EXHIBIT 1.1
6,144,908 Shares
Class A Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
May 20, 2004
UNDERWRITING AGREEMENT
May 20, 2004
UBS Securities LLC
Natexis Bleichroeder Inc.
as Managing Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Xxxxxxx X. XxXxxxx Irrevocable Trust (the "Selling Stockholder")
proposes to sell to the underwriters named in Schedule A annexed hereto (the
"Underwriters"), for whom you are acting as representatives, an aggregate of
6,144,908 shares (the "Firm Shares") of Class A Common Stock, $.01 par value
(the "Class A Common Stock"), of World Wrestling Entertainment, Inc., a Delaware
corporation (the "Company"). In addition, solely for the purpose of covering
over-allotments, the Selling Stockholder proposes to grant to the Underwriters
the option to purchase from the Selling Stockholder up to an additional 921,736
shares of Class A Common Stock (the "Additional Shares"). The Firm Shares and
the Additional Shares are hereinafter collectively sometimes referred to as the
"Shares." The Shares are described in the Prospectus which is referred to below,
and represent the number of shares of Class A Common Stock into which the same
number of shares of Class B Common Stock, $.01 par value (the "Class B Common
Stock"), of the Company held by the Selling Stockholder will automatically
convert upon their sale in the transactions contemplated hereby. The Class A
Common Stock and the Class B Common Stock are hereinafter collectively sometimes
referred to as the "Common Stock."
The Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-3 (File No. 333-114915) under
the Act, including a prospectus which incorporates by reference documents which
the Company has filed or will file in accordance with the provisions of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder (collectively, the "Exchange Act"), relating to, among other things,
the Shares and the offer and sale thereof in accordance with Rule 415 of the
Act. Such registration statement has been declared effective and the Company has
furnished to you, for use by the Underwriters and by dealers, copies of such
registration statement as amended (including post-effective amendments, if any)
and one or more preliminary prospectus supplement relating to the Shares. Except
where the context otherwise requires, the registration statement, as amended at
the time it became effective (including post-effective amendments, if any),
including the Prospectus (as defined below) and all documents filed as a part
thereof or incorporated by reference therein and also including any registration
statement filed pursuant to Rule 462(b) under the Act ("Rule 462(b)"), is herein
called the "Registration Statement." The prospectus, in the form in which it is
to be filed with the Commission pursuant to Rule 424(b), or, if the prospectus
is not to be filed with the Commission pursuant to Rule 424(b), the prospectus
in the form included as part of the Registration Statement at the time the
Registration Statement became effective, is hereinafter referred
to as the "Prospectus," except that if any revised prospectus, preliminary
prospectus supplement or prospectus supplement shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares which differs from the Prospectus (whether or not such revised prospectus
or prospectus supplement is required to be filed by the Company pursuant to Rule
424(b)), the term "Prospectus" shall also refer to such revised prospectus,
preliminary prospectus supplement or prospectus supplement, as the case may be,
from and after the time it is first provided to the Underwriters for such use.
As used herein, "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
The Company, the Selling Stockholder and the Underwriters agree
as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the Selling
Stockholder agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Selling
Stockholder the number of Firm Shares as set forth in Schedule A attached
hereto, subject to adjustment in accordance with Section 10 hereof, in each case
at a purchase price of $10.9825 per Share. The Selling Stockholder is advised by
you that the Underwriters intend (i) to make a public offering of their
respective portions of the Firm Shares as soon after the filing of the
prospectus supplement required to be filed pursuant to Rule 424(b) as in your
judgment is advisable and (ii) initially to offer the Firm Shares upon the terms
set forth in the Prospectus. You may from time to time increase or decrease the
public offering price of the Shares after the initial public offering to such
extent as you may determine.
In addition, the Selling Stockholder hereby grants to the several
Underwriters the option to purchase, and upon the basis of the representations
and warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholder ratably in accordance with the number of Firm Shares to
be purchased by each of them, all or a portion of the Additional Shares as may
be necessary to cover over-allotments made in connection with the offering of
the Firm Shares, at the same purchase price per share to be paid by the
Underwriters to the Selling Stockholder for the Firm Shares. This option may be
exercised by UBS Securities LLC ("UBS") on behalf of the several Underwriters at
any time and from time to time on or before the thirtieth day following the date
hereof, by written notice to the Selling Stockholder. Such notice shall set
forth the aggregate number of Additional Shares as to which the option is being
exercised, and the date and time when the Additional Shares are to be delivered
(such date and time being herein referred to as the "additional time of
purchase"); provided, however, that the additional time of purchase shall not be
earlier than the time of purchase (as defined below) nor earlier than the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall have
been exercised. The number of Additional Shares to be sold to each Underwriter
shall be the number which bears the same proportion to the aggregate number of
Additional Shares being purchased as the number of Firm Shares set forth
opposite the name of such Underwriter on Schedule A hereto bears to the total
number of Firm Shares (subject, in each case, to such adjustment as you may
determine to eliminate fractional shares), subject to adjustment in accordance
with Section 10 hereof.
2. Payment and Delivery. Payment of the purchase price for the Firm
Shares shall be made to the Selling Stockholder by Federal Funds wire transfer,
against delivery of the certificates for
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the Firm Shares to you through the facilities of The Depository Trust Company
(DTC) for the respective accounts of the Underwriters. Such payment and delivery
shall be made at 10:00 A.M., New York City time, on May 26, 2004 (unless another
time shall be agreed to by you and the Company and the Selling Stockholder or
unless postponed in accordance with the provisions of Section 10 hereof). The
time at which such payment and delivery are to be made is hereinafter sometimes
called "the time of purchase." Electronic transfer of the Firm Shares shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.
Payment of the purchase price for the Additional Shares shall be made
at the additional time of purchase in the same manner and at the same office as
the payment for the Firm Shares. Electronic transfer of the Additional Shares
shall be made to you at the additional time of purchase in such names and in
such denominations as you shall specify.
Deliveries of the documents described in Section 8 hereof with respect
to the purchase of the Shares shall be made at the offices of Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxx Xxx, Xxx Xxxx, Xxx Xxxx at 9:00 A.M., New York City time,
on the date of the closing of the purchase of the Firm Shares or the Additional
Shares, as the case may be.
3. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has been declared effective under
the Act; no stop order of the Commission preventing or suspending the
use of the Prospectus or the effectiveness of the Registration
Statement has been issued and no proceedings for such purpose have
been instituted or, to the Company's knowledge, are contemplated by
the Commission; the Company is eligible to use Form S-3 and the
conditions to the use of Form S-3 have been satisfied; the
Registration Statement as of the date of this Agreement meets, and the
offering of the Shares complies with, the requirements of Rule 415
under the Act. The Registration Statement complied when it became
effective, complies and, at the time of purchase and any additional
time of purchase, will comply, and the Prospectus conformed as of its
date, conforms and, at the time of purchase and any additional time of
purchase, will conform in all material respects with the requirements
of the Act and any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
have been and will be so described or filed; the Registration
Statement did not at the time of effectiveness, does not and, at the
time of purchase and any additional time of purchase, will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and the Prospectus will not, as of its date and at the time
of purchase and any additional time of purchase, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no warranty or
representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning an Underwriter and furnished in
writing by or on behalf of such Underwriter through you or on your
behalf to the Company expressly for use in the
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Registration Statement or the Prospectus; the documents incorporated
by reference in the Registration Statement and the Prospectus, at the
time they became effective or were filed with the Commission, complied
in all material respects with the requirements of the Exchange Act and
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; and the Company has not distributed
and will not distribute any offering material in connection with the
offering or sale of the Shares other than the Registration Statement,
including the Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth under the
heading "Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase
and the additional time of purchase, as the case may be, the Company
shall have an authorized and outstanding capitalization as set forth
under the heading "As Adjusted" in the section of the Registration
Statement and the Prospectus entitled "Capitalization," subject in
each case in the issuance of Common Stock upon the exercise of stock
options and the vesting of restricted stock units; all of the issued
and outstanding shares of capital stock, including the Common Stock,
of the Company have been duly authorized and validly issued and are
fully paid and non-assessable, have been issued in compliance with all
federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar
right; the shares of Class B Common Stock held by the Selling
Stockholder immediately prior to the consummation of the transactions
contemplated hereby will by the terms of the Class B Common Stock
convert automatically upon the sale thereof at the time of purchase or
the time of additional purchase, as the case may be, on a one-for-one
basis into shares of Class A Common Stock;
(c) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Registration Statement and the Prospectus, to execute and deliver this
Agreement and to perform its obligations hereunder;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in the
aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Company
and the Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect");
(e) none of the Company's subsidiaries (as defined in the
Exchange Act) (collectively, the "Subsidiaries"), individually or
collectively, constitutes a significant subsidiary (as defined under
Section 1-02 of Regulation S-X promulgated under the Securities Act);
except as described in the Registration Statement and Prospectus, the
Company does not own, directly or indirectly, any shares of stock or
any other equity or long-term debt securities of any corporation or
have any equity interest in any firm, partnership, joint venture,
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association or other entity; complete and correct copies of the
certificates of incorporation and the by-laws of the Company and all
amendments thereto have been delivered to you, and no changes therein
will be made subsequent to the date hereof and prior to the time of
purchase or, if later, the additional time of purchase;
(f) the Shares have been duly and validly authorized and are duly
and validly issued, fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of
first refusal and similar rights;
(g) the capital stock of the Company, including the Common Stock
and the Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the Prospectus and
the holders of the Shares will not be subject to personal liability
solely by reason of being such holders;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Company is not in breach or violation of or in default
under (nor has any event occurred which with notice, lapse of time or
both would result in any breach of, constitute a default under or give
the holder of any indebtedness (or a person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment
of all or a part of such indebtedness under) (1) its charter or
by-laws, or (2) any indenture, mortgage, deed of trust, bank loan or
credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company
is a party or by which the Company or any of its properties may be
bound or affected, except, in the case of clause (2) only, for any
breach, violation or default which would not, alone or in the
aggregate, have a Material Adverse Effect, and the execution, delivery
and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby will not conflict with, result
in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would
result in any breach of or constitute a default under) the charter or
by-laws of the Company, or any indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or
any license, lease, contract or other agreement or instrument to which
the Company is a party or by which any of the Company or any of its
properties may be bound or affected, or any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order
applicable to the Company;
(j) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection
with the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated hereby other than
registration of the Shares under the Act, which has been effected, and
any necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Shares are being offered by the
Underwriters or under the rules and regulations of the NASD;
(k) except as set forth in the Registration Statement and the
Prospectus, (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any
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shares of Common Stock or shares of any other capital stock or other
equity interests of the Company, (ii) no person has any preemptive
rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other capital
stock or other equity interests of the Company, and (iii) no person
has the right to act as an underwriter or as a financial advisor to
the Company in connection with the offer and sale of the Shares, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether
as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise; except as described in the Registration Statement and the
Prospectus, no person has the right, contractual or otherwise, to
cause the Company to register under the Act any shares of Common Stock
or shares of any other capital stock or other equity interests of the
Company, or to include any such shares or interests in the
Registration Statement or the offering contemplated thereby, whether
as a result of the filing or effectiveness of the Registration
Statement or the sale of the Shares as contemplated thereby or
otherwise;
(l) the Company has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required
under any federal, state, local or foreign law, regulation or rule,
and has obtained all necessary authorizations, consents and approvals
from other persons, in order to conduct its respective business,
except where the failure to do so would not, individually or in the
aggregate, have a Material Adverse Effect; the Company is not in
violation of, or in default under, and has not received notice of any
proceedings relating to revocation or modification of, any such
license, authorization, consent or approval or any federal, state,
local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company, except where such violation,
default, revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(m) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement have been so
described or filed as required;
(n) except as described in the Registration Statement and the
Prospectus, there are no actions, suits, claims, investigations or
proceedings pending or, to the Company's knowledge, threatened, to
which the Company or any of its directors or officers (in their
capacities as such) is a party or of which any of its properties is
subject at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority
or agency (including the Federal Communications Commission), except
any such action, suit, claim, investigation or proceeding which would
not result in a judgment, decree or order having, individually or in
the aggregate, a Material Adverse Effect or preventing consummation of
the transactions contemplated hereby;
(o) Deloitte & Touche LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is filed with
the Commission as part of the Registration Statement and the
Prospectus, are independent public accountants as required by the Act;
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(p) the audited financial statements included in the Registration
Statement and the Prospectus, together with the related notes and
schedules, present fairly the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and
the Subsidiaries for the periods specified and have been prepared in
compliance with the requirements of the Act and in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved; the other financial and statistical data
set forth in the Registration Statement or the Prospectus are
accurately presented and prepared on a basis consistent with the
financial statements and books and records of the Company; there are
no financial statements (historical or pro forma) that are required to
be included in the Registration Statement or the Prospectus that are
not included as required; the Company and the Subsidiaries do not have
any liabilities or obligations, direct or contingent (including any
off-balance sheet obligations) material to the Company and
Subsidiaries taken as a whole that are not disclosed in the
Registration Statement and the Prospectus; and all disclosures
contained in the Registration Statement or the Prospectus regarding
"non-GAAP financial measures" (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the
extent applicable.
(q) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been (i) any Material Adverse Effect, or any development that could
result in a Material Adverse Effect, (ii) any transaction which is
material to the Company and the Subsidiaries taken as a whole, (iii)
any obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Company or the Subsidiaries, which is
material to the Company and the Subsidiaries taken as a whole, (iv)
any change in the capital stock or outstanding indebtedness of the
Company or the Subsidiaries or (v) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company;
(r) the Company has obtained for the benefit of the Underwriters
the agreement (a "Lock-Up Agreement"), in the form set forth as
Exhibit A hereto, of each of its directors, the officers listed under
the heading "Management" in the Prospectus, and holders of Class B
Common Stock; provided that the Selling Stockholder will not be
required to execute such Lock-Up Agreement;
(s) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(t) except as described in the Registration Statement and the
Prospectus, the Company and each of the Subsidiaries has good and
marketable title to all real property described in the Registration
Statement or in the Prospectus as being owned by each of them, free
and clear of all liens, claims, security interests or other
encumbrances; all the property described in the Registration Statement
or the Prospectus as being held under lease by the Company or a
