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EXHIBIT 2.h.
EXPRESS SCRIPTS AUTOMATIC
EXCHANGE SECURITY TRUST
$__________ TRUST ISSUED AUTOMATIC EXCHANGE SECURITIES
(SUBJECT TO EXCHANGE INTO CLASS A COMMON STOCK (PAR VALUE $.01
PER SHARE) OF EXPRESS SCRIPTS, INC.)
UNDERWRITING AGREEMENT
November [ ], 2000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
CREDIT SUISSE FIRST BOSTON CORPORATION
c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. 10004
Ladies and Gentlemen:
1. Introductory. Express Scripts Automatic Exchange Security Trust, a trust
duly created under the laws of the State of New York (such trust and the
trustees thereof acting in their capacities as such being referred to herein as
the "Trust"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule 1 hereto (the
"Underwriters" or "you") an aggregate of 3,000,000 $[ ] Trust Issued Automatic
Exchange Securities of the Trust specified above (the "Firm Securities") and, at
the election of the Underwriters, up to an aggregate of 450,000 additional $[ ]
Trust Issued Automatic Exchange Securities (the "Optional Securities") (the Firm
Securities and the Optional Securities which the Underwriters elect to purchase
pursuant to Section 3 hereof are herein collectively called the "Securities").
The $[ ] Trust Issued Automatic Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Exchange Securities." Each Automatic Exchange Security
will be exchanged for one or fewer shares of Class A Common Stock, par value
$.01 per share ("the Common Stock"), of
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Express Scripts, Inc., a Delaware corporation (the "Company") or in certain
circumstances, other securities or property or cash on November [ ], 2003, (the
"Exchange Date") or such other date as specified in the Contract (as defined
below), which Common Stock will be delivered pursuant to a forward purchase
contract (the "Contract"), dated as of November [ ], 2000, between the Trust and
NYLIFE LLC, a Delaware limited liability company (the "Selling Stockholder").
The Selling Stockholder's obligation under the Contract will be secured by a
pledge of collateral pursuant to the terms of a collateral agreement, dated
November [ ], 2000, among the Selling Stockholder, The Chase Manhattan Bank
("Chase"), as collateral agent (in such capacity, the "Collateral Agent"), and
the Trust (the "Collateral Agreement").
It is understood and agreed to by all parties that the Company and the
Selling Stockholder are concurrently entering into an agreement (the "Secondary
Underwriting Agreement") providing for the sale by the Selling Stockholder of up
to a total of 6,000,000 shares of Common Stock and, at the election of the
underwriters who are parties to the Secondary Underwriting Agreement, up to
900,000 additional shares of Common Stock.
2. Representations and Warranties of the Company and the Selling
Stockholder.
(a) The Company represents and warrants to, and agrees with, each of the
Underwriters, the Trust and the Selling Stockholder that:
(i) A registration statement on Form S-3 (No. 333-47572) in respect of the
shares of Common Stock deliverable pursuant to the Contract (the "Contract
Shares"), has been filed with the Securities and Exchange Commission (the
"Commission") and either (i) has been declared effective under the
Securities Act of 1933 (the "Act") and is not proposed to be amended or
(ii) is proposed to be amended by amendment or post-effective amendment.
The Company has complied with the conditions for use of Form S-3 under the
Act. If such registration statement (the "initial Company registration
statement") has been declared effective, either (i) an additional
registration statement (the "additional Company registration statement")
relating to the Contract Shares may have been filed with the Commission
pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has
become effective upon filing pursuant to such Rule, and the Contract Shares
all have been duly registered under the Act pursuant to the initial Company
registration statement and, if applicable, the additional Company
registration statement or (ii) such an additional Company registration
statement is proposed to be filed with the Commission pursuant to Rule
462(b) and will become effective upon filing pursuant to such Rule, and
upon such filing the Contract Shares will all have been duly registered
under the Act pursuant to the initial Company registration statement and
such additional Company registration statement. If the Company does not
propose to amend the initial Company registration statement or if an
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additional Company registration statement has been filed and the Company
does not propose to amend it, and if any post-effective amendment to either
such Company registration statement has been filed with the Commission
prior to the execution and delivery of this Agreement, the most recent
amendment (if any) to each such Company registration statement has been
declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of
the additional Company registration statement, Rule 462(b). For purposes of
this Agreement, "Effective Time" with respect to the initial Company
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional Company registration statement means (i) if
the Company has advised the Underwriters that it does not propose to amend
such Company registration statement, such date and time as of which such
Company registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c), or (ii) if the Company has advised the
Underwriters that it proposes to file an amendment or post-effective
amendment to such Company registration statement, the date and time as of
which such Company registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by the
Commission. If an additional Company registration statement has not been
filed prior to the execution and delivery of this Agreement but the Company
has advised the Underwriters that it proposes to file one, "Effective Time"
with respect to such additional Company registration statement means the
date and time as of which such additional Company registration statement is
filed and becomes effective pursuant to Rule 462(b). "Effective Date" with
respect to the initial Company registration statement or the additional
Company registration statement (if any) means the date of the Effective
Time thereof. The initial Company registration statement, as amended at its
Effective Time, including all material incorporated by reference therein,
and all information contained in the additional Company registration
statement (if any) and deemed to be a part of the initial Company
registration statement as of the Effective Time of the additional Company
registration statement pursuant to the General Instructions of Form S-3,
including all information (if any) deemed to be a part of the initial
Company registration statement as of its Effective Time pursuant to Rule
430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the
"Initial Company Registration Statement." The additional Company
registration statement, as amended at its Effective Time, including the
contents of the initial Company registration statement incorporated by
reference therein and including all information (if any) deemed to be a
part of the additional Company registration statement as of its Effective
Time pursuant to Rule 430A(b), is hereinafter referred to as the
"Additional Company Registration Statement." The Initial Company
Registration Statement and the Additional Company Registration Statement
are herein referred to
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collectively as the "Company Registration Statements." The form of
prospectus relating to the Contract Shares, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)")
under the Act or (if no such filing is required) as included in a Company
Registration Statement, including all material incorporated by reference in
such prospectus, is hereinafter referred to as the "Company Prospectus";
and the Trust Registration Statement (as defined in Section 2(c)(i) hereof)
and the Company Registration Statement are hereinafter collectively called
the "Registration Statements" and the Trust Prospectus and the Company
Prospectus are hereinafter collectively called the "Prospectuses"; and any
reference herein to any Company preliminary prospectus or the Company
Prospectus shall be deemed to refer to any amendment or supplement to any
Company preliminary prospectus. No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Company Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective
Date of the Initial Company Registration Statement, the Initial Company
Registration Statement conformed in all respects to the requirements of the
Act and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) on the
Effective Date of the Additional Company Registration Statement (if any),
each Company Registration Statement conformed, or will conform, in all
respects to the requirements of the Act and the Rules and Regulations and
did not include, or will not include, any untrue statement of a material
fact and did not omit, or will not omit, to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) on the date of this Agreement, as of the First
Date of Delivery and any Second Date of Delivery, and at the time of filing
of the Company Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Company Registration
Statement in which the Company Prospectus is included, the Company
Prospectus will conform in all respects to the requirements of the Act and
the Rules and Regulations, and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. If the
Effective Time of the Initial Company Registration Statement is subsequent
to the execution and delivery of this Agreement: on the Effective Date of
the Initial Company Registration Statement, the Initial Company
Registration Statement, and on the Effective Date of the Initial Company
Registration Statement and as of the First Date of Delivery and any Second
Date of Delivery, the Company Prospectus, will conform in all respects to
the requirements of the Act and the Rules and Regulations, neither of such
documents will include any untrue statement of a material fact or will omit
to state any material fact required to be stated
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therein or necessary to make the statements therein not misleading and no
Additional Company Registration Statement has been or will be filed. The
two preceding sentences do not apply to statements in or omissions from a
Company Registration Statement or the Company Prospectus based upon written
information furnished to the Company by any Underwriter through the
Underwriters specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 8(c)
hereof. The documents incorporated by reference in the Company Prospectus,
at the time filed with the Commission, conformed in all material respects
to the requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or the Act, as applicable, and the rules and regulations
of the Commission thereunder. The Commission has not issued an order
preventing or suspending the use of any Company Prospectus relating to the
proposed offering of the Contract Shares nor instituted proceedings for
that purpose.
(iii) To the extent that any statements or omissions made in the Trust
Registration Statement, any Trust Preliminary Prospectus, the Trust
Prospectus or any amendment or supplement thereto are made in reliance upon
and in conformity with written information furnished to the Trust by the
Company expressly for use therein (A) the Trust Registration Statement and
any amendment or supplement thereto, do not and will not, as of the
effective dates, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) the Trust Prospectus does
not, and as amended and supplemented will not, as of the applicable filing
date, contain any 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.
(iv) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct
its business as described in the Company Registration Statements and the
Company Prospectus. Each of the subsidiaries of the Company as listed in
Exhibit A hereto (collectively, the "Subsidiaries") has been duly organized
and is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and authority
to own or lease its properties and conduct its business as described in the
Company Registration Statements and the Company Prospectus. The
subsidiaries listed in Exhibit B hereto are the only subsidiaries, direct
or indirect, of the Company. The Company and each of the Subsidiaries are
duly qualified to transact business in all jurisdictions in which the
conduct of their business requires such qualification (except where the
failure to so qualify would not have a material adverse effect on the
Company and the
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Subsidiaries taken as a whole). The outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and to the extent shown in Exhibit B hereto
are owned by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims; and, other than as described in the
Company Registration Statements and the Company Prospectus or as disclosed
in writing to the Underwriters, no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to
convert any obligations into shares of capital stock or ownership interests
in the Company or any of the Subsidiaries are outstanding.
(v) The outstanding shares of Common Stock of the Company (including the
shares of Common Stock to be pledged under the Collateral Agreement) have
been duly authorized and validly issued, are fully paid and non-assessable.
Neither the filing of any Company Registration Statement nor the offering
or sale of the Securities as contemplated by this Agreement gives rise to
any rights for or relating to the registration of any shares of Common
Stock. Except as disclosed in the Company Prospectus, there are no
contracts, agreements or understandings between the Company and any person
that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment
in connection with this offering.
(vi) The information set forth under the caption "Capitalization" in the
Company Prospectus is true and correct. All of the outstanding shares of
Common Stock and the Contract Shares conform, in all material respects, to
the description thereof contained in the Company Registration Statements.
The form of certificates for the Contract Shares conforms to the corporate
law of the jurisdiction of the Company's incorporation.
