Draft -- September [CARAT] 13, 1997
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▇▇▇▇▇▇ COMMUNICATIONS, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
U.S. PURCHASE AGREEMENT
-----------------------
Dated: September [_], 1997
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TABLE OF CONTENTS
U.S. PURCHASE AGREEMENT................................................... 1
SECTION 1. Representations and Warranties........................... 4
(a) Representations and Warranties by the Company and the
Partnership.............................................. 4
(i) Compliance with Registration Requirements....... 5
(ii) Independent Accountants......................... 6
(iii) Financial Statements............................ 6
(iv) No Material Adverse Change in Business.......... 6
(v) Good Standing of the Company.................... 7
(vi) Good Standing of Subsidiaries................... 7
(vii) Capitalization.................................. 7
(viii) Authorization................................... 8
(ix) Authorization and Description of Securities..... 8
(x) Absence of Defaults and Conflicts............... 8
(xi) Absence of Labor Dispute........................ 9
(xii) Absence of Proceedings.......................... 9
(xiii) Accuracy of Exhibits............................ 10
(xiv) Possession of Intellectual Property............. 10
(xv) Absence of Further Requirements................. 10
(xvi) Possession of Licenses and Permits.............. 11
(xvii) Title to Property............................... 11
(xviii) Investment Company Act.......................... 11
(xix) Environmental Laws.............................. 12
(xx) Registration Rights............................. 12
(xxi) Certain Contracts............................... 12
(xxii) Compliance with Laws............................ 13
(xxiii) Taxes........................................... 13
(xxiv) Insurance....................................... 13
(b) Representations, Warranties and Covenants by the
Selling Shareholders..................................... 13
(i) Authorization of Agreements..................... 13
(ii) Good and Valid Title............................ 14
(iii) Due Execution of Custody Agreement and [CARAT]
Power of Attorney............................... 14
(iv) Absence of Manipulation......................... 15
(v) Absence of Further Requirements................. 15
(vi) Certificates Suitable for Transfer;
Instruments of Transfer [CARAT]................. 15
(vii) No Association with NASD........................ 15
i
(c) Additional Representations and Warranties by the Option
Selling Shareholders.............................. [CARAT] 16
(d) Additional Representations and Warranties................ 16
(e) Officer's Certificates................................... 17
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.......... 17
(a) Initial Securities....................................... 17
(b) Option Securities........................................ 17
(c) Payment.................................................. 18
(d) Denominations; Registration.............................. 19
SECTION 3. Covenants of the Company and the Partnership............. 19
(a) Compliance with Securities Regulations and Commission
Requests................................................. 19
(b) Filing of Amendments..................................... 20
(c) Delivery of Registration Statements...................... 20
(d) Delivery of Prospectuses................................. 20
(e) Continued Compliance with Securities Laws................ 20
(f) Blue Sky Qualifications.................................. 21
(g) Rule 158................................................. 21
(h) Use of Proceeds.......................................... 22
(i) Listing.................................................. 22
(j) Restriction on Sale of Securities........................ 22
(k) Reporting Requirements................................... 22
SECTION 4. Payment of Expenses...................................... 22
(a) Expenses................................................. 22
(b) Expenses of the Selling Shareholders..................... 23
(c) Termination of Agreement................................. 23
(d) Allocation of Expenses............................ [CARAT] 24
SECTION 5. Conditions of U.S. Underwriters' Obligations............. 24
(a) Effectiveness of Registration Statement.................. 24
(b) Opinion of Counsel for Company........................... 24
(c) Opinions of Counsel for the Selling Shareholders.. [CARAT] 25
(d) Opinion of Counsel for U.S. Underwriters................. 25
(e) Officers' Certificate.................................... 26
(f) Certificate of Selling Shareholders...................... 26
(g) Accountant's Comfort Letter.............................. 26
(h) Bring-down Comfort Letter......................... [CARAT] 27
(i) Approval of Listing...................................... 27
(j) No Objection............................................. 27
(k) Lock-up Agreements....................................... 27
(l) Form W-9................................................. 27
(m) Purchase of Initial International Securities............. 27
(n) Conditions to Purchase of U.S. Option Securities......... 27
(o) Additional Documents..................................... 28
ii
(p) Termination of Agreement................................. 29
SECTION 6. Indemnification.......................................... 29
(a) Indemnification of U.S. Underwriters..................... 29
(b) Indemnification of U.S. Underwriters by the
Non-Executive Selling Shareholders....................... 32
(c) Indemnification of Company, Directors and Officers and
Selling Shareholders..................................... 33
(d) Actions against Parties; Notification.................... 33
(e) Settlement without Consent if Failure to Reimburse....... 34
(f) Other Agreements with Respect to Indemnification......... 34
SECTION 7. Contribution............................................. 34
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.......................................... 36 [CARAT]
SECTION 9. Termination of Agreement................................. 36
(a) Termination; General..................................... 36
(b) Liabilities.............................................. 37
SECTION 10. Default by One or More of the U.S. Underwriters.......... 37
SECTION 11. Default by One or More of the Selling Shareholders
or the Company........................................... 38
SECTION 12. Notices.................................................. 39
SECTION 13. Parties.................................................. 39
SECTION 14. GOVERNING LAW AND TIME................................... 39
SECTION 15. Effect of Headings................................ [CARAT] 40
SCHEDULES
Schedule A - List of U.S. Underwriters...................... Sch A-1
Schedule B - List of Selling Shareholders................... Sch B-1
Schedule C - Pricing Information............................ Sch C-1
Schedule D - List of Persons Subject to Lock-up............. Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel............ A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel B-1
Exhibit C - Form of Lock-up Letter.......................... C-1
Exhibit D - Form of Pledgee Lock-up Letter.................. D-1
iii
▇▇▇▇▇▇ COMMUNICATIONS, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
(Par Value $.001 Per Share)
U.S. PURCHASE AGREEMENT
------------------------
September [_], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇▇▇▇ Securities
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
as U.S. Representatives of the several U.S. Underwriters
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
▇▇▇▇▇▇ Communications, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇
Communications, L.P., a Delaware limited partnership (the "Partnership"), ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the persons listed in Schedule B hereto
(collectively, the "Selling Shareholders") confirm their respective agreements
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other U.S. Underwriters named in Schedule A
hereto (collectively, the "U.S. Underwriters", which term shall also include any
underwriter substituted as hereinafter provided in Section 10 hereof), for whom
▇▇▇▇▇▇▇ ▇▇▇▇▇, Goldman, Sachs & Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇▇▇▇▇ Securities and Bear, ▇▇▇▇▇▇▇ & Co. Inc. are acting as representatives
(in such capacity, the "U.S. Representatives"), with
respect to (i) the sale by the Company and the Selling Shareholders other than
C.E. and USN College Marketing (each as hereinafter defined)(collectively, the
"Initial Selling Shareholders"), acting severally and not jointly, and the
purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.001 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto and (ii) the
grant by C.E., LLC, a Delaware limited liability company ("C.E."), and USN
College Marketing, L.P., a Delaware limited partnership ("USN College Marketing"
and, together with C.E., the "Option Selling Shareholders") to the U.S.
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [ ] additional shares of
Common Stock to cover over-allotments, if any. The aforesaid [ ] shares of
Common Stock (the "Initial U.S. Securities") to be purchased by the U.S.
Underwriters and all or any part of the [ ] shares of Common Stock subject to
the option described in Section 2(b) hereof (the "U.S. Option Securities") are
hereinafter called, collectively, the "U.S. Securities".
It is understood that the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders are concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company and the Initial Selling Shareholders,
acting severally and not jointly, of an aggregate of [ ] shares of Common
Stock (the "Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada (the "International Managers")
for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. International Limited, ▇▇▇▇▇▇▇▇▇▇ Securities and Bear, ▇▇▇▇▇▇▇
International Limited are acting as lead managers (the "Lead Managers") and the
grant by the Option Selling Shareholders to the International Managers, acting
severally and not jointly, of an option to purchase all or any part of the
International Managers' pro rata portion of up to [ ] additional shares of
Common Stock solely to cover over-allotments, if any (the "International Option
Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and the International Option
Securities are hereinafter called the "International Securities". It is
understood that the Company [CARAT] and the Initial Selling Shareholders are not
obligated to sell, and the U.S. Underwriters are not obligated to purchase, any
Initial U.S. Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities". The Selling Shareholders
other than C.E. are hereinafter collectively called the "Non-Executive Selling
Shareholders".
