Exhibit 1.6
▇▇▇▇▇-Illinois, Inc.
8,000,000 Shares
Convertible Preferred Stock
($.01 par value)
UNDERWRITING AGREEMENT
New York, New York
May 14, 1998
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇ BROTHERS INC.
c/o ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
▇▇▇▇▇-Illinois, Inc., a Delaware corporation (the "Company"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., are acting as representative
(the "Representative"), 8,000,000 shares of Convertible Preferred Stock, $.01
par value per share ("Convertible Preferred Stock") of the Company (the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase up to 1,050,000 additional shares of
Convertible Preferred Stock (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, being hereinafter called the
"Securities").
The Securities are convertible into shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), upon the terms and subject
to the conditions and adjustments set forth in the Certificate of Designation
relating thereto to be filed with the Secretary of State of the State of
Delaware on May 15, 1998 (the "Certificate of Designation"). The shares of
Common Stock initially issuable upon the conversion of the Securities (assuming
no adjustment of the conversion price therefor) are hereinafter called the
"Conversion Stock".
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-47519), which registration statement also constitutes, pursuant to Rule 429
under the Securities Act of 1933, as amended (the "Securities Act"), Post-
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Effective Amendment No. 1 to the Registration Statement (File No. 333-25175), as
amended, relating to the Securities and the offering thereof from time to time
in accordance with Rule 415 under the Securities Act. Such registration
statements, as amended, have been declared effective by the Commission. In
addition, the Company has prepared and filed with the Commission the Preliminary
Prospectus (as defined herein) pursuant to Rule 424(b) under the Securities Act
in accordance with Rule 424(b) under the Securities Act.
The form of prospectus, including any prospectus supplement,
relating to the Securities as first filed pursuant to Rule 424(b) or, if no
filing pursuant to Rule 424(b) is made, such form of prospectus included in the
Registration Statement at the Effective Date, is hereinafter called the
"Prospectus". "Preliminary Prospectus" shall mean any preliminary prospectus,
including any preliminary prospectus supplement, used in connection with the
offer of any Securities prior to the date hereof.
The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Registration
Statement" shall mean the registration statement referred to above (File No.
333- 47519), including incorporated documents and financial statements, as
amended at the Execution Time and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as defined herein), shall
also mean such registration statement as so amended. Any reference herein to the
Registration Statement, Preliminary Prospectuses or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") on or before the Effective
Date of the Registration Statement or the issue date of such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
1. Representations and Warranties. (a) The Company represents and
warrants, as of the date hereof and as of the Closing Date, to and agrees with
each of the Underwriters as follows:
(i) The Company meets the requirements for use of Form S-3 under the
Securities Act. The Registration Statement, at the time the Registration
Statement
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became effective, as of the Closing Date and as amended or supplemented,
if applicable, and the Prospectus, when it is first filed in accordance
with Rule 424(b) under the Securities Act and on the Closing Date,
complied and will comply, as the case may be, in all material respects
with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(ii) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect
and no proceedings for such purpose are pending before or threatened by
the Commission; and any required filing of the Prospectus pursuant to Rule
424(b) under the Securities Act has been made in accordance with Rule
424(b) under the Securities Act.
(iii) The Registration Statement, at the time the Registration
Statement became effective, as amended or supplemented (or, if an
amendment to the Registration Statement or an annual report on Form 10-K
has been filed by the Company with the Commission subsequent to the
Effective Date, then at the time of the most recent such filing) did not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. The Prospectus, at the time the
Registration Statement became effective, as amended or supplemented and as
of the Closing Date, did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with information furnished to the Company in
writing by any of you expressly for use in the Registration Statement or
Prospectus.
(iv) The documents incorporated by reference in the Registration
Statement and Prospectus, as amended or supplemented, if applicable, at
the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder
and, when read together with the other information in the Prospectus, at
the time the Registration Statement and any amendments thereto became or
become effective and at the Closing Date, did not and will not contain an
untrue statement of a material fact and will not omit
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to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(v) Each of Ernst & Young LLP and Ernst & Young, Melbourne,
Australia, who are reporting upon the audited financial statements and
schedules included or incorporated by reference in the Registration
Statement and the Prospectus, each as amended or supplemented, if
applicable, are independent public accountants as required by the
Securities Act.