(vii) The consolidated financial statements of the Company and its
consolidated subsidiaries, together with related notes and schedules as set
forth or incorporated by reference in the Company Registration Statements
and the Company Prospectus, present fairly the financial position and the
results of operations and cash flows of the Company and its consolidated
subsidiaries, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance
with generally accepted accounting principles, consistently applied
throughout the periods involved, except as disclosed therein, and all
adjustments necessary for a fair presentation of results for such periods
have been made. The summary financial and operating data included or
incorporated by reference in the Company Registration Statements and the
Company Prospectus present fairly the information shown therein and such
data have been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company.
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(viii) PricewaterhouseCoopers LLP, who have certified certain of the
financial statements filed with the Commission as part of, or incorporated
by reference in, the Company Registration Statements and the Prospectus,
are independent public accountants as required by the Act and the Rules and
Regulations.
(ix) There is no action, suit, claim or governmental or third-party payor
audit (other than client audits in the ordinary course of business),
investigation or other proceeding ("Proceeding") pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of
their respective properties which if determined adversely to the Company or
any of the Subsidiaries might individually or in the aggregate have a
material adverse effect on the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise) or prospects
of the Company and of the Subsidiaries taken as a whole or prevent the
consummation of the transactions contemplated hereby, except as set forth
in the Company Prospectus, including, without limitation, any such
Proceeding pursuant to federal or state laws or regulations (i) prohibiting
the payment or receipt of remuneration for patient referrals, (ii)
prohibiting the filing of false claims, (iii) prescribing conditions of
participation for certification by the Medicare and Medicaid programs and
state fund programs or standards for licensure or health planning approval
or (iv) providing for reimbursement under the Medicare and Medicaid and
state fund programs.
(x) The Company and the Subsidiaries have good and marketable title to all
of the properties and assets reflected in the financial statements (other
than as described in the Company Registration Statements and Company
Prospectus) hereinabove described, except for such properties disposed of
in the ordinary course of business, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such financial
statements (or as described in the Company Registration Statements and
Company Prospectus) or which are not material in amount. The Company and
the Subsidiaries occupy their leased properties under valid and binding
leases, with such exceptions as are not material.
(xi) The Company and the Subsidiaries have timely filed all material
federal, state, local and foreign income tax returns which have been
required to be filed and have paid all taxes indicated by said returns and
all assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith in
appropriate proceedings. All material tax liabilities have been adequately
provided for in the financial statements of the Company.
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(xii) Since the date of the last audited financial statement included in
the Company Registration Statements and the Company Prospectus, there has
not been any material adverse change or any development involving a
prospective material adverse change in or adversely affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Subsidiaries
taken as a whole, whether or not occurring in the ordinary course of
business, and there has not been any material transaction entered into or
any material transaction that is probable of being entered into by the
Company or any of the Subsidiaries, other than transactions in the ordinary
course of business and changes and transactions described in the Company
Prospectus. Except as disclosed in or contemplated by the Company
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
The Company and the Subsidiaries have no material contingent obligations
which are not disclosed in the Company's financial statements which are
included or incorporated by reference in the Company Registration
Statements and the Company Prospectus.
(xiii) Neither the Company nor any of the Subsidiaries is, or, with the
giving of notice or lapse of time or both, will be, in violation of or in
default under (i) its corporate charter or by-laws, (ii) any agreement,
lease, contract, indenture or other instrument or obligation to which it is
a party or by which it, or any of its properties, is bound or (iii) any
statute, rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective properties, which default or
violation (in the case of (ii) and (iii) only) is of material significance
in respect of the condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole or the earnings, business, management,
properties, assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and the Subsidiaries taken as a whole. This
Agreement has been duly authorized, executed and delivered by the Company.
The execution and delivery of this Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms hereof
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of a lien pursuant to any indenture, mortgage, deed of trust or
other agreement or instrument to which the Company or any Subsidiary is a
party, or of the charter or by-laws of the Company or any statute, rule
regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company or any Subsidiary
or any of their respective properties.
(xiv) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary
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in connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein contemplated
(except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or such additional
steps as may be necessary to qualify the Contract Shares for public
offering by the Underwriters under state securities or Blue Sky laws) has
been obtained or made and is in full force and effect.
(xv) The Company and the Subsidiaries own, possess or can acquire on
reasonable terms adequate patents, patent rights, trade names, trademarks
or copyrights and other intellectual property materially necessary to
conduct the business now operated by them, or presently employed by them.
To the best knowledge of the Company, neither the Company nor any of the
Subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of
the Company and the Subsidiaries taken as a whole. The Company knows of no
material infringement by others of patents, patent rights, trade names,
trademarks or copyrights owned by or licensed to the Company or any
Subsidiary.
(xvi) No labor dispute with the employees of the Company or any Subsidiary
exists or, to the best knowledge of the Company, is imminent that could
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Company and the Subsidiaries taken as a
whole.
(xvii) Neither the Company nor, to the Company's best knowledge, any of its
affiliates (as such term is defined in the Rules and Regulations) has taken
or may take, directly or indirectly, any action designed to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Contract Shares.
(xviii) Neither the Company nor any Subsidiary is, and after giving effect
to the offer and sale of the Contract Shares will be, an "investment
company" within the meaning of such term under the Investment Company Act
of 1940, as amended (the "1940 Act"), and the rules and regulations of the
Commission thereunder.
(xix) The Company and each of the Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses as presently conducted and the value
of their respective properties and as is customary for companies engaged in
similar industries.
(xx) With respect to pension and welfare plans maintained by the Company
and the Subsidiaries, each of the Company and the Subsidiaries is in
compliance in all
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material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of the
Subsidiaries would have any liability; none of the Company and the
Subsidiaries has incurred or expects to incur liability under (i) Title IV
of ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company and the
Subsidiaries would have any ---- liability that is intended to be qualified
under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which
would cause the loss of such qualification.
(xxi) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes and the Company agrees to
comply with such Section if prior to the completion of the distribution of
the Securities it commences doing such business.
(xxii) To the best knowledge of the Company, the Company and each of the
Subsidiaries has conducted its business in material compliance with all the
laws, rules and regulations of the jurisdictions in which each such entity
is conducting business, except as disclosed in the Company Prospectus and
the Company Registration Statements. Without limiting the foregoing, except
as disclosed in the Company Prospectus and the Company Registration
Statements, (i) the Company is in compliance with the requirements of
Section 13(b)(2) of the Exchange Act applicable to it and (ii) the Company
and each of the Subsidiaries, and each of the professional employees of the
Company and each Subsidiary, owns or possesses and is in compliance with
the terms, provisions and conditions of all permits, licenses, franchises,
operating certificates, orders, authorizations, registrations,
qualifications, consents or approvals (including certificates of need,
licenses, pharmacy licenses, Medicare provider numbers, accreditations and
other similar documentation or approvals of any local health departments of
any Authority (as hereinafter defined)) of any court, arbitrator or
arbitral body, or any federal, state, local or foreign governmental agency
or self-regulatory authority, department or commission, or any other board,
bureau, review board, instrumentality or similar organization, domestic or
foreign, or any applicable private accrediting organization (collectively,
"Authority") (hereinafter collectively, "Permits") necessary to own and use
the properties and assets of the Company and each of the Subsidiaries,
respectively, and to conduct their respective businesses, except where the
failure to
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comply, individually or in the aggregate, would not have a material adverse
effect on the Company and the Subsidiaries taken as a whole; as to the
Company and each Subsidiary, each such Permit of and from such Authorities
is valid and in full force and effect and there is no Proceeding pending
or, to the Company's knowledge, threatened (or any reasonable basis
therefor) which may cause any such Permit of or from any Authority to be
revoked, withdrawn, canceled, suspended or not renewed, except where the
failure to own or possess such Permit would not have a material adverse
effect on the Company and the Subsidiaries taken as a whole.
(xxiii) To the best knowledge of the Company, each of the Company and the
Subsidiaries and their respective officers and directors, and, to the best
knowledge of the Company, persons who provide professional services under
agreements with the Company and/or the Subsidiaries, have not engaged in
any activities which are prohibited, or are cause for civil penalties or
mandatory or permissive exclusion from Medicare or Medicaid, under Section
1320a-7, 1320a-7a, 1302a-7b or 1395nn of Title 42 of the United States
Code, the federal CHAMPUS statute or the regulations promulgated pursuant
to such statutes or related state or local statutes or regulations,
standards of accreditation applicable to the Company or the Subsidiaries or
rules of professional conduct, which activities might reasonably be
expected to result in sanctions (financial or otherwise) that would be
material to the Company and the Subsidiaries taken as a whole.
(xxiv)(A) To the best of the Company's knowledge, no person who immediately
following any Date of Delivery will have a direct or indirect ownership
interest (as those terms are defined in 42 C.F.R. Section 1001.1001) in the
Company of 10% or more (a "Major Investor"), and (B) to the best knowledge
of the Company, no present subsidiary of such Major Investor other than the
Company: (1) has had a civil monetary penalty assessed against it under 42
U.S.C. Section 1320a-7a; (2) has been excluded from participation under the
Medicare program or under a state health care program as defined in 42
U.S.C. Section 1320a-7(h) (a "State Health Care Program"); or (3) has been
convicted (as that term is defined in 42 C.F.R. Section 1001.2) of any of
the following categories of offenses as described in 42 U.S.C. Section
1320a-7(a) or (b)(1), (2), (3):
(a) criminal offenses relating to the delivery of an item or service
under Medicare or any State Health Care Program;
(b) criminal offenses under federal or state law relating to patient
neglect or abuse in connection with the delivery of a health care item or
service;
(c) criminal offenses under federal or state law relating to fraud,
theft, embezzlement, breach of fiduciary responsibility or other financial
misconduct
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in connection with the delivery of a health care item or service
or with respect to any act or omission in a program operated by or financed
in whole or in part by any federal, state or local government agency;
(d) criminal offenses under federal or state laws relating to the
interference with or obstruction of any investigation into any criminal
offense described in (a) through (c) above; or
(e) criminal offenses under federal or state law relating to the
unlawful manufacture, distribution, prescription or dispensing of a
controlled substance.
(xxv) To the best knowledge of the Company, except as disclosed in the
Company Prospectus, there is no Medicare, Medicaid or CHAMPUS recoupment or
recoupments of any other third-party payor being sought, threatened,
requested or claimed against the Company or any Subsidiary.
(xxvi) The Contract Shares have been approved for listing on The Nasdaq
National Market, subject to notice of issuance.
(xxvii) As of the First Time of Delivery, there will be no shares of Class
B Common Stock, par value $.01 per share, of the Company outstanding.
(b) The Selling Stockholder represents and warrants to, and agrees with,
each of the Underwriters, the Company and the Trust that:
(i) The Selling Stockholder is validly existing as a limited liability
company under the laws of the State of Delaware and has the limited
liability company power and authority to own and sell its property and to
conduct its business.
