to Section 3(f), file promptly all documents required to be filed
with the Commission pursuant to Section 13, Section 14 or Section 15(d) of
the 1934 Act.
(d) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Shares, the Company will
inform you of its intention to file any amendment to the Registration
Statement, any supplement to the Prospectus or any document that would as a
result thereof be incorporated by reference in the Prospectus; and the
Company will furnish you with copies of any such amendment, supplement or
other document at a reasonable time in advance of filing, except any
current report on Form 8-K filed with the Commission with respect to a
press release issued by the Company that is not reasonably expected to have
a material effect on the
21
Company or the price of the Preferred Stock; provided, however, that the
Company shall inform you of its intention to file documents pursuant to
Section 14(d) of the 1934 Act and shall furnish you with copies of such
documents immediately upon the filing thereof; and provided further that
you or your counsel shall not be entitled to object thereto other than
pursuant to Section 3(b).
(e) During the period when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Shares, the Company will
notify you immediately, and confirm the notice in writing, (i) of the
effectiveness of any amendment to the Registration Statement, (ii) of the
mailing or the delivery to the Commission for filing of any supplement to
the Prospectus or any document that would as a result thereof be
incorporated by reference in the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement,
the Prospectus or the Prospectus Supplement, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
supplement to the Prospectus or for additional information relating thereto
or to any document incorporated by reference in the Prospectus and (v) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of
the institution or threatening of any proceeding for any of such purposes.
The Company will use every reasonable effort to prevent the issuance of any
such stop order or of any order suspending such qualification and, if any
such order is issued, to obtain the lifting thereof at the earliest
possible moment.
(f) The Company has furnished or will furnish to you one signed copy
of the Registration Statement (as originally filed), of any Rule 462(b)
Registration Statement, and of all amendments thereto, whether filed before
or after the Registration Statement became effective, copies of
22
all exhibits and documents filed therewith or incorporated by reference
therein (through the end of the period when the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the Shares) and
signed copies of all consents and certificates of experts, as you may
reasonably request, and has furnished or will furnish to you, for each of
the Underwriters, ten conformed copies of the Registration Statement (as
originally filed), of any Rule 462(b) Registration Statement and of each
amendment thereto (including documents incorporated by reference into the
Prospectus but without exhibits).
(g) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Shares for offering and sale under the
applicable securities laws of such states and other jurisdictions as you
may designate and to maintain such qualifications in effect for a period of
not less than one year from the date hereof; 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. The Company will file such statements and reports
as may be required by the laws of each jurisdiction in which the Shares
have been qualified as above provided. The Company will also supply you
with such information as is necessary for the determination of the legality
of the Shares for investment under the laws of such jurisdictions as you
may request.
(h) The Company will make generally available to its security holders
as soon as practicable, but not later than 45 days after the close of the
period covered thereby, an earnings statement of the Company (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations),
covering (i) a period of 12 months beginning after the effective date of
the Registration Statement (or, if
23
applicable, any Rule 462(b) Registration Statement) and covering a period
of 12 months beginning after the effective date of any post-effective
amendment to the Registration Statement but not later than the first day of
the Company's fiscal quarter next following such respective effective dates
and (ii) a period of 12 months beginning after the date of this Agreement
but not later than the first day of the Company's fiscal quarter next
following the date of this Agreement.
(i) If and to the extent specified in Schedule II hereto, the Company
will use its best efforts to cause the Shares to be duly authorized for
listing on the New York Stock Exchange.
(j) For a period of two years after the Closing Time, the Company will
furnish to you and, upon request, to each Underwriter, copies of all annual
reports, quarterly reports and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated
by the Commission, and such other documents, reports and information as
shall be furnished by the Company to its stockholders or security holders
generally.
(k) The Company agrees, for a period of 90 days from the date of the
Prospectus Supplement, they will not, without the prior written consent of
[____________] in any transaction settled by delivery of Preferred Stock or
other securities, in cash or otherwise, (i) register, offer, pledge, sell,
contract to sell, 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 shares of Preferred Stock of the Company or any
securities convertible into, or exercisable or exchangeable for, Preferred
Stock of the Company (provided, however, that the Company may file a shelf
registration statement covering its equity securities during such 90 day
period) or (ii) enter into any swap or similar agreement that transfers, in
whole or in part, the economic risk of ownership of such Preferred Stock
24
(except for (y) Preferred Stock (A) issued as part of the offering of the
Shares, (B) issued upon conversion of 3% Convertible Subordinated Notes Due
2002 the Company's 4 3/4% Convertible Senior Notes due 2003, (C) issued
pursuant to the Company's stock option or employee benefit plans, (D)
issued by the Company in connection with strategic acquisitions, (E) issued
or sold pursuant to employee benefit plans of the Company existing at the
Closing Time, and (F) sold in connection with an employee's decision to
direct that 401(k) contributions be invested in Preferred Stock; provided
that any shares issued pursuant to clause (D) above in excess of 5% of the
then outstanding shares of Preferred Stock shall remain subject to the
foregoing restriction) or exercise any right to have securities of the
Company registered by the Company under the 1933 Act.
