EXHIBIT 1.2
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______________________________________________________________________________
TUESDAY MORNING CORPORATION
(a Delaware corporation)
_____ Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
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Dated: _______, 1999
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
Page
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INTERNATIONAL PURCHASE AGREEMENT..................................................................... 1
SECTION 1. Representations and Warranties....................................................... 4
(a) Representations and Warranties by the Company........................................ 4
(i) Compliance with Registration Requirements.................................. 4
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(ii) Independent Accountants.................................................... 6
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(iii) Financial Statements....................................................... 6
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(iv) No Material Adverse Change in Business..................................... 6
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(v) Good Standing of the Company............................................... 7
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(vi) Good Standing of Subsidiaries.............................................. 7
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(vii) Capitalization............................................................. 7
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(viii) Authorization of Agreement................................................. 8
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(ix) Authorization and Description of Securities................................ 8
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(x) Absence of Defaults and Conflicts.......................................... 8
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(xi) Absence of Labor Dispute................................................... 9
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(xii) Absence of Proceedings..................................................... 9
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(xiii) Accuracy of Exhibits....................................................... 9
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(xiv) Possession of Intellectual Property........................................ 9
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(xv) Absence of Further Requirements............................................ 10
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(xvi) Possession of Licenses and Permits......................................... 10
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(xvii) Title to Property.......................................................... 11
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(xviii) Compliance with Cuba Act................................................... 11
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(xix) Investment Company Act..................................................... 11
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(xx) Environmental Laws......................................................... 11
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(xxi) Registration Rights........................................................ 12
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(b) Representations and Warranties by the Selling Stockholders............................ __
(i) Accurate Disclosure........................................................ __
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(ii) Authorization of Agreements................................................ __
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(iii) Good and Marketable Title.................................................. __
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(iv) Due Execution of Powers of Attorney and Custody Agreements................. __
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(v) Absence of Manipulation.................................................... __
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(vi) Absence of Further Requirements............................................ __
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(vii) Restriction on Sale of Securities.......................................... __
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(viii) Certificates Suitable for Transfer......................................... __
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(ix) No Association with NASD................................................... __
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(c) Officer's Certificates................................................................ 12
SECTION 2. Sale and Delivery to International Managers; Closing.................................. 12
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(a) Initial Securities.................................................................... 12
(b) Option Securities..................................................................... 12
(c) Payment............................................................................... 13
(d) Denominations; Registration........................................................... 14
SECTION 3. Covenants of the Company.............................................................. 14
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(a) Compliance with Securities Regulations and Commission Requests........................ 14
(b) Filing of Amendments................................................................... 15
(c) Delivery of Registration Statements.................................................... 15
(d) Delivery of Prospectuses............................................................... 15
(e) Continued Compliance with Securities Laws.............................................. 16
(f) Blue Sky Qualifications................................................................ 16
(g) Rule 158............................................................................... 16
(h) Use of Proceeds........................................................................ 17
(i) Listing................................................................................ 17
(j) Restriction on Sale of Securities...................................................... 17
(k) Reporting Requirements................................................................. 17
SECTION 4. Payment of Expenses.................................................................... 18
(a) Expenses............................................................................... 18
(b) Expenses of the Selling Stockholders................................................... __
(c) Termination of Agreement............................................................... 19
(d) Allocation of Expenses................................................................. __
SECTION 5. Conditions of International Managers' Obligations...................................... 19
(a) Effectiveness of Registration Statement................................................ 19
(b) Opinion of Counsel for Company......................................................... 20
(c) Opinion of Counsel for the Selling Stockholders........................................ 20
(d) Opinion of Counsel for International Managers.......................................... 20
(e) Officers' Certificate.................................................................. 20
(f) Certificate of Selling Stockholders.................................................... 20
(g) Accountants' Comfort Letters........................................................... 21
(h) Bring-down Comfort Letters............................................................. 21
(i) Approval of Listing.................................................................... 21
(j) No Objection........................................................................... 22
(k) Lock-up Agreements..................................................................... 22
(l) Purchase of Initial International Securities........................................... 22
(m) Conditions to Purchase of International Option Securities.............................. 22
(n) Additional Documents................................................................... 23
(o) Termination of Agreement............................................................... 23
SECTION 6. Indemnification........................................................................ 23
(a) Indemnification of International Managers.............................................. 23
(b) Indemnification of Company, Directors and Officers and Selling Stockholders............ 25
(c) Actions against Parties; Notification.................................................. 26
(d) Settlement without Consent if Failure to Reimburse..................................... 27
(e) [Other Agreements with Respect to Indemnification]..................................... 27
SECTION 7. Contribution........................................................................... 27
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......................... 29
SECTION 9. Termination of Agreement............................................................... 29
(a) Termination; General................................................................... 29
(b) Liabilities............................................................................. 29
SECTION 10. Default by One or More of the International Managers................................... 30
SECTION 11. Default by One or More of the Selling Stockholders or the
Company................................................................................ 30
SECTION 12. Notices................................................................................ 30
SECTION 13. Parties................................................................................ 30
SECTION 14. Governing Law and Time................................................................. 31
SECTION 15. Effect of Headings..................................................................... 31
SCHEDULES
Schedule A - List of International
Managers.................................................................................... Sch A-1
Schedule B - Number of International Securities to be Sold by the
Company and the Selling Stockholders......................................................... Sch B-1
Schedule C - Pricing Information............................................................. Sch C-1
Schedule D - List of Persons and Entities 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 Stockholders' Counsel................................. B-1
Exhibit C - Form of Lock-up Letter........................................................... C-1
TUESDAY MORNING CORPORATION
(a Delaware corporation)
_____ Shares of Common Stock
(Par Value $.01 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
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_____, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
as Lead Managers of the several International Managers
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
Tuesday Morning Corporation, a Delaware corporation (the "Company"),
and the selling stockholders listed in Schedule B hereto (the "Selling
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Stockholders") confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇
International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other international underwriters
named in Schedule A hereto (collectively, the "International Managers," which
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term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
are acting as representatives (in such capacity, the "Lead Managers"), with
respect to (i) the sale by the Company and the Selling Stockholders, acting
severally and not jointly, and the purchase by the International Managers,
acting severally and not jointly, of the respective numbers of shares of Common
Stock, par value $.01 per share, of the Company ("Common Stock") set forth in
said Schedule A and Schedule B, and (ii) the grant by the Selling Stockholders
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to the International Managers, 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 International Securities") to be purchased
by the International Managers and all or any part of the _____ shares of Common
Stock subject to the option described in Section 2(b) hereof (the "International
Option Securities") are hereinafter called, collectively, the "International
Securities."