(ii) The compliance by the Selling Stockholder with all of the applicable
provisions of this Agreement, the Contract, the Collateral Agreement, the
Fund Indemnity Agreement among the Selling Stockholder, Chase and the Trust
dated November [ ], 2000 (the "Fund Indemnity Agreement") and the Fund
Expense Agreement among the Selling Stockholder, Chase and the Trust dated
November [ ], 2000 (the "Fund Expense Agreement") to which the Selling
Stockholder is a party, and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action result
in any violation of the provisions of
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the certificate of formation, operating agreement or other organizational
documents of the Selling Stockholder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Selling Stockholder or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or filing
with any court or governmental agency or body is required for the
compliance by the Selling Stockholder with or the consummation by the
Selling Stockholder of the transactions contemplated by this Agreement, the
Contract, the Collateral Agreement, the Fund Indemnity Agreement and the
Fund Expense Agreement, except such as may be required by the NASD or the
registration under the Act of the Contract Shares and registration under
the 1940 Act of the Trust and the Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws or any laws of jurisdictions outside the
United States in connection with the purchase and distribution of the
Common Stock by the Trust pursuant to the Contract, other than breaches,
defaults or violations which would not impair the ability of the Selling
Stockholder to perform its obligations thereunder.
(iii) This Agreement has been duly authorized, executed and delivered by
the Selling Stockholder; the Contract, the Collateral Agreement, the Fund
Indemnity Agreement and the Fund Expense Agreement have been duly
authorized, executed and delivered by the Selling Stockholder and, assuming
due authorization, execution and delivery by the other parties thereto,
constitute valid and legally binding agreements of the Selling Stockholder,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles and except as rights to indemnity and
contribution thereunder may be limited by state or Federal securities laws
or the public policy underlying such laws.
(iv) The Selling Stockholder will have, immediately prior to each Time of
Delivery (as defined in Section 3 hereof) good and valid title to the
shares of Common Stock to be pledged and assigned by it under the
Collateral Agreement, free and clear of all liens, encumbrances, or claims
other than those created pursuant to the Collateral Agreement and the
Stockholder and Registration Rights Agreement, dated October 6, 2000 (the
"Stockholder and Registration Rights Agreement") between NY Life Healthcare
Management, Inc., a wholly owned subsidiary of the Selling Stockholder, and
the Company; all consents, approvals, authorizations and orders necessary
for the Selling Stockholder to pledge and assign the shares of Common Stock
to be pledged and assigned by the Selling Stockholder pursuant to the
Collateral Agreement have been obtained; the Selling Stockholder has full
right, power and authority to pledge and assign the shares of Common Stock
to be pledged and assigned by the Selling
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Stockholder pursuant to the Collateral Agreement; and upon delivery of such
shares of Common Stock to the Collateral Agent, for the benefit of the
Trust pursuant to the Collateral Agreement, the Collateral Agent will
obtain a first priority perfected security interest in such shares of
Common Stock, and upon delivery of such shares of Common Stock by the
Collateral Agent to the Trust pursuant to the Collateral Agreement and
payment therefor pursuant to the Contract, good and valid title to such
shares of Common Stock, free and clear of all liens, encumbrances, equities
or claims, will pass to the Trust.
(v) The representations and warranties of the Selling Stockholder set
forth in Section 3 of the Collateral Agreement are true and correct on and
as of the date hereof with the same effect as though such representations
and warranties had been set forth in full in this Agreement.
(vi) Except the Reorganization (as defined in the Secondary Underwriting
Agreement), neither the Selling Stockholder nor any of its affiliates
(other than the Company and its subsidiaries, as to which the Selling
Stockholder makes no representation) has taken or may take, directly or
indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Securities; provided, however, that
the Selling Stockholder may sell or offer to sell up to an aggregate of
6,900,000 shares of the Common Stock pursuant to the Secondary Underwriting
Agreement.
(vii)If the Effective Time of the Initial Company Registration Statement is
prior to the execution and delivery of this Agreement: (A) on the Effective
Date of the Initial Company Registration Statement, the Initial Company
Registration Statement did not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) on the
Effective Date of the Additional Company Registration Statement (if any),
each Company Registration Statement did not include, or will not include,
any untrue statement of a material fact and did not omit, or will not omit,
to state any material fact required to be stated therein or necessary to
make the statement therein not misleading, and (C) on the date of this
Agreement, neither the Initial Company Registration Statement nor, if the
Effective Time of the Additional Company Registration Statement is prior to
the execution and delivery of this Agreement, the Additional Company
Registration Statement, and at the time of filing of the Prospectus
pursuant to Rule 424(b) or (if no such filing is required) at the Effective
Date of the Additional Company Registration Statement in which the Company
Prospectus is included, neither Company Registration Statement nor the
Company Prospectus includes, or will include, any untrue statement of a
material fact or omits, or will omit, to
15
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state any material fact required to be stated therein or necessary to make
the statements therein not misleading. If the Effective Time of the Initial
Company Registration Statement is subsequent to the execution and delivery
of this Agreement: on the Effective Date of the Initial Company
Registration Statement, neither the Initial Company Registration Statement
nor the Company Prospectus will include any untrue statement of a material
fact or will omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading. The two
preceding sentences do not apply to statements in or omissions from a
Company Registration Statement or the Company Prospectus based upon written
information furnished to the Company by any Underwriter through the
Underwriters specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 8(c) .
(viii) To the extent that any statements or omissions made in the Trust
Registration Statement, any Trust Preliminary Prospectus, the Trust
Prospectus or any amendment or supplement thereto are made in reliance upon
and in conformity with written information furnished to the Trust by the
Selling Stockholder expressly for use therein, (A) the Trust Registration
Statements and any amendment or supplement thereto do not and will not, as
of the applicable effective date, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and (B)
the Trust Prospectus does not, and as amended or supplemented will not, as
of the applicable filing date, 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.
(ix) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act
of 1982 with respect to the transactions herein contemplated, the Selling
Stockholder agrees to deliver to you prior to or at the First Time of
Delivery (as hereinafter defined) a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).
(c) The Trust represents and warrants to, and agrees with, each of the
Underwriters, the Selling Stockholder and the Company that:
(i) A notification on Form N-8A (the "Notification") of registration of the
Trust as an investment company has been filed with the Commission; a
registration statement on Form N-2 (File No. 333-82331 and File No.
811-09427) (the "Initial Trust Registration Statement") in respect of the
Securities has been filed with the
16
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Commission; the Initial Trust Registration Statement and any post-effective
amendment thereto, each in the form heretofore made available to you and
excluding exhibits thereto, have been declared effective by the Commission
in such form; no other document with respect to the Initial Trust
Registration Statement has heretofore been filed with the Commission; and
no stop order suspending the effectiveness of the Initial Trust
Registration Statement, or any post-effective amendment thereto, has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in the Initial Trust
Registration Statement or filed with the Commission pursuant to Rule 497(a)
of the Rules and Regulations is hereinafter called a "Trust Preliminary
Prospectus"; the various parts of the Initial Trust Registration Statement
including all exhibits thereto and including the information contained in
the form of final prospectus filed with the Commission pursuant to Rule
497(h) under the Act in accordance with Section 5 hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial Trust
Registration Statement at the time it was declared effective, as amended at
the time such part of the registration statement became effective, are
hereinafter collectively called the "Trust Registration Statement"; and
such final prospectus, in the form first filed pursuant to Rule 497(h)
under the Act, is hereinafter called the "Trust Prospectus").
(ii) No order preventing or suspending the use of any Trust Preliminary
Prospectus has been issued by the Commission, and each Trust Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the 1940 Act, and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by the Underwriters (it being
understood and agreed that the only such information is that described as
such in Section 8(c) hereof) by the Selling Stockholder or by the Company
expressly for use therein.
(iii) The Notification and the Trust Registration Statement conform, and
the Trust Prospectus and any further amendments or supplements to the
Notification, the Trust Registration Statement or the Trust Prospectus will
conform, in all material respects to the requirements of the Act and the
1940 Act (together, the "Acts") and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Trust Registration Statement and any amendment
thereto and as of the applicable filing date as to the Trust Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to
17
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state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Trust by the Underwriters (it being understood and agreed
that the only such information is that described as such in Section 8(c)
hereof), by the Selling Stockholder or by the Company expressly for use
therein.
(iv) Since the respective dates as of which information is given in the
Trust Registration Statement and the Trust Prospectus, there has not been
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, results of operations, prospects, investment
objectives, investment policies, or liabilities of the Trust, otherwise
than as set forth or contemplated in the Trust Prospectus, and there have
been no transactions entered into by the Trust which are material to the
Trust other than those in the ordinary course of its business or as
described in the Trust Prospectus.
(v) The Trust has been duly created, is validly existing as a trust under
the laws of the State of New York, with power and authority to own its
properties and conduct its business as described in the Trust Prospectus
and to enter into and perform its obligations under this Agreement and the
Fundamental Agreements (as defined in Section 2(c)(vii) hereof); the Trust
has all necessary consents, approvals, authorizations, orders,
registrations or qualifications, of and from, and has made all declarations
and filings with, all courts and governmental agencies and bodies, to own
and use its assets and to conduct its business in the manner described in
the Trust Prospectus, except to the extent that the failure to obtain or
file the foregoing would not have a material adverse effect on the Trust
and except such as may be required by the NASD or the registration under
the Act of the Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters; the Trust has no subsidiaries.
(vi) The Trust is registered with the Commission as a non-diversified,
closed-end management investment company under the 1940 Act and no order of
suspension or revocation of such registration has been issued or
proceedings therefor initiated or, to the knowledge of the Trust,
threatened by the Commission; no person is serving or acting as an officer
or trustee of the Trust except in accordance with the provisions of the
1940 Act.
(vii) Each of the Contract, the Collateral Agreement, the Administration
Agreement between Chase and the Trust (the "Administration Agreement"), the
Custodian Agreement between Chase and the Trust (the "Custodian
Agreement"), the
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Paying Agent Agreement between ChaseMellon Shareholder Services, L.L.C.,
and the Trust (the "Paying Agent Agreement"),the Fund Expense Agreement and
the Fund Indemnity= Agreement (the Contract, the Collateral Agreement, the
Administration Agreement, the Custodian Agreement, the Paying Agent
Agreement, the Fund Expense Agreement and the Fund Indemnity Agreement are
herein collectively called the "Fundamental Agreements") has been duly
authorized, executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the Trust, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(viii)The Amended and Restated Trust Agreement Constituting Express Scripts
Automatic Exchange Security Trust dated as of November [ ], 2000 (the
"Trust Agreement") and the Fundamental Agreements comply with all
applicable provisions of the Acts, and all approvals of such agreements
required under the 1940 Act by the holders of the Automatic Exchange
Securities and the trustees have been obtained and are in full force and
effect.