(l) The Company has complied and will comply with all the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida statutes,
and all regulations promulgated thereunder relating to issuers doing
business in Cuba.
Section 4. Payment of Expenses. The Company will pay and bear all
costs and expenses incident to the performance of its obligations under this
Agreement, including, without limitation, (a) the preparation, printing and
filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, any preliminary prospectus
supplements and the Prospectus and any amendments or supplements thereto, and
the cost of furnishing copies thereof to the Underwriters, (b) the preparation,
printing and distribution of this Agreement, [any Delayed Delivery Contracts,]
the Shares, the Blue Sky Survey, (c) the delivery of the Shares to the
Underwriters, (d) the fees and disbursements of the Company's counsel and
accountants and the fees and disbursements of the Company's counsel (including,
without limitation, local counsel upon whom such counsel may rely in rendering
their opinion required by Section 5 and 6 hereof), (e) the qualification of the
Shares under
25
the applicable securities laws, (f) the reasonable fees and disbursements of
counsel in connection with the Blue Sky Survey, and (g) any applicable fees for
listing the Shares on an exchange.
If this Agreement is terminated by you in accordance with the
provisions of Section 5 or Section 10(a)(i), the Company shall reimburse the
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwrit ers, incurred by
them in connection with the public offering of the Shares.
Section 5. Conditions of the Underwriters' Obligations. Except as
otherwise provided in Schedule II hereto, the obligations of the several
Underwriters to purchase and pay for the Shares that they have respectively
agreed to purchase hereunder, including any Additional Shares as to which the
option granted in Section 2 has been exercised and the Delivery Date determined
by you is the same as the Closing Time, are subject to (i) the accuracy of the
representations and warranties of the Company contained herein or in
certificates of the Company's officers delivered pursuant to the provisions
hereof, (ii) the performance by the Company of its obligations hereunder, (iii)
the delivery to the Underwriters at the Closing Time by the Company of all of
the Firm Shares, and (iv) the following further conditions:
(a) The Registration Statement shall have become effective prior to
the date hereof or, with your consent, at a later time and date no later,
however, than the first business day following the date hereof, or at such
later date as you may agree to in writing with the approval of a majority
in interest of the several underwriters; and at the Closing Time, no stop
order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose shall
have been instituted or shall be pending or, to your knowledge or the
knowledge of the Company, shall be contemplated by the Commission, and any
request on
26
the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel for the
Underwriters.
(b) At the Closing Time, you shall have received a signed opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx, in New York, in its capacity as
special counsel for the Company, dated as of the Closing Time, together
with signed or reproduced copies of such opinion for each of the other
Underwriters, in form and substance reasonably satisfactory to Counsel for
the Underwriters to the effect as attached hereto as Exhibit 1.
(c) At the Closing Time, you shall have received signed opinions of
Counsel for the Company, and Xxxxxx, Xxxxxxx & Xxxxxx, special South Dakota
counsel for the Company, dated as of the Closing Time, together with signed
or reproduced copies of such opinions for each of the other Underwriters,
in form and substance reasonably satisfactory to counsel for the
Underwriters to the effect, with respect to the opinion of Counsel for the
Company, as attached hereto as Exhibit 2.
(d) At the Closing Time, you shall have received a signed opinion of
Xxxxxxxx, Rosenwein & Xxxxxxx, special trademark counsel for the Company
with respect to the Coldwell Banker franchise system, dated as of the
Closing Time, together with signed or reproduced copies of such opinion for
each of the other Underwriters, in form and substance reasonably
satisfactory to counsel for the Underwriters.
The opinions referred to above in clauses (b), (c) and (d) shall be to
such further effect with respect to other legal matters relating to this
Agreement and the sale of the Shares pursuant to this Agreement as counsel for
the Underwriters may reasonably request. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they
27
deem proper, upon certificates of officers of the Company, as the case may be,
and certificates of public officials; provided that such certificates have been
delivered to the Underwriters.
In giving the opinions referred to above in clause (b), (c) and (d),
such counsel may rely, as to all matters governed by the laws of jurisdictions
other than those in which they are expert, upon opinions of other counsel who
shall be counsel reasonably satisfactory to counsel for the Underwriters, in
which case the opinion shall state that they believe you and they are justified
and entitled to so rely.
(e) At the Closing Time, you shall have received the favorable opinion
of [_________], counsel for the Underwriters, dated as of the Closing Time,
together with signed or reproduced copies of such opinion for each of the
other Underwriters.