It is understood that the Company and the Selling Stockholders are
concurrently entering into an agreement dated the date hereof (the "U.S.
Purchase Agreement") providing for the offering by the Company and the Selling
Stockholders, acting severally and not jointly, of an aggregate of _____ shares
of Common Stock (the "Initial U.S. Securities") through arrangements with
certain underwriters in the United States and Canada (the "U.S. Underwriters")
for which ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company, L.L.C. are acting as representatives (the "U.S. Representatives") and
the grant by the Selling Stockholders
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to the U.S. Underwriters, acting severally and not jointly, of an option to
purchase all or any part of the U.S. Underwriters' pro rata portion of up to
_____ additional shares of Common Stock solely to cover overallotments, if any
(the "U.S. Option Securities" and, together with the International Option
Securities, the "Option Securities"). The Initial U.S. Securities and the U.S.
Option Securities are hereinafter called the "U.S. Securities." It is understood
that the Company and the Selling Stockholders are not obligated to sell, and the
International Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters," the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities," and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities."
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 ▇▇▇▇▇▇▇ Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in such capacity, the
"Global Coordinator").
The Company and the Selling Stockholders understand that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-74365) covering the
registration of the Securities under the Securities Act of 1933 (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 International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. 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 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 International Prospectus and Form of U.S
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
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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 International Prospectus and the final Form of U.S. Prospectus
in the forms first furnished to the Underwriters for use in connection with the
offering of the Securities are herein called the "International Prospectus" and
the "U.S. Prospectus," respectively, and collectively, the "Prospectuses." If
Rule 434 is relied on, the terms "International Prospectus" and "U.S.
Prospectus" shall refer to the preliminary International Prospectus dated _____,
1999 and preliminary U.S. Prospectus dated ____, 1999, 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 International Prospectus, the U.S. 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 ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
represents and warrants to each International Manager 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 International Manager, as follows:
(i) Compliance with Registration Requirements. Each of the
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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, 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 International 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 International 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
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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 International Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
International Manager through the Lead Managers expressly for use in the
Registration Statement or the International 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.
(ii) Independent Accountants. The accountants who certified the
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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
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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.
(iv) No Material Adverse Change in Business. Since the respective
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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) except for regular
quarterly dividends on the Company's preferred stock in amounts per share that
are consistent with past
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practice, there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly organized
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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 "significant subsidiary" of
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the Company (as such term is defined in Rule 1-02 of Regulation S-X) has been
duly organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate 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
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; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, 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. The only
subsidiaries of the Company are the subsidiaries listed on Exhibit 21.1 to the
Registration Statement.
(vii) Capitalization. The authorized, issued and outstanding capital
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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 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 Stockholders,
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
Stockholders, was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(viii) Authorization of Agreement. This Agreement and the U.S.
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Purchase Agreement have been duly authorized, executed and delivered by the
Company.
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(ix) Authorization and Description of Securities. The Securities to be
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purchased by the International Managers and the U.S. Underwriters from the
Company have been duly authorized for issuance and sale to the International
Managers pursuant to this Agreement and the U.S. Underwriters pursuant to the
U.S. Purchase Agreement, respectively, and, when issued and delivered by the
Company pursuant to this Agreement and the U.S. Purchase Agreement,
respectively, against payment of the consideration set forth herein and in the
U.S. 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
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its subsidiaries is in violation of its charter or by-laws 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 or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any subsidiary 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 U.S. Purchase Agreement and the
consummation of the transactions contemplated in this Agreement, the U.S.