Subsidiary is held thereby under valid, subsisting and enforceable
leases;
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(u) except as described in the Registration Statement and the
Prospectus, (i) the Company and the Subsidiaries own, or have obtained
valid and enforceable licenses for, or other rights to use, the
inventions, patent applications, patents, trademarks (both registered
and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in the Registration Statement or the
Prospectus as being owned or licensed by them or which are necessary
for the conduct of their respective businesses, except where the
failure to own, license or have such rights would not, individually or
in the aggregate, have a Material Adverse Effect (collectively,
"Intellectual Property"); (ii) there are no third parties who have or,
to the Company's knowledge after due inquiry, will be able to
establish, rights to any Intellectual Property, except for the
ownership rights of the owners of the Intellectual Property which is
licensed to the Company; (iii) to the Company's knowledge, there is no
infringement by third parties of any Intellectual Property except as
is not material and has been previously disclosed to the Underwriters;
(iv) there is no pending or, to the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the Company's
rights in or to any Intellectual Property, except for actions, suits,
proceedings or claims that would not, individually or in the
aggregate, have a Material Adverse Effect and such pending actions,
suits, proceedings or claims that have been previously disclosed to
the Underwriters, and the Company is unaware of any facts which could
form a reasonable basis for any such claim; (v) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the validity or scope of any Intellectual
Property, except for actions, suits, proceedings or claims that would
not, individually or in the aggregate, have a Material Adverse Effect
and such pending actions, suits, proceedings or claims that have been
previously disclosed to the Underwriters, and the Company is unaware
of any facts which could form a reasonable basis for any such claim;
and (vi) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others that the
Company infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, except
for actions, suits, proceedings or claims that would not, individually
or in the aggregate, have a Material Adverse Effect and such pending
actions, suits, proceedings or claims that have been previously
disclosed to the Underwriters, and the Company is unaware of any facts
which could form a reasonable basis for any such claim; and the
Company has no issued patents or pending patent applications;
(v) the Company is not engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate,
have a Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the Company's knowledge after due
inquiry, threatened against the Company before the National Labor
Relations Board, and no grievance or arbitration proceeding arising
out of or under any collective bargaining agreement to which the
Company is party is pending or threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company's knowledge,
threatened against the Company and (C) no union representation dispute
currently existing concerning the employees of the Company, and (ii)
to the Company's knowledge, (A) no union organizing activities are
currently taking place concerning the employees of the Company and (B)
there has been no material violation of any federal, state, local or
foreign law relating to discrimination in the hiring, promotion or pay
of employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") or the rules
and regulations promulgated thereunder concerning the employees of the
Company;
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(w) the Company has not violated any environmental, safety or
similar law or regulation applicable to it or its business or property
relating to the protection of health and human safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), does not lack any permit, license or other
approval required of it under applicable Environmental Laws, and is
not violating any term or condition of any such permit, license or
approval, except in each case as could not reasonably be expected to
have a Material Adverse Effect;
(x) all tax returns required to be filed by the Company have been
filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any
interest, additions to tax or penalties applicable thereto due or
claimed to be due from such entities have been paid, other than those
being contested in good faith and for which adequate reserves have
been provided;
(y) the Company maintains insurance covering its properties,
operations, personnel, including independent contractors working as
performers, and businesses as the Company deems adequate and as
previously disclosed to the Underwriters; such insurance insures
against such losses and risks to an extent which the Company
reasonably believes is adequate to protect the Company and its
businesses; all such insurance is fully in force on the date hereof
and will be fully in force at the time of purchase and any additional
time of purchase;
(z) the Company has not sustained since the date of the last
audited financial statements included in the Registration Statement
and the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree that, individually or in the aggregate, would result
in a Material Adverse Effect;
(aa) except as would not result in a Material Adverse Effect, the
Company has not sent or received any communication regarding
termination of, or intent not to renew, any of the contracts or
agreements referred to or described in, or filed as an exhibit to, the
Registration Statement, and no such termination or non-renewal has
been threatened by the Company or, to the Company's knowledge after
due inquiry, any other party to any such contract or agreement;
(bb) the Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(cc) the Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 and
15d-14 under the Exchange Act); such
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disclosure controls and procedures are designed to ensure that
material information relating to the Company, including the
Subsidiaries, is made known to the Company's Chief Executive Officer
and its Chief Financial Officer by others within those entities, and
such disclosure controls and procedures are effective to perform the
functions for which they were established; the Company's auditors and
the Audit Committee of the Board of Directors have been advised of:
(i) any significant deficiencies in the design or operation of
internal controls which could adversely affect the Company's ability
to record, process, summarize, and report financial data; and (ii) any
fraud, whether or not material, that involves management or other
employees who have a role in the Company's internal controls; any
material weaknesses in internal controls have been identified for the
Company's auditors; and since the date of the most recent evaluation
of such disclosure controls and procedures, there have been no
significant changes in internal controls or in other factors that
could significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses;
(dd) the Company has provided you true, correct, and complete
copies of all documentation pertaining to any extension of credit in
the form of a personal loan made, directly or indirectly, by the
Company to any director or executive officer of the Company, or to any
family member or affiliate of any director or executive officer of the
Company; and since July 30, 2002, the Company has not, directly or
indirectly, including through any subsidiary: (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer
of the Company, or to or for any family member or affiliate of any
director or executive officer of the Company; or (ii) made any
material modification, including any renewal thereof, to any term of
any personal loan to any director or executive officer of the Company,
or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002;
(ee) any statistical and market-related data included in the
Registration Statement or the Prospectus are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required;
(ff) neither the Company nor, to the Company's knowledge, any
employee, independent contractor or agent of the Company, has made any
payment of funds of the Company or the Subsidiaries or received or
retained any funds in violation of any law, rule or regulation, which
payment, receipt or retention of funds is of a character required to
be disclosed in the Registration Statement or the Prospectus;
(gg) neither the Company nor, to the Company's knowledge, any of
its directors, officers, affiliates or controlling persons has taken,
directly or indirectly, any action designed to, or which has
constituted or might reasonably be expected to, cause or result in,
under the Exchange Act or otherwise, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Shares;
10
(hh) to the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or 5% or greater securityholders, except as set
forth in the Registration Statement and the Prospectus;
(ii) the Company has received a waiver from Invemed Capital Fund,
L.P. ("ICF"), a holder of Class A Common Stock, by which ICF waives
any and all of its rights under the Registration Rights Agreement
between ICF and the Company dated August 30, 2001, in connection with
the transactions contemplated hereby; and
(jj) the Company and any of the officers and directors of the
Company, in their capacities as such, are in compliance in all
material respects with the provisions of the Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations promulgated thereunder.
In addition, any certificate signed by any officer of the Company
and delivered to the Underwriters or counsel for the Underwriters in connection
with the offering of the Shares shall be deemed to be a representation and
warranty by the Company as to matters covered thereby, to each Underwriter.
4. Representations and Warranties of the Selling Stockholder. The
Selling Stockholder represents and warrants to each Underwriter that:
(a) the Selling Stockholder now is and at the time of delivery of
the Shares (whether the time of purchase or additional time of
purchase, as the case may be) will be, the lawful owner of a number of
shares Class B Common Stock equal to the number of shares of Class A
Common Stock to be purchased by the Underwriters pursuant to this
Agreement and has and, at the time of delivery thereof, will have
valid and marketable title to such Class B Common Stock, and upon
delivery of and payment for the Shares (whether at the time of
purchase or the additional time of purchase, as the case may be), the
Underwriters will acquire valid and marketable title to the Shares
free and clear of any claim, lien, encumbrance, security interest,
community property right, restriction on transfer or other defect in
title;
(b) the Selling Stockholder has and at the time of delivery of
the Shares (whether the time of purchase or additional time of
purchase, as the case may be) will have, full legal right, power and
capacity, and any approval required by law (other than those imposed
by the Act and the securities or blue sky laws of certain
jurisdictions), to sell, assign, transfer and deliver such Shares in
the manner provided in this Agreement;
(c) this Agreement has been duly executed and delivered by the
Selling Stockholder and is a legal, valid and binding agreement of the
Selling Stockholder enforceable in accordance with its terms;
(d) the Registration Statement did not at the time of
effectiveness, does not and, at the time of purchase, any additional
time of purchase and at any time at which the Prospectus is delivered
in connection with any sale of Shares, will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were
11
made, not misleading and the Prospectus will not, as of its date and
at the time of purchase, any additional time of purchase and at any
time at which the Prospectus is delivered in connection with any sale
of Shares, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Selling
Stockholder makes no warranty or representation with respect to any
statement contained in the Registration Statement or the Prospectus in
reliance upon and in conformity with information concerning an
Underwriter and furnished in writing by or on behalf of such
Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; and
(e) the sale of the Shares pursuant to this Agreement is not
prompted by any information concerning the Company which is not set
forth in the Prospectus.