2
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in
such capacity, the "Global Coordinator").
The Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders understand that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The public offering of the U.S. Securities is expected to close
concurrently with the offering of the Structured Yield Product Exchangeable for
Stock (the "STRYPES") of the ▇▇▇▇▇▇ STRYPES Trust (the "Trust"), described in
the Registration Statement (as hereinafter defined). In the STRYPES
transaction, D.M.S. Endowment, LLC ("Endowment"), a Delaware limited liability
company of which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are the beneficial
owners, and certain other stockholders of the Company will enter into a forward
purchase contract (the "Contract") with the Trust. Pursuant to the Contract,
Endowment may deliver up to [3,100,000] shares of Common Stock, assuming full
exercise of the over-allotment option in the STRYPES offering. In the STRYPES
transaction, Endowment will receive at the closing thereof proceeds of $[ ]
million, $[ ] million if such over-allotment option is exercised in
full. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ respective pro rata share,
calculated on the basis of his or her ownership interest in Endowment, of the
proceeds to be received by Endowment in the STRYPES transaction is hereinafter
referred to as "STRYPES Proceeds."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-33691) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical
to the Form of U.S. Prospectus, except for the front cover and back cover pages
and the information under
3
the caption "Underwriting". The information included in any such prospectus or
in any such Term Sheet, as the case may be, that was omitted from such
registration statement at the time it became effective but that is deemed to be
part of such registration statement at the time it became effective (a) pursuant
to paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each Form of U.S. Prospectus and Form of International Prospectus used before
such registration statement became effective, and any prospectus that omitted,
as applicable, the Rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of U.S. Prospectus and the final Form of
International Prospectus in the forms first furnished to the Underwriters for
use in connection with the offering of the Securities are herein called the
"U.S. Prospectus" and the "International Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the terms "U.S.
Prospectus" and "International Prospectus" shall refer to the preliminary U.S.
Prospectus dated August 29, 1997 and preliminary International Prospectus dated
August 29, 1997, respectively, each together with the applicable Term Sheet, and
all references in this Agreement to the date of such Prospectuses shall mean the
date of the applicable Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the U.S.
Prospectus, the International Prospectus or any Term Sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("▇▇▇▇▇").
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectuses.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company and the Partnership.
Each of the Company and the Partnership, jointly and severally, represents and
warrants to each U.S. Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b), hereof and agrees with each U.S. Underwriter, as
follows:
4
(i) Compliance with Registration Requirements. Each of the
-----------------------------------------
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company or the Partnership, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither of the Prospectuses nor any amendments or
supplements thereto, at the time the Prospectuses or any amendments or
supplements thereto were issued and at the Closing Time (and, if any U.S.
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of Rule
434 and the Prospectuses shall not be "materially different", as such term
is used in Rule 434, from the prospectuses included in the Registration
Statement at the time it became effective. The representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the U.S. Prospectus made in reliance
upon and in conformity with information furnished to the Company in writing
by any U.S. Underwriter through the U.S. Representatives expressly for use
in the Registration Statement or the U.S. Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
5
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
--------------------
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included in the Registration
Statement present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The financial statements have been prepared in accordance with
the Commission's rules and guidelines with respect to combined financial
statements and have been properly compiled on the bases described therein.
The pro forma financial data included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since June 30, 1997 or
--------------------------------------
such later dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Company
or any subsidiary on any class of its capital stock or any partnership
interest, as the case may be.
6
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
listed on Exhibit 21 to the Registration Statement (each, a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has corporate or partnership, as the case
may be, power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and is duly qualified
as a foreign corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
all of the issued and outstanding capital stock of each corporate
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company directly or indirectly through
subsidiaries, and all of the partnership interests of the Partnership have
been duly authorized and validly issued and are owned by the Company,
directly or indirectly through ▇▇▇▇▇▇ Marketing Services, Inc., in each
case free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital
stock or partnership interests, as the case may be, of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Company
are (a) the subsidiaries listed on Exhibit 21 to the Registration Statement
and (b) certain other subsidiaries which, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as defined
in Rule 1-02 of Regulation S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee
7
benefit plans referred to in the Prospectuses or pursuant to the exercise
of convertible securities or options referred to in the Prospectuses). The
shares of issued and outstanding capital stock of the Company, including
the Securities to be purchased by the Underwriters from the Selling
Shareholders, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock of
the Company, including the Securities to be purchased by the Underwriters
from the Selling Shareholders, was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(viii) Authorization. This Agreement and the International Purchase
-------------
Agreement have been duly authorized, executed and delivered by the Company
and the Partnership. The performance of this Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated in this Agreement, the International Purchase Agreement and
the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use Of Proceeds") and
compliance by the Company and the Partnership with its obligations under
this Agreement and the International Purchase Agreement have been duly
authorized by the Company and the Partnership, respectively.
(ix) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and the International Purchase Agreement,
respectively, will be validly issued, fully paid and non-assessable; the
Common Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject
to personal liability by reason of being such a holder; and the issuance of
the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of the Subsidiaries is in violation of its charter or by-laws or
partnership agreement, as the case may be, or in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement
8
or instrument to which the Company or any of the Subsidiaries is a party or
by which any of them may be bound, or to which any of the property or
assets of the Company or any of the Subsidiaries is subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the International Purchase Agreement and
the consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectuses
under the caption "Use of Proceeds") and compliance by the Company and the
Partnership with their respective obligations under this Agreement and the
International Purchase Agreement have been duly authorized by all necessary
corporate or partnership, as the case may be, action and do not and will
not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any Subsidiary pursuant to, the Agreements and Instruments (except for
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws or partnership
agreement, as the case may be, of the Company or any Subsidiary or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any Subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any Subsidiary exists or, to the knowledge of the Company
or the Partnership, is imminent, and neither the Company nor the
Partnership is aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers, customers or
contractors, which, in either case, might reasonably be expected to result
in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company or the Partnership, threatened, against or affecting the
Company or any
9
subsidiary, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement and the
International Purchase Agreement or the performance by the Company or the
Partnership of its obligations hereunder or thereunder; the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective properties or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor the Partnership has
received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of the Subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required by or on behalf of the Company or the Partnership
for the performance by the Company or the Partnership of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities under this Agreement and the International Purchase Agreement or
the consummation of the transactions contemplated by this Agreement and the
International Purchase Agreement, except such as have been
10
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations and foreign or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and the
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and the Subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
-
described in the Prospectuses, including those disclosed in the financial
statements and the related notes included therein, or (b) do not, singly or
-
in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of the Subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectuses, are in full force and
effect, and neither the Company nor the Partnership has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as
11
such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xix) Environmental Laws. Except as described in the Registration
------------------
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of the Subsidiaries and (D)
there are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
or affecting the Company or any of the Subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xx) Registration Rights. Except as described in the Registration
-------------------
Statement and the Prospectuses, there are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xxi) Certain Contracts. Each of the Company's contracts with AT&T
-----------------
Communications, Inc. ("AT&T") have been duly executed and delivered by each
of the Partnership or the Company, as the case may be, and, to the
knowledge of the Company and the Partnership, by AT&T and are in full force
and effect. There does not exist any default, event or condition that,
after notice or lapse of time or both, could give rise under either such
contract to any claim by any person against the Company or any subsidiary
or would constitute a default
12
thereunder on the part of the Company or any subsidiary or any other party
thereto.