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 with its obligations under this Agreement and the
U.S. Purchase Agreement have been duly authorized by all necessary corporate
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 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
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the Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance
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by the employees of any of its or any subsidiary's principal suppliers,
manufacturers, customers or contractors, which, in either case, may reasonably
be expected to result in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
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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,
threatened, against or affecting the Company or any 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 U.S. Purchase Agreement or the
performance by the Company 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 property 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
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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 its
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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, except for
such failures that individually or in the aggregate would not result in a
Material Adverse Effect, and neither the Company nor any of its subsidiaries 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 its 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,
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approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities under this Agreement and the U.S.
Purchase Agreement or the consummation of the transactions contemplated by this
Agreement and the U.S. Purchase Agreement, except such as have been 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.
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(xvi) Possession of Licenses and Permits. The Company and its
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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 its 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 its 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 its subsidiaries have good and
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marketable title to all real property owned by the Company and its 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
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 its 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 any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xviii) Compliance with Cuba Act. The Company has complied with, and is
------------------------
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder (collectively,
the "Cuba Act") or is exempt therefrom.
(xix) 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 such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").
(xx) 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 its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule
8
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 its 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 its
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 its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxi) Registration Rights. Except as described in the Prospectuses,
-------------------
there are no persons with registration rights or other similar rights, except as
have been waived or satisfied, to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the 1933
Act.
(b) Representations and Warranties by the Selling Stockholders. Each
----------------------------------------------------------
Selling Stockholder severally represents and warrants to each International
Manager as of the date hereof, as of the Closing Time, and, if the Selling
Stockholder is selling Option Securities on a Date of Delivery, as of each such
Date of Delivery, and agrees with each International Manager, as follows:
(i) Accurate Disclosure. Such Selling Stockholder has reviewed
-------------------
and is familiar with the Registration Statement, any Rule 462(b)
----------------------
Registration Statement and the Prospectuses and any amendments and
supplements to any of the foregoing and none of the foregoing includes any
untrue statement of a material fact with respect to such Selling
Stockholder or omits to state a material fact with respect to such Selling
Stockholder necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; such
Selling Stockholder is not prompted to sell the Securities to be sold by
such Selling Stockholder hereunder by any information concerning the
Company or any subsidiary of the Company which is not set forth in the
Prospectuses .
(ii) Authorization of Agreements. Each Selling Stockholder has
---------------------------
all necessary right, power and authority to enter into this Agreement, the
U.S. Purchase Agreement and a Power of Attorney and Custody Agreement for
each of this Agreement and the U.S. Purchase Agreement (collectively, the
"Powers of Attorney and Custody Agreements") and to sell, transfer and
deliver the Securities to be sold by such Selling
9
Stockholder hereunder or under the U.S. Purchase Agreement. The execution
and delivery of this Agreement, the U.S. Purchase Agreement and the Powers
of Attorney and Custody Agreements and the sale and delivery of the
Securities to be sold by such Selling Stockholder and the consummation of
the transactions contemplated herein and therein and compliance by such
Selling Stockholder with its obligations hereunder and thereunder have been
duly authorized by such Selling Stockholder 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 under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Stockholder pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
license, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder may be bound,
or to which any of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument of such Selling
Stockholder, if applicable, or 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 Stockholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Stockholder has and will
-------------------------
at the Closing Time and, if any Option Securities are purchased, on the Date of
Delivery have good and marketable title to the Securities to be sold by such
Selling Stockholder hereunder and under the U.S. Purchase Agreement, 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 U.S.
Purchase Agreement; and upon delivery of such Securities and payment of the
purchase price therefor as contemplated herein and in the U.S. Purchase
Agreement, assuming each such Underwriter has no notice of any adverse claim,
each of the Underwriters will receive good and marketable title to the
Securities purchased by it from such Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or encumbrance
of any kind.
(iv) Due Execution of Powers of Attorney and Custody Agreements. Such
Selling Stockholder has duly executed and delivered, in the form heretofore
furnished to the Global Coordinator, the Powers of Attorney and Custody
Agreements with ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, as attorney-in-fact (the
"Attorney-in-Fact") and ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇, as custodian (the
"Custodian"); the Custodian is authorized to deliver the Securities to be sold
by such Selling Stockholder hereunder and under the U.S. Purchase Agreement and
to accept payment therefor; and the Attorney-in-Fact is authorized (A) to
execute and deliver this Agreement, the U.S. Purchase Agreement and the
certificates referred to in Section 5(f) of this Agreement and the U.S. Purchase
Agreement, respectively, or that may be required pursuant to Sections 5(m) and
5(n) of this Agreement and the U.S. Purchase Agreement, respectively, on behalf
of such Selling Stockholder, (B) to sell, assign and transfer to the
Underwriters the Securities to be sold by such Selling Stockholder hereunder and
under the U.S. Purchase Agreement, (C) to determine the purchase price to be
paid by the Underwriters to such Selling Stockholder, as provided in Section
2(a)hereof and of the U.S. Purchase Agreement, (D) to authorize the delivery of
the Securities to be sold by such Selling Stockholder
10
hereunder and under the U.S. Purchase Agreement, (E) to accept payment therefor,
and (F) otherwise to act on behalf of such Selling Stockholder in connection
with this Agreement and the U.S. Purchase Agreement.
(v) Absence of Manipulation. Such Selling Stockholder 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.