(vi) (A) The consolidated financial statements and the related notes
of the Company included or incorporated by reference in the Registration
Statement and the Prospectus, or in any supplement thereto or amendment
thereof, present fairly, in all material respects, the consolidated
financial position of the Company and its subsidiaries, considered as one
enterprise, as of the dates indicated and the consolidated results of
operations and cash flows of the Company and its subsidiaries, considered
as one enterprise, for the periods specified; (B) such financial
statements and related notes have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved; and (C) the financial statement schedule
incorporated by reference in the Registration Statement presents fairly
the information required to be stated therein.
(vii) The pro forma financial statements contained in the
Preliminary Prospectus and the Prospectus under the heading "Unaudited Pro
Forma Condensed Consolidated Financial Information" have been prepared on
a basis consistent with the historical statements referred to in (vi)
above, except for the pro forma adjustments specified therein, and (A)
include all material adjustments to the historical financial data required
by Rule 11-02 of Regulation S-X necessary to reflect the Acquisition and
the related financing and the Offerings(each as defined in the Preliminary
Prospectus or the Prospectus), (B) give effect to the assumptions made on
a reasonable basis, (C) present fairly in all material respects, the
historical and proposed transactions contemplated by the Preliminary
Prospectus and the Prospectus and (D) comply in all material respects with
the requirements of Rules 11-01 and 11-02 of Regulation S-X; and the other
pro forma financial information and pro forma financial data set forth in
the Prospectus under the captions "Summary -- Summary Historical and Pro
Forma Financial Data" and "Consolidated Capitalization" are
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derived from such "Unaudited Pro Forma Condensed Consolidated Financial
Information."
(viii) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of Delaware,
has the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), properties, assets, business or results of operations of the
Company and its subsidiaries, considered as one enterprise (a "Material
Adverse Effect").
(ix) Each subsidiary of the Company that is a "Significant
Subsidiary" (as defined in Rule 1-02 of Regulation S-X under the
Securities Act) (hereinafter a "Significant Subsidiary") has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect.
(x) All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and are validly issued, fully paid and
non-assessable.
(xi) All of the issued and outstanding capital stock of each
Significant Subsidiary of the Company (including ▇▇▇▇▇-Illinois Group,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Company)
has been duly authorized, is validly issued, fully paid and non-assessable
and, except as set forth in Schedule II hereto, is owned by the Company,
directly or through one or more subsidiaries of the Company, free and
clear of any material lien.
(xii) There are no holders of securities (debt or equity) of the
Company, or holders of rights (including preemptive rights), warrants or
options to obtain securities of the Company, who have the right to
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request the Company to register securities held by them under the
Securities Act, except for the Registration Rights Agreement dated as of
March 17, 1986 by and among OII Holdings Corporation (the predecessor in
interest to the Company), KKR Partners II, L.P., OII Associates, L.P., OII
Associates II, L.P. and KKR Associates, L.P.
(xiii) The Company has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement; the execution
and delivery of, and the performance by the Company of its obligations
under, this Agreement have been authorized by all necessary corporate
action of the Company; and this Agreement has been duly executed and
delivered by the Company.
(xiv) The Securities to be issued and sold by the Company pursuant
to this Agreement have been duly authorized and, when issued to and paid
for by you in accordance with the terms of this Agreement, will be validly
issued, fully paid and non-assessable and, to the best of our knowledge,
free of preemptive rights.
(xv) All of the shares of Conversion Stock have been duly and
validly authorized and reserved for issuance upon conversion of the
Securities and, if issued and delivered upon conversion of the Securities
in accordance with the terms of the Certificate of Designation, would be
duly and validly issued, fully paid and non-assessable.
(xvi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, contemplated thereby or otherwise incorporated by reference
therein, there has not been (A) any material adverse change in the
condition (financial or otherwise), properties, assets, business, or
results of operations of the Company and its subsidiaries, considered as
one enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Change"), (B) any transaction entered into by the
Company or any of its subsidiaries, other than in the ordinary course of
business, that could have a Material Adverse Effect, or (C) any dividend
or distribution of any kind declared, paid or made by the Company on its
capital stock.