(f) At the Closing Time, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the 1933 Act and
the 1933 Act Regulations and in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations, and the 1934 Act
and the 1934 Act Regulations, the Company shall have complied in all
material respects with Rule 430A (if it shall have elected to rely thereon)
and (A) the Registration Statement, as it may then be amended or
supplemented, shall 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 and (B) the Prospectus, as it
may be amended or supplemented, will not include an 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, (ii) there shall not have been, since the
respective dates as of which information is
28
given in the Registration Statement, any material adverse change in the
condition (financial or otherwise), 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,
(iii) no action, suit or proceeding shall be pending or, to the knowledge
of the Company, threatened against the Company or any Subsidiary that would
be required to be set forth in the Prospectus other than as set forth
therein and no proceedings shall be pending or, to the knowledge of the
Company, threatened against the Company or any Subsidiary before or by any
federal, state or other commission, board or administrative agency wherein
an unfavorable decision, ruling or finding would materially adversely
affect the condition (financial or otherwise), earnings, business affairs
or business prospects of the Company and its Subsidiaries, considered as
one enterprise, other than as set forth in the Prospectus, (iv) the Company
shall have complied in all material respects with all agreements and
satisfied in all material respects all conditions included herein on its
part to be performed and satisfied at or prior to the Closing Time and (v)
the other representations and warranties of the Company set forth in
Section 1(a) shall be accurate as though expressly made at and as of the
Closing Time. At the Closing Time, you shall have received a certificate of
the Chairman of the Board or the President and the Chief Financial Officer
of the Company, dated as of the Closing Time, to such effect, it being
understood that such certificate shall not constitute personal
representations and warranties of the signing individual.
(g) You shall have received a letter or letters at the date hereof
substantially in the form attached hereto as Schedule VI hereto, and a
letter or letters to be delivered at the Closing Time reaffirming the
statements made in each such letter or letters, except that the inquiries
and procedures specified therein shall have been carried out to a
29
specified date not more than five days prior to the Closing Time.
(h) The Company shall have complied with the provisions of Section
3(a) hereof with respect to the furnishing of Prospectuses and Supplemental
Prospectuses on the business day next succeeding the date of this
Agreement, in such quantities as you reasonably request.
(i) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may
reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the Shares as herein contemplated and the matters
referred to in Section 5(c) and in order to evidence the accuracy and
completeness of any of the representations, warranties or statements of the
Company, the performance of any of the covenants of the Company, or the
fulfillment of any of the conditions herein contained; and all proceedings
taken by the Company at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as herein contemplated shall
be reasonably satisfactory in form and substance to you and to counsel for
the Underwriters.
(j) The Shares have been duly authorized for listing by the New York
Stock Exchange subject to notice of issuance thereof and notice of a
satisfactory distribution of the Shares.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4 herein.
Notwithstanding any such termination, the provisions of Sections 7, 8 and 9
shall remain in effect.
Section 6. Conditions to Purchase of Additional
30
Shares. In the event that the Underwriters exercise their option granted in
Section 2 to purchase all or any of the Additional Shares, and each Delivery
Date determined by you pursuant to Section 2 is later than the Closing Time,
the obligations of the several Underwriters to purchase and pay for the
Additional Shares that they shall have respectively agreed to purchase pursuant
to this Agreement (collectively, the "purchased Additional Shares") are subject
to the accuracy of the representations and warranties of the Company herein
contained, to the performance by the Company of its obligations hereunder, the
delivery to the Underwriters at the Delivery Date by the Company of such
Additional Shares and to the following further conditions:
(a) The Registration Statement shall remain effective at each Delivery
Date, and, at each Delivery Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act and no proceedings for that purpose shall have been instituted
or shall be pending, or, to your knowledge or the knowledge of the Company,
shall be 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 for the Underwriters.
(b) At each Delivery Date, the provisions of Sections 5(f)(i) through
5(f)(v) shall have been complied with at and as of each Delivery Date and,
at each Delivery Date, you shall have received a certificate of the
Chairman of the Board or the President and the Chief Financial Officer of
the Company, dated as of such Delivery Date, to such effect, it being
understood that such certificate shall not constitute personal
representations and warranties of the signing individual.
(c) At each Delivery Date, you shall have received the favorable
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP in New York, in its
role as special counsel for the Company, Xxxxx Xxxxxxx, Esq., General
Counsel for the Company, together with
31
signed or reproduced copies of such opinions for each of the other
Underwriters, respectively, dated as of each Delivery Date, relating to the
purchased Additional Shares and otherwise to the same effect required by
Sections 5(b) and 5(c), as the case may be, and each such counsel shall
have been furnished with all such documents, certificates and opinions as
such counsel may reasonably request for the purpose of enabling such
counsel to deliver such opinion or opinions.
The opinions referred to above shall be to such further effect with
respect to other legal matters relating to this Agreement and the sale of the
Shares pursuant to this Agreement as counsel for the Underwriters may
reasonably request. 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 certificates of public
officials; provided that such certificates have been delivered to the
Underwriters.
In giving the opinions referred to above, each such counsel may rely,
as to all matters governed by the laws of jurisdictions other than those in
which they are expert, upon opinions of other counsel who shall be counsel
reasonably satisfactory to counsel for the Underwriters, in which case the
opinion shall state that they believe you and they are justified and entitled
to so rely.
(d) At each Delivery Date, you shall have received the favorable
opinion of [__________ ], counsel for the Underwriters, dated as of such
Delivery Date, relating to the purchased Additional Shares and otherwise to
the same effect as the opinion required by Section 5(e).
(e) At each Delivery Date, you shall have received a separate letter
from Deloitte & Touche LLP, in form and substance satisfactory to you and
dated as of such Delivery Date, to the effect that they reaffirm the
statements made in their respective letter furnished pursuant to Section
5(f), except
32
that the specified date referred to shall be a date not more than five days
prior to such Delivery Date.