(vi) Absence of Further Requirements. 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 for the performance by such Selling Stockholder of its obligations
hereunder, under the U.S. Purchase Agreement or in the Powers of Attorney and
Custody Agreements, or in connection with the sale and delivery of the
Securities hereunder or thereunder or the consummation of the transactions
contemplated by this Agreement and the U.S. 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.
(vii) Restriction on Sale of Securities. During a period of 180 days
from the date of the Prospectuses, such Selling Stockholder will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (A) 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 (B) 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 (A) or (B) 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 the Securities to be sold hereunder and under the U.S. Purchase Agreement.
(viii) Certificates Suitable for Transfer. Certificates for all of the
----------------------------------
Securities to be sold by such Selling Stockholder pursuant to this Agreement and
the U.S. Purchase Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in blank with
signatures guaranteed, have been placed in custody with the Custodian with
irrevocable conditional instructions to deliver such Securities to the
Underwriters pursuant to this Agreement and the U.S. Purchase Agreement, as the
case may be.
(ix) No Association with NASD. Neither such Selling Stockholder nor
any affiliates thereof 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 the Conduct Rules of
the National Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
11
(c) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Global Coordinator, the
Lead Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company to each International Manager as to
the matters covered thereby ; and any certificate signed by or on behalf of the
Selling Stockholders as such and delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers pursuant to the terms of
this Agreement shall be deemed a representation and warranty by such Selling
Stockholder to the International Managers as to the matters covered thereby.
SECTION 2. Sale and Delivery to International Managers; 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 each Selling Stockholder, severally and not jointly,
agrees to sell to each International Manager, severally and not jointly, and
each International Manager, severally and not jointly, agrees to purchase from
the Company and each Selling Stockholder, at the price per share set forth in
Schedule C, the number of Initial International Securities set forth in Schedule
----------
A opposite the name of such International Manager, plus any additional number of
Initial International Securities which such International Manager may become
obligated to purchase pursuant to the provisions of Section 10 hereof. The
number of Initial U.S. Securities to be purchased by each International Manager
from the Company and each Selling Stockholder shall be in the same proportion to
the number of Initial International Securities set forth in Schedule B opposite
----------
the name of the Company or such Selling Stockholder, as the case may be, as the
number of Initial International Securities being purchased by each International
Manager bears to the total number of Initial International Securities to be sold
hereunder, subject, in each case, to such adjustments among the International
Managers as the Global Coordinator in its 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 Selling Stockholders, acting severally and not
jointly, hereby grant an option to the International Managers, 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 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 International Securities upon notice by the Global Coordinator to
the Selling Stockholders setting forth the number of International Option
Securities as to which the several International Managers are then exercising
the option and the time and date of payment and delivery for such International
Option Securities. Any such time and date of delivery for the International
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
International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities, subject in each case to such
12
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares. The number of International Option
Securities to be purchased by each International Manager from each Selling
Stockholder shall be in the same proportion to the number of International
Option Securities set forth in Schedule B opposite the name of such Selling
Stockholder as the number of Initial International Securities purchased by each
International Manager bears to the total number of Initial International
Securities sold hereunder, subject, in each case, to such adjustments among the
International Managers as the Global Coordinator in its sole discretion shall
make to eliminate any sales or purchases of fractional securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇
& ▇▇▇▇▇▇ L.L.P., 3700 ▇▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, 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), 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 International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International 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 Selling Stockholders.
Payment shall be made to the Company and the Selling Stockholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Stockholder's Powers of
Attorney and Custody Agreements, as the case may be, against delivery to the
Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the Initial International Securities and the International
Option Securities, if any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the Initial
International Securities or the International Option Securities, if any, to be
purchased by any International Manager 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 International Manager from its obligations
hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers 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
International Securities and the International Option Securities, if any,
13
will be made available for examination and packaging by the Lead Managers 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. The Company covenants with each
---------
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), 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.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its 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 International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Managers,
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 Lead Managers, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers. The copies of the Registration Statement and each amendment thereto
furnished to the International Managers 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
International Manager, without charge, as many copies of each preliminary
prospectus as such
14
International Manager reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each International Manager, without charge, during the period when
the International Prospectus is required to be delivered under the 1933 Act or
the Securities Exchange Act of 1934 (the "1934 Act"), such number of copies of
the International Prospectus (as amended or supplemented) as such International
Manager may reasonably request. The International Prospectus and any amendments
or supplements thereto furnished to the International Managers 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 U.S.
Purchase Agreement and in the Prospectuses. If at any time when a prospectus is
required by the 1933 Act to be delivered in 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 International Managers 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), 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 International Managers such number of copies of
such amendment or supplement as the International Managers may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the International Managers, 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 a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; 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 a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(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.
15
(h) Use of Proceeds. The Company will use the net proceeds received by
it 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 and
maintain the quotation of the Common Stock (including the Securities) on the
Nasdaq National Market and will file with the Nasdaq National Market all
documents and notices required by the Nasdaq National Market of companies that
have securities that are traded in the over-the-counter market and quotations
for which are reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. Except as otherwise contemplated
in the Prospectuses during a period of 180 days from the date of the
Prospectuses, the Company will not, 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 the
Securities to be sold hereunder or under the U.S. Purchase Agreement.
(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 will pay or cause to be paid all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing 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 International Managers and the U.S.