(ix) All of the outstanding Automatic Exchange Securities have been duly
and validly authorized and issued and are fully paid and non-assessable,
and the form of certificates used to evidence the Automatic Exchange
Securities is in due and proper form and complies with all provisions of
applicable law; the Trust Agreement and the Fundamental Agreements conform
to the descriptions thereof contained in the Trust Prospectus.
(x) The Securities have been duly authorized and, when issued and delivered
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable; the Securities will conform to the description thereof in
the Trust Prospectus; no person has rights to registration of any
securities because of the filing of the Trust Registration Statement.
(xi) The issue and sale of the Securities and the compliance by the Trust
with all of the provisions of the Securities, this Agreement and each
Fundamental Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, the Trust Agreement or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the
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Trust or any of its properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Trust of the transactions
contemplated by this Agreement or the Fundamental Agreements, except such
as may be required by the NASD or the registration under the Act of the
Securities and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriters.
(xii) Assuming due authorization, execution and delivery by the parties
other than the Trust, the Fundamental Agreements are in full force and
effect and the Trust is not in default in the performance or observance of
any obligation, covenant or condition thereunder and, to the knowledge of
the Trust, no event has occurred which with the passage of time or the
giving of notice or both would constitute a default thereunder; the Trust
is not in default in the performance or observance of any obligation,
covenant or condition contained in any other agreement or instrument to
which it is a party or by which it or any of its properties may be bound.
(xiii) The statements set forth in the Trust Prospectus under the caption
"Description of Securities," insofar as they purport to constitute a
summary of the terms of the Securities, under the caption "Certain Federal
Income Tax Considerations," and under the caption "Underwriting," insofar
as they purport to describe the provisions of the laws and agreements
referred to therein, are accurate, complete and fair in all material
respects.
(xiv) Other than as set forth in the Trust Prospectus, there are no legal
or governmental proceedings pending to which the Trust is a party or of
which any property of the Trust is the subject which, if determined
adversely to the Trust, would individually or in the aggregate have a
material adverse effect on the current or future financial position, or
results of operations of the Trust; and, to the best of the Trust's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
(xv) There are no material restrictions, limitations or regulations with
respect to the ability of the Trust to invest its assets as described in
the Trust Prospectus, other than as described therein.
(xvi) The Securities have been approved for listing on the Nasdaq National
Market subject to notice of issuance; the Trust's Registration Statement on
Form 8-A under the Exchange Act is effective.
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(xvii) PricewaterhouseCoopers LLP, who have certified certain financial
statements included in the Trust Registration Statement, are independent
accountants as required by the Act and the Rules and Regulations.
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Trust agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Trust, at a purchase price of $[ ] per Security, the respective numbers
of shares of Firm Securities set forth opposite the names of the Underwriters in
Schedule A hereto.
The Trust will deliver the Firm Securities to the Underwriters, against
payment of the purchase price in federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. drawn to the order of the Trust, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at [ ], New York City time, on
November [ ], 2000, or at such other time not later than seven full business
days thereafter as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Selling Stockholder determine,
such time being herein referred to as the "First Time of Delivery." For purposes
of Rule 15c6-1 under the Exchange Act, the First Time of Delivery (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Firm Securities sold
pursuant to the offering. The certificates for the Firm Securities so to be
delivered will be in such form, in such denominations and registered in such
names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. requests and will be made available for checking
and packaging at least 24 hours prior to the First Time of Delivery.
In addition, upon written notice from ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. given to the
Trust from time to time not more than 30 days subsequent to the date of the
Trust Prospectus, the Underwriters may purchase all or less than all of the
Optional Securities at the purchase price per Security to be paid for the Firm
Securities. The Trust agrees to sell to the Underwriters the number of shares of
Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name or Schedule A bears to the total number of shares of Firm
Securities (subject to adjustment by the Underwriters to eliminate fractions)
and may be purchased by the Underwriters only for the purpose of covering
over-allotments made in connection with the sale of the Firm Securities. No
Optional Securities shall be sold or delivered unless the Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to
purchase the Optional Securities or any portion thereof may be exercised from
time to time and to the extent not previously exercised may be surrendered and
terminated at any time upon notice by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. to the Selling
Stockholder.
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Each time for the delivery of and payment for the Optional
Securities, being herein referred to as a "Second Time of Delivery," which may
be the First Time of Delivery (the First Time of Delivery and each Second Time
of Delivery, if any, being sometimes referred to as a "Date of Delivery"), shall
be determined by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. but shall be not later than five full
business days and not earlier than two full business days after written notice
of election to purchase Optional Securities is given. The Trust will deliver the
Optional Securities being purchased on each Second Time of Delivery to the Trust
for the accounts of the several Underwriters against payment of the purchase
price therefor in federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to the Underwriters drawn to
the order of the Trust, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇. The
certificates for the Optional Securities being purchased on each Second Time of
Delivery will be in such form, in such denominations and registered in such
names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. requests upon reasonable notice prior to such
Second Time of Delivery and will be made available for checking and packaging at
a reasonable time in advance of such Second Time of Delivery.
As compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be used by the Trust as specified in the Contract, the Selling
Stockholder at each Time of Delivery will pay to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., for the
accounts of the several Underwriters, an amount equal to $_____ per Security for
the Securities to be delivered at such Time of Delivery. Alternatively, as a
matter of convenience, the Underwriters may, with the written consent of the
Selling Stockholder, deduct such amount from the purchase price of the
Securities, and in such event the Selling Stockholder shall be deemed to have
paid the same.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Trust Prospectus.
5. The Trust agrees with each of the Underwriters:
(i) To prepare the Trust Prospectus in a form approved by you and
to file such Trust Prospectus pursuant to Rule 497(h) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Trust Registration Statement or Trust Prospectus prior to the last Time
of Delivery which shall not be approved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives
notice thereof, of the time when any amendment to the Trust
Registration Statement has been filed or becomes effective or any
supplement to the Trust Prospectus or any amended prospectus has been
filed and to furnish you with copies thereof; to file promptly all
reports and any definitive proxy or information
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statements required to be filed by the Trust with the Commission
pursuant to the Acts and the Exchange Act subsequent to the date of the
Trust Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities; to
advise you, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any Trust Preliminary Prospectus or Trust
Prospectus or any order pursuant to Section 8(e) of the 1940 Act, of
the suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Trust Registration Statement
or Trust Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending
the use of any Trust Preliminary Prospectus or Trust Prospectus or
suspending any such qualification or order pursuant to Section 8(e) of
the 1940 Act, promptly to use its reasonable best efforts to obtain the
withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions in the United States as
you may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be reasonably necessary to complete the distribution of the
Securities; provided that in connection therewith the Trust shall not
be required to qualify as a sure foreign trust or association or to
file a general consent to service of process or subject itself to
taxation in any jurisdiction;
(iii) Prior to 12:00 p.m. (noon), New York City time, on the
business day next succeeding the date of this Agreement and from time
to time, at the expense of the Selling Stockholder, to furnish the
Underwriters with copies of the Trust Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of
a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Trust Prospectus in connection
with the offering or sale of the Securities and if at such time any
event shall have occurred as a result of which the Trust Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Trust Prospectus was delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Trust Prospectus in order to
comply with the Act, to notify you and upon your request to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as it may from time to time reasonably
request of an amended Trust Prospectus or a supplement to the Trust
Prospectus which will correct such statement or omission or
23
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effect such compliance; and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the Securities
at any time nine months or more after the time of issue of the Trust
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as it may
request of an amended or supplemented Trust Prospectus complying with
Section 10(a)(3) of the Act;
(iv) To make generally available to the Trust's securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Trust Registration Statement an
earnings statement (as defined in Rule 158(c) under the Act) of the
Trust (which need not be audited) complying with Section 11(a) of the
Act and the rules and regulations of the Commission thereunder
(including, at the option of the Trust, Rule 158);
(v) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the
Trust Prospectus under the caption "Use of Proceeds"; and
(vi) To use its best efforts to have the Securities approved for
listing on the Nasdaq National Market, subject to notice of issuance,
and to maintain the listing of the Securities on the Nasdaq National
Market.
6. Certain Agreements of the Company and the Selling
Stockholder.
(a) The Company agrees with the several Underwriters that:
(i) If the Effective Time of the Initial Company Registration
Statement is prior to the execution and delivery of this Agreement, the
Company will file the Company Prospectus with the Commission pursuant
to and in accordance with Rule 424(b) not later than the earlier of (A)
the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date of
the Initial Company Registration Statement. The Company will advise
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Company Registration
Statement is prior to the execution and delivery of this Agreement and
an additional Company registration statement is necessary to register a
portion of the Contract Shares under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional Company registration statement or, if filed,
will file a post-effective amendment thereto with the Commission
pursuant to and in accordance with Rule 462(b) on or prior to 10:00
P.M., New York City time, on the date of this Agreement or, if earlier,
on or prior to the time the Company Prospectus is printed and
distributed
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to any Underwriter, or will make such filing at such later date as
shall have been consented to by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
(ii) The Company will advise ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. promptly of any
proposal to amend or supplement the initial or any additional Company
registration statement as filed or the related prospectus or the
Initial Company Registration Statement, the Additional Company
Registration Statement (if any) or the Company Prospectus and will not
effect such amendment or supplementation without ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.'s
prior consent; and the Company will also advise ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
promptly of the effectiveness of each Company Registration Statement
(if its Effective Time is subsequent to the execution and delivery of
this Agreement) and of any amendment or supplementation of a Company
Registration Statement or the Company Prospectus and of the institution
by the Commission of any stop order proceedings in respect of a Company
Registration Statement or the Company Prospectus and will use its
reasonable best efforts to prevent the issuance of any such stop order
and to obtain as soon as possible its lifting, if issued.
(iii) If, at any time when a prospectus relating to the Contract
Shares is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Company Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
is necessary at any time to amend the Company Prospectus to comply with
the Act, the Company will promptly notify ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. of such
event and will promptly prepare and file with the Commission (subject
to Section 5(a)(ii)), at its own expense, an amendment or supplement
which will correct such statement or omission or an amendment which
will effect such compliance. Neither ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.'s consent to,
nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
7.
(iv) As soon as practicable, but not later than the Availability
Date (as defined below), the Company will make generally available to
its securityholders an earnings statement covering a period of at least
12 months beginning after the Effective Date of the Initial Company
Registration Statement (or, if later, the Effective Date of the
Additional Company Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the
end of the fourth fiscal quarter following the fiscal quarter that
includes such Effective Date, except that, if such fourth fiscal
quarter is the last quarter of the Company's fiscal year, "Availability
Date" means the 90th day after the end of such fourth fiscal quarter.