(xxii) Compliance with Laws. Each of the Company and the Subsidiaries
--------------------
is in compliance with all applicable laws, statutes, ordinances, rules or
regulations of any applicable jurisdiction, the enforcement of which,
singly or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(xxiii) Taxes. Each of the Company and the Subsidiaries has filed all
-----
material federal, state, local and foreign income and franchise tax returns
required to be filed by it and has paid all taxes shown as due thereon,
other than taxes which are being contested in good faith or state
withholding taxes and for both of which adequate reserves have been
established in accordance with GAAP; and neither the Company nor the
Partnership has knowledge of any tax deficiency which has been or might be
asserted or threatened against the Company or any Subsidiary other than
those for which adequate reserves have been established in accordance with
GAAP. Adequate charges, accruals and reserves have been provided for in
the financial statements referred to in Section 1(a)(iii) hereof in respect
of all material federal, state, local and foreign taxes for all periods as
to which the tax liability of the Company or any Subsidiary has not been
finally determined or remains open to examination by applicable taxing
authorities.
(xxiv) Insurance. Each of the Company and the Subsidiaries carries or
---------
is entitled to the benefits of insurance in such amounts and covering such
risks as it reasonably believes are sufficient to cover potential losses or
damages, and all such insurance is in full force and effect.
(b) Representations, Warranties and Covenants by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each U.S.
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling U.S. Option Securities on a Date of Delivery, as of each
such Date of Delivery, and agrees with each U.S. Underwriter, as follows:
(i) Authorization of Agreements. Each Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and a Custody
Agreement and Power of Attorney (the "Custody Agreement and Power of
Attorney") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement, the International Purchase Agreement and the Custody Agreement
and Power of Attorney and the sale and delivery of the Securities to be
sold by such Selling Shareholder and the consummation by such Selling
Shareholder of the transactions contemplated herein, in the International
Purchase Agreement and in the
13
Registration Statement and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by each Selling Shareholder
that is not an individual and do not and will not, whether with or without
the giving of notice or passage of time or both, result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities to
be sold by such Selling Shareholder, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of such Selling Shareholder, if applicable, or,
to the best of such Selling Shareholder's knowledge, any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its properties.
(ii) Good and Valid Title. Such Selling Shareholder has and will at
--------------------
the Closing Time and, if any U.S. Option Securities are purchased, such
Option Selling Shareholder will on the Date of Delivery have good and valid
title to the Securities to be sold by such Selling Shareholder hereunder,
free and clear of any security interest, mortgage, pledge, lien, charge,
claim, equity or encumbrance of any kind, other than pursuant to this
Agreement or the Custody Agreement and Power of Attorney; and upon delivery
of such Securities and payment of the purchase price therefor as herein
contemplated, assuming each such U.S. Underwriter has no notice of any
adverse claim, each of the U.S. Underwriters will receive good and valid
title to the Securities purchased by it from such Selling Shareholder, free
and clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iii) Due Execution of Custody Agreement and Power of Attorney. Such
--------------------------------------------------------
Selling Shareholder has duly executed and delivered, in the forms
heretofore furnished to the U.S. Representatives, the Custody Agreement and
Power of Attorney with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇, or any of them, as attorneys-in-fact (the "Attorneys-in-Fact") and
American Stock Transfer and Trust Company, as custodian (the "Custodian");
the Custodian is authorized to deliver the Securities to be sold by such
Selling Shareholder hereunder and to accept payment therefor, pursuant to
the Custody Agreement and Power of Attorney; and each Attorney-in-Fact is
authorized to execute and deliver this Agreement and the certificate
referred to in Section 5(f) or that may be required pursuant to Sections
[CARAT] 5(n) (in the case of any Option Selling Shareholder) and 5(o) on
behalf of such Selling Shareholder, to sell, assign and transfer to the
U.S. Underwriters the Securities to be sold by such Selling Shareholder
hereunder, to determine the purchase price to be paid by the U.S.
Underwriters to such Selling Shareholder, as provided in Section 2 hereof,
to authorize the delivery of the Securities to be sold by such Selling
Shareholder hereunder, to accept payment therefor, and otherwise to act on
behalf of such
14
Selling Shareholder in connection and in accordance with this Agreement and
the Custody Agreement and Power of Attorney.
(iv) Absence of Manipulation. Such Selling Shareholder has not
-----------------------
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(v) Absence of Further Requirements. [CARAT] To the best of such
-------------------------------
Selling Shareholder's knowledge, no filing with, or consent, approval,
authorization, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, is necessary or
required by such Selling Shareholder for the performance by such Selling
Shareholder of its obligations hereunder or in the Custody Agreement and
Power of Attorney, or in connection with the offering, sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement and the International Purchase Agreement,
except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(vi) Certificates Suitable for Transfer; Instruments of Transfer.
-----------------------------------------------------------
Certificates for all of the Securities sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank, or, in the case of uncertificated stock, duly executed stock
powers, in each case with signatures guaranteed (or notarized, in the case
of any such Selling Shareholder not resident in the United States), have
been placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities or stock powers to the U.S.
Underwriters pursuant to this Agreement and the Custody Agreement and Power
of Attorney.
(vii) No Association with NASD. Except as described in the
------------------------
Registration Statement and the Prospectuses, neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the NASD), any member firm of the
NASD, except that ▇▇▇▇▇▇ ▇▇▇ is an officer of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation and NatWest Ventures [CARAT] Investments Limited is
an affiliate of certain member firms of the NASD.
15
(c) Additional Representations and Warranties by the Option Selling
Shareholders. Each Option Selling Shareholder further severally represents and
warrants to each U.S. Underwriter as of the date hereof, as of the Closing Time,
and, if the Option Selling Shareholder is selling U.S. Option Securities on a
Date of Delivery, as of each such Date of Delivery, and agrees with each U.S.
Underwriter, that, during a period of 90 days from the date of the Prospectuses,
such Option Selling Shareholder will not, without the prior written consent of
the Global Coordinator, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided that any Option Selling Shareholder
--------
may, at any time after 30 days from the date of the Closing Time, pledge as
security for borrowed money (x) up to 50%, in the case of C.E., and (y) all, in
the case of USN College Marketing, or its partners, of the shares of Common
Stock then owned by such Option Selling Shareholder to any commercial banking
institution that is a member of the Federal Reserve System or any institutional
lender that makes loans secured by margin securities in the ordinary course of
business having combined capital and surplus in excess of $500,000,000 (a
"Pledgee") as long as such Pledgee shall have agreed in writing to be bound by
the obligations and restrictions applicable to the Common Stock under this
Section 1(c) and the U.S. Representatives shall have received an agreement
substantially in the form of Exhibit D hereto signed by such Pledgee. The
foregoing sentence shall not apply to (x) the Securities to be sold hereunder or
(y) the STRYPES of the Trust described in the prospectus dated the date of this
Agreement relating to the STRYPES.
(d) Additional Representations and Warranties. Each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E., USN College Marketing, ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇ further severally represents and warrants to each U.S. Underwriter as of
the date hereof, as of the Closing Time, and (in the case of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E. and USN College Marketing), if C.E. or USN College
Marketing, as the case may be, is selling U.S. Option Securities on a Date of
Delivery, as of each such Date of Delivery, and agrees with each U.S.
Underwriter, that, to the best of its, his or her knowledge, as the case may be,
the representations and warranties of the Company and the Partnership contained
in Section 1(a) hereof are true and correct; it, he or she, as the case may be,
has reviewed and is familiar with the Registration Statement and the
Prospectuses and the Prospectuses do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the
16
light of the circumstances under which they were made, not misleading; and such
person is not prompted to sell the Securities to be sold by it, he or she, as
the case may be, hereunder or to participate in the STRYPES offering, as the
case may be, by any information concerning any of the Company or any of its
subsidiaries which is not set forth in the Prospectuses. [CARAT] The
representations and warranties in this subsection shall not apply to statements
in or omissions from the Registration Statement or the U.S. Prospectus made in
reliance upon and in conformity with information furnished to the Company in
writing by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement or the U.S. Prospectus.
(e) Officer's Certificates. Any certificate signed by any officer of the
Company or the Partnership delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company or the Partnership, as the case may
be, to each U.S. Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Global Coordinator, the U.S. Representatives or to counsel for
the U.S. Underwriters pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to [CARAT] each U.S.