(xvii) Neither the Company nor any of its subsidiaries is (A) in
violation of its certificate of incorporation or by-laws or in default
(nor has an event occurred that with notice or passage of time or both
would constitute such a default) in the
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performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or other material agreement or instrument to
which the Company or its subsidiaries is subject or by which any of them
or any of their properties or assets may be bound or affected, (B) in
violation of any existing applicable law, ordinance, regulation, judgment,
order or decree of any government, governmental instrumentality,
arbitrator or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets or
(C) in each case to the knowledge of the Company, in violation of or has
violated any permit, certificate, license, order or other approval or
authorization required in connection with the operation of its business
that, with respect to each of clause (A), (B) and (C) of this paragraph,
would (individually or in the aggregate) (I) adversely affect the
legality, validity or enforceability of this Agreement or the Securities,
(II) have a Material Adverse Effect or (III) impair the ability of the
Company to fully perform on a timely basis any obligations that it has
under this Agreement, or the Securities.
(xviii) The issuance, sale and delivery of the Securities, the
execution, delivery and performance by the Company of this Agreement and
the Certificate of Designation, the issuance of the Conversion Stock upon
conversion of the Securities (assuming that the issuance of the Conversion
Stock were to take place on the date hereof), the compliance by the
Company with the terms herein and the consummation by the Company of the
transactions contemplated hereby, and in the Registration Statement and
the Prospectus, do not and will not result in a violation of any of the
terms or provisions of the certificate of incorporation or by-laws of the
Company or any of its subsidiaries, and (A) will not, as of the Closing
Date, conflict with, or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties
or assets is bound, except for such conflicts, breaches, violations or
defaults that would not have a Material Adverse Effect or (B) do not and
will not conflict with or result in a breach or violation of any existing
applicable law, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the
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Company or any of its subsidiaries or any of their properties or assets,
except for any conflict, breach or violation that would not have a
Material Adverse Effect.
(xix) No authorization, approval, consent or order of, or
qualification with, any governmental body or agency is required to be
obtained or made by the Company for the due authorization, execution,
delivery and performance by the Company of this Agreement, the valid
authorization, issuance, sale and delivery of the Securities, the valid
authorization, issuance and delivery of the Conversion Stock upon
conversion of the Securities (assuming that the issuance of the Conversion
Stock were to take place on the date hereof), except (A) such as may be
required by the securities or blue sky laws of the various states (the
"Blue Sky laws") in connection with the offer and sale of the Securities
and (B) for such authorizations, approvals, consents or orders of, or
qualifications with, any governmental body or agency that are required and
have been received and are in full force and effect as of the Closing
Date.
(xx) There is no action, suit, investigation or proceeding before or
by any government, governmental instrumentality or court, domestic or
foreign, now pending or, to the knowledge of the Company, threatened,
against or affecting the Company or any of its subsidiaries or any of
their properties and assets that (A) is required to be disclosed in the
Prospectus and is not so disclosed, (B) except as disclosed in the
Prospectus, could result in any Material Adverse Change, (C) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance and sale of the Securities or the execution and delivery of this
Agreement or any of the transactions contemplated hereby or (D) questions
the legality or validity of any such transaction or seeks to recover
damages or obtain other relief in connection with any such transaction,
and, in each case to the knowledge of the Company, there is no valid basis
for any such action, suit, investigation or proceeding; the aggregate of
all pending legal or governmental proceedings to which the Company or any
of its subsidiaries is a party or that affect any of their properties and
assets that are not described in the Registration Statement or the
Prospectus, including ordinary routine litigation incidental to its
business, would not have a Material Adverse Effect.
(xxi) There are no statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement
or the
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Prospectus or to be filed as exhibits to the Registration Statement that
are not described or filed as required or, in the case of exhibits, will
not be so filed promptly after the Closing Date.
(xxii) Each of the Company and its subsidiaries has good title to
all properties owned by them, in each case free and clear of all liens
except (A) as do not materially interfere with the use made and proposed
to be made of such properties, (B) as set forth in the Registration
Statement and the Prospectus or (C) as could not reasonably be expected to
have a Material Adverse Effect.