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(v) The Company will furnish to the Underwriters copies of each
Company Registration Statement (five of which will be signed and will
include all exhibits), each related preliminary Company prospectus,
and, so long as a prospectus relating to the Contract Shares is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Company Prospectus and all amendments and
supplements to such documents, in each case in such quantities as
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. requests. The Company Prospectus shall be so
furnished on or prior to 3:00 P.M., New York City time, on the business
day following the later of the execution and delivery of this Agreement
or the Effective Time of the Initial Company Registration Statement.
All other documents shall be so furnished as soon as available. The
Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(vi) The Company will arrange for the qualification of the Contract
Shares for sale under the laws of such jurisdictions as the
Underwriters designate and will continue such qualifications in effect
so long as required for the distribution.
(vii) During the period of five years hereafter, the Company will
furnish to the Underwriters and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the
Company will furnish to the Underwriters (a) as soon as available, a
copy of each report and any definitive proxy statement of the Company
filed with the Commission under the Exchange Act or mailed to
stockholders, and (b) from time to time, such other information
concerning the Company as the Underwriters may reasonably request.
(viii) For a period of 90 days after the date of the commencement
of the public offering of the Securities, the Company will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to, any additional shares of the Common Stock or other
capital stock of the Company or securities convertible into or
exchangeable or exercisable for any shares of the Common Stock, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Underwriters, except that such 90-day restriction shall not prohibit
(a) in the case of grants of employee stock options or other issuances
of Common Stock pursuant to the terms of a plan in effect on the date
hereof, issuances by the Company of Common Stock pursuant to the
exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof, (b) the Company from issuing
shares of Common Stock in private placements pursuant to Section 4(2)
of the Act or in connection with any of the Company's existing
strategic alliances, (c) the Company from publicly announcing its
intention to issue, or actually issuing, shares of Common
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Stock to shareholders of another entity as consideration for the
Company's acquisition of, or merger with, such entity or (d) the
Company from issuing shares of Common Stock in connection with the
Reorganization.
(ix) The Company will pay all expenses incident to the performance
of its obligations under this Agreement. The Company will maintain a
transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
(x) In connection with the offering of the Securities, neither the
Company nor any of its subsidiaries will take, directly or indirectly,
any action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
(b) The Selling Stockholder agrees with the Company, the Trust
and the several Underwriters that:
(i) The Selling Stockholder will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees and other expenses (including fees and disbursements of counsel)
incurred in connection with qualification of the Securities for sale
under the laws of such jurisdictions as the Underwriters designate and
the printing of memoranda relating thereto, for the filing fee incident
to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the
Securities, for any commercial travel and lodging expenses of the
Company's officers and employees in connection with attending or
hosting meetings with prospective purchasers of the Securities (it
being understood that to the extent such travel and lodging expenses
are duplicative with those expenses covered by Section 5(a)(ix) of the
Secondary Underwriting Agreement, they shall not be payable by the
Selling Stockholder hereunder), for any transfer taxes on the sale of
the Securities to the Underwriters and for expenses incurred in
printing and distributing preliminary prospectuses and the Trust
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(ii) The Selling Stockholder agrees to deliver to ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. on or prior to the First Time of Delivery a properly completed and
executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(iii) For a period of 90 days after the date of the commencement of
the public offering of the Securities, the Selling Stockholder will not
offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any additional shares of its
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Common Stock or other capital stock of the Company or securities
convertible into or exchangeable or exercisable for any shares of the
Common Stock, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written
consent of the Underwriters except that such 90-day restriction shall
not prohibit (a) the Selling Stockholder from selling up to 6,900,000
shares of Common Stock pursuant to the Secondary Underwriting
Agreement, (b) the sale of shares of the Common Stock and other
securities by the Selling Stockholder in connection with the Selling
Stockholder's ownership and management (alone or with others) of assets
(x) held by it or its affiliates in a fiduciary or custodial capacity
or (y) of third parties, (c) transfers of shares of Common Stock by the
Selling Stockholder to one or more of its affiliates or among
affiliates of the Selling Stockholder and (d) transfers of Common Stock
in connection with the Reorganization.
(iv) In connection with the offering of the Securities, neither the
Selling Stockholder nor any of its affiliates (other than the Company
and its subsidiaries, as to which the Selling Stockholder makes no
covenant) will take, directly or indirectly, any action designed to
cause or result in, or that has constituted or might reasonably be
expected to constitute, the stabilization or manipulation of the price
of any securities of the Company; provided, however, that the Selling
Stockholder may sell up to 6,900,000 shares of Common Stock pursuant to
the Secondary Underwriting Agreement.
7. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Firm
Securities on the First Time of Delivery and the Optional Securities to be
purchased on each Second Time of Delivery will be subject to the accuracy of the
representations and warranties on the part of the Company, the Trust and the
Selling Stockholder herein set forth, to the accuracy of the statements of the
Company's officers made pursuant to the provisions hereof, to the performance by
the Company, the Trust and the Selling Stockholder of their obligations
hereunder and to the following additional conditions precedent:
(a) the Underwriters shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time of the Initial
Company Registration Statement is prior to the execution and delivery
of this Agreement, shall be on or prior to the date of this Agreement
or, if the Effective Time of the Initial Company Registration Statement
is subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
Company Registration Statement to be filed shortly prior to such
Effective Time), of PricewaterhouseCoopers LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
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(i) in their opinion the financial statements and schedules
examined by them and included or incorporated by reference in
the Company Registration Statements comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Company Registration Statements;
(iii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of
officials of the Company, who have responsibility for
financial and accounting matters and other specified
procedures up to a date no earlier than three business days
prior to the date of this Agreement, nothing came to their
attention that caused them to believe that:
(A) the unaudited financial statements
included in the Company Prospectus do not comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related
published Rules and Regulations or any material
modifications should be made to such unaudited
financial statements for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available
balance sheet read by such accountants there was any
change in capital stock, increase in long-term debt
or any decreases in consolidated net current assets
(working capital) or stockholders' equity of the
Company and its consolidated subsidiaries as compared
with the amounts shown on the June 30, 2000
consolidated balance sheet included in the Company
Prospectus, and at the last day of the month
preceding the date of this Agreement, there was any
change in the capital stock, increase in long-term
debt or any decreases in stockholders' equity of the
Company and its consolidated subsidiaries as compared
with amounts shown on the June 30, 2000 consolidated
balance sheet shown in the Company Prospectus; or
(C) for the period from July 1, 2000 to
September 30, 2000, there were any decreases, as
compared with the corresponding period in the
preceding year in the Company's net sales or in the
total or per share amounts in the Company's income
before extraordinary items or
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of the Company's net income; and, at the last day of
the month preceding this Agreement, as compared with
the corresponding period in the preceding year, there
were any decreases in the Company's net sales,
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Company Prospectus
discloses have occurred or may occur;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Company Registration
Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the Company and
its subsidiaries, subject to the internal controls of the
Company's accounting system, or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the
Initial Company Registration Statement is subsequent to the execution
and delivery of this Agreement, "Company Registration Statements" shall
mean the initial Company registration statement as proposed to be
amended by the amendment or post-effective amendment to be filed
shortly prior to its Effective Time, (ii) if the Effective Time of the
Initial Company Registration Statement is prior to the execution and
delivery of this Agreement but the Effective Time of the Additional
Company Registration Statement is subsequent to such execution and
delivery, "Company Registration Statements" shall mean the Initial
Company Registration Statement and the additional Company registration
statement as proposed to be filed or as proposed to be amended by the
post-effective amendment to be filed shortly prior to its Effective
Time, and (iii) "Company Prospectus" shall mean the prospectus included
in the Company Registration Statements. All financial statements and
schedules included in material incorporated by reference into the
Company Prospectus shall be deemed included in the Company Registration
Statements for purposes of this subsection.
(b) If the Effective Time of the Initial Company Registration
Statement is not prior to the execution and delivery of this Agreement,
such Effective Time shall have occurred not later than 10:00 P.M., New
York City time, on the date of this Agreement or such later date as
shall have been consented to by the Underwriters. If
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the Effective Time of the Additional Company Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
City time, on the date of this Agreement or, if earlier, the time the
Company Prospectus is printed and distributed to any Underwriter, or
shall have occurred at such later date as shall have been consented to
by the Underwriters. If the Effective Time of the Initial Company
Registration Statement is prior to the execution and delivery of this
Agreement, the Company Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section
6(a)(i) of this Agreement. Prior to such Date of Delivery, no stop
order suspending the effectiveness of a Company Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Trust, the Selling
Stockholder, the Company or the Underwriters, shall be contemplated by
the Commission.
(c) The Trust Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) or Rule 497(h), as applicable,
within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(i)
hereof; become effective by 10:00 p.m. New York City time; no stop
order suspending the effectiveness of the Trust Registration Statement
or any part thereof, and no order pursuant to Section 8(e) of the 1940
Act, shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all requests
for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction.
(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the earnings,
business, management, properties, assets, rights, operating condition
(financial or other), or prospects of the Company and the Subsidiaries
taken a whole which, in the judgment of a majority in interest of the
Underwriters, including the Underwriters, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Securities; (ii) any
downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that
any such organization has under surveillance or review its rating of
any debt securities of the Company (other than an announcement with
positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock
Exchange or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market;
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(iv) any banking moratorium declared by U.S. federal or New York
authorities; (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the
Underwriters including the Underwriters, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Securities or (vi) any
change or any development involving a prospective change, in or
affecting the general affairs, management, financial position, results
of operations, prospects, investment objectives, investment policies or
liabilities of the Trust, otherwise than as set forth or contemplated
in the Trust Prospectus.
(e) The Underwriters shall have received an opinion, dated
such Date of Delivery, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company, substantially in the form of Exhibit D hereto.
(f) The Underwriters shall have received an opinion, dated
such First Date of Delivery, of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., Senior Vice
President General Counsel and Secretary of the Company, to the effect
that:
(i) Each of the Subsidiaries has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, with corporate
power and authority to conduct its business as described in
the Company Registration Statements; each of the Company and
the Subsidiaries is duly qualified to transact business in all
jurisdictions deemed material to its operations and listed on
a schedule to such opinion; the outstanding shares of capital
stock of each of the Subsidiaries have been duly authorized
and validly issued and are fully paid and non-assessable and
are owned of record by the Company or a Subsidiary except as
described in Exhibit B hereto; and, to the best of such
counsel's knowledge, the outstanding shares of capital stock
of each of the Subsidiaries are owned free and clear of all
liens, encumbrances, equities and claims, and no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any
obligations into any shares of capital stock or ownership
interests in the Subsidiaries are outstanding, except as
otherwise described in the Company Registration Statements.
(ii) The Company has authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Company
Prospectus.