5. Certain Covenants of the Company. The Company hereby agrees:
(a) to furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the
securities or blue sky laws of such states or other jurisdictions as
you may designate and to maintain such qualifications in effect so
long as you may request for the distribution of the Shares; provided
that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of
any such jurisdiction (except service of process with respect to the
offering and sale of the Shares); and to promptly advise you of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose;
(b) to make available to the Underwriters in New York City, as
soon as practicable after this Agreement becomes effective, and
thereafter from time to time to furnish to the Underwriters, as many
copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to
deliver a prospectus after the nine-month period referred to in
Section 10(a)(3) of the Act in connection with the sale of the Shares,
the Company will prepare promptly upon request such amendment or
amendments to the Registration Statement and the Prospectus as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Act;
(c) if, at the time this Agreement is executed and delivered, it
is necessary for any post-effective amendment to the Registration
Statement to be declared effective before the offering of the Shares
may commence, the Company will endeavor to cause such post-effective
amendment to become effective as soon as possible and the Company will
advise you promptly and, if requested by you, will confirm such advice
in writing, (i) when any such post-effective amendment thereto has
become effective, and (ii) if Rule 430A under the Act is used, when
the Prospectus is filed with the Commission pursuant to Rule 424(b)
under the Act (which the Company agrees to file in a timely manner
under such Rule);
12
(d) to advise you promptly, confirming such advice in writing, of
any request by the Commission for amendments or supplements to the
Registration Statement or the Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for,
or the entry of a stop order, suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop
order suspending the effectiveness of the Registration Statement, to
use its best efforts to obtain the lifting or removal of such order as
soon as possible; to advise you promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus, including by
filing any documents that would be incorporated therein by reference,
and to provide you and Underwriters' counsel copies of any such
documents for review and comment a reasonable amount of time prior to
any proposed filing and to file no such amendment or supplement to
which you shall object in writing;
(e) subject to Section 5(d) hereof, to file promptly all reports
and any definitive proxy or information statement required to be filed
by the Company with the Commission in order to comply with the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to provide you with a copy of such
reports and statements and other documents to be filed by the Company
pursuant to Section 13, 14 or 15(d) of the Exchange Act during such
period a reasonable amount of time prior to any proposed filing, and
to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to advise the Underwriters promptly of the happening of any
event within the time during which a prospectus relating to the Shares
is required to be delivered under the Act which could require the
making of any change in the Prospectus then being used so that the
Prospectus would not include an untrue statement of material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading, and, during such time, subject to Section 5(d) hereof,
to prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be
necessary to reflect any such change;
(h) to make generally available to its security holders, and to
deliver to you, an earnings statement of the Company (which will
satisfy the provisions of Section 11(a) of the Act) covering a period
of twelve months beginning after the effective date of the
Registration Statement (as defined in Rule 158(c) of the Act) as soon
as is reasonably practicable after the termination of such
twelve-month period but not later than June 30, 2005;
(i) to furnish to its shareholders as soon as practicable after
the end of each fiscal year an annual report (including a consolidated
balance sheet and statements of income, shareholders' equity and cash
flow of the Company and the Subsidiaries for such fiscal year,
accompanied by a copy of the certificate or report thereon of
nationally recognized independent certified public accountants);
13
(j) to furnish to you five copies of the Registration Statement
and Prospectus, as initially filed with the Commission, and of all
amendments and supplements thereto (including all exhibits thereto and
documents incorporated by reference therein) and sufficient copies of
the foregoing (other than exhibits) for distribution of a copy to each
of the other Underwriters;
(k) to furnish to you promptly and, upon request, to each of the
other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its stockholders or shall from time to time
publish or publicly disseminate, (ii) copies of all annual, quarterly
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, (iii) copies of documents or reports filed with any
national securities exchange on which any class of securities of the
Company is listed, and (iv) such other information as you may
reasonably request regarding the Company or the Subsidiaries;
(l) to furnish to you as early as practicable prior to the time
of purchase and any additional time of purchase, as the case may be,
but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company and the Subsidiaries which have
been read by the Company's independent certified public accountants,
as stated in their letter to be furnished pursuant to Section 8(c)
hereof;
(m) not to sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose
of or agree to dispose of, directly or indirectly, any Common Stock or
securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any
other securities of the Company that are substantially similar to
Common Stock, or file or cause to be declared effective a registration
statement under the Act relating to the offer and sale of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or other rights to purchase Common Stock
or any other securities of the Company that are substantially similar
to Common Stock for a period of 90 days after the date hereof (the
"Lock-Up Period"), without the prior written consent of UBS, except
for (i) the registration of the Shares and the sales to the
Underwriters pursuant to this Agreement, (ii) issuances of Common
Stock upon the exercise of options or warrants or the vesting of
restricted stock units disclosed as outstanding in the Registration
Statement and the Prospectus, and (iii) the issuance of employee stock
options or restricted stock units not exercisable or vesting, as the
case may be, during the Lock-Up Period pursuant to stock option plans
described in the Registration Statement and the Prospectus; provided,
however, that if (i) during the period that begins on the date that is
15 calendar days plus 3 business days before the last day of the
90-day restricted period and ends on the last day of the 90-day
restricted period, the Company issues a earnings release or material
news or a material event relating to the Company occurs, or (ii) prior
to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day
period beginning on the last day of the 90-day period, the
restrictions imposed by this section 5(n) shall continue to apply
until the expiration of the date that is 15 calendar days plus 3
business days after the date on which the issuance of the earnings
release or the material news or material event occurs; provided
further, however,
14
the foregoing proviso will not apply if, within 3 days of the
termination of the 90-day restricted period, the Company delivers to
UBS a certificate in accordance with Section 13 hereof, signed by the
Chief Financial Officer or Chief Executive Officer of the Company,
certifying on behalf of the Company that the Company's shares of Class
A Common Stock are, as of the date of delivery of such certificate,
"actively traded securities," as defined in Regulation M, 17 CFR
242.101(c)(1)(i); and
(n) to maintain a transfer agent and, if necessary under the
jurisdiction of incorporation of the Company, a registrar for the
Class A Common Stock.
6. Certain Covenants of the Selling Stockholder. The Selling
Stockholder hereby agrees with each of the Underwriters and the Company that:
(a) except for any distribution to a trust beneficiary required
by the terms of the Xxxxxxx X. XxXxxxx Irrevocable Deed of Trust,
dated June 30, 1999 ("Deed of Trust") where the distributee is bound
as a successor or assign under this Agreement, the Selling Stockholder
will not sell, grant any option to sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock for a period of 90 days after the date
hereof, without the prior written consent of UBS; provided, however,
that if (i) during the period that begins on the date that is 15
calendar days plus 3 business days before the last day of the 90-day
restricted period and ends on the last day of the 90-day restricted
period, the Company issues a earnings release or material news or a
material event relating to the Company occurs, or (ii) prior to the
expiration of the 90-day restricted period, the Company announces that
it will release earnings results during the 16-day period beginning on
the last day of the 90-day period, the restrictions imposed by this
section 6(a) shall continue to apply until the expiration of the date
that is 15 calendar days plus 3 business days after the date on which
the issuance of the earnings release or the material news or material
event occurs; provided further, however, the foregoing proviso will
not apply if, within 3 days of the termination of the 90-day
restricted period, the Company delivers to UBS a certificate in
accordance with Section 13 hereof, signed by the Chief Financial
Officer or Chief Executive Officer of the Company, certifying on
behalf of the Selling Stockholder that the Selling Stockholder's
shares of Class A Common Stock and Class B Common Stock, upon
conversion into Class A Common Stock, are, as of the date of delivery
of such certificate, "actively traded securities," as defined in
Regulation M, 17 CFR 242.101(c)(1)(i); and
(b) to pay all costs, expenses, fees and taxes in connection with
(i) the preparation and filing of the Registration Statement, the
Prospectus and any amendments or supplements thereto, and the printing
and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the
registration, issue, sale and delivery of the Shares including any
stock or transfer taxes and stamp or similar duties payable upon the
sale, issuance or delivery of the Shares to the Underwriters, (iii)
the producing, word processing and/or printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements and any closing
documents (including compilations thereof) and the reproduction and/or
printing and furnishing of copies of each thereof to the Underwriters
and (except closing documents) to dealers (including costs of mailing
and shipment), (iv) the
15
qualification of the Shares for offering and sale under state or
foreign laws and the determination of their eligibility for investment
under state or foreign law as aforesaid (including the legal fees and
filing fees and other disbursements of counsel for the Underwriters)
and the printing and furnishing of copies of any blue sky surveys or
legal investment surveys to the Underwriters and to dealers, (v) any
filing for review of the public offering of the Shares by the NASD,
including the legal fees and filing fees and other disbursements of
counsel to the Underwriters, (vi) the fees and disbursements of any
transfer agent or registrar for the Shares, and (vii) the costs and
expenses of the Company relating to presentations or meetings
undertaken in connection with the marketing of the offering and sale
of the Shares to prospective investors and the Underwriters' sales
forces, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the
Company and any such consultants, and the cost of any aircraft
chartered in connection with the road show.