(xxiii) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all federal,
state, local, foreign and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to conduct its
business in the manner described in the Registration Statement or the
Prospectus, except to the extent that the failure to so obtain or file
would not have a Material Adverse Effect.
(xxiv) Each of the Company and its subsidiaries owns or possesses,
or can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other proprietary or confidential information, systems or procedures,
whether patented or unpatented), trademarks, service marks and trade names
(collectively, "Intellectual Property") presently employed by them in
connection with the business now operated by them, except where the
failure to own or possess or have the ability to acquire any such
Intellectual Property would not have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing that, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in any
Material Adverse Change.
(xxv) Except as disclosed in the Registration Statement and the
Prospectus, each of the Company and its subsidiaries is in material
compliance with all applicable existing federal, state, local and foreign
laws and regulations relating to protection of human health, safety and
the environment or imposing liability or standards of conduct concerning
any
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Hazardous Material (as hereinafter defined) ("Environmental Laws"),
except, in each case, where such noncompliance, individually or in the
aggregate, would not have a Material Adverse Effect. The term "Hazardous
Material" means (A) any "hazardous substance" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, (B) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (C) any petroleum or petroleum
product, (D) any polychlorinated biphenyl and (E) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law.
(xxvi) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Securities or any action resulting in a violation of Regulation M under
the Exchange Act.
(xxvii) The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxviii) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the Government
of Cuba or with any person or affiliate located in Cuba.
(xxix) The Securities have been approved for listing on the New York
Stock Exchange.
(b) Any certificate signed by any officer of either the Company or
any of its subsidiaries and delivered to you or to your counsel at the Closing
Date pursuant to this Agreement or the transactions contemplated hereby shall be
deemed a representation and warranty by the Company or such subsidiary of the
Company, as the case may be, to each of you as to the matters covered thereby.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $48.57 per
share, the number of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants an
option to the several
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Underwriters to purchase, severally and not jointly, up to an aggregate of
1,050,000 shares of Option Securities at the same purchase price per share as
the Underwriters shall pay for the Underwritten Securities. Said option may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time on or before the 30th day after the date of the Prospectus upon
written or telegraphic notice by the Representative to the Company setting forth
the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. Delivery of
certificates for the shares of Option Securities, and payment therefor, shall be
made as provided in Section 3 hereof. The number of shares of the Option
Securities to be purchased by each Underwriter shall be the same percentage of
the total number of shares of the Option Securities to be purchased by the
several Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as you in your absolute discretion shall
make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the business day
prior to the Closing Date) shall be made at 7:00 a.m. New York City time, on May
20, 1998, or such later date (not later than May 26, 1998) as the Representative
shall designate, which date and time may be postponed by agreement between the
Representative and the Company or as provided in Section 11 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representative
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representative of the purchase price thereof to
or upon the order of the Company by means of a wire transfer of immediately
available funds in accordance with written instructions from the Company or
through the facilities of the Depository Trust Company ("DTC"). Delivery of the
Underwritten Securities and the Option Securities shall be made at such location
as the Representative shall reasonably designate at least one business day in
advance of the Closing Date and payment for such Securities shall be made at the
office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, New York, New York. Certificates for the
Securities shall be registered in such names and in such denominations as the
Representative may request not less than one full business day in advance of the
Closing Date.
If the option to purchase the Option Securities provided for in
Section 2(b) hereof is exercised by the Underwriters after the business day
prior to the Closing
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Date, the Company will deliver (at the expense of the Company) to the
Representative, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date
specified by the Representative (which shall be three business days after
exercise of said option, the "Option Closing Date"), delivery of the Option
Securities shall be made to the Representative for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representative of the purchase price thereof to or upon the order of the Company
by means of a wire transfer of immediately available funds in accordance with
written instructions from the Company or through the facilities of DTC. If
settlement for the Option Securities occurs after the Closing Date, the Company
will deliver to the Representative on the settlement date for the Option
Securities, and the obligation of the Underwriter to purchase the Option
Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 5 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Conditions to the Underwriters' Obligations. The several
obligations of the Underwriters to purchase and pay for the Securities pursuant
to this Agreement are subject to the satisfaction of each of the following
conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) (A) no downgrading shall have occurred in the rating
accorded any of the Company's debt securities or preferred stock by
any "nationally recognized statistical rating organization" as that
term is defined by the Commission for purposes of Rule 436(g)(2)
under the Securities Act and regulations thereunder and (B) no such
organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of the Company's debt securities or preferred stock; and
(ii) no stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose shall have been instituted and shall be pending or, to your
knowledge or the knowledge of the Company, shall be contemplated by
the Commission, and any
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request on the part of the Commission for additional information
shall have been complied with to the satisfaction of your counsel.