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(iii) Except as described in or contemplated by the Company
Prospectus or as otherwise disclosed to the Underwriters, to
the knowledge of such counsel there are no outstanding
securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares
of capital stock of the Company and there are no outstanding
or authorized options, warrants or rights of any character
obligating the Company to issue any shares of its capital
stock or any securities convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares
of such capital stock; and, except as described in the Company
Registration Statements, to the knowledge of such counsel, no
holder of any securities of the Company or any other person
has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell
or otherwise issue to them, or the right to have any shares of
Common Stock or other securities of the Company included in
the Company Registration Statements or the right, as a result
of the filing of the Company Registration Statements, to
require registration under the Act of any shares of Common
Stock or other securities of the Company.
(iv) Such counsel does not know of any contracts or documents
required to be filed as exhibits to or incorporated by
reference in the Company Registration Statements or described
in the Company Registration Statements or Company Prospectus
which are not so filed, incorporated by reference or described
as required; the descriptions in the Company Registration
Statements and the Company Prospectus of such contracts or
other documents are accurate in all material respects and
fairly present the information shown therein.
(v) The descriptions in the Company Registration Statements
and Company Prospectus of legal and governmental proceedings
are accurate in all material respects and fairly present the
information shown therein.
(vi) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any
of the Subsidiaries of a character required to be disclosed in
the Company Prospectus pursuant to the Act and the Rules and
Regulations, except as set forth in the Company Prospectus.
(vii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not
and will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any
agreement or instrument known to such counsel or of any decree
or order known to such counsel by any court, domestic or
foreign, having
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jurisdiction over the Company or any Subsidiary or any of
their respective properties to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries may be bound, except where such conflict or
breach would not have a material adverse effect on the Company
or any of the Subsidiaries, taken as a whole, or the offer,
sale, delivery or trading of the Contract Shares.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the
attention of such counsel which leads him to believe that (i) each
Company Registration Statement, or any amendment thereto, at the time
it became effective under the Act (but after giving effect to any
modifications incorporated therein pursuant to Rule 430A under the
Act), contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) the Company
Prospectus, or any supplement thereto, as of the date hereof and as of
the First Time of Delivery or the Second Time of Delivery, as the case
may be, contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they are made, not misleading (except that such counsel need express no
view as to financial statements and related schedules included or
incorporated by reference therein).
(g) [▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, LLP], counsel for
the Selling Stockholder, shall have furnished to you their written
opinion with respect to the Selling Stockholder, dated such Date of
Delivery, in form and substance reasonably satisfactory to you, to the
effect that:
(i) The Selling Stockholder is validly existing as a limited
liability company under the laws of the State of Delaware and
has the requisite limited liability company power and
authority to enter into this Agreement, the Contract, the
Collateral Agreement, the Fund Indemnity Agreement and the
Fund Expense Agreement, and to consummate the transactions
contemplated hereby and thereby;
(ii) This Agreement has been duly executed and delivered by or
on behalf of the Selling Stockholder; the Contract, the
Collateral Agreement, the Fund Indemnity Agreement and the
Fund Expense Agreement have been duly executed and delivered
by or on behalf of the Selling Stockholder and, assuming due
authorization, execution and delivery by the other parties
thereto, each constitutes a valid and legally binding
agreement of the Selling Stockholder, enforceable against the
Selling Stockholder in accordance with its terms,
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subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law); and the compliance by the Selling Stockholder with this
Agreement, the Contract, the Collateral Agreement, the Fund
Indemnity Agreement and the Fund Expense Agreement and the
consummation of the transactions herein and therein
contemplated will not breach or result in a default under any
agreement or instrument listed on an attached schedule, nor
will such action violate any Federal or New York statute or
any rule or regulation issued pursuant to any Federal or New
York statute or any order known to such counsel issued
pursuant to any Federal or New York statute by any court or
governmental agency or body having jurisdiction over the
Selling Stockholder or any of its properties;
(iii) No authorization of the United States or the State of
New York is required for the compliance by the Selling
Stockholder with all of the provisions of this Agreement, the
Contract, the Collateral Agreement, the Fund Indemnity
Agreement and the Fund Expense Agreement, except for the
registration of the Securities and the Common Stock under the
Acts and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities Blue Sky laws or the rules and regulations of the
NASD in connection with the purchase and distribution of the
Securities and the Contract Shares (as to which such counsel
need express no opinion);
(iv) Assuming due authorization, execution and delivery
thereof by the Trust and the Collateral Agent, the Collateral
Agreement, together with the delivery of (x) the certificates
in registered form representing the Common Stock pledged
thereunder by the Selling Stockholder and (y) undated Common
Stock powers with respect thereto duly endorsed in blank, to
the Collateral Agent for the benefit of the Trust in the State
of New York creates in favor of the Collateral Agent for the
benefit of the Trust a perfected security interest in such
Common Stock under the Uniform Commercial Code as in effect in
the State of New York (the "New York UCC"); upon such
delivery, at the First Time of Delivery, assuming that (A) the
Collateral Agent and the Trust will acquire the security
interest in such shares in good faith and without notice of
any adverse claim (within the meaning of the New York UCC) and
(B) the Selling Stockholder has rights in the shares of Common
Stock subject to the Collateral Agreement, the Collateral
Agent will acquire such security interest in such shares of
Common Stock for the benefit of the Trust free of any adverse
claims (within the meaning of the New York UCC); and
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(v) Upon payment for and delivery of certificates representing
the shares of Common Stock together with undated Common Stock
powers with respect thereto duly endorsed in blank in
accordance with the Contract and the Collateral Agreement,
assuming due authorization, execution and delivery thereof by
the Trust and, in the case of the Collateral Agreement, the
Collateral Agent, and assuming that (A) the Selling
Stockholder continues to be the sole registered owner of the
shares of Common Stock to be sold by it with the Collateral
Agent having a security entitlement to the pledged shares, (B)
the certificates representing the shares to be sold do not
contain any notation of liens or restrictions and (C) the
purchasers of Securities will acquire such shares in good
faith and without notice of any adverse claims (within the
meaning of the New York UCC), the purchasers will acquire
valid title to the shares of Common Stock to be purchased by
them free and clear of any adverse claims (within the meaning
of the New York UCC).
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than as to
the laws of the State of New York, the General Corporation Law of the
State of Delaware and the Federal Law of the United States.
(h) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Trust, shall have
furnished to you their written opinion or opinions, dated such Date of
Delivery, in form and substance satisfactory to you, to the effect that
(i) The Trust has been duly formed and is validly existing as
a trust under the laws of the State of New York and is
registered with the Commission under the 1940 Act as a
non-diversified, closed-end management investment company;
(ii) The Securities have been duly authorized and validly
issued and are fully paid and non-assessable and are entitled
to the benefits provided by the Trust Agreement;
(iii) The Securities will be exchanged for shares of Common
Stock in accordance with the terms of the Trust Agreement and
the Contract (unless a Reorganization Event (as such term is
defined in the Contract) occurs or the Selling Stockholder
elects the Cash Settlement Alternative under the Contract),
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and
to general equity principles;
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(iv) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Trust under the
Federal laws of the United States and the laws of the State of
New York for the issuance, sale and delivery of the Securities
by the Trust have been obtained or made;
(v) This Agreement has been duly authorized, executed and
delivered by the Trust;
(vi) Each Fundamental Agreement has been duly authorized,
executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties
thereto, constitutes a valid and legally binding agreement of
the Trust, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors, rights and
to general equity principles;
(vii) The statements in the Trust Prospectus under the caption
"Certain Federal Income Tax Considerations," to the extent
that such statements constitute summaries of the legal matters
referred to therein, fairly represent their opinion as to such
matters;
(viii) On the basis of information which was gained in the
course of the performance of the services referred to in such
counsel's opinion considered in the light of their
understanding of the applicable law and the experience such
counsel gained through such counsel's practice under the Acts,
such counsel is of the opinion that the Trust Registration
Statement, as of its effective date, and the Trust Prospectus,
as of the date of the Trust Prospectus, appeared on their face
to be appropriately responsive in all material respects to the
requirements of the Acts and the applicable rules and
regulations of the Commission thereunder; and that nothing
that came to their attention in the course of such review has
caused them to believe that the Trust Registration Statement,
as of its effective date, contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Trust Prospectus, as of the
date of the Trust Prospectus, contained any untrue statement
of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; also, nothing that has come to such counsel's
attention in the course of certain procedures (as described in
such opinion) has caused such counsel to believe that the
Trust Prospectus, as of the date and time of delivery of such
opinion, contained any untrue statement of a material fact or
omitted to
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state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
such opinion may state that the limitations inherent in the
independent verification of factual matters and the character
of determinations involved in the registration process are
such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Trust Registration Statement
or the Trust Prospectus except for those made under the
captions "Underwriting," "Investment Objective and Policies,"
and "Description of Securities" in the Trust Prospectus
insofar as they relate to provisions of documents therein
described, and such counsel need not express any opinion or
belief as to the financial statements or other financial data
contained in the Trust Registration Statement and the Trust
Prospectus; and provided, further, that such counsel may state
that they have not participated in the preparation of the
Company Registration Statement or the Company Prospectus and
need not express any opinion or belief with respect thereto or
with respect to information relating to the Company contained
in the Trust Prospectus under the Caption: "Prospectus Summary
-- The Company" and "Investment Objectives and Policies -- The
Company."
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the
laws of the State of New York and the Federal laws of the United
States.
(i) The Underwriters shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Underwriters, an opinion, dated the First Time
of Delivery or the Second Time of Delivery, as the case may be, in form
and substance satisfactory to you and such counsel shall have received
such papers and information as they may reasonably request to enable
them to pass upon such matters.
(j) The Underwriters shall have received from ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇, special regulatory counsel to the Underwriters, an opinion
dated the First Date of Delivery, in form and substance satisfactory to
the Underwriters.