Underwriters, (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 o f each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or
16
supplements thereto, (vii) the preparation, printing 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 National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities, (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market and (xi) the fees and
expenses, including reasonable fees and disbursements of counsel for the
Underwriters in connection with compliance with any foreign law.
(b) Expenses of the Selling Stockholders. The Selling Stockholders,
jointly and severally, 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
Underwriters, and the transfer of the Securities between the International
Managers and the U.S. Underwriters pursuant to an agreement between such
International Managers and U.S. Underwriters, and (ii) the fees and
disbursements of their respective counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated by the
Lead (l) or Section 9(a)(i) hereof, the Company and the Selling Stockholders
shall reimburse the International Managers for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
International Managers.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholders may make for
the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
-------------------------------------------------
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company and the Selling
Stockholders contained in Section 1 hereof or in certificates of any officer of
the Company or any subsidiary of the Company or on behalf of any Selling
Stockholder delivered pursuant to the provisions hereof, to the performance by
the Company and the Selling Stockholders of their respective 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 International Managers. 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
17
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 Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, LLP, counsel for the Company, in form and substance satisfactory to
counsel for the International Managers, together with signed or reproduced
copies of such letter for each of the other International Managers, to the
effect set forth in Exhibit A hereto and to such further effect as counsel to
---------
the International Managers may reasonably request. 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 of the State of Delaware, upon the opinions of
counsel satisfactory to the Lead Managers. 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.
(c) Opinion of Counsel for the Selling Stockholders. At Closing Time,
the Lead Managers shall have received the favorable opinions, dated as of
Closing Time, of (i) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Capital
Partners II, L.P., (ii) ____________, counsel for ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., (iii)
____________, counsel for Ares Leveraged Investment Fund, L.P., and (iv)
____________, counsel for [Sun America], in form and substance satisfactory to
counsel for the International Managers, together with signed or reproduced
copies of such letter for each of the other International Managers, to the
effect set forth in Exhibit B hereto and to such further effect as counsel to
---------
the International Managers may reasonably request. 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 of the State of Delaware, upon the opinions of
counsel satisfactory to the Lead Managers. 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.
(d) Opinion of Counsel for International Managers. At Closing Time, the
Lead Managers shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Managers with respect to the matters set forth in paragraphs (i),
(ii), (v), (vi) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (viii) through
(x), inclusive, (xii), (xiv) (solely as to the information in the Prospectuses
under "Description of Capital Stock--Common Stock") and the penultimate
paragraph of Exhibit A 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 of the State of Delaware, upon the opinions of counsel
satisfactory to the Lead Managers. 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. The Company confirms that ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., by virtue of its acting as counsel to the Underwriters, has not
established and is not establishing an attorney-client relationship with the
Company, as the Company is separately represented in this
18
transaction by counsel of its own choosing; provided, however, that it is
understood that, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., by virtue of its acting as counsel to
the Underwriters, has access to material confidential information of the Company
and that such access to that information may preclude ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
from undertaking a legal representation adverse to the Company.
(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 Lead Managers
shall have received a certificate of the president or a vice president of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties of the Company contained
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 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 Stockholders. At Closing Time, the Lead
Managers shall have received a certificate of the Attorney-in-Fact on behalf of
each Selling Stockholder, dated as of Closing Time, to the effect that (i) the
representations and warranties of each Selling Stockholder contained in Section
1(b) 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
Stockholder 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) Accountants' Comfort Letters. At the time of the execution of this
Agreement, the Lead Managers shall have received from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP and KPMG LLP a letter dated such date, in form and substance satisfactory to
the Lead Managers, together with signed or reproduced copies of such letter for
each of the other International Managers, 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.
(h) Bring-down Comfort Letters. At Closing Time, the Lead Managers
shall have received from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and KPMG 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 inclusion in the Nasdaq National Market, subject only to
official notice of issuance.
19
(j) No Objection. The NASD has confirmed that it has not 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 Lead
Managers shall have received an agreement substantially in the form of Exhibit C
---------
hereto signed by the persons listed on Schedule D hereto.
----------
(l) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(m) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercise their option provided in Section
2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company and the Selling
Stockholders contained herein and the statements in any certificates furnished
by the Company, any subsidiary of the Company and the Selling Stockholders
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the president or a vice president of the Company and of the chief
financial or chief accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(e) hereof
remains true and correct as of such Date of Delivery.
(ii) Certificate of Selling Stockholders. A certificate, dated
------------------------------------
such Date of Delivery, of the Attorney-in-Fact on behalf of each Selling
Stockholder confirming that the certificate delivered at Closing Time pursuant
to Section 5(f) remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, counsel for the Company, in form and substance
satisfactory to counsel for the International Managers, dated such Date of
Delivery, relating to the International 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 Selling Stockholders. The favorable
-----------------------------------------------
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Selling Stockholders, in form and
substance satisfactory to counsel for the International Managers, dated such
Date of Delivery, relating to the International Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for International Managers. The favorable
---------------------------------------------
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the International Managers, dated
such Date of Delivery, relating to the International Option Securities to be
purchased on such
20
Date of Delivery and otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(vi) Bring-down Comfort Letters. A letter from each of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
LLP and KPMG LLP, in form and substance satisfactory to the Lead Managers and
dated such Date of Delivery, substantially in the same form and substance as the
letter from each such firm furnished to the Lead Managers pursuant to Section
5(h) hereof, except that the specified date in the letter furnished pursuant to
this subsection shall be a date not more than five days prior to such Date of
Delivery.