[CARAT] Underwriter as to matters covered thereby.
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.
-----------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Initial Selling Shareholders, severally and not
jointly, agree to sell to each U.S. Underwriter, severally and not jointly, and
each U.S. Underwriter, severally and not jointly, agrees to purchase from the
Company and the Initial Selling Shareholders, at the price per share set forth
in Schedule C, that proportion of the number of Initial U.S. Securities set
forth in Schedule B opposite the name of the Company or the Initial Selling
Shareholders, as the case may be, which the number of Initial U.S. Securities
set forth in Schedule A opposite the name of such U.S. Underwriter, plus any
additional number of Initial U.S. Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial U.S. Securities, subject, in each case, to such
adjustments among the U.S. Underwriters as the U.S. Representatives in their
sole discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Option Selling Shareholders, acting severally and not jointly,
hereby grant an option to the U.S. Underwriters, severally and not jointly, to
purchase up to an additional [ ] shares of Common Stock, as set forth
in Schedule B, at the price per share set forth in
17
Schedule C. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial U.S. Securities upon notice by the Global
Coordinator to the Company and the Option Selling Shareholders setting forth the
number of U.S. Option Securities as to which the several U.S. Underwriters are
then exercising the option and the time and date of payment and delivery for
such U.S. Option Securities. Any such time and date of delivery for the U.S.
Option Securities (a "Date of Delivery") shall be determined by the Global
Coordinator, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
U.S. Option Securities, each of the U.S. Underwriters, acting severally and not
jointly, will purchase that proportion of the total number of U.S. Option
Securities then being purchased which the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter bears to the
total number of Initial U.S. Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Global Coordinator and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Global Coordinator and the Company, on each Date of Delivery as specified in the
notice from the Global Coordinator to the Company and the Option Selling
Shareholders.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Custody
Agreement and Power of Attorney against delivery to the U.S. Representatives for
the respective accounts of the U.S. Underwriters of certificates for the U.S.
Securities to be purchased by them. It is understood that each U.S. Underwriter
has authorized the U.S. Representatives, for its account, to accept delivery of,
receipt for, and make payment of the purchase price for,
18
the Initial U.S. Securities and the U.S. Option Securities, if any, which it has
agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
U.S. Underwriters, may (but shall not be obligated to) make payment of the
purchase price for, the Initial U.S. Securities or the U.S. Option Securities,
if any, to be purchased by any U.S. Underwriter whose funds have not been
received by the Closing Time or the relevant Date of Delivery, as the case may
be, but such payment shall not relieve such U.S. Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company and the Partnership. Each of the
--------------------------------------------
Company and the Partnership, jointly and severally, covenants with each U.S.
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b) hereof, will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement, shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
19
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of the Company's intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the U.S.
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. Underwriter reasonably requested, and the Company and the
Partnership hereby consent to the use of such copies for purposes permitted
by the 1933 Act. The Company will furnish to each U.S. Underwriter,
without charge, during the period when the U.S. Prospectus is required to
be delivered under the 1933 Act or the Securities Exchange Act of 1934, as
amended (the "1934 Act"), such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished to
the U.S. Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the International Purchase Agreement and in the Prospectuses.
If at any time when a prospectus is required by the 1933 Act to be
delivered in
20
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the U.S. Underwriters or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the
Prospectuses will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b)
hereof, such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to
the U.S. Underwriters such number of copies of such amendment or supplement
as the U.S. Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the U.S. Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for such period
after the effective date of the Registration Statement and any Rule 462(b)
Registration Statement as the Prospectuses are required by the 1933 Act or
such state securities laws to be delivered in connection with sales of the
Securities by any underwriter or dealer; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for the period specified above.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
21
(h) Use of Proceeds. The Company will use the net proceeds received
by the Company from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, neither the Company nor the Partnership
will, without the prior written consent of the Global Coordinator, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder or under the International Purchase Agreement, (B) any options to
purchase shares of Common Stock granted or shares of Common Stock sold
pursuant to any employee benefit plan of the Company whether existing at
the date of this Agreement or adopted subsequent hereto and the filing of
any registration statement on Form S-8 related thereto or (C) any option or
warrant to purchase shares of Common Stock or shares of Common Stock issued
or sold in connection with an acquisition by the Company and the filing of
any registration statement on Form S-4 in connection therewith as long as
all executive officers, directors and other affiliates of the person being
acquired have agreed in writing to be bound by the obligations and
restrictions of the foregoing sentence of this Section 3(j).
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Partnership, jointly and severally, will pay all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing (or
22
reproduction) and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation, printing (or reproduction) and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters and such other documents as may
be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing (or reproduction) and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
U.S. Underwriters, and their transfer between Underwriters pursuant to any
agreement between Underwriters, and (ii) the fees and disbursements of their
respective counsel and accountants, except in each case as otherwise provided in
any agreement between the Company and any Selling Shareholder.
(c) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 (other than
Section 5(j)), Section 9(a)(i) or Section 11 hereof, the Company, the
Partnership and the Selling Shareholders, severally and not jointly, shall
reimburse the U.S. Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters, except as otherwise provided in any agreement between the Company
and any Selling Shareholder.
23
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company, the Partnership and the Selling
Shareholders may make for the sharing of such costs and expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
--------------------------------------------
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company, the Partnership,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders contained in
Section 1 hereof or in certificates of any officer of the Company or the
Partnership or by or on behalf of any Selling Shareholder delivered pursuant to
the provisions hereof, to the performance by the Company and the Partnership of
their covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinion and letter, in
each case dated as of Closing Time, of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇,
counsel for the Company, in form and substance satisfactory to counsel for
the U.S. Underwriters, together with signed or reproduced copies of such
opinion and letter for each of the other U.S. Underwriters to the effect
set forth in Exhibit A-1 and Exhibit A-2, respectively, hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws
of jurisdictions other than the law of the State of New York, the federal
law of the United States and the General Corporation Law and the Revised
Uniform Limited Partnership Act of the State of Delaware, upon the opinions
of counsel satisfactory to the U.S. Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials.
24
(c) Opinions of Counsel for the Selling Shareholders. At Closing
Time, the U.S. Representatives shall have received the favorable opinions,
dated as of Closing Time, of (i) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel
for C.E., USN College Marketing, ▇▇▇▇▇ ▇▇▇▇▇▇▇ [CARAT] and ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, (ii) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the former
shareholders of ▇▇▇▇▇ Holdings Limited (except 3i Group plc and NatWest
Ventures Investment Limited), (iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for 3i Group
plc and NatWest Ventures Investment Limited, (iv) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇,
counsel for ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Charitable
Foundation, (v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (vi)
[ ] and ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ [▇▇▇▇▇], ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Ltd., counsel
for ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ [CARAT], (vii) ▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and ▇ ▇
▇▇▇▇▇▇ & Co. [CARAT], counsel for the former shareholders of Bounty Group
Holdings Limited, and (viii) [ ], counsel for ▇▇▇▇▇▇ ▇▇▇, in each case
in form and substance satisfactory to counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters, to the effect set forth in Exhibit B hereto. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law, the
Revised Uniform Limited Partnership Act and the Limited Liability Company
Act of the State of Delaware, as applicable, upon the opinions of counsel
satisfactory to the U.S. Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of the Selling Shareholders or
officers of the Company and its subsidiaries and certificates of public
officials.