(b) The Company shall have furnished to the Underwriters a
certificate of the Company, signed by the Chairman of the Board or the
President or a Vice President and the Treasurer or Controller of the
Company, dated the Closing Date, to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied in all material respects with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Registration Statement and the Prospectus, there has
been no Material Adverse Change.
(c) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, outside counsel for the Company, dated the
Closing Date, in form and substance reasonably satisfactory to your
counsel to the effect that:
(i) the Registration Statement and the Prospectus (excluding
the documents incorporated therein by reference) comply as to form
in all material respects with the requirements for registration
statements on Form S-3 under the Securities Act and the rules and
regulations of the Commission thereunder; it being understood,
however, that such counsel expresses no opinion with respect to the
financial statements, schedules and other financial data included or
incorporated in the Registration Statement or the Prospectus or with
respect to the Statement as to the Eligibility and Qualification of
the Trustee on Form T-1. In passing upon the compliance as to form
of the Registration Statement and the Prospectus, such counsel has
assumed that the
14
statements made therein (or incorporated by reference therein) are
correct and complete.
(ii) the Registration Statement has become effective under the
Securities Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings therefor have
been initiated or threatened by the Commission; and any required
filing of the Prospectus pursuant to Rule 424(b) under the
Securities Act has been made in accordance with Rule 424(b) under
the Securities Act;
(iii) the Company has been duly incorporated and is validly
existing and in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its
property and to conduct its business as described in the
Registration Statement and the Prospectus;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Securities to be issued and sold by the Company
pursuant to the Underwriting Agreement, have been duly authorized
and, when issued to and paid for by you in accordance with the terms
of the Underwriting Agreement, will be validly issued, fully paid
and non-assessable and, to our knowledge, free of preemptive rights.
(vi) the shares of Conversion Stock initially issuable upon
conversion of the Securities have been duly authorized and reserved
for issuance upon conversion of the Securities and, if issued on the
Closing Date upon conversion of the Securities in accordance with
the terms of the Certificate of Designation, would be validly
issued, fully paid and non-assessable.
(vii) the execution and delivery by the Company of, and the
issuance and sale of the Securities by the Company pursuant to, this
Agreement, and the issuance of the Conversion Stock upon conversion
of the Securities (assuming that the issuance of the Conversion
Stock were to take place on the Closing Date), will not result in
(A) the violation by the Company of its Certificate of Incorporation
or Bylaws, the General Corporation Law of the State of Delaware or
any federal or New York statute, or any rule or regulation that has
been issued pursuant to the
15
General Corporation Law of the State of Delaware or any federal or
New York statute known to such counsel to be applicable to the
Company (except that no opinion shall be expressed with respect to
federal or state securities or "blue sky" laws) or (B) the breach of
or a default under (I) any indenture or other agreement or
instrument pertaining to the Company's long-term debt listed in the
Prospectus Supplement under the caption "Consolidated
Capitalization", excluding long-term debt listed as "Other," or (II)
any court or administrative orders, writs, judgments or decrees
specifically directed to the Company and identified to such counsel
by an officer of the Company as material to the Company;
(viii) to such counsel's knowledge, no authorization,
approval, consent or order of, or filing or qualification with, any
federal or New York State court or governmental body or agency is
required to be obtained or made by the Company for the execution and
delivery by the Company of this Agreement or the issuance and sale
of the Securities by the Company or the valid authorization,
issuance and delivery of the Conversion Stock upon the conversion of
the Securities (assuming that the issuance of the Conversion Stock
were to take place on the Closing Date) except (A) such as may be
required under state securities or blue sky laws in connection with
the purchase and distribution of the Securities and (B) except such
as have been obtained or made;
(ix) the statements set forth in the "Description of the
Common Stock" contained in the Company's Registration Statement on
Form 8-A filed on December 3, 1991, as amended, and in the
"Description of the Convertible Preferred Stock" contained in the
Prospectus, insofar as such statements constitute summaries of the
documents referred to therein, are accurate in all material
respects; and the Securities conform in all material respects to the
description thereof incorporated by reference in the Prospectus;
(x) the statements set forth in the Prospectus under the
heading "Certain United States Federal Tax Considerations for
Non-United States Holders," insofar as such statements constitute a
summary of legal matters are accurate in all material respects; and
16
(xi) the Company is not an "investment company," as such term
is defined in the 1940 Act.