(f) At each Delivery Date, counsel for the Underwriters shall have
been furnished with all such documents, certificates and opinions as they
may reasonably request for the purpose of enabling them to pass upon the
issuance and sale of the purchased Additional Shares as contemplated in the
Underwriting Agreement and the matters referred to in Section 6(d) and in
order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company, the performance
of any of the covenants of the Company, or the fulfillment of any of the
conditions herein contained; and all proceedings taken by the Company at or
prior to each Delivery Date in connection with the authorization, issuance
and sale of the purchased Additional Shares as contemplated in the
Underwriting Agreement shall be reasonably satisfactory in form and
substance to you and to counsel for the Underwriters.
Section 7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter, as the case may be, within the meaning of Section 15 of the 1933
Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of an untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including all documents incorporated therein by
reference, 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 an untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus
supplement or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to
33
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 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, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred, including
fees and disbursements of counsel chosen by you, reasonably incurred in
investigating, preparing or defending against any litigation, or
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 such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (i) or (ii)
above;
provided, however, that this indemnity agreement does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an 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
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus supplement or the Prospectus
(or any amendment or supplement thereto); and provided, further, however, that
the foregoing indemnification with respect to any preliminary prospectus
supplement shall not inure to the benefit of any Underwriter (or any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased any of the Shares if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any
34
amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Shares to such person and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) Each 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 and of Section 20 of the
1934 Act, from and against any and all loss, liability, claim, damage and
expense described in the indemnity agreement in Section 7(a), 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) or any preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of such Underwriter expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus supplement or the
Prospectus (or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to any of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the
35
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all such indemnified parties
and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the Underwriters and
such control persons of Underwriters, such firm shall be designated in
writing by. In the case of any such separate firm for the Company, and such
directors, officers and control persons of the Company, such firm shall be
designated in writing by the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened 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 proceeding.
36
Section 8. Contribution. If the indemnification provided for in
Sections 7(a) and 7(b) is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its terms, then each
indemnifying party under such paragraph (it being understood that an
indemnifying party is one who would have had an obligation to provide
indemnification pursuant to Section 7 had such indemnification been
enforceable), in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect (A) the relative benefits received by the Underwriters,
and (B) that the Company is responsible for the balance 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 allocation referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand in connection with the offering of the
Shares shall be deemed to be in the same respective proportions as the net
proceeds from the offering of the Shares (before deducting expenses) received
by the Company and the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Shares. The relative fault of the Company on the one hand and of the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 8 are
37
several in proportion to the respective number of Shares they have purchased
hereunder, and not joint.
The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph 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 or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company, any Underwriter or any
person who controls the Company or any Underwriter within the meaning of
Section 15 of the 1933 Act and will survive delivery of and payment for the
Shares.
38
Section 10. Termination of Agreement. (a) You may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition (financial or otherwise), 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 any outbreak of hostilities or escalation thereof or other calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable to market the Shares or
enforce contracts for the sale of the Shares or (iii) if trading in any
securities of the Company has been suspended by the Commission, the New York
Stock Exchange or any other exchange or quotation system on which securities of
the Company are listed, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange or in the overthe-counter market has
been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange
or by order of the Commission or any other governmental authority or (iv) if a
banking moratorium has been declared by either federal, New Jersey or New York
authorities.
(b) If this Agreement is terminated pursuant to this Section 10, such
termination shall be without liability of any party to any other party,
except to the extent provided in Section 4 herein. Notwithstanding any such
termination, the provisions of Sections 7, 8 and 9 shall remain in effect.
Section 11. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Firm Shares
that it or they are obligated to purchase (the "Defaulted Shares"), you shall
have the right, within 24 hours thereafter, to make arrangements for one or
more of the
39
non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Shares in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, you have not
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Shares does not exceed 10% of the total
number of the Shares to be purchased pursuant to this Agreement, the
non-defaulting Underwriters shall be obligated to purchase the full amount
thereof in the proportions that their respective underwriting obligation
proportions (as defined below) bear to the underwriting obligation
proportions of all non-defaulting Underwriters, or
(b) if the number of Defaulted Shares exceeds 10% of the total number
of the Shares to be purchased pursuant to this Agreement, this Agreement
shall terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 11 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination
of this Agreement, either you or the Company shall have the right to postpone
the Closing Time or the Delivery Date, as applicable 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 "Underwriter" includes any person substituted for an
Underwriter under this Section 11. As used herein, the term "underwriting
obligation proportion" means the proportion that the number of Firm Shares set
forth opposite the name of each Underwriter in Schedule I hereto bears to the
total number of Firm Shares.
Section 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered,
mailed or
40
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed as set forth in Schedule I. Notices to the
Company shall be directed to it at 0 Xxxxxx Xxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, attention of Xxxxx Xxxxxxx, Esq., General Counsel.