(d) Opinion of Counsel for U.S. Underwriters. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters with respect to the matters set forth in clauses 1,
2, 4 (as to the [CARAT] third [CARAT] clause thereof), 5 (solely as to
preemptive or other similar rights arising by operation of law or under the
charter or by-laws of the Company), 8 through 10, inclusive, 11, 13 (solely
as to the information in the Prospectus under "Description of Capital
Stock -- Common Stock") and Exhibit A-2 hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions
other than the law of the State of New York, the federal law of the United
States and the General Corporation Law and the Revised Uniform Limited
Partnership Act of the State of Delaware, upon the opinions of counsel
satisfactory to the U.S. Representatives. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem
25
proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the U.S. Representatives shall have received a certificate of each of (x)
the Chairman of the Board, the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company and
(y) the President or a Vice President of the Partnership and of the chief
financial or chief accounting officer of the Partnership, in each case
dated as of Closing Time and to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company or the
Partnership, as the case may be, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At the Closing Time, the
U.S. Representatives shall have received a certificate of an Attorney-in-
Fact on behalf of each Selling Shareholder, dated as of Closing Time, to
the effect that (i) the representations and warranties of each Selling
Shareholder contained in Section 1(b), 1(c) and 1(d) hereof are true and
correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) each Selling Shareholder has
complied in all material respects with all agreements and all conditions on
its part to be performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the U.S. Representatives shall have received from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP a letter dated such date, in form and substance satisfactory
to the U.S. Representatives, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
26
(h) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(j) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule D hereto.
(l) Form W-9. At or prior to Closing Time, the U.S. Representatives
shall have received from each Selling Shareholder a properly completed and
executed United States Treasury Form W-9 or Form W-8, as applicable.
(m) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase
Agreement.
(n) Conditions to Purchase of U.S. Option Securities. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company, the Partnership, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Option Selling Shareholders contained
herein and the statements in any certificates furnished by any of them
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, and the U.S. Representatives shall have
received:
(i) Officers' Certificates. A certificate, dated such Date of
----------------------
Delivery, of each of (x) the Chairman of the Board, President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company and (y) the President or a Vice
President of the Partnership and of the chief financial or chief
accounting officer of the Partnership, in each case confirming that
the certificate delivered at the Closing Time
27
pursuant to Section 5(e) hereof remains true and correct as of such
Date of Delivery.
(ii) Certificate of the Option Selling Shareholders. A certificate,
----------------------------------------------
dated such Date of Delivery, of an Attorney-in-Fact on behalf of each
Option Selling Shareholder, in each case confirming that the
certificate delivered at Closing Time pursuant to Section 5(f) hereof
remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of ▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for the Company, in form and
substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iv) Opinion of Counsel for the Option Selling Shareholders. The
------------------------------------------------------
favorable opinion of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for the
Option Selling Shareholders, in form and substance satisfactory to
counsel for the U.S. Underwriters, dated such Date of Delivery,
relating to the U.S. Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the respective opinions
required by Section 5(c) hereof.
(v) Opinion of Counsel for U.S. Underwriters. The favorable
----------------------------------------
opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the U.S. Underwriters,
dated such Date of Delivery, relating to the U.S. Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect
as the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
-------------------------
in form and substance satisfactory to the U.S. Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the U.S. Representatives pursuant
to Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of
28
any of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company, the
Partnership and the Selling Shareholders in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the U.S. Representatives and counsel for the U.S. Underwriters.
(p) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after Closing Time, the obligations of
the several U.S. Underwriters to purchase the relevant Option Securities, may be
terminated by the U.S. Representatives by notice to the Company at any time at
or prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company, the Partnership,
C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, jointly and severally, agree to
indemnify and hold harmless each U.S. Underwriter, its directors, officers and
employees, and each person, if any, who controls any U.S. Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or
29
omission; provided that (subject to Section 6(e) hereof) any such
settlement is effected with the written consent of the Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that (a) this indemnity agreement shall not apply to any
-------- -------
loss, liability, claim, damage or expense (x) to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any U.S. Underwriter through the U.S. Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) and
(y) with respect to any preliminary prospectus to the extent that any such loss,
liability, claim, damage or expense of such U.S. Underwriter results solely from
the fact that such U.S. Underwriter sold Securities to a person as to whom the
Company shall establish that there was not sent by commercially reasonable
means, at or prior to the written confirmation of such sale, a copy of the U.S.
Prospectus in any case where such delivery is required by the 1933 Act, if the
Company has previously furnished copies thereof in sufficient quantity to such
U.S. Underwriter and the loss, claim, damage or liability of such U.S.
Underwriter results from an untrue statement or omission of a material fact
contained in the preliminary prospectus that was corrected in the U.S.
Prospectus, (b) C.E.'s aggregate liability under this Section 6 shall be limited
to an amount equal to C.E.'s net proceeds (after deducting the underwriting
discount, but before deducting expenses) ("C.E.'s Proceeds") from the sale of
C.E.'s Securities pursuant to this Agreement, (c) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ aggregate
liability under this Section 6 shall be limited to an amount equal to his
STRYPES Proceeds from the STRYPES transaction (after deducting his pro rata
share, calculated on the basis of his ownership interest in Endowment, of any
indemnification that Endowment has paid under section 6(a) of the purchase
agreement for the STRYPES transaction), and (d) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ aggregate
liability under this Section 6 shall be limited to an amount equal to (i) C.E.'s
Proceeds plus (ii) an amount equal to her STRYPES Proceeds from the STRYPES
transaction (after deducting her pro rata share, calculated on the basis of her
ownership interest in Endowment, of any indemnification that Endowment has paid
under section 6(a) of the purchase agreement for the STRYPES transaction).
30
In making a claim for indemnification under this Section 6 (other than
pursuant to clause (a)(iii) of this Section 6), or contribution under Section 7,
by the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
the indemnified parties may proceed against either (i) the Company and/or the
Partnership and C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or (ii) the Company
and/or the Partnership only, but may not proceed solely against C.E., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. In the event that the indemnified parties are
entitled to seek indemnity or contribution hereunder against any loss,
liability, claim, damage and expense incurred with respect to a final judgment
from a trial court, then, as a precondition to any indemnified party obtaining
indemnification or contribution from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, the indemnified parties shall first obtain a final judgment from a trial
court that such indemnified parties are entitled to indemnity or contribution
under this Agreement with respect to such loss, liability, claim, damage or
expense (the "Final Judgment") from the Company and/or the Partnership and C.E.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and shall seek to satisfy such Final
Judgment in full from the Company and/or the Partnership by making a written
demand upon the Company and/or the Partnership for such satisfaction. Only in
the event such Final Judgment shall remain unsatisfied in whole or in part 45
days following the date of receipt by the Company and/or the Partnership of such
demand shall any indemnified party have the right to take action to satisfy such
Final Judgment by making demand directly on C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (but only if and to the extent the Company and/or the Partnership have
not already satisfied such Final Judgment, whether by settlement, release or
otherwise). The indemnified parties may exercise this right to first seek to
obtain payment from the Company and/or the Partnership and thereafter obtain
payment from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ without regard to the
pursuit by any party of its rights to the appeal of such Final Judgment. The
indemnified parties shall, however, be relieved of their obligation to first
obtain a Final Judgment, seek to obtain payment from the Company and/or the
Partnership with respect to such Final Judgment or, having sought such payment,
to wait such 45 days after failure by the Company and/or the Partnership to
satisfy immediately any such Final Judgment if (i) the Company or the
Partnership files a petition for relief under the United States Bankruptcy Code
(the "Bankruptcy Code"), (ii) an order for relief is entered against the Company
or the Partnership in an involuntary case under the Bankruptcy Code, (iii) the
Company or the Partnership makes an assignment for the benefit of its creditors,
or (iv) any court orders or approves the appointment of a receiver or custodian
for the Company or the Partnership or a substantial portion of either of their
assets. The foregoing provisions of this paragraph are not intended to require
any indemnified party to obtain a Final Judgment against the Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ before obtaining
reimbursement of expenses pursuant to clause (a)(iii) of this Section 6.