In addition, such counsel shall state that, while they did not
prepare any of the documents incorporated by reference in the Registration
Statement and the Prospectus, they have participated in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, and the Underwriters'
representatives at which the contents of the Registration Statement and
the Prospectus and related matters were discussed, and although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectus and have not made any
independent check or verification thereof (except as set forth in
paragraphs (ix) and (x) above), during the course of such participation,
no facts came to such counsel's attention that caused such counsel to
believe that the Registration Statement (including the incorporated
documents), at the time it 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 Prospectus (including the incorporated documents), as of its
date and as of the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that such
counsel express no belief with respect to the financial statements,
schedule and other financial data or the Statement of Eligibility of the
Trustee on Form T-1 included or incorporated by reference in the
Registration Statement or the Prospectus.
In rendering such opinion, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials and need not express any opinion with regard to the laws of any
jurisdiction other than the federal law of the United States, the law of
the State of New York and the General Corporation Law of the State of
Delaware.
(d) At the Closing Date, each of you shall have received a signed
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., General Counsel of the Company, dated as
of the Closing Date, in form and substance reasonably satisfactory to your
counsel, to the effect that:
17
(i) the Company is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse
Effect;
(ii) each Significant Subsidiary (as defined in Rule 1-02 of
Regulation S-X under the Securities Act) of the Company has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualifications, except to the
extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect (other than ▇▇▇▇▇-Illinois
International B.V. and the following foreign subsidiaries of the
Company, with respect to which foreign counsel will deliver the
foregoing opinion: Continental PET Holdings Pty Limited,
▇▇▇▇▇-Illinois (Australia) Pty Limited, ACI Operations Pty Limited,
BTR Nylex Limited, AVIR S.p.A., Orion S.p.A. and OI Italia S.r.l.);
(iii) the Company's capitalization as of March 31, 1998 is as
set forth in the Prospectus, including any amendment or supplement
thereto; all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and all of the issued and
outstanding capital stock of such Significant Subsidiaries, except
as set forth on Schedule II hereto, is owned of record by the
Company, directly or through subsidiaries, and is free and clear of
any material lien, claim, encumbrance or other security interest;
(iv) the Company has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement;
the execution and delivery of, and the performance by the Company of
its obligations under, this Agreement have been authorized by all
necessary corporate action of the Company;
18
(v) the Securities to be issued and sold by the Company
pursuant to the Underwriting Agreement have been duly authorized
and, when issued to and paid for by you in accordance with the terms
of the Underwriting Agreement, will be validly issued, fully paid
and non-assessable and, to the best of our knowledge, free of
preemptive rights;
(vi) the shares of Conversion Stock initially issuable upon
conversion of the Securities have been duly authorized and reserved
for issuance upon conversion of the Securities and, if issued on the
Closing Date and delivered upon conversion in accordance with the
terms of the Certificate of Designation, would be validly issued,
fully paid and non-assessable.