Section 13. Parties. This Agreement is made solely for the benefit of
the several Underwriters, the Company and, to the extent expressed, any person
who controls the Company or any of the Underwriters within the meaning of
Section 15 of the 1933 Act, and the directors of the Company, its officers who
have signed the Registration Statement, and their respective executors,
administrators, successors and assigns and, subject to the provisions of
Section 11, no other person shall acquire or have any right under or by virtue
of this Agreement. The term "successors and assigns" shall not include any
purchaser, as such purchaser, from any Underwriter of the Shares. If there are
two or more Underwriters, all of their obligations hereunder are several and
not joint.
Section 14. Governing Law and Time. This Agreement shall be governed
by the laws of the State of New York. Specified times of the day refer to New
York City time.
Section 15. Counterparts. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
Section 16. Headings. All headings of the sections and subparts
thereof of this Agreement are for convenience of reference only and shall not
be deemed a part of this Agreement.
41
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company and each
Underwriter in accordance with its terms.
Very truly yours,
CENDANT CORPORATION
By:
-------------------------------
Name:
Title:
Confirmed and Accepted, as of the date first above written:
[UNDERWRITERS]
By:
By:
-------------------------------
Name:
Title:
42
SCHEDULE I
to Underwriting
Agreement dated
[_____________]
CENDANT CORPORATION
Preferred Stock
Number of Initial
Shares
Underwriter to be Purchased
----------- ---------------
Total.........................................................________________
43
SCHEDULE II
to Underwriting
Agreement
dated [________]
CENDANT CORPORATION
Preferred Stock
Number of Firm Shares to be issued: [________]
Number of Additional Shares to be issued: [________]
Initial public offering price: $_______
Purchase price: $_______
Closing date, time and location:
Delayed delivery contracts:
Listing requirement:
Other terms and conditions:
44
SCHEDULE III
to Underwriting Agreement
dated [______________]
SUBSIDIARIES OF THE COMPANY
SCHEDULE IV
to Underwriting Agreement
dated [_______________]
CENDANT CORPORATION
Preferred Stock
DELAYED DELIVERY CONTRACT
CENDANT CORPORATION
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Dear Sirs:
The undersigned hereby agrees to purchase from Cendant Corporation, a
Delaware corporation (the "Company"), and the Company agrees to sell to the
undersigned on _______, 19__ (the "Delivery Date"), __________________________
[____] Shares of the Company's Preferred Stock, par value $.01 per share (the
"Shares"), offered by the Company's Prospectus dated ________, 1996, as
supplemented by its Prospectus Supplement dated _______, 19__, receipt of which
is hereby acknowledged, at a purchase price of $____ per share, a on the
further terms and conditions set forth in this contract.
Payment for the Shares shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds, at the
offices of _____________, _____________, New York, New York, at A.M., New York
City time, on the Delivery Date (or in such other funds and/or at such other
place as the Company and the undersigned may agree upon in writing), upon
delivery of the Shares to the undersigned, in such authorized denominations and
registered in such names as the undersigned may request in writing addressed to
the Company not less than five business days prior to the Delivery Date.
48
The obligation of the undersigned to take delivery of and make payment
for the Shares on the Delivery Date shall be subject only to the conditions
that (1) the purchase of the Shares by the undersigned shall not, on the
Delivery Date, be prohibited under the laws of any jurisdiction to which the
undersigned is subject and that govern such investment, and (2) the Company, on
or before _______, 19__, shall have sold to the Underwriters of the Shares (the
"Underwriters") such number of Shares as is to be sold to them pursuant to the
Underwriting Agreement dated the date hereof between the Company and the
Underwriters. The obligation of the undersigned to take delivery of and make
payment for the Shares shall not be affected by the failure of any Underwriter
or other purchaser to take delivery of and make payment for the Shares pursuant
to other contracts simi lar to this contract.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned, at its address set forth below, a
notice to such effect, accompanied by a copy of the opinion of counsel for the
Company delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that (1) its investment in the Shares is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and that govern such investment, (2) all necessary corporate action
for the due execution and delivery of this contract and the payment for and
purchase of the Shares has been taken by it and no further authorization or
approval of any governmental or other regulatory authority is required for such
execution, delivery, payment or purchase and (3) upon the acceptance by the
Company and the mailing or delivery of a copy as provided below, this contract
will constitute a valid and binding agreement of the undersigned in accordance
with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective
49
successors, but will not be assignable by either party hereto without the
written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Shares, the aggregate proceeds of which are in excess
of $______ and that the acceptance of any Delayed Delivery Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance on a copy hereof
and mail or deliver a signed copy to the undersigned at its address set forth
below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
50
This contract shall be governed by the laws of the State of New York.
Yours very truly,
(Name of Purchaser)
By:
---------------------------
Title:
------------------------------
------------------------------
(Address)
Accepted as of the date first above written:
CENDANT CORPORATION
By:
------------------------------
Name:
Title:
PURCHASER - PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed is as
follows: (Please print.)
Telephone No.