However, the indemnified parties shall first seek to obtain such reimbursement
in full from the Company and/or the Partnership by making a written demand upon
the Company and/or the Partnership for such reimbursement. Only in the event
such
31
expenses shall remain unreimbursed in whole or in part 45 days following
the date of receipt by the Company and/or the Partnership of such demand shall
any indemnified party have the right to receive reimbursement of such expenses
from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by making written demand
directly on C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (but only if and to the
extent the Company and/or the Partnership have not already satisfied the demand
for reimbursement, whether by settlement, release or otherwise). The
indemnified parties shall, however, be relieved of their obligation to first
seek to obtain such reimbursement in full from the Company and/or the
Partnership or, having made written demand therefor, to wait such 45 days after
failure by the Company and/or the Partnership to reimburse immediately such
expenses if (i) the Company or the Partnership files a petition for relief under
the Bankruptcy Code, (ii) an order for relief is entered against the Company or
the Partnership in an involuntary case under the Bankruptcy Code, (iii) the
Company or the Partnership makes an assignment for the benefit of its creditors,
or (iv) any court orders or approves the appointment of a receiver or custodian
for the Company or the Partnership or a substantial portion of its assets.
(b) Indemnification of U.S. Underwriters by the Non-Executive Selling
Shareholders. Each Non-Executive Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each U.S. Underwriter, its
directors, officers and employees, and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, with respect to any untrue statement or omission, or
alleged untrue statement or omission, contained in the Registration Statement
(or any amendment thereto), including the Rule 430 Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectuses
(or any amendment or supplement thereto) in reliance upon and in conformity with
information furnished to the Company in writing by or on behalf of such Non-
Executive Selling Shareholder expressly for use therein; provided, however, that
-------- -------
(x) this indemnity agreement shall not apply to any loss, liability, claim,
damage or expense (i) to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto) and
(ii) with respect to any preliminary prospectus to the extent that any such
loss, liability, claim, damage or expense of such U.S. Underwriter results
solely from the fact that such U.S. Underwriter sold Securities to a person as
to whom the Company shall establish that there was not sent by commercially
reasonable means, at or prior to the written confirmation of such sale, a copy
of the U.S. Prospectus in any case where such delivery is required by the 1933
Act, if the Company has previously furnished copies thereof in
32
sufficient quantity to such U.S. Underwriter and the loss, claim, damage or
liability of such U.S. Underwriter results from an untrue statement or omission
of a material fact contained in the preliminary prospectus that was corrected
in the U.S.Prospectus, and (y) each Non-Executive Selling Shareholder's
aggregate liability under this Section 6(b) shall be limited to an amount equal
to the net proceeds (after deducting the underwriting discount, but before
deducting expenses) received by such Non-Executive Selling Shareholder from the
sale of Securities pursuant to this Agreement.
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary U.S. prospectus or the U.S.
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or (b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or
33
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested in accordance with this Agreement an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company, the Partnership,
C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders with
respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders on the one hand and the U.S. Underwriters on the other hand
from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling
Shareholders on the one hand and of the U.S. Underwriters on the other hand in
connection with the statements or omissions, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
34
The relative benefits received by the Company, the Partnership, C.E.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders on the one hand
and the U.S. Underwriters on the other hand in connection with the offering of
the U.S. Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (after deducting the underwriting
discount, but before deducting expenses) received by the Company, the
Partnership, C.E. and the Selling Shareholders (and, in the case of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, his STRYPES Proceeds and, in the case of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E.'s
Proceeds plus her STRYPES Proceeds) and the total underwriting discount received
by the U.S. Underwriters, in each case as set forth on the cover of the U.S.
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the U.S.
Securities as set forth on such cover.
The relative fault of the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or by the Selling Shareholders in writing or by the U.S. Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
the Selling Shareholders and the U.S. Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (x) no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission, and (y) no
Non-Executive Selling Shareholder shall be
35
required to contribute any amount in excess of such Non-Executive Selling
Shareholder's net proceeds (after deducting the underwriting discount, but
before deducting expenses) from the sale of Securities pursuant to this
Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or the Partnership or
the Selling Shareholders submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any U.S. Underwriter or controlling person, or by or on behalf of the Company
or any controlling person, the Partnership or the Selling Shareholders, and
shall survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets,
36
any outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
-----------------------------------------------
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Company to sell
the Option Securities to be purchased and sold on such Date of Delivery
shall terminate without liability on the part of any non-defaulting U.S.
Underwriter.
37
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the
---------------------------------------------------------
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
-------
of Delivery to sell and deliver the number of Securities that such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, the
remaining Selling Shareholders shall have the right to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number of Securities to be sold by all Selling Shareholders as set forth in
Schedule B hereto. In the event that a Selling Shareholder or Selling
Shareholders shall so fail, and the remaining Selling Shareholders do not
exercise such right to increase the number of Securities to be sold by them, and
the Company does not exercise the right hereby granted to sell the Securities
that the defaulting Selling Shareholders are obligated to sell hereunder, then
the U.S. Underwriters may, at the option of the U.S. Representatives, by notice
from the U.S. Representatives to the Company and the non-defaulting Selling
Shareholders, either (i) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (ii) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default. If the remaining Selling Shareholders exercise the right to sell the
Securities that such defaulting Selling Shareholder is obligated to sell
hereunder, as used herein the term "Selling Shareholder" shall not include such
defaulting Selling Shareholder for purposes of determining compliance with all
agreements and conditions to be performed by the Selling Shareholders hereunder.
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the U.S. Representatives, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectuses or in any other documents
or arrangements.
38
(b) If the Company shall fail at Closing Time to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain
-------- -------
in full force and effect. No action taken pursuant to this Section shall
relieve the Company or the Partnership from liability, if any, in respect of
such default.
SECTION 12. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations; notices to the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be directed to the Company at Two Democracy Center, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and notices to the Selling Shareholders shall be directed to
the Selling Shareholders care of the Company at the foregoing address, attention
of ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the U.S. Underwriters, the Company, the Partnership, ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the U.S.
Underwriters, the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and the Selling Shareholders and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the U.S. Underwriters, the Company, the
Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
39
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
40
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling
Shareholders in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇ COMMUNICATIONS, INC.
By___________________________
Name:
Title:
▇▇▇▇▇▇ COMMUNICATIONS, L.P.
By___________________________
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
For himself and as Attorney-in-Fact acting
on behalf of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By__________________________
As Attorney-in-Fact acting on behalf of
the Selling Shareholders named in
Schedule B hereto
41
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By ________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
42
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriter Securities
------------------------ ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ...........................
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co ..............................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ................
▇▇▇▇▇▇▇▇▇▇ Securities ............................
Bear, ▇▇▇▇▇▇▇ & Co. Inc. .........................
[other U.S. Underwriters]. .......................
Total ............................................ ===========
Sch A -1
SCHEDULE B
Maximum Number of
Number of Initial U.S. U.S. Option
Securities to be Sold Securities to be Sold
---------------------- ---------------------
▇▇▇▇▇▇ Communications, Inc.
C.E., LLC..................... - -
USN College Marketing, L.P....
▇▇▇▇▇ ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇............ -
▇▇▇▇▇▇ ▇▇▇.................... -
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇........ -
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.............. -
▇▇▇▇ Madoc ▇▇▇▇▇▇............. -
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇.... -
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇.......... -
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇... -
▇▇▇. ▇. ▇▇▇▇▇................. -
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇............. -
Mrs. B.R. ▇▇▇▇▇▇.............. -
▇▇▇. ▇.▇. ▇▇▇▇▇▇.............. -
Mrs. C.M. Kitcatt............. -
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Boss..... -
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇............... -
ATB 1995 Settlement........... -
▇▇▇. ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇......... -
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇.............. -
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.............. -
▇. ▇▇▇▇▇ Settlement........... -
3i Group plc.................. -
NatWest Ventures [CARAT]
Limited..................... -
▇. ▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇▇................... -
A. Styler..................... -
▇. ▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇▇▇▇.................. -
▇. ▇▇▇........................ -
▇. ▇▇▇▇▇▇..................... -
Sch B-1
Maximum Number of
Number of Initial U.S. U.S. Option
Securities to be Sold Securities to be Sold
--------------------- ---------------------
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇.................... -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇▇▇▇▇.............. -
▇. ▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇.................. -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇▇▇▇................. -
▇. ▇▇▇▇▇▇▇▇▇............... -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇▇▇▇▇................ -
▇. ▇▇▇▇.................... -
▇. ▇▇▇▇▇................... -
▇. ▇▇▇▇▇▇▇▇▇............... -
▇. ▇▇▇▇▇▇▇▇................ -
Sch B-2
Maximum Number of
Number of Initial U.S. U.S. Option
Securities to be Sold Securities to be Sold
--------------------- ---------------------
▇▇▇▇▇▇ ▇▇▇▇▇......................... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇....................... -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇..................... -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Charitable.......... -
Foundation......................... -
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇..................... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇............ -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Interest in......... -
Possession Trust -1................ -
Second Brown ▇▇▇▇▇▇▇ Fund............ -
Second Brown ▇▇▇▇▇▇▇ Fund II......... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇.............. -
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement......... -
of 23/6/97......................... -
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ No. 2.............. -
Settlement of 27/6/97.............. -
Emmadin Trust........................ -
▇▇▇▇ D'Inverno Settlement............ -
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇................... -
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇.................. -
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇.................. -
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement........ -
Bounty Group Employee Share.......... -
Scheme Trustee Limited............. -
▇▇▇▇▇▇ ▇▇▇▇▇▇........................ -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇.............. -
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇................... -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇............ -
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇............... -
---------- -----------
Total................................ ========== ===========
Sch B-3
SCHEDULE C
▇▇▇▇▇▇ COMMUNICATIONS, INC.
[ ] Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[ ].
2. The purchase price per share for the U.S. Securities to be paid by
the several U.S. Underwriters shall be $[ ], being an amount
equal to the initial public offering price set forth above less $[ ]
per share.
Sch C-1
SCHEDULE ▇
▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇▇▇ Marketing Services, Inc.
▇▇▇▇▇▇ Communications, L.P.
C.E., LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
USN College Marketing, L.P.
MBZ Trust of 1996
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Sch D-1
Exhibit A-1
FORM OF OPINION OF ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement.
3. The Company is in good standing in each jurisdiction that issued a
Company Good Standing Certificate.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to the U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectuses or pursuant to the exercise of
convertible securities or options referred to in the Prospectuses);
the shares of issued and outstanding capital stock of the Company
outstanding prior to the issuance of the Company Shares have been duly
authorized and validly issued and are fully paid and non-assessable
and no holder of the Company Shares is or will be subject to personal
liability by reason of being such a holder; the Company Shares have
been duly authorized and, when issued and delivered to the U.S.
Underwriters and the International Managers in accordance with the
terms of the U.S. Purchase Agreement and the International Purchase
Agreement, will be validly issued, fully paid and nonassessable; and
none of the outstanding shares of capital stock of the Company was
issued in violation of any preemptive rights under the General
Corporation Law of the State of Delaware.
5. To our knowledge, when issued and delivered to the U.S. Underwriters
and the International Managers against payment therefor in accordance
with the terms of the U.S. Purchase Agreement and the International
Purchase Agreement, the issuance and sale of the Company Shares by the
Company will not be subject to any preemptive or other similar
contractual rights that would entitle any person to acquire any of the
Company Shares upon the issuance and sale by the Company.
A-1-1
6. Each Subsidiary is validly existing as a corporation or partnership,
as the case may be, in good standing under the laws of the
jurisdiction of incorporation, has corporate or partnership, as the
case may be, power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation or
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction that issued a Subsidiary Good Standing
Certificate.
7. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and, based upon our review of the capital stock records of
the Subsidiaries, is owned by the Company directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. All of the partnership
interests are authorized under the Partnership Agreement and, based
upon our review of the Partnership's records, are owned by ▇▇▇▇▇▇
Marketing Services, Inc. as the corporate general partner and by the
Company as the sole limited partner, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. None
of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such subsidiary.
8. The U.S. Purchase Agreement and the International Purchase Agreement
have been duly authorized, executed and delivered by the Company and
the Partnership. The performance by the Company and the Partnership of
their respective obligations under the U.S. Purchase Agreement and the
International Purchase Agreement and the consummation of the
transactions contemplated therein and compliance by the Company and
the Partnership with their obligations under the U.S. Purchase
Agreement and the International Purchase Agreement have been duly
authorized by the Company and the Partnership, respectively.
9. The Registration Statement was declared effective under the 1933 Act
on September [_], 1997, the U.S. Prospectus was filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations on
September [_], 1997 and, to our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
10. The Registration Statement and the Prospectuses as of their respective
effective or issue dates (except for the financial statements and the
notes
A-1-2
thereto and the supporting schedules and other financial data included
therein, as to which we express no opinion) comply as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
11. The form of certificate used to evidence the Common Stock complies in all
material respects with the requirements of the General Corporation Law of
the State of Delaware, any applicable requirements of the Certificate of
Incorporation and Bylaws of the Company and the requirements of the New
York Stock Exchange.
12. To our knowledge, except as set forth in the Prospectuses, there is not
pending any action, suit, proceeding, inquiry or investigation to which the
Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets of
the Company and its subsidiaries considered as one enterprise, or the
consummation of the transactions contemplated in the U.S. Purchase
Agreement and the International Purchase Agreement or the Exchange
Agreement or the performance by the Company or the Partnership of their
respective obligations thereunder.
13. The information in the Prospectuses under "Risk Factors -Government
Regulation," "Risk Factors - Shares Eligible For Future Sale, STRYPES
Offering and Registration Rights," "Risk Factors - Effect of Certain
Charter and Bylaw Provisions," "Business - Government Regulation,"
"Business - Properties," "Business - Legal Proceedings," "Description of
Capital Stock," "Shares Eligible for Future Resale," and "Considerations
for Non-United States Holders" and in the Registration Statement under Item
14 and Item 15, to the extent that it describes matters of law, summaries
of legal matters, the Company's Certificate of Incorporation or Bylaws, or
legal proceedings, or legal conclusions, has been reviewed by us and is
correct in all material respects.
14. To our knowledge, there are no statutes or regulations that are required to
be described in the Prospectuses that are not described as required.
15. The descriptions in the Prospectuses of contracts and other legal documents
to which the Company or any subsidiary is a party are accurate in all
material respects. To our knowledge, there are no franchises,
A-1-3
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Prospectuses or
to be filed as exhibits thereto other than those described or referred to
in the Prospectuses or filed as exhibits to the Registration Statement, and
the descriptions thereof or references thereto are accurate in all material
respects.
16. To our knowledge, neither the Company nor any Subsidiary is in violation of
its charter or bylaws, and the Partnership is not in violation of its
Partnership Agreement, and no default by the Company or any Subsidiary
exists in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument that
is described or referred to in the Registration Statement or the
Prospectuses or filed as an exhibit to the Registration Statement.
17. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any domestic court or
governmental authority or agency (other than under the 1933 Act and the
1933 Act Regulations and the Securities Exchange Act of 1934, which have
been obtained, or as may be required under the securities or blue sky laws
of the various states, as to which we express no opinion) is necessary or
required in connection with the due authorization, execution and delivery
of the U.S. Purchase Agreement and the International Purchase Agreement by
the Company and the Partnership, or for the offering, issuance, sale or
delivery by the Company of the Company Shares to the U.S. Underwriters and
the International Managers in accordance with the U.S. Purchase Agreement
and the International Purchase Agreement.
18. The execution, delivery and performance of the U.S. Purchase Agreement and
the International Purchase Agreement by the Company and the Partnership,
and the consummation of the transactions contemplated therein by the
Company and the Partnership, and the compliance by the Company and the
Partnership with their respective obligations under the U.S. Purchase
Agreement and the International Purchase Agreement, do not and will not,
whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreements) under or, to our
knowledge, result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Subsidiary
under any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which the
A-1-4
Company or any Subsidiary is a party or by which any of them or their
properties is or may be bound, or to which any of them or their properties
may be subject, that is filed as an exhibit to the Registration Statement
or which is otherwise known to us, except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect, nor will such action result in any violation of the
provisions of the charter or bylaws or Partnership Agreement, as the case
may be, of the Company or any Subsidiary or any applicable law, statute,
rule, regulation (other than the blue sky or securities laws or regulations
of the various states, as to which we express no opinion), judgment, order,
writ or decree, known to us, of any government, government instrumentality
or court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective properties, assets or operations.