7. Reimbursement of Underwriters' Expenses. If the Shares are not
delivered for any reason other than the termination of this Agreement pursuant
to the fifth paragraph of Section 10 hereof or the default by one or more of the
Underwriters in its or their respective obligations hereunder, the Selling
Stockholder shall, in addition to paying the amounts described in Section 6(b)
hereof, reimburse the Underwriters for all of their out-of-pocket expenses,
including the fees and disbursements of their counsel.
8. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and the Selling Stockholder on the
date hereof, at the time of purchase and, if applicable, at the additional time
of purchase, the performance by the Company and the Selling Stockholder of its
obligations hereunder and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and,
if applicable, at the additional time of purchase, an opinion of
Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form and substance satisfactory to Weil,
Gotshal & Xxxxxx, LLP counsel for the Underwriters, stating that:
(i) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with the corporate power and authority to own, lease
and operate its properties and conduct its business as described
in the Registration Statement and the Prospectus and to execute
and deliver this Agreement;
(ii) the Company is duly qualified to do business as a
foreign corporation and is in good standing in the jurisdictions
listed on an exhibit to such opinion of counsel;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
16
(iv) the Shares have been duly authorized and validly issued
and are fully paid and non-assessable;
(v) the Company has an authorized and, to such counsel's
knowledge based solely on a fact certificate, outstanding
capitalization as set forth in the Registration Statement and the
Prospectus; all of the issued and outstanding shares of capital
stock of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are not subject to
preemptive rights by operation of law; and the holders of the
Shares will not be subject to personal liability for the
obligations and liabilities of the Company solely by reason of
being such holders;
(vi) the shares of Class B Common Stock to be sold to you
pursuant hereto will convert automatically, on a one-for-one
basis, into shares of Class A Common Stock immediately upon the
sale of such shares of Class B Common Stock;
(vii) the capital stock of the Company, including the
Shares, conforms in all material respects to the description
thereof contained in the Registration Statement and the
Prospectus;
(viii) the Registration Statement and the Prospectus (except
as to the financial statements and schedules and other financial
data contained therein, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act (including the requirements of Rule 415
under the Act) and the conditions to the use of Form S-3 have
been satisfied; the documents incorporated by reference in the
Registration Statement and the Prospectus, at the time they
became effective or were filed with the Commission, complied as
to form in all material respects with the requirements of the
Exchange Act (except as to the financial statements and schedules
and other financial data contained therein, as to which such
counsel need express no opinion);
(ix) the Registration Statement has become effective under
the Act and, to such counsel's knowledge based solely on a
telephone conversation with a member of the staff of the
Commission, no stop order proceedings with respect thereto are
pending or threatened under the Act and any required filing of
the Prospectus and any supplement thereto pursuant to Rule 424
under the Act has been made in accordance with Rule 424;
(x) the performance by the Company of its obligations
hereunder does not require the Company to obtain any approval,
authorization, consent or order of any court or governmental
authority, other than registration of the Shares under the Act
(except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the
various jurisdictions in which the Shares are being offered by
the Underwriters);
(xi) the execution and delivery by the Company hereof, and
the performance by the Company of its obligations hereunder, do
not result in any breach or violation of
17
or constitute a default under (or constitute an event which with
notice, lapse of time or both would result in any breach or
violation of or constitute a default under) the charter or
by-laws of the Company, the express terms of any agreement or
instrument filed as an exhibit to the Registration Statement, the
General Corporation Law of the State of Delaware, any applicable
statute, rule or regulation of the United States, or any existing
obligation of the Company under the express terms of any court
order which, to such counsel's knowledge based solely on a fact
certificate, names the Company and is specifically directed to it
or its property;
(xii) to such counsel's knowledge without investigation, at
the date hereof, there are no actions, suits, claims,
investigations or proceedings pending or overtly threatened in
writing to which the Company or any of its directors or officers
is a party or to which any of the Company's properties is subject
which are required to be described in the Registration Statement
or the Prospectus but are not so described;
(xiii) 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; and
(xiv) the information in the Registration Statement and the
Prospectus under the headings "Risk Factors - We could incur
substantial liabilities if pending material litigation is
resolved unfavorably," "Business - Litigation," and "Description
of Capital Stock", insofar as such statements constitute a
summary of the Company charter or bylaws or matters of law are
accurate in all material respects and present fairly the
information required to be shown; to such counsel's knowledge
based solely on a fact certificate, all contracts and other
documents required to be described or referred to in the
Registration Statement or filed as exhibits to the Registration
Statement have been so described, referred to, or filed, as the
case may be, and the descriptions of or references to those
documents in the Registration Statement are correct in all
material respects.
In addition, such counsel shall state that such counsel has
participated in conferences with representatives of the Company, including
certain of its executive, financial and accounting officers, representatives of
the independent public accountants of the Company and representatives of the
Underwriters, including counsel to the Underwriters, at which the contents of
the Registration Statement and the Prospectus and related matters were
discussed, has reviewed certificates of certain officers of the Company and a
letter addressed to the Underwriters from the Company's independent accountants
and, although such counsel is not opining as to factual matters and is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or the
Prospectus, assumes the correctness and completeness of the information included
in the Registration Statement and the Prospectus, and has not made independent
investigation or verification of that information, on the basis of such
counsel's review of the Registration Statement and the Prospectus and
participation in their preparation, nothing has come to the attention of such
counsel that causes them to believe that the Registration Statement contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus or any supplement
18
thereto at the date of such Prospectus or such supplement, and at the time of
purchase or the additional time of purchase, as the case may be, contained an
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to the
financial statements and schedules and other financial or accounting data
included in the Registration Statement or the Prospectus or any supplement or
amendment thereto).
(b) The Company shall furnish to you at the time of purchase and,
if applicable, at the additional time of purchase, an opinion of
Xxxxxx X. Xxxxxxx, general counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form and substance satisfactory to Weil,
Gotshal & Xxxxxx, LLP counsel for the Underwriters, stating that:
(i) there are no affiliate transactions, off-balance sheet
transactions, contracts, licenses, agreements, leases or
documents of a character which are required to be described in
the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement which have not been so
described or filed;
(ii) except as described in the Registration Statement and
the Prospectus, (i) the Company and the Subsidiaries own, or have
obtained valid and enforceable licenses for, or other rights to
use, the Intellectual Property, except where the failure to own,
license or have such rights would not, individually or in the
aggregate, have a Material Adverse Effect; (ii) there are no
third parties who have or, to such counsel's knowledge after due
inquiry, will be able to establish, rights to any Intellectual
Property, except for the ownership rights of the owners of the
Intellectual Property which is licensed to the Company; (iii) to
such counsel's knowledge, there is no infringement by third
parties of any Intellectual Property except as is not material
and has been previously disclosed to the Underwriters; (iv) there
is no pending or, to such counsel's knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's
rights in or to any Intellectual Property, except for threatened
actions, suits, proceedings or claims that would not,
individually or in the aggregate, have a Material Adverse Effect
and such pending actions, suits, proceedings or claims that have
been previously disclosed to the Underwriters, and such counsel
is unaware of any facts which could form a reasonable basis for
any such claim; (v) there is no pending or, to such counsel's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Intellectual Property,
except for actions, suits, proceedings or claims that would not,
individually or in the aggregate, have a Material Adverse Effect
and such pending actions, suits, proceedings or claims that have
been previously disclosed to the Underwriters, and such counsel
is unaware of any facts which could form a reasonable basis for
any such claim; and (vi) there is no pending or, to such
counsel's knowledge, threatened action, suit, proceeding or claim
by others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary
rights of others, except for actions, suits, proceedings or
claims that would not, individually or in the
19
aggregate, have a Material Adverse Effect and such pending
actions, suits, proceedings or claims that have been previously
disclosed to the Underwriters, and such counsel is unaware of any
facts which could form a reasonable basis for any such claim; and
the Company has no issued patents or pending patent applications;
(iii) except as described in the Registration Statement and
the Prospectus, no person has the right, pursuant to the terms of
any contract, agreement or other instrument described in or filed
as an exhibit to the Registration Statement or otherwise known to
such counsel, to cause the Company to register under the Act any
shares of Common Stock or shares of any other capital stock or
other equity interest of the Company, or to include any such
shares or interest in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise;
(iv) the issued and outstanding shares of capital stock of
the Company are not subject to contractual preemptive rights,
resale rights, rights of first refusal and similar rights; and
(v) the Company is not in breach or violation of or in
default under (nor has any event occurred which with notice,
lapse of time or both would result in any breach of, constitute a
default under or give the holder of any indebtedness (or a person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness under) (1) its charter or by-laws, or (2) any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company is
a party or by which the Company or any of its properties may be
bound or affected, except, in the case of clause (2) only, for
any breach, violation or default which would not, alone or in the
aggregate, have a Material Adverse Effect, and the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute
a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach of or constitute
a default under) the charter or by-laws of the Company, or any
indenture, mortgage, deed of trust, bank loan or credit agreement
or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company is
a party or by which any of the Company or any of its properties
may be bound or affected, or any federal, state, local or foreign
law, regulation or rule or any decree, judgment or order
applicable to the Company.