(n) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the International Managers 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 any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company and the Selling Stockholders in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(o) 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 International
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
Option Securities, may be terminated by the Lead Managers 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 International Managers. The Company, and
each of the Selling Stockholders, severally and not jointly, agrees to indemnify
and hold harmless each International Manager and each person, if any, who
controls any International Manager 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 (collectively, "Losses") 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 included 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;
21
(ii) against any and all Losses 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 omission;
provided that (subject to Section 6(d) below) any such settlement is
effected with the written consent of the Company and the Selling
Stockholders; 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 this indemnity agreement shall not apply to any Losses
-------- -------
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 International Manager through the
Lead Managers 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 International Prospectus (or
any amendment or supplement thereto); and provided further, that each Selling
-------- -------
Stockholder shall be liable for indemnification for Losses referred to in
clauses (i) and (ii) of this Section 6(a) and for expenses referred to in clause
(iii) of this Section 6(a) only to the extent such Losses and expenses are as a
result of any claim based on untrue statements or alleged untrue statements or
an omission or alleged omission from the Registration Statement (or any
amendment thereto), preliminary prospectus or the Prospectuses (or any amendment
or supplement thereto) regarding such Selling Stockholder or otherwise made in
reliance upon, and in conformity with, written information furnished to the
Company by such Selling Stockholder expressly for use therein or in the
preparation thereof; and provided further, that the liability of a Selling
-------- -------
Stockholder shall not exceed the product of the number of Securities sold by
such Selling Stockholder (including Option Securities) multiplied by the initial
public offering price of the Securities (less the underwriting discount with
respect to such Securities) as set forth in the Prospectuses.
(b) Indemnification of Company, Directors and Officers and Selling
Stockholders. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, 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, each
Selling Stockholder and each person, if any, who controls any Selling
Stockholder 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
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 international prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information
22
furnished to the Company by such International Manager through the Lead Managers
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).
(c) 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) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company and the Selling
Stockholders. 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 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.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested 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) 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.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Stockholders 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
23
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 and the Selling Stockholders on the one hand and the International
Managers 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 and the Selling Stockholders on the one hand and of the
International Managers 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.
The relative benefits received by the Company and the Selling Stockholders
on the one hand and the International Managers on the other hand in connection
with the offering of the International 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 International Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the Selling
Stockholders and the total underwriting discount received by the International
Managers, in each case as set forth on the cover of the International
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the International
Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholders on the one
hand and the International Managers 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 or the Selling Stockholders
or by the International Managers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholders and the International Managers 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 International Managers
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, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.
24
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 an
International Manager 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
International Manager, 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 or any Selling Stockholder 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 or such Selling Stockholder, as the case may be.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
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 and the Selling Stockholders 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 any of its subsidiaries or the
Selling Stockholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any International Manager or controlling person, or by or on behalf of the
Company or the Selling Stockholders, and shall survive delivery of the
Securities to the International Managers.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Lead Managers may terminate this
Agreement, by notice to the Company and the Selling Stockholders, 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 International 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, 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 Lead Managers, 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 Nasdaq National Market, 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
National Association of Securities Dealers,
25
Inc. 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 International Managers. If
----------------------------------------------------
one or more of the International Managers 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 Lead Managers
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting International Managers, 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 Lead Managers 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 International Securities to be purchased on such date, each of the
non-defaulting International Managers 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 International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number
of International 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 International Managers 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 International
Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager 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
International Managers to purchase and the Selling Stockholders to sell the
relevant International Option Securities, as the case may be, (i) either the
Lead Managers or (ii) the Company or the Selling Stockholders, as the case may
be, shall have the right to postpone the 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 Prospectuses or in
any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for a International Manager under this
Section 10.
SECTION 11. Default by One or More of the Selling Stockholders or the
----------------------------------------------------------
Company. (a) If a Selling Stockholder shall fail at Closing Time or at a Date of
-------
Delivery to sell and deliver the number of Securities which such Selling
Stockholder is obligated to sell
26
hereunder, and the remaining Selling Stockholders do not exercise the right
hereby granted to increase, pro rata or otherwise, the number of Securities to
be sold by them hereunder to the total number to be sold by all Selling
Stockholders as set forth in Schedule B hereto, then the International Managers
----------
may, at option of the Lead Managers, by notice from the Lead Managers to the
Company and the non-defaulting Selling Stockholders, 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
Stockholders and the Company have agreed to sell hereunder. No action taken
pursuant to this Section 11 shall relieve any Selling Stockholder so defaulting
from liability, if any, in respect of such default.
In the event of a default by any Selling Stockholder as referred to in
this Section 11, each of the Lead Managers, the Company and the non-defaulting
Selling Stockholders shall have the right to postpone the 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.
(b) If the Company shall fail at the 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 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
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of __________;
and notices to the Company and the Selling Stockholders shall be directed to it
at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ of ▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief
Financial Officer.