Name (including Area Code)
---- ---------------------
51
SCHEDULE V
to Underwriting Agreement
dated [_______________]
MATTERS TO BE COVERED BY LETTER OR LETTERS
OF INDEPENDENT PUBLIC ACCOUNTANTS
To the extent that a report or opinion of Deloitte & Touche, LLP, on
the Consolidated Financial Statements of Cendant Corporation is included or
incorporated by reference in the Registration Statement or any exhibit thereto,
the Prospectus or any Prospectus Supplement, such firm, to the extent
applicable, shall have furnished to you the following letter or letters (in
each case in form and substance satisfactory to you):
(1) At the date hereof, a letter (the "Comfort Letter"), to the effect
that:
(a) They are independent accountants with respect to the Company and
its subsidiaries within the meaning of the 1933 Act and the applicable
published 1933 Act Regulations.
(b) In their opinion, the audited consolidated financial statements
and the related financial statement schedules of the Company reported on by
them included or incorporated by reference in such annual report on Form
10-K comply as to form in all material respects with the applicable
accounting requirements of the 1933 Act and the published 1933 Act
Regulations with respect to Registration Statements on Form S-3 and the
0000 Xxx and the published 1934 Act Regulations with respect to annual
reports on Form 10-K.
(c) Such letter shall further state that they have performed such
other procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other
52
financial information in the Form 10-K identified by you and have compared
certain of such amounts, percentages, numerical data and financial
information with, and have found such items to be in agreement with or
derived from, the detailed accounting records of the Company and its
subsidiaries.
(d) On the basis of procedures (but not an examination in accordance
with generally accepted auditing standards) consisting of:
(i) a reading of minutes of all meetings of the Company's
shareholders, Board of Directors (including the audit, executive and
compensation committees) from the date of the latest audited
consolidated financial statements of the Company and its subsidiaries;
(ii) a reading of the unaudited condensed consolidated financial
statements of the Company and its subsidiaries included or
incorporated by reference in the quarterly report on Form 10-Q for
each Form 10-Q filed; and
(iii) inquiries of certain officials of the Company who have
responsibility for financial and accounting matters as to (A) whether
the unaudited condensed consolidated financial statements referred to
in (ii) above comply as to form in all material respects with the
applicable ac counting requirements of the 1934 Act and the published
1934 Act Regulations with respect to Form 10-Q and (B) whether such
unaudited condensed consolidated financial statements are in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
financial statements referred to above;
nothing came to their attention that caused them to believe that the unaudited
condensed consolidated
53
financial statements included or incorporated by reference in such quarterly
report on Form 10-Q do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the published 1934 Act
Regulations with respect to Form 10-Q, or that such unaudited condensed
consolidated financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
audited consolidated financial statements referred to above, except as
disclosed in the notes to such unaudited condensed consolidated financial
statements.
(e) Such letter shall further state that they have performed such
other procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other financial information in the Form
10-Qs identified by you and have compared certain of such amounts,
percentages, numerical data and financial information with, and have found
such items to be in agreement with or derived from, the detailed accounting
records of the Company and its subsidiaries.
(f) On the basis of the inquiries and procedures referred to in
Section 1(d) of Schedule III (but carried out to the specified date
referred to in Section 2(a) of Schedule III), nothing came to their
attention that caused them to believe that, from the date of the latest
balance sheet of the Company and its subsidiaries included or incorporated
by reference in theProspectus to such specified date, there was:
(i) any change in the capital stock of the Company, as compared
with the amount shown in such latest balance sheet;
(ii) any decrease in stockholders' equity of the Company and its
subsidiaries, as compared with the amounts shown in such latest
balance sheet;
54
(iii) any increase in long-term debt of the Company and its
subsidiaries, as compared with the corresponding total amount of such
debt outstanding at the date of such latest balance sheet; or
(iv) any decrease from the date of such latest balance sheet to
such specified date in consolidated net revenue of the Company and its
subsidiaries or in the total amount or per share amount (on a primary
and fully diluted basis) of consolidated net income of the Company and
its subsidiaries, as compared with the corresponding period of the
preceding year, except in all instances for changes or decreases that
the Prospectus discloses have occurred or may occur or that are
described in the Closing Letter.
(g) Such letter shall further state that they have performed such
other procedures, specified by you, not constituting an audit, as they have
agreed to perform and report on with respect to certain amounts,
percentages, numerical data and other financial information in the
Registration Statement, the Prospectus and the exhibits to the Registration
Statement or in the documents incorporated by reference in the Prospectus
identified by you, and have compared certain of such amounts, percentages,
numerical data and financial information with, and have found such items to
be in agreement with or derived from, the detailed accounting records of
the Company and its subsidiaries.
(2) At the Closing Time, a letter dated the Closing Time (the "Closing
Letter"), to the effect that they reaffirm as of the date of the Closing Letter
(and as though made on the date of the Closing Letter) all statements made in
the comfort letter, if any, except that the inquiries and procedures specified
therein shall have been carried out to a specified date not more than five days
prior to the date of the Closing Letter.