(vii) the execution and delivery by the Company of, and the
issuance and sale of the Securities by the Company pursuant to, this
Agreement and the conversion of the Securities (assuming that the
conversion were to take place on the Closing Date), upon the terms
and subject to the conditions and adjustments set forth in the
Certificate of Designation and the issuance of the Conversion Stock,
will not result in (A) the violation by the Company of its
Certificate of Incorporation or Bylaws, the General Corporation Law
of the State of Delaware or any federal or Ohio State Statute, or
any rule or regulation that has been issued pursuant to the General
Corporation Law of the State of Delaware or any federal or Ohio
State Statute known to such counsel to be applicable to the Company
or any of its subsidiaries (except that no opinion is expressed with
respect to federal or state securities or "blue sky" laws) or (B)
the breach of or default under (I) any indenture or other agreement
or instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries considered as
one enterprise or (II) any court or administrative orders, writs,
judgments or decrees known to such officer;
(viii) Such counsel has no knowledge of any legal or
governmental proceeding pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties or assets of the Company or any of its subsidiaries is
subject that is required to be described in the Registration
Statement or the Prospectus and is not so described therein; or of
19
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required, except such exhibits
which are permitted, pursuant to the Securities Act, to be filed
subsequently on a Current Report on Form 8-K; and
(ix) each of the documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the
Prospectus, at the time it was filed with the Commission, complied
as to form in all material respects with the requirements for such
document under the Exchange Act and the regulations thereunder; it
being understood, however, that such counsel expresses no opinion
with respect to the financial statements, schedules and other
financial data included or incorporated in the Registration
Statement or the Prospectus or with respect to the Statement as to
the Eligibility and Qualification of the Trustee on Form T-1. In
passing upon the compliance as to form of the Registration Statement
and the Prospectus, such counsel has assumed that the statements
made therein (or incorporated by reference therein) are correct and
complete.
In addition, such counsel shall state that he has participated in
conferences with representatives of the Company, representatives of the
independent public accountants for the Company, and the Underwriters'
representatives and counsel at which the contents of the Registration
Statement and the Prospectus and related matters were discussed, and
although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus,
during the course of such participation no facts came to such counsel's
attention that caused such counsel to believe that the Registration
Statement (including the incorporated documents), at the time it 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 Prospectus, as of its
date and as of the Closing Date, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that such
counsel
20
expresses no belief with respect to the financial statements, schedules
and other financial data included or incorporated by reference in the
Registration Statement or the Prospectus.
In rendering such opinion, such counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Company or upon certificates of public
officials, and need not express any opinion with respect to the laws of
any jurisdiction other than the federal law of the United States, the law
of the State of Ohio and the General Corporation Law of the State of
Delaware.
(e) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, dated
the Closing Date, covering certain matters requested by the Underwriters.
(f) At the Closing Date, (i) the Registration Statement and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the Securities Act
and the regulations thereunder and in all material respects shall conform
to the requirements of the Securities Act and the regulations thereunder,
and neither the Registration Statement nor the Prospectus, as they may
then be amended or supplemented, shall contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the case of the
Prospectus, in the light of the circumstances under which they were made,
not misleading; (ii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement, any
Material Adverse Change, or any development involving a prospective
Material Adverse Change, whether or not arising in the ordinary course of
business; (iii) no action, suit or proceeding at law or in equity shall be
pending or, to the knowledge of the Company, threatened against the
Company or any of its subsidiaries that would be required to be set forth
in the Prospectus other than as set forth therein and no proceedings shall
be pending or, to the knowledge of the Company, threatened against it or
any of its subsidiaries before or by any federal, state or other
commission, board or administrative agency wherein an unfavorable
decision, ruling or finding could have a Material Adverse Effect, other
than as set forth in the Prospectus; (iv) the Company shall have complied
with all material agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing
21
Date; and (v) the other representations and warranties of the Company set
forth in Section 1(a) shall be accurate in all material respects as though
expressly made at and as of the Closing Date.
(g) The Underwriters shall have received on the Closing Date letters
dated the date hereof and the Closing Date, in form and substance
reasonably satisfactory to the Underwriters, from Ernst & Young LLP and
Ernst & Young, Melbourne, Australia, independent public accountants,
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 Prospectus.
(h) By the Closing Date, your counsel shall have been furnished with
all such documents (including any consents under any agreements to which
the Company is a party), certificates and opinions as they may reasonably
request for the purpose of enabling them to pass upon the issuance and
sale of the Securities as contemplated in this Agreement and in Section
5(e) herein and in order to evidence the accuracy and completeness of any
of the representations, warranties or statements of the Company, the
performance of any of the covenants of the Company, or the fulfillment of
any of the conditions herein; and all proceedings taken by the Company at
or prior to the Closing Date in