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the International Managers, the Company and the Selling
Stockholders 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 International Managers, the Company and the Selling
Stockholders 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 International Managers, the Company and the Selling
Stockholders 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 International Manager 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
27
STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
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.
28
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
Stockholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement between the International
Managers, the Company and the Selling Stockholders in accordance with its terms.
Very truly yours,
TUESDAY MORNING CORPORATION
By_________________________________
Title:
[ATTORNEY-IN-FACT NAME]
By_________________________________
As Attorney-in-Fact acting on behalf of the
Selling Stockholders named in Schedule B
----------
hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By____________________________________________
Authorized Signatory
For themselves and as Lead Managers of the
other International Managers named in Schedule A hereto.
----------
29
SCHEDULE A
----------
List of International Managers
Number of
Initial
International
Name of International Manager Securities
------------------------------ -----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International..........................
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.......................
-----------
Total................................................
===========
SCH A - 1
SCHEDULE B
----------
Number of International Securities to be Sold by the Company
And the Selling Stockholders
Number of Initial Maximum Number of
International International Option
Securities to be Sold Securities to Be Sold
--------------------- ---------------------
Tuesday Morning 0
Corporation Selling Stockholders:
Madison Dearborn
Capital Partners II, ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
Ares Leveraged
Investment Fund, L.P.
[Sun America]
Total.........................
Sch B - 1
SCHEDULE C
----------
TUESDAY MORNING CORPORATION
_____ Shares of Common Stock
(Par Value $.01 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 International Securities to be
paid by the several International Managers shall be $____________, being an
amount equal to the initial public offering price set forth above less
$____________ per share.
Sch C - 1
SCHEDULE D
----------
List of Persons and Entities Subject to Lock-up
Sch D - 1
EXHIBIT A
---------
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) 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
International Purchase Agreement and the U.S. Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation 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.
(iv) 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 International Purchase Agreement and the U.S. 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, including the Securities to be purchased by the
International Managers and the U.S. Underwriters from the Selling Stockholders,
have been duly authorized and validly issued and are fully paid and non-
assessable; and none of the outstanding shares of capital stock of the Company
was issued in violation of any statutory or, to the knowledge of such counsel,
contractual or other preemptive or other similar rights of any securityholder of
the Company.
(v) The Securities to be purchased by the International Managers and
the U.S. Underwriters from the Company have been duly authorized for issuance
and sale to the Underwriters pursuant to the International Purchase Agreement
and the U.S. Purchase Agreement, respectively, and, when issued and delivered by
the Company pursuant to the International Purchase Agreement and the U.S.
Purchase Agreement, respectively, against payment of the consideration set forth
in the International Purchase Agreement and the U.S. Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of the Securities
is or will be subject to personal liability by reason of being such a holder.
(vi) Neither the issuance and sale of the Securities by the Company nor
the sale of the Securities by the Selling Stockholders is subject to any
statutory or, to the knowledge of such counsel, contractual or other preemptive
or other similar rights of any securityholder of the Company.
A-1
(vii) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate 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 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; except as otherwise
disclosed in the Registration Statement, 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, to the best of our knowledge, is owned by the
Company, directly or through subsidiaries, 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
any statutory or, to the knowledge of such counsel, contractual or other
preemptive or similar rights of any securityholder of such subsidiary.
(viii) The International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectuses pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to the best of
our knowledge, 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 threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434 Information,
as applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and the Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectuses were not
"materially different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the Nasdaq National Market.
(xiii) To the best of our knowledge, there is not pending or
threatened 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
A-2
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the International Purchase Agreement and the U.S.
Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectuses under "Dividend Policy,"
"Capitalization," "Business--Properties," "Business--Legal Proceedings" and
"Description of Capital Stock" and in the Registration Statement under Item 14,
to the extent that it constitutes matters of law, summaries of legal matters,
the Company's charter and bylaws or legal proceedings, or legal conclusions, has
been reviewed by us and is correct in all material respects.
(xv) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectuses that are not
described as required.
(xvi) All descriptions in the Prospectuses of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xvii) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws 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 or incorporated by reference as an exhibit to the
Registration Statement.
(xviii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization,
execution and delivery of the International Purchase Agreement and the U.S.
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.
(xix) The execution, delivery and performance of the International
Purchase Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in the International Purchase Agreement, the U.S.
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 with its obligations under the International
Purchase Agreement and the U.S. 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 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 any contract, indenture, mortgage, deed of
trust, loan or credit
A-3
agreement, note, lease or any other agreement or instrument, known to us, to
which the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (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 by-laws
of the Company or any subsidiary, or any applicable law, statute, rule,
regulation, 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.
(xx) To the best of our knowledge, except as described in the
Prospectuses, there are no persons with registration rights or other similar
rights, except as have been waived or satisfied, to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the 1933 Act.
(xxi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Nothing has come to our attention that would lead us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable) (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time such Registration
Statement or any such amendment became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein or omitted
therefrom, as to which we need make no statement), at the time the Prospectuses
were issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time or Date of Delivery, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-4
EXHIBIT B
---------
FORM OF OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization or order,
registration, qualification or decree of any governmental authority or agency
or, to such counsel's knowledge, of any court, domestic or foreign (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, as to which we need express no opinion) is
necessary or required to be obtained by the Selling Stockholders for the
performance by each Selling Stockholder of its obligations under the
International Purchase Agreement and the U.S. Purchase Agreement or in the
Powers of Attorney and Custody Agreements, or in connection with the offer, sale
or delivery of the Securities by the Selling Stockholders pursuant to the
Registration Statement.