(k) The Underwriters shall have received on the First Time of
Delivery or the Second Time of Delivery, as the case may be, a
certificate or certificates of the Chief Executive Officer and the
Chief Financial Officer of the Company, dated as of the First Time of
Delivery or the Second Time of Delivery, as the case may be, to the
effect that each of them severally represents in his capacity as an
officer of the Company as follows:
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(i) Each Company Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Company Registration Statements has been issued and no
proceedings for such purpose have been taken or are, to his
best knowledge, contemplated by the Commission;
(ii) The representations and warranties of the Company
contained in Section 2 hereof are true and correct in all
material respects as of such Date of Delivery and the Company
has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior
to such Date of Delivery;
(iii) All filings required to have been made pursuant to Rules
424 or 430A under the Act have been made;
(iv) He has carefully examined each Company Registration
Statement and the Company Prospectus and, in his opinion, as
of the effective date of each Company Registration Statement,
the statements contained in such Company Registration
Statement and, as of the date of the Company Prospectus and as
of such Date of Delivery, the statements contained in the
Company Prospectus were true and correct in all material
respects, each Company Registration Statement and the Company
Prospectus did not omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading, and since the effective date of each
Company Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment
of such Company Registration Statement or the Company
Prospectus which has not been so set forth in such supplement
or amendment; and
(v) Since the date of the most recent financial statements of
the Company included in the Company Prospectus and the Company
Registration Statements, there has been no material adverse
change, nor any development involving a prospective material
adverse change, in or affecting the condition, financial or
otherwise, of the Company and the Subsidiaries taken as a
whole or the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise)
or prospects of the Company and the Subsidiaries taken as a
whole, whether or not arising in the ordinary course of
business.
(l) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto and the Selling Stockholder shall have
delivered to the Collateral Agent the number of shares of Common Stock
required by the Collateral Agreement
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to be initially pledged thereunder in accordance with the requirements
of the Collateral Agreement.
(m) The Trust and the Company shall have complied with the
provisions of Sections 5(iii) and 6(v) hereof with respect to the
furnishing of prospectuses on the business day next succeeding the date
of this Agreement.
(n) The Company shall have obtained and delivered to the
Underwriters executed copies of the lock-up agreements from each of the
holders of Common Stock of the Company set forth in the Secondary
Underwriting Agreement in form and substance reasonably satisfactory to
the Underwriters.
(o) The Trust, and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Date of Delivery
certificates of officers of the Trust, and the Selling Stockholder
reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Trust, and the Selling
Stockholder, respectively, herein and in the Contract and Collateral
Agreements at and as of such Date of Delivery, as to the satisfaction
and performance by the Trust and the Selling Stockholder of all of
their respective obligations hereunder and thereunder to be performed
at or prior to such Date of Delivery and as to such other matters as
you may reasonably request.
(p) The Firm Securities and the Optional Securities, if any,
and the Contract Shares shall have been approved for inclusion in the
Nasdaq National Market subject to notice of issuance.
(q) The Underwriters shall have received a letter, dated such
Date of Delivery, of PricewaterhouseCoopers LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not more
than three business days prior to such Date of Delivery for the
purposes of this subsection.
(r) The Reorganization (as defined in the Secondary
Underwriting Agreement) shall have been consummated and there shall be
no shares of Class B Common Stock outstanding.
The Company and the Selling Stockholder will furnish the
Underwriters with such conformed copies of such opinions, certificates, letters
and documents as the Underwriters reasonably request. The Underwriters may in
their sole discretion waive on behalf of the Underwriters compliance with any
conditions to the obligations of the Underwriters hereunder.
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8. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless the Trust,
each Underwriter, its partners, directors and officers and each person, if any,
who controls the Trust or such Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or several,
to which the Trust or such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in (A) any Company Registration
Statement, the Company Prospectus, or any amendment or supplement thereto, or
any related preliminary prospectuses, or (B) any Trust Registration Statement,
the Trust Preliminary Prospectus or the Trust Prospectus, or any amendment or
supplement thereto, but only to the extent such untrue statement, such alleged
untrue statement, omission or alleged omission was made in reliance upon and in
conformity with written information furnished by the Company to the Trust
specifically for use therein, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Trust and each Underwriter for any legal or other expenses reasonably
incurred by the Trust or such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable (x) in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in subsection (c) of this Section 8 or (y) to any Underwriter pursuant
to this Section 8(a) with respect to any preliminary prospectus to the extent
that any such loss, claim, damage or liability (or any actions or proceedings in
respect thereof) results from such Underwriter's sale of Securities to a person
as to whom it shall be established that there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the Company Prospectus in
any case where such delivery is required by the Act if the Company has
previously furnished copies thereof to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the Company Prospectus.
(b) The Selling Stockholder will indemnify and hold harmless
the Trust and each Underwriter, its partners, directors and officers and each
person, if any, who controls the Trust or such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
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actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in (A) any Company
Registration Statement, the Company Prospectus or any amendment or supplement
thereto, or any related preliminary prospectuses, but only to the extent such
untrue statement, alleged untrue statement, omission or alleged omission was
made in reliance upon and in conformity with written information furnished by
the Selling Stockholder to the Company specifically for use therein or (B) any
Trust Registration Statement, the Trust Preliminary Prospectus or the Trust
Prospectus or any amendment or supplement thereto, but only to the extent such
untrue statement, alleged untrue statement, omission or alleged omission was
made in reliance upon and in conformity with written information furnished by
the Selling Stockholder to the Trust specifically for use therein, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred. Notwithstanding anything to the contrary set forth
herein, the Selling Stockholder will not be liable to any Underwriter pursuant
to this Section 8(b) with respect to any Company Prospectus to the extent that
any such loss, claim, damage or liability (or any actions or proceedings in
respect thereof) results from such Underwriter's sale of Securities to a person
as to whom it shall be established that there was not sent or given, at or prior
to the written confirmation of such sale, a copy of the Company Prospectus in
any case where such delivery is required by the Act if the Company has
previously furnished copies thereof to such Underwriter and the loss, claim,
damage or liability of such Underwriter results from an untrue statement or
omission of a material fact contained in such preliminary prospectus which was
corrected in the Company Prospectus. The aggregate liability of the Selling
Stockholder pursuant to this Section 8(b) and Sections 8(e), (f), (g) and (h)
hereof shall in no event exceed in the aggregate the total proceeds received by
the Selling Stockholder from the sale of Securities (the "Selling Stockholder's
Proceeds"). This indemnity agreement will be in addition to any liability which
the Selling Stockholder may otherwise have.
(c) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, the Selling Stockholder, the Trust and their
respective directors, managers and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company, the Trust or the
Selling Stockholder may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statements, or the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or the Trust by
such Underwriter through the Underwriters specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company, the
Trust and the Selling Stockholder in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectuses furnished
on behalf of each Underwriter: the concession and reallowance figures appearing
(A) in the fifth paragraph under the caption "Underwriting" in the Company
Prospectus and (B) in the third paragraph under the caption "Underwriting" in
the Trust Prospectus, and the information contained (A) in the twelfth and
thirteenth paragraphs under the caption "Underwriting" in the Company Prospectus
and (B) in the fourth and fifth paragraphs under the caption "Underwriting" in
the Trust Prospectus.
(d) The Company will indemnify and hold harmless the Selling
Stockholder, its managers, directors and officers and each person, if any, who
controls the Selling Stockholder within the meaning of Section 15 the Act
against all losses, claims, damages or liabilities (or any actions or
proceedings in respect thereof) to which the Selling Stockholder or any such
controlling person may become subject under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or any actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Company
Registration Statements, any related preliminary prospectus, the Company
Prospectuses or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in light of the
circumstances under which they were made; and will reimburse the Selling
Stockholder and each such controlling person upon demand for all legal or other
expenses reasonably incurred by the Selling Stockholder or such controlling
person in connection with investigating or defending any such loss, claim,
damage or liability (or any actions or proceedings in respect thereof) or in
responding to a subpoena or governmental inquiry related to the offering of the
Securities, whether or not the Selling Stockholder or such controlling person is
a party to any such action or proceeding. However, the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability (or any actions or proceedings in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statements, the Prospectuses, any
related preliminary prospectuses or any amendment or supplement thereto naming
the Selling Stockholder or any affiliate thereof or describing the Selling
Stockholder's relationship with the Company, including the summary of the
Stockholder and Registration Rights Agreement and the Asset Acquisition
Agreement (as defined in the Company Prospectus) and the descriptions of the
offering of the
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Trust Securities (as defined in the Company Prospectus) by the Selling
Stockholder. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.
(e) The Selling Stockholder will indemnify and hold harmless
the Company, each of the directors of the Company and each of the officers of
the Company who shall have signed the Company Registration Statement against all
losses, claims, damages or liabilities (or any actions or proceedings in respect
thereof) to which the Company or any such director or officer may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or any actions or proceedings in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in the Company Registration Statements, any Company
preliminary prospectus, the Company Prospectuses or any amendment or supplement
thereto, or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in light of the circumstances under which they were made, and
will reimburse the Company and each such director or officer upon demand in
connection with investigating or defending any such loss, claim, damage or
liability (or any actions or proceedings in respect thereof) or in responding to
a subpoena or governmental inquiry related to the offering of the Securities,
whether or not the Company or such director or officer is a party to any such
action or proceeding. However, the Selling Stockholder will be liable in each
case to the extent, but only to the extent, that any such loss, claim, damage or
liability (or any actions or proceedings in respect thereof) arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Company Registration Statement, the Company
Prospectus or any related preliminary prospectuses or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by the Selling Stockholder specifically for use
therein. Further, the aggregate liability of the Selling Stockholder pursuant to
this Section 8(e) and Sections 8(b), (f), (g) and (h) hereof shall in no event
exceed the amount of the Selling Stockholder's Proceeds. This indemnity
agreement will be in addition to any liability which the Selling Stockholder may
otherwise have.
(f) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) through (e) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsections (a) through (e) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to
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assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 any claims that are the subject
matter of such action.