19. To our knowledge, other than as described in the Prospectuses, there are no
persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act (other than rights which have
been waived or satisfied).
20. The Company is not and immediately after receiving the proceeds from the
sale of the Company Shares, will not be an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
A-1-5
Exhibit A-2
Because the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or accounting matters and
because of the wholly or partially non-legal character of many of the statements
contained in the Registration Statement or the Prospectuses, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectuses and we make no representation that we have independently verified
the accuracy, completeness or fairness of such statements. Without limiting the
foregoing, we assume no responsibility for, and have not independently verified,
the accuracy, completeness or fairness of the financial statements and the notes
thereto and the schedules and other financial data included in the Registration
Statement and we have not examined the accounting or financial records from
which such financial statements, notes, schedules and data are derived.
However, on the basis of our participation, as counsel to the Company,
with representatives of the Company and its subsidiaries in the preparation of
the Registration Statement and the Prospectuses, and our participation with
representatives of the Company, its independent public accountants and the
Underwriters at meetings in which the contents of the Registration Statement and
the Prospectuses and related matters were discussed and the examination by us of
such corporate records, statutes, documents and questions of law as we deemed
necessary, but without independent verification by us of the accuracy,
completeness and fairness of the statements contained in the Registration
Statement and the Prospectuses, and without commenting as to the financial
statements and the notes thereto and the schedules and other financial data
included therein, nothing has come to our attention that would lead us to
believe that the Registration Statement, at the time it became effective under
the Securities Act, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectuses, or any amendment or
supplement thereto (except for the financial statements and the notes thereto
and the schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), as of its date and as of the
Closing Time, contained or contains any untrue statement of material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-2-1
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
1. No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign, [CARAT]
other than the issuance of the order of the Commission declaring
the Registration Statement effective and such authorizations,
approvals or consents as may be necessary under state securities
laws [CARAT] (as to which we need express no opinion), is
necessary or required to be obtained by the Selling Shareholders
for the performance by each Selling Shareholder of its
obligations under the U.S. Purchase Agreement and the
International Purchase Agreement or in the Custody Agreement and
Power of Attorney, or in connection with the offer, sale or
delivery of the Securities.
2. Each Custody Agreement and Power of Attorney has been duly
executed and delivered by the respective Selling Shareholder
named therein and constitutes the legal, valid and binding
agreement of such Selling Shareholder, enforceable in accordance
with its terms, subject to the qualification that the
enforceability of such Selling Shareholders' obligations under
the Custody Agreement and Power of Attorney may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors'
rights generally, and by general equitable principles (whether
applied by a court of law or equity).
3. The U.S. Purchase Agreement and the International Purchase
Agreement have been duly authorized, executed and delivered by or
on behalf of each Selling Shareholder.
4. American Stock Transfer & Trust Company has been duly authorized
by the Selling Shareholders to deliver the Securities on behalf
of the Selling Shareholders in accordance with the terms of the
U.S. Purchase Agreement and the International Purchase Agreement
and the Custody Agreement and Power of Attorney.
B-1
5. The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement and the Custody
Agreement and Power of Attorney and the sale and delivery of the
Securities and the consummation of the transactions contemplated
in the U.S. Purchase Agreement and the International Purchase
Agreement and in the Registration Statement and compliance by the
Selling Shareholders with their obligations under the U.S.
Purchase Agreement and the International Purchase Agreement have
been duly authorized by all necessary action on the part of such
Selling Shareholders and, to the best of our knowledge, (i) do
not and will not, whether with or without the giving of notice or
passage of time or both, result in the creation or imposition of
any tax, lien, charge or encumbrance upon the Securities to be
sold by such Selling Shareholder nor (ii) will such action result
in any violation of the provisions of the charter or by-laws of
the Selling Shareholders, if applicable, or any law,
administrative regulation, judgment or order of any governmental
agency or body or any administrative or court decree having
jurisdiction over such Selling Shareholder or any of its
properties.
6. [CARAT] Each Selling Shareholder is the sole registered owner of
the Securities to be sold by such Selling Shareholder pursuant to
the U.S. Purchase Agreement [CARAT] and the International
Purchase Agreement and has full right, power and authority to
sell, transfer and deliver such Securities pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement. Upon
delivery of such Securities, such Selling Shareholder will
transfer to the Underwriters who have purchased such Securities
pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement (without notice of any adverse claim of such
Selling Shareholder and who are otherwise bona fide purchasers
for purposes of the Uniform Commercial Code) good and valid title
to such Securities, free and clear of any pledge, lien, security
interest, charge, claim, equity or encumbrance of any kind.
B-2
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
SHAREHOLDERS PURSUANT TO SECTION 5(k)
September [_], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
as U.S. Representatives of the several
U.S. Underwriters to be named in the
within-mentioned U.S. Purchase Agreement
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Proposed Public Offering by ▇▇▇▇▇▇ Communications, Inc.
-------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director]* of
▇▇▇▇▇▇ Communications, Inc., a Delaware corporation (the "Company"), understands
that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇▇▇▇▇ Securities and Bear, ▇▇▇▇▇▇▇ & Co. Inc. propose to enter into a U.S.
Purchase Agreement (the "U.S. Purchase Agreement") with the Company and the
other parties named therein providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $.001 per share (the
"Common Stock"). In recognition of the benefit that such an offering will
confer upon the undersigned as a stockholder [and an officer and/or director]*
of the Company, and for other good and valuable consideration, the
______________________________
* Delete or revise bracketed language as approprite.
C-1
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
with each underwriter to be named in the U.S. Purchase Agreement that, during a
period of 90 days from the date of the U.S. Purchase Agreement, the undersigned
will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or
indirectly, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant for the sale of, or otherwise dispose of or transfer any shares
of the Company's Common Stock or any securities convertible into or exchangeable
or exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise.
[Notwithstanding the foregoing, the undersigned may, at any time after 30
days from the date of the Closing Time (as defined in the U.S. Purchase
Agreement), pledge as security for borrowed money [up to 50% of]* the shares
of Common Stock then owned by the undersigned to any commercial banking
institution that is a member of the Federal Reserve System or any institutional
lender that makes loans secured by margin securities in the ordinary course of
business having combined capital and surplus in excess of $500,000,000 (a
"Pledgee") as long as such Pledgee shall have agreed in writing to be bound by
the obligations and restrictions applicable to the Common Stock under Section
1(c) of the U.S. Purchase Agreement and the U.S. Representatives shall have
received an agreement substantially in the form of Exhibit D to the U.S.
Purchase Agreement signed by such Pledgee.]**
Very truly yours,
Signature:_________________________
Print Name:________________________
______________________________
* Include in the case of lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
* Include in the case of lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and USN College Marketing, L.P. or its partners.
C-2
Exhibit D
FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 1(c)
[month and day], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
as U.S. Representatives of the several
U.S. Underwriters named in the
within-mentioned U.S. Purchase Agreement
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Re: Public Offering by ▇▇▇▇▇▇ Communications, Inc.
----------------------------------------------
Dear Sirs:
The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of ▇▇▇▇▇▇ Communications, Inc., a Delaware
corporation (the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇
Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇▇▇▇ Securities and Bear,
▇▇▇▇▇▇▇ & Co. Inc. have entered into a U.S. Purchase Agreement, dated September
[_], 1997 (the "U.S. Purchase Agreement"), with the Company and the other
parties named therein providing for the public offering of shares of the
Company's Common Stock. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter named in the U.S. Purchase Agreement that, during a period of 90
days from the date of the U.S. Purchase Agreement, the undersigned will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
D-1
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any Pledged Shares or any
securities convertible into or exchangeable or exercisable for any Pledged
Shares, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of any
Pledged Shares, whether any such swap or transaction is to be settled by
delivery of any Pledged Shares or other securities, in cash or otherwise.
Very truly yours,
[name of Pledgee]
By:______________________
Name:
Title:
D-2