(ii) Each Power of Attorney and Custody Agreement to which any Selling
Stockholder is a party has been duly executed and delivered by the respective
Selling Stockholder named therein and constitutes the legal, valid and binding
agreement of such Selling Stockholder.
(iii) The International Purchase Agreement and the U.S. Purchase Agreement
have been duly authorized, executed and delivered by or on behalf of each
Selling Stockholder.
(iv) Each Attorney-in-Fact has been duly authorized by the Selling
Stockholders who have executed Power of Attorney to deliver the Securities on
behalf of the Selling Stockholders in accordance with the terms of the
International Purchase Agreement and the U.S. Purchase Agreement.
(v) The execution, delivery and performance of the International
Purchase Agreement, the U.S. Purchase Agreement and the Powers of Attorney and
Custody Agreements to which any Selling Stockholder is a party, and the sale and
delivery of the Securities and the consummation of the transactions contemplated
in the International Purchase Agreement and the U.S. Purchase Agreement and in
the Registration Statement and compliance by each Selling Stockholder with its
obligations under the International Purchase Agreement and the U.S. Purchase
Agreement have been duly authorized by all necessary action on the part of the
Selling Stockholders and do not (i) violate the Selling Stockholder's
organizational documents, (ii) violate any order, judgment or decree known to
such counsel (after inquiry of the Selling Stockholder) of any court or
governmental agency or body having jurisdiction over the Selling Stockholder
which order, judgment or decree is specifically applicable to the Selling
Stockholder, (iii) constitute a violation by the Selling Stockholder of any
applicable provision of any law, statute or regulation of any governmental
agency or body having jurisdiction over the Selling Stockholder or the property
of the Selling Stockholder (except that such counsel need express no opinion in
this paragraph as to compliance with any disclosure requirement or any
prohibition against fraud or misrepresentation or as to whether performance of
the indemnification or contribution provisions in the U.S. and International
Purchase Agreements would be permitted) or (iv) breach, or result in a default
under, any existing obligation of the Selling Stockholder under any agreement or
instrument known to such counsel (after inquiry of the Selling Stockholder) to
which the Selling Stockholder is a party or by which the Selling Stockholder is
bound and to which any property or assets of the Selling Stockholder is
B-1
subject, in each case other than such violations, breaches or defaults which,
individually or in the aggregate, would not materially adversely affect the
Selling Stockholder's ability to perform its obligations under the U.S. and
International Purchase Agreements or otherwise result in the creation or
imposition of any tax, lien, charge or encumbrance upon any of the Securities
sold by the Selling Stockholder pursuant to the U.S. and International Purchase
Agreements.
(vi) Upon delivery of the Shares to Underwriters against payment therefore
as contemplated by the U.S. and International Purchase Agreements and
registration of the Shares in the names of the Underwriters in the stock records
of the Company, the Underwriters will have acquired valid title to such Shares,
free and clear of all adverse claims. For purposes of this opinion, we have
assumed that the Underwriters will have purchased the Shares for value in good
faith and without notice of any adverse claim or defect in the validity of the
Shares. We have also assumed that the Shares are duly authorized and validly
issued by the Company. The term "adverse claim" as used in this opinion has the
meaning given such term in Article 8 of the Uniform Commercial Code as adopted
in the State of New York (the "UCC") and does not include (i) any claim which
arises through the Underwriters or any person claiming through the Underwriters
(such as any security interest the Underwriters may have granted in the Shares)
and (ii) any adverse interest which would not be extinguished upon the purchase
of the Shares by a person who qualifies as a "bona fide purchaser" or "protected
purchaser" under Section 8-303 of the UCC. We advise you that we have no actual
knowledge of the existence of any interest of the kind specified in clause (ii)
of the preceding sentence. We have also assumed that such Underwriters' rights
are not limited by subsection (4) of Section 8-302 of the UCC.
B-2
EXHIBIT C
---------
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR
OTHER STOCKHOLDERS PURSUANT TO SECTION 5(k)
_____, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
as Lead Managers of the several
International Managers to be named in
the within-mentioned International Purchase Agreement
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Proposed Public Offering by Tuesday Morning Corporation
-------------------------------------------------------
Ladies and Gentlemen:
The undersigned, a stockholder [and an officer and/or director] of Tuesday
Morning Corporation, a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company,
L.L.C. propose to enter into an International Purchase Agreement (the
"International Purchase Agreement") with the Company providing for the public
offering of shares (the "Securities") of the Company's common stock, par value
$.01 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 receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees with each underwriter to be named in the International Purchase Agreement
that, during a period of 180 days from the date of the International 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
--------------------------------------
1 Delete or revise bracketed language as appropriate.
2 Delete or revise bracketed language as appropriate.
C-1
Securities Act of 1933 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.
Very truly yours,
Signature:________________________
Print Name:_______________________
C-2