55
EXHIBIT 1
SKADDEN, ARPS, SLATE, XXXXXXX & XXXX OPINION
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth above, we are of the opinion that:
(1) the authorized capital stock of the Company conform in all
material respects as to legal matters to the description thereof contained in
the Prospectus;
(2) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(3) the execution and delivery by the Company of, and the performance
by the Company of its obligations under, the Underwriting Agreement will not
(i) contravene any provision of the Amended and Restated Certificate of
Incorporation of the Company as currently in effect or the Amended and Restated
By-Laws of the Company as currently in effect, (ii) contravene any agreement or
other instrument binding upon the Company or any of its subsidiaries that is
listed as an exhibit to (a) the Registration Statement or (b) the Company's
Annual Report on Form 10-K for the fiscal year ending December 31, ____, as
amended, or (iii) violate any present statute, rule or regulation
(collectively, "Requirements of Law") or any order, judgment or decree of any
court or governmental agency or body (collectively, "Orders") having
jurisdiction over the Company or any of its properties or assets. The opinion
expressed in clause (iii) of this paragraph (3) is based on our review of those
Requirements of Law which are ordinarily applicable to transactions of the type
provided for in the Underwriting Agreement, but without making any special
investigation concerning any other Requirements of Law, and those Orders
specifically identified to us by the Company as being Orders to which it is
subject (no such Orders have been so identified to such counsel). In addition,
we express no opinion in this paragraph (3) with respect to (i) any state
securities or Blue Sky
56
laws, rules or regulations or (ii) the information contained in, or the
accuracy, completeness or correctness of, the Prospectus or the Registration
Statement or the compliance thereof as to form with the Securities Act of 1933
(the "Act") and the General Rules and Regulations thereunder, which matters are
dealt with in paragraphs (1) above and (5) below and the second paragraph
following paragraph (7) below;
(4) based upon our review of those Requirements of Law which are
ordinarily applicable to transactions of the type provided for in the
Underwriting Agreement, but without having made any special investigation
concerning any other Requirements of Law, no consent, approval, authorization
or Order of, or filing or registration with, any court or governmental agency
or body having jurisdiction over the Company and its Subsidiaries or any of
their respective properties or assets is required for the execution, delivery
and performance of the Underwriting Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby except for
(i) such as have been obtained under the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or (ii) such as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the shares by you, as to which we express no opinion;
(5) the statements made in the Prospectus under the caption
"Description of Capital stock," to the extent such statements constitute
summaries of legal matters and documents or legal conclusions, have been
reviewed by us and fairly present the information disclosed therein in all
material respects;
(6) (i) each document filed pursuant to the Exchange Act, and
incorporated by reference in the Prospectus (other than the financial
statements, notes and schedules thereto and other financial information
included in or omitted from such document as to which we need express no
opinion), when filed, appeared on its face to be responsive as to form in all
material respects with the requirements of the Exchange Act and the applicable
rules and regulations of the Commission
57
thereunder and (ii) each of the Registration Statement and the Prospectus
(other than the financial statements, notes and schedules thereto and other
financial information included in or omitted from the Registration Statement or
Prospectus, as to which we express no opinion), as of their respective
effective or issue dates, appeared on their face to be responsive as to form in
all material respects with the requirements of the Act and the applicable rules
and regulations thereunder; and such counsel does not have actual knowledge of
any contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement which are not filed as required; and
(7) the Company is not required to be registered or regulated as an
"investment company" as such term is defined under the Investment Company Act
of 1940, as amended.
We have been orally advised by the Commission that the Registration
statement was declared effective under the 1933 Act at ___ on __________ and,
we have been advised by the Commission that no stop order suspending the
effectiveness of the Registration Statement under the 1933 Act has been issued
and, to the best of our knowledge, no proceedings for that purpose have been
initiated or are pending or threatened by the Commission.
In addition, we have participated in conferences with officers and
representatives of the Company, representatives of the independent accountants
of the Company, and you and your counsel at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although 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 Prospectus and we have made no independent check
or verification thereof, except as set forth in numbered paragraph 5 hereof, on
the basis of the foregoing, no facts have come to our attention that have led
us to believe that the Registration Statement, on the original effective date
of the Registration Statement, on the effective date of the most recent
post-effective
58
amendment thereto, if any, on the date of the filing of any annual report on
Form 10-K after the filing of the Registration Statement, on the date of the
Underwriting Agreement, or at the Closing Time, contained an untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, or any amendment or supplement thereto, at the time the Prospectus
Supplement was issued at the time any such amended or supplemented Prospectus
was issued or at the Closing Time, contained or contains an untrue statement of
a 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, except that we express no opinion or belief
with respect to the financial statements, schedules and other financial data
included therein or excluded therefrom.