(c) The Selling Stockholder shall furnish to you at the time of
purchase and at the additional time of purchase, as the case may be,
an opinion of Xxxxxxxxxxx & Xxxxxxxx LLP, counsel for the Selling
Stockholder (in reliance on an opinion of Connecticut counsel as to
matters of Connecticut law), addressed to the Underwriters, and dated
the time of purchase or the additional time of purchase, as the case
may be, with reproduced copies for each of the
20
other Underwriters, and in form and substance satisfactory to Weil,
Gotshal & Xxxxxx LLP, counsel for the Underwriters, stating that:
(i) this Agreement has been duly executed and delivered by
the Selling Stockholder;
(ii) the Selling Stockholder has the trust power to perform
its obligations hereunder, and to such counsel's knowledge, the
performance by the Selling Stockholder of its obligations
hereunder does not require the Selling Stockholder to obtain any
approval by or make any filing with any governmental authority
under any statute, rule or regulation of the United States or the
State of Connecticut (other than those imposed by federal or
state securities laws, as to which such counsel need express no
opinion);
(iii) the Selling Stockholder is the record owner of the
securities to be sold by the Selling Stockholder pursuant hereto
upon delivery to the Underwriters of the certificates evidencing
those securities indorsed by and effective indorsement to the
Underwriters in blank, and payment for those securities in
accordance with the terms hereof, the Underwriters will acquire
all the rights in those securities that the Selling Stockholder
has or has the power to transfer and, assuming that the
Underwriters do not have notice of any adverse claim, those
rights will be free of any adverse claim within the meaning of
the Uniform Commercial Code; and
(iv) to such counsel's knowledge the statements in the
Prospectus under the caption "Selling Stockholder" insofar as
such statements constitute a summary of the matters referred to
therein present fairly the information called for with respect to
such matters.
(d) You shall have received from Deloitte & Touche LLP letters
dated, respectively, the date of this Agreement, the time of purchase
and, if applicable, the additional time of purchase, and addressed to
the Underwriters (with reproduced copies for each of the Underwriters)
in the forms heretofore approved by UBS.
(e) You shall have received at the time of purchase and, if
applicable, at the additional time of purchase, the favorable opinion
of Weil, Gotshal & Xxxxxx LLP, counsel for the Underwriters, dated the
time of purchase or the additional time of purchase, as the case may
be, as to the matters referred to in subparagraphs (iii), (v) (with
respect to preemptive rights only), (vii) (with respect to the Shares
only), (viii), (ix) and the last subparagraph of paragraph (a) of this
Section 8.
(f) No Prospectus or amendment or supplement to the Registration
Statement or the Prospectus, including documents deemed to be
incorporated by reference therein, shall have been filed to which you
object in writing.
(g) Any Prospectus required to be filed pursuant to Rule 424(b)
shall have been filed with the Commission at or before 5:30 P.M., New
York City time, on the second full
21
business day after the date of this Agreement and any registration
statement pursuant to Rule 462(b) under the Act required in connection
with the offering and sale of the Shares shall have been filed and
become effective no later than 5:30 P.M., New York City time, on the
date of this Agreement.
(h) Prior to the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto
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 (iii) the Prospectus
and all amendments or supplements thereto 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, in
the light of the circumstances under which they are made, not
misleading.
(i) Between the time of execution of this Agreement and the time
of purchase or the additional time of purchase, as the case may be, no
material adverse change or any development involving a prospective
material adverse change in the business, properties, management,
financial condition or results of operations of the Company and the
Subsidiaries taken as a whole shall occur or become known.
(j) The Company will, at the time of purchase and, if applicable,
at the additional time of purchase, deliver to you a certificate of
its Chief Executive Officer and its Chief Financial Officer to the
form attached as Exhibit B hereto.
(k) You shall have received signed Lock-up Agreements referred to
in Section 3(r) hereof.
(l) The Company and the Selling Stockholder shall have furnished
to you such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the
Prospectus as of the time of purchase and, if applicable, the
additional time of purchase, as you may reasonably request.
(n) The Selling Stockholder will at the time of purchase and the
additional time of purchase, as the case may be deliver to you a
certificate of the Selling Stockholder to the effect that the
representations and the warranties of the Selling Stockholder as set
forth in this Agreement are true and correct as of each such date.
9. Effective Date of Agreement; Termination. This Agreement shall
become effective when the parties hereto have executed and delivered this
Agreement.
The obligations of the several Underwriters hereunder shall be subject
to termination in the absolute discretion of UBS or any group of Underwriters
(which may include UBS) which has agreed to purchase in the aggregate at least
50% of the Firm Shares, if (x) since the time of execution of this Agreement or
the earlier respective dates as of which information is given in the
Registration Statement and the Prospectus, there has been any material adverse
change or any development
22
involving a prospective material adverse change in the business, properties,
management, financial condition or results of operation of the Company and the
Subsidiaries taken as a whole, which would, in UBS' judgment or in the judgment
of such group of Underwriters, make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus, or (y)
there shall have occurred: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general moratorium
on commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States or a
declaration by the United States of a national emergency or war; or (v) any
other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in UBS' judgment or in the judgment of such
group of Underwriters makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement and the Prospectus, or (z) there
shall have occurred any downgrading, or any notice or announcement shall have
been given or made of (i) any intended or potential downgrading or (ii) any
watch, review or possible change that does not indicate an affirmation or
improvement, in the rating accorded any securities of or guaranteed by the
Company or any Subsidiary by any "nationally recognized statistical rating
organization," as that term is defined in Rule 436(g)(2) under the Act.
If UBS or any group of Underwriters elects to terminate this
Agreement as provided in this Section 9, the Company, the Representatives of the
Selling Stockholder and each other Underwriter shall be notified promptly in
writing.
If the sale to the Underwriters of the Shares, as contemplated by
this Agreement, is not carried out by the Underwriters for any reason permitted
under this Agreement or if such sale is not carried out because the Company or
the Selling Stockholder, as the case may be, shall be unable to comply with any
of the terms of this Agreement, the Company or the Selling Stockholder, as the
case may be, shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 6(b), 7 and 11 hereof), and the
Underwriters shall be under no obligation or liability to the Company and the
Selling Stockholder under this Agreement (except to the extent provided in
Section 9 hereof) or to one another hereunder.
10. Increase in Underwriters' Commitments. Subject to Sections 8 and 9
hereof, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a
failure of a condition set forth in Section 8 hereof or a reason sufficient to
justify the termination of this Agreement under the provisions of Section 9
hereof) and if the number of Firm Shares which all Underwriters so defaulting
shall have agreed but failed to take up and pay for does not exceed 10% of the
total number of Firm Shares, the non-defaulting Underwriters shall take up and
pay for (in addition to the aggregate number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriters in
such amount or amounts as you may designate with the consent of each Underwriter
so designated or, in the event no such designation is made, such Shares shall be
23
taken up and paid for by all non-defaulting Underwriters pro rata in proportion
to the aggregate number of Firm Shares set opposite the names of such
non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its obligations
hereunder, the Company and the Selling Stockholder agrees with the
non-defaulting Underwriters that it will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and the
Prospectus and other documents may be effected.