(g) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) through (e) above, (other than as expressly provided therein, and
subject to the limitations and exceptions set forth therein) then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) through (e) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the Trust
and the Selling Stockholder on the one hand and the Underwriters on the other
from the offering of the Securities 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, the Trust and the Selling
Stockholder on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company, the Trust and the Selling Stockholder on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Selling Stockholder, bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Trust, the
Selling Stockholder or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (g) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (g). Notwithstanding the provisions of this subsection (g), (i) no
Underwriter shall be required to contribute
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any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) the Selling Stockholder shall not be
required to contribute any amount in respect of any losses, claims, damages,
liabilities or amounts paid in settlement greater than the excess of the Selling
Stockholder's Proceeds over the amount paid by the Selling Stockholder under
Sections 8(b) and 8(e) hereof or to contribute any amount in respect of losses,
claims, damages or liabilities or amounts paid in settlement that the Selling
Stockholder would not be obligated to indemnify under Sections 8(b) and 8(e)
hereof. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (g) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(h) Subject to the following provisions of this Section 8(h),
the Selling Stockholder hereby guarantees, irrevocably, absolutely and
unconditionally, the full and prompt payment of any and all amounts as may be
due from time to time from the Company pursuant to Section 8(a) and Section
8(g), provided, however, that (A) the Selling Stockholder shall have no
obligation to make any payment pursuant to this Section 8(h) in respect of the
reimbursement of any indemnified party for any expenses incurred unless such
indemnified party shall first have demanded from the Company reimbursement of
expenses to which such indemnified party is entitled and the Company shall have
failed to make such payment within 30 days of such demand, and (B) the Selling
Stockholder shall have no obligation to make any other payment to any
indemnified party pursuant to this Section 8(h) unless such indemnified party
shall first have demanded from the Company the full amount of the payment then
due from the Company and the Company shall have failed to pay such amount owed
to such indemnified party pursuant to Section 8(a) or Section 8(g) within 30
days after the earlier to occur of (i) a demand by the indemnified party for
payment by the Company of such amount, which amount the Selling Stockholder
agrees, whether by settlement or otherwise, is owed, or (ii) entry of a final
judgment by a court of competent jurisdiction, from which the time period for
filing an appeal has expired, against such indemnified party has remained
unsatisfied by the Company; provided, further, however, that after any
Insolvency Event (as hereinafter defined), the Selling Stockholder shall be
liable in accordance with this Section 8(h) without regard to the provisions set
forth in the first proviso of this sentence. For purposes of this Section 8(h),
an "Insolvency Event" shall have occurred when (i) the Company shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment (or its
equivalent) for the benefit of creditors; (ii) any proceeding shall be
instituted against the Company seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
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adjustment, protection, relief, or composition of it or its debt under any law
relating to bankruptcy, insolvency, reorganization, relief of debtors,
moratorium, suspension of payments or similar laws relating to or affecting
creditors' rights, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or for any
substantial part of its property, and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 90 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of any order
for relief against, or the appointment of a receiver, trustee, custodian or
similar official for, it or for any substantial part of its property) shall
occur, or (iii) the Company shall take any corporate action to authorize any of
the actions set forth in clauses (i) or (ii) of this sentence. Furthermore, the
Selling Stockholder's payment obligations pursuant to this Section 8(h) shall in
no event exceed the amount of the Selling Stockholder's Proceeds, less any
amount paid by the Selling Stockholder under Sections 8(b), (e), (g) and (j) in
respect of losses, claims, damages or liabilities or amounts paid in settlement
that the Selling Stockholder would not be obligated to indemnify under Sections
8(b) and (e) hereof.
(i) If the Selling Stockholder shall pay any amount due from
the Company pursuant to Section 8(a) in accordance with the provisions of
Section 8(h), the Selling Stockholder shall thereafter have full subrogation
rights, for the entire amount of each amount so paid, against the Company.
However, the Company will not be liable to the Selling Stockholder in any such
case to the extent that any such loss, claim, damage or liability (or any
actions or proceedings in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statements, the Prospectuses, any related preliminary
prospectus or any amendment or supplement thereto naming the Selling Stockholder
or any affiliate thereof or describing the Selling Stockholder's relationship
with the Company, including the summary of the Stockholder and Registration
Rights Agreement and the Asset Acquisition Agreement and the descriptions of the
offering of Trust Securities by the Selling Stockholder.
(j) If both the Company and the Selling Stockholder are at
fault, or if the Selling Stockholder is solely at fault, insofar as any losses,
claims, damages or liabilities (or any actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statements,
the Prospectuses, any related preliminary prospectus or any amendment or
supplement thereto, or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances under which they were
made, then notwithstanding anything to the contrary contained in this Section 8,
as between the Company and the Selling Stockholder, the Selling Stockholder
shall contribute to any indemnification required pursuant to Section 8(a) and
the Selling Stockholder shall contribute to any amount payable by the Company
pursuant to
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Section 8(g), in either case, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Selling Stockholder on
the other hand in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or any actions or proceedings in
respect thereof). If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(d) or 8(e) in respect of any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) referred to therein or any amount
paid in settlement thereof, then the indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof) or
settlement in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Selling Stockholder on the other hand.
However, the aggregate liability of the Selling Stockholder pursuant to this
Section 8(j) and Sections 8(b), (e) and (g) hereof shall in no event exceed the
Selling Stockholder's Proceeds, less any amount paid by the Selling Stockholder
under Sections 8(b), (e), (g) and (j) in respect of losses, claims, damages or
liabilities or amounts paid in settlement that the Selling Stockholder would not
be obligated to indemnify under Sections 8(b) and (e) hereof. Relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or to information included in reliance upon and in conformity with
written information furnished to the Company by the Selling Stockholder
specifically for use in the Company Registration Statement, Company Prospectus,
any related preliminary prospectus or an amendment or supplement to any of the
foregoing on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
This Section 8(j) is solely for the benefit of the Company and the Selling
Stockholder and, to the extent expressed, any other persons entitled to claim
indemnification pursuant to Section 8(d) or 8(e), and no other person shall
acquire or have any right pursuant to or by virtue of this Section 8(j). This
Section 8(j) shall not be construed as limiting or affecting in any manner the
rights of the Underwriters under Sections 8(a), 8(g) or 8(h).
(k) The obligations of the Company, the Trust and the Selling
Stockholder under this Section 8 shall be in addition to any liability which the
Company and the Selling Stockholder may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who has signed any Company Registration Statement and to each person, if
any, who controls the Company within the meaning of the Act.
48
-48-
9. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Securities hereunder on either the
First or Second Time of Delivery and the aggregate number of Securities that
such defaulting Underwriter or Underwriters agreed but failed to purchase does
not exceed 10% of the total number of Securities that the Underwriters are
obligated to purchase on such Date of Delivery, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may make
arrangements satisfactory to the Selling Stockholder for the purchase of such
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Date of Delivery, the non-defaulting Underwriters
shall be obligated, severally, in proportion to their respective commitments
hereunder, to purchase the Securities that such defaulting Underwriters agreed
but failed to purchase on such Date of Delivery. If any Underwriter or
Underwriters so default and the aggregate number of Securities with respect to
which such default or defaults occur exceeds 10% of the total number of
Securities that the Underwriters are obligated to purchase on such Date of
Delivery and arrangements satisfactory to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Selling
Stockholder for the purchase of such Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Trust or the
Company, except as provided in Section 10 (provided that if such default occurs
with respect to Optional Securities after the First Time of Delivery, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 9. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Selling Stockholder, the Trust, the Company or its officers
and of the several Underwriters set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Selling Stockholder, the Company, the Trust or any of their respective
Underwriters, officers or directors or any controlling person, and will survive
delivery of and payment for the Securities. If this Agreement is terminated
pursuant to Section 9 or if for any reason the purchase of the Securities by the
Underwriters is not consummated, the Selling Stockholder shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
6 and the respective obligations of the Company, the Selling Stockholder, the
Trust and the Underwriters pursuant to Section 8 shall remain in effect, and if
any Securities have been purchased hereunder the representations and warranties
in Section 2 and all obligations under Section 6 shall also remain in effect. If
the purchase of the Securities by the Underwriters is not consummated for any
reason other than solely because of the termination of this Agreement pursuant
to Section 9 or the occurrence of any event specified in clause (iii), (iv) or
(v) of Section 7(c), the Selling Stockholder will reimburse the Underwriters for
all out-of-pocket expenses
49
-49-
(including fees and disbursements of counsel to the Underwriters) reasonably
incurred by them in connection with the offering of the Securities; provided,
however, that if the purchase of the Offered Securities by the Underwriters is
not consummated as a result of any action by the Selling Stockholder, the
Selling Stockholder will reimburse the Underwriters for all out-of-pocket
expenses (including fees and disbursements of counsel to the Underwriters)
reasonably incurred by them in connection with the offering of the Offered
Securities.
11. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Underwriters c/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Special Execution, or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at Express Scripts,
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer, or if sent to the Selling Stockholder, will be mailed,
delivered or telegraphed and confirmed to it at NYLIFE LLC, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel or, it to the Trust, to ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; provided, however, that any notice
to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed
and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8, and no
other person will have any right or obligation hereunder.
13. Representation of Underwriters. The Underwriters will act
for the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Underwriters jointly will be binding upon all
the Underwriters.
14. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Each of the Company, the Trust and the Selling Stockholder
hereby submits to the non-exclusive jurisdiction of the federal and state courts
in the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
[Signature Page Follows]
50
-50-
If the foregoing is in accordance with the Underwriters'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Selling Stockholder, the Company, the Trust and the several Underwriters in
accordance with its terms.
Very truly yours,
EXPRESS SCRIPTS AUTOMATIC
EXCHANGE SECURITY TRUST
By: _________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
By: _________________________________________
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
EACH A TRUSTEE OF EXPRESS SCRIPTS
AUTOMATIC COMMON EXCHANGE
TRUST
NYLIFE LLC
By: _________________________________________
Name:
Title:
EXPRESS SCRIPTS, INC.
By: _________________________________________
Name:
Title:
51
-51-
The foregoing Underwriting Agreement
is hereby confirmed and accepted as of
the date first above written.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,
CREDIT SUISSE FIRST BOSTON CORPORATION
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By: _______________________________
Name:
Title:
52
EXHIBIT A
1. Diversified Pharmaceutical Services, Inc. (Minnesota)
2. Express Scripts Sales Development Co. (Delaware)
3. Express Scripts Vision Corp. (Delaware)
4. IVTx, Inc. (Delaware)
5. Value Health, Inc. (Delaware)
6. ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. (Delaware)
7. ESI Mail Pharmacy Service, Inc. (Delaware)
53
EXHIBIT B
Subsidiary State of Incorporation D/B/A
------------------------------------------------------ ---------------------- --------------------------------
Diversified Pharmaceutical Services, Inc. Minnesota None
Diversified NY IPA, Inc. New York None
Diversified Pharmaceutical Services (Puerto Rico) Inc. Puerto Rico None
ESI Canada, Inc. New Brunswick, Canada None
ESI Canada Holdings, Inc. New Brunswick, Canada None
Express Scripts Vision Corporation Delaware ESI Vision Care
IVTx, Inc. Delaware Express Scripts Infusion Service
Express Scripts Sales Development Co. Delaware None
Great Plains Reinsurance Company Arizona None
Practice Patterns Science, Inc. Delaware None
Value Health, Inc. Delaware None
ValueRx of Michigan, Inc. Michigan None
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc. Delaware None
ESI Mail Pharmacy Service, Inc. Delaware None
Express Scripts Specialty Distribution Services, Inc. Delaware None
ESI Utilization Management Co. Delaware None
ESI Claims, Inc. Delaware None
607486.Alberta Ltd. Alberta None
54
EXHIBIT C
Officers:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Directors:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
55
SCHEDULE I
NUMBER OF OPTIONAL
TOTAL NUMBER OF FIRM SECURITIES TO BE PURCHASED
UNDERWRITER SECURITIES TO BE PURCHASED IF MAXIMUM OPTION EXERCISED
----------- -------------------------- ---------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co....................... 1,500,000 225,000
Credit Suisse First Boston Corporation.... 1,500,000 225,000
--------- -------
Total............................ 3,000,000 450,000
========= =======