Very truly yours,
59
EXHIBIT 2
COMPANY COUNSEL OPINION
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that:
1. the Company has been duly organized and is subsisting in good
standing as a corporation under the laws of the State of Delaware with
corporate power and corporate authority under such laws to own, lease and
operate its properties and conduct its business as described in the Prospectus;
2. the Company is qualified to do business and is in good standing as
a foreign corporation in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary except to the extent that the failure to so qualify or
be in good standing would not have a material adverse effect on the Company and
its subsidiaries, considered as one enterprise;
3. each of the subsidiaries that is incorporated in Delaware (a
"Delaware Subsidiary") has been duly organized and is subsisting and in good
standing as a corporation under the laws of Delaware with corporate power and
corporate authority under such laws to own, lease and operate its properties
and conduct its business;
4. each subsidiary is qualified to do business and is in good standing
as a foreign corporation in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary except to the extent that the failure to so qualify or
be in good standing would not have a material adverse effect on the Company and
its subsidiaries, considered as one enterprise;
5. all of the outstanding shares of capital stock of the Company have
been duly authorized by all
60
requisite corporate action on the part of the Company and have been validly
issued and are fully paid and nonassessable; no holder thereof is or will be
subject to personal liability by reason of being such a holder; and none of the
outstanding shares of capital stock of the Company were issued in violation of
the preemptive rights of any stockholder of the Company;
6. the Shares have been duly authorized and validly reserved for
issuance by the Company and, when issued and paid for in accordance with the
terms of the Underwriting Agreement, will be validly issued, fully paid and
nonassessable; all corporate action required to be taken for the authorization,
issuance and delivery of such Shares has been validly taken; the issuance of
the Shares is not subject to any preemptive rights of any stockholder of the
Company;
7. the authorized, issued and outstanding capital stock of the Company
is as described in the Prospectus under the caption "Description of Capital
Stock";
8. all of the outstanding shares of capital stock of each Delaware
Subsidiary have been duly authorized by all requisite corporate action on the
part of the relevant Delaware Subsidiary and have been validly issued and are
fully paid and nonassessable. All of the shares of capital stock of each of the
Company Subsidiaries are owned by the Company free and clear of any pledge,
lien, security interest, charge, claim, encumbrance or equity (each a "Lien")
except for such Liens as are not, individually or in the aggregate, material to
the Company and its subsidiaries, considered as one enterprise;
9. there are no statutes or regulations, or any pending or, to my
knowledge, threatened legal or governmental proceedings against the Company or
any subsidiary, required to be described in the Prospectus that are not
described as required, nor are there any contracts or documents required to be
described in the
61
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
furthermore, no default exists in the due performance or observance by the
Company, or any subsidiary, or, to my knowledge, any other party thereto, of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, loan agreement, note, lease or other agreement or
instrument that is described in the Registration Statement or the Prospectus or
filed as an exhibit to the Registration State ment, except such defaults that
do not have a material adverse effect on the Company and its subsidiaries,
considered as one enterprise;
10. the provisions of the contracts and agreements that are summarized
in the Prospectus or in the Company's Proxy Statement dated [ ] (the "Proxy")
under the heading "Certain Relationships and Related Transactions" and
"Executive Compensation" conform in all material respects to the description
thereof contained in the Prospectus or Proxy and such description fairly
presents the information disclosed;
11. the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
12. the execution and delivery of the Underwriting Agreement by the
Company and compliance by the Company with the terms of the Underwriting
Agreement (a) do not and will not constitute or result in a breach of or a
default under any of the terms or provisions of, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any subsidiary under (i) any indenture, mortgage or loan
agreement, or any other agreement, including without limitation the Credit
Agreement (as defined in the Prospectus) or instrument to which the Company or
any subsidiary is a party or by which it may be bound or to which any of its
properties may be subject, (ii) any judgment, order or decree applicable to the
Company or any subsidiary of any government, governmental instrumentality or
court, domestic, or foreign, having jurisdic tion over the Company or any
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subsidiary or any of their properties, and (B) do not and will not result in a
violation of any applicable law, rule or regulation (except for the federal
securities laws, and the securities or blue sky laws of the various states, as
to which I express no opinion) except, in each case, for such breaches,
defaults or violations that would not have a material adverse effect on the
condition (financial or otherwise), earnings or business affairs of the Company
and its subsidiaries, considered as one enterprise;
13. except as previously disclosed to you in writing, (i) the Company
or its subsidiaries are the beneficial owners of the U.S. trademarks and
service marks set forth in the Prospectus, with the exception of the Ramada
xxxx; (ii) there is no claim, suit, action or proceeding pending or, to the
best of my knowledge, threatened against the Company or any subsidiary that
involves a claim of infringement of any trademark or service marks which
infringement (if the subject of any unfavorable decision) would have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise; and (iii) the current use of the trademarks and service marks by
the Company or any of its subsidiaries does not, to the best of my knowledge,
infringe upon any right of any third party which infringement (if the subject
of any unfavorable decision) would reasonably be expected to have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise;
14. all corporate action required to be taken for consummation of the
Merger has been validly taken.
In addition, I have participated in conferences with other officers
and representatives of the Company, representatives of the independent
accountants of the Company, and you and your counsel at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed and, although I am 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 Prospectus and I have made no
independent check or verification
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thereof, except as otherwise specifically referred to in paragraph 12 of this
opinion, on the basis of the foregoing, no facts have come to my attention that
have led me to believe that the Registration Statement, on the original
effective date of the Registration Statement, on the effective date of the most
recent post-effective amendment thereto, if any, on the date of the filing of
any annual report on Form 10-K after the filing of the Registration Statement,
on the date of the Underwriting Agreement, or at the Closing Time, contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that the Prospectus, or any amendment or supplement thereto, at
the time the Prospectus Supplement was issued, at the time any such amended or
supplemented Prospectus was issued or at the Closing Time, contained or
contains an untrue statement of a 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, except that I
express no opinion or belief with respect to the financial statements,
schedules and other financial data included therein or excluded therefrom.
Very truly yours,
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