The term Underwriter as used in this Agreement shall refer to and
include any Underwriter substituted under this Section 10 with like effect as if
such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Firm Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Firm Shares which all Underwriters agreed to purchase hereunder, and if
neither the non-defaulting Underwriters nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Shares which the defaulting Underwriter or Underwriters agreed to purchase
hereunder, this Agreement shall terminate without further act or deed and
without any liability on the part of the Company to any non-defaulting
Underwriter and without any liability on the part of any non-defaulting
Underwriter to the Company. Nothing in this paragraph, and no action taken
hereunder, shall relieve any defaulting Underwriter from liability in respect of
any default of such Underwriter under this Agreement.
11. Indemnity and Contribution.
(a) The Company and the Selling Stockholder jointly and severally
agree to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, any such Underwriter or any such person
may incur under the Act, the Exchange Act, the common law or
otherwise, insofar as such loss, damage, expense, liability or claim
arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus,
or arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated in either such
Registration Statement or such Prospectus or necessary to make the
statements made therein not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or
24
is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information
concerning such Underwriter furnished in writing by or on behalf of
such Underwriter through you to the Company expressly for use in such
Registration Statement or such Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in
connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such
information not misleading, (ii) any untrue statement or alleged
untrue statement made by the Company in Section 3 hereof or the
failure by the Company to perform when and as required under any
agreement or covenant contained herein or (iii) any untrue statement
or alleged untrue statement of any material fact contained in any
audio or visual materials provided by the Company or based upon
written information furnished by or on behalf of the Company
including, without limitation, slides, videos, films or tape
recordings used in connection with the marketing of the Shares;
provided, further, that the Selling Stockholder shall not be
responsible, either pursuant to this indemnity or as a result of any
breach of this Agreement, for losses, expenses, liability or claims
arising out of or based upon such untrue statement or omission or
allegation thereof based upon information furnished by any party other
than the Selling Stockholder and, in any event, the Selling
Stockholder shall not be responsible, either pursuant to this
indemnity or as a result of any breach of this Agreement, for losses,
expenses, liability or claims for an amount in excess of the proceeds
to be received by the Selling Stockholder (before deducting expenses)
from the sale of Shares hereunder.
If any action, suit or proceeding (each, a "Proceeding") is
brought against an Underwriter or any such person in respect of which indemnity
may be sought against the Company or the Selling Stockholder pursuant to the
foregoing paragraph, such Underwriter or such person shall promptly notify the
Company and the Selling Stockholder in writing of the institution of such
Proceeding and the Company or the Selling Stockholder, as the case may be, shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Company or the
Selling Stockholder shall not relieve the Company or the Selling Stockholder
from any liability which the Company or the Selling Stockholder may have to any
Underwriter or any such person or otherwise, except where such omission results
in material prejudice to the Company or the Selling Stockholder that affects the
substantive rights of the Company or the Selling Stockholder. Such Underwriter
or such person shall have the right to employ its or their own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
such Underwriter or of such person unless the employment of such counsel shall
have been authorized in writing by the Company or the Selling Stockholder in
connection with the defense of such Proceeding or the Company or the Selling
Stockholder shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
are defenses available to it or them which are different from, additional to or
in conflict with those available to the Company or the Selling Stockholder (in
which case the Company or the Selling Stockholder shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company or the Selling Stockholder and paid as incurred (it being understood,
however, that the Company or the Selling Stockholder shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are
25
parties to such Proceeding). The Company or the Selling Stockholder shall not be
liable for any settlement of any Proceeding effected without its written consent
but if any such proceeding is settled with the written consent of the Company or
the Selling Stockholder, as the case may be, the Company or the Selling
Stockholder agrees to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement to
the extent otherwise required by this Paragraph 11(a). Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle. 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 and does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, the Selling
Stockholder and any person who controls the Company or the Selling
Stockholder within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Company, the Selling Stockholder or
any such person may incur under the Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in and in conformity
with information concerning such Underwriter furnished in writing by
or on behalf of such Underwriter through you to the Company expressly
for use in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Company) or in a Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration
Statement or such Prospectus or necessary to make such information not
misleading.
If any Proceeding is brought against the Company, the Selling
Stockholder or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Company, the
Selling Stockholder or such person shall promptly notify such Underwriter in
writing of the institution of such Proceeding and such Underwriter shall assume
the defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify such Underwriter shall not
relieve such Underwriter from any liability which such Underwriter may have to
the Company, the Selling Stockholder or any such person or otherwise, except
where
26
such omission results in material prejudice to such Underwriter that affects the
substantive rights of such Underwriter. The Company, the Selling Stockholder or
such person shall have the right to employ its own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of the Company,
the Selling Stockholder or such person unless the employment of such counsel
shall have been authorized in writing by such Underwriter in connection with the
defense of such Proceeding or such Underwriter shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to or in conflict with those available to such
Underwriter (in which case such Underwriter shall not have the right to direct
the defense of such Proceeding on behalf of the indemnified party or parties,
but such Underwriter may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), in any of which events such fees and expenses shall be borne by
such Underwriter and paid as incurred (it being understood, however, that such
Underwriter shall not be liable for the expenses of more than one separate
counsel (in addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the indemnified
parties who are parties to such Proceeding). No Underwriter shall be liable for
any settlement of any such Proceeding effected without the written consent of
such Underwriter but if settled with the written consent of such Underwriter,
such Underwriter agrees to indemnify and hold harmless the Company, the Selling
Stockholder and any such person from and against any loss or liability by reason
of such settlement to the extent otherwise required by this Section 11(b).
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. 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.
(c) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under subsections (a) and (b) of
this Section 11 or insufficient to hold an indemnified party harmless
in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as
a result of such losses, damages, expenses, liabilities or claims (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company and the Selling Stockholder on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses,
liabilities or claims,
27
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholder on the
one hand and the Underwriters on the other shall be deemed to be in
the same respective proportions as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and the Selling
Stockholder and the total underwriting discounts and commissions
received by the Underwriters, bear to the aggregate public offering
price of the Shares. The relative fault of the Company and the Selling
Stockholder on the one hand and of the Underwriters on the other shall
be determined by reference to, among other things, whether the untrue
statement or alleged untrue statement of a material fact or omission
or alleged omission relates to information supplied by the Company
and/or the Selling Stockholder or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by
such party in connection with investigating, preparing to defend or
defending any Proceeding.
(d) The Company, the Selling Stockholder and the Underwriters
agree that it would not be just and equitable if contribution pursuant
to this Section 11 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 subsection (c) above. Notwithstanding
the provisions of this Section 11, 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 such Underwriter and distributed
to the public were offered to the public exceeds the amount of any
damage which such Underwriter has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 11 are several in proportion to
their respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this
Section 11 and the covenants, warranties and representations of the
Company and the Selling Stockholder contained in this Agreement shall
remain in full force and effect regardless of any investigation made
by or on behalf of any Underwriter, its partners, directors or
officers or any person (including each partner, officer or director of
such person) who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors or officers, the Selling
Stockholder or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall
survive any termination of this Agreement or the issuance and delivery
of the Shares. The Company, the Selling Stockholder and each
Underwriter agree promptly to notify each other of the commencement of
any Proceeding against it and, in the case of the Company or the
Selling Stockholder, against the Company's or the Selling
Stockholder's officers or directors, as the case may be, in connection
with the issuance and sale of the Shares, or in connection with the
Registration Statement or the Prospectus.
28
12. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page of the prospectus supplement and
the statements set forth in the sixth (regarding commissions and discounts) and
the thirteenth (regarding stabilization) paragraphs under the caption
"Underwriting" in the Prospectus constitute the only information furnished by or
on behalf of the Underwriters as such information is referred to in Sections 3
and 11 hereof.
13. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
the Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 0000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000, Attention: Xxxxxx X. Xxxxxxx, Esq.; and if
to the Selling Stockholder, shall be sufficient in all respects if delivered or
sent to the Selling Stockholder at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx,
00000, Attention: Xxxxxxx X. XxXxxxx, as Trustee.
14. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. Submission to Jurisdiction. Except as set forth below, no Claim
may be commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company and the Selling Stockholder hereby consent to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
UBS or any indemnified party. Each of UBS, the Selling Stockholder and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) waives all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement. The Company
and the Selling Stockholder agree that a final judgment in any such action,
proceeding or counterclaim brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
16. Parties at Interest. The Agreement herein set forth has been and
is made solely for the benefit of the Underwriters, the Selling Stockholder and
the Company and to the extent provided in Section 11 hereof the controlling
persons, directors and officers referred to in such section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from any of the Underwriters) shall
acquire or have any right under or by virtue of this Agreement.
17. Counterparts. This Agreement may be signed by the parties in one
or more counterparts which together shall constitute one and the same agreement
among the parties.
29
18. Successors and Assigns. This Agreement shall be binding upon the
Underwriters, the Selling Stockholder and the Company, and their rights shall
inure to the benefit of, and their obligations hereunder shall be binding upon,
their successors and assigns and any successor or assign of any substantial
portion of the Company's, the Selling Stockholder's and any of the Underwriters'
respective businesses and/or assets. If, prior to satisfaction of all
obligations of the parties under this Agreement, the Deed of Trust requires a
distribution by the Selling Stockholder of any Shares or the proceeds from the
sale hereunder of any Shares, then the distributee (and such distributee's own
successors, assigns, heirs, personal representatives and executors and
administrators) shall be deemed a successor or assign of the Selling Stockholder
for the purposes of, and shall assume, jointly and generally with any other such
distributee, the rights and obligations of the Selling Stockholder under, this
Agreement.
19. Miscellaneous. UBS, an indirect, wholly owned subsidiary of UBS
AG, is not a bank and is separate from any affiliated bank, including any U.S.
branch or agency of UBS AG. Because UBS is a separately incorporated entity, it
is solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by UBS are not deposits, are not insured
by the Federal Deposit Insurance Corporation, are not guaranteed by a branch or
agency, and are not otherwise an obligation or responsibility of a branch or
agency.
30
If the foregoing correctly sets forth the understanding among the
Company, the Selling Stockholder and the Underwriters, please so indicate in the
space provided below for the purpose, whereupon this agreement and your
acceptance shall constitute a binding agreement among the Company, the Selling
Stockholder and the Underwriters, severally.
Very truly yours,
WORLD WRESTLING ENTERTAINMENT, INC.
By:
--------------------------------
Title:
THE XXXXXXX X. XXXXXXX IRREVOCABLE
TRUST
By:
--------------------------------
Xxxxxxx X. XxXxxxx, not in his individual
capacity, but as Trustee under the Xxxxxxx
X. XxXxxxx Irrevocable Deed of Trust,
dated June 30, 1999
31
Accepted and agreed to as of the
date first above written, on
behalf of themselves
and the other several Underwriters
named in Schedule A
UBS SECURITIES LLC
NATEXIS BLEICHROEDER INC.
By: UBS SECURITIES LLC
By:
-------------------------------
Title:
By:
-------------------------------
Title:
32
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS SECURITIES LLC 5,545,780
NATEXIS BLEICHROEDER INC. 291,883
XXXXXXXX & PARTNERS, L.P. 61,449
FIRST ALBANY CAPITAL INC. 61,449
XXXXX PARTNERS, INC. 61,449
MAXIM GROUP LLC 61,449
STANFORD GROUP COMPANY 61,449
-----------
Total..................... 6,144,908
===========
Exhibit A
-----------
World Wrestling Entertainment, Inc.
------------------------------------
Class A Common Stock
Class B Common Stock
($.01 Par Value)
_________ ___, 2004
UBS Securities LLC
Natexis Bleichroeder Inc.
As Representative of the several Underwriters
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This Lock-Up Letter Agreement is being delivered to you in connection
with the proposed Underwriting Agreement (the "Underwriting Agreement") to be
entered into by World Wrestling Entertainment, Inc. (the "Company"), the Xxxxxxx
X. XxXxxxx Irrevocable Trust (the "Selling Stockholder") and you, as
Representative of the several Underwriters named therein, with respect to the
public offering (the "Offering") of Class A Common Stock, par value $.01 per
share, of the Company (the "Class A Common Stock"). The Class A Common Stock
together with the Class B Common Stock, par value $.01 per share, of the Company
is hereinafter referred to as the "Common Stock".
In order to induce you to enter into the Underwriting Agreement, the
undersigned agrees that for a period of 90 days after the date of the final
prospectus relating to the Offering the undersigned will not, without the prior
written consent of UBS, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(the "Commission") in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the meaning
of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Commission promulgated thereunder with respect to, any
Common Stock of the Company, or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock, (ii) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or warrants or other rights to purchase Common Stock, whether any
such transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, or (iii) publicly announce an intention to
effect any
transaction specified in clause (i) or (ii). The foregoing sentence shall not
apply to (a) the registration of or sale to the Underwriters of any Common Stock
pursuant to the Offering and the Underwriting Agreement, (b) bona fide gifts,
provided the recipient thereof agrees in writing with the Underwriters to be
bound by the terms of this Lock-Up Letter Agreement and confirm that he, she or
it has been in compliance with the terms of this Lock-Up Letter Agreement since
the date hereof, (c) dispositions to any trust for the direct or indirect
benefit of the undersigned and/or the immediate family of the undersigned,
provided that such trust agrees in writing with the Underwriters to be bound by
the terms of this Lock-Up Letter Agreement and confirms that it has been in
compliance with the terms of this Lock-Up Letter Agreement since the date hereof
or (d) dispositions to the Company to the extent and up to the amount required
to cover withholding tax obligations in connections with the vesting of
previously granted restricted stock units.
In addition, the undersigned hereby waives any rights the undersigned
may have to require registration of Common Stock in connection with the filing
of a registration statement relating to the Offering. The undersigned further
agrees that, for a period of 90 days after the date of the final prospectus
relating to the Offering, the undersigned will not, without the prior written
consent of UBS, make any demand for, or exercise any right with respect to, the
registration of Common Stock of the Company or any securities convertible into
or exercisable or exchangeable for Common Stock, or warrants or other rights to
purchase Common Stock.
If (i) during the period that begins on the date that is 15 calendar
days plus 3 business days before the last day of the 90-day restricted period
and ends on the last day of the 90-day restricted period, the Company issues a
earnings release or material news or a material event relating to the Company
occurs; or (ii) prior to the expiration of the 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, the restrictions imposed by this
letter shall continue to apply until the expiration of the date that is 15
calendar days plus 3 business days after the date on which the issuance of the
earnings release or the material news or material event occurs; provided,
however, this paragraph will not apply if, within 3 days of the termination of
the 90-day restricted period, the Company delivers to UBS a certificate, signed
by the Chief Financial Officer or Chief Executive Officer of the Company,
certifying on behalf of the undersigned that the undersigned's shares of Class A
Common Stock and, if applicable, Class B Common Stock, upon conversion into
Class A Common Stock, are, as of the date of delivery of such certificate,
"actively traded securities," as defined in Regulation M, 17 CFR 242.101(c)(1).
Such notice shall be delivered in accordance with Section 13 of the Underwriting
Agreement.
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, (ii) the registration statement filed with the
Securities and Exchange Commission with respect to the Offering is withdrawn or
(iii) for any reason the Underwriting Agreement shall be terminated prior to the
time of purchase (as defined in the Underwriting Agreement), this Lock-Up Letter
Agreement shall be terminated and the undersigned shall be released from its
obligations hereunder.
Yours very truly,
--------------------------
Name:
Exhibit B
Officers' Certificate
-----------------------
1. I have reviewed the Registration Statement and the Prospectus,
2. The representations and warranties of the Company as set forth in this
Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under this Agreement as
are to be performed at or before the time of purchase and at or before the
additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (g) and (h) of Section 8 of this
Agreement have been met.
5. The financial statements and other financial information included in the
Registration Statement and the Prospectus fairly present in all material
respects the financial condition, results of operations, and cash flows of
the Company as of, and for, the periods presented in the Registration
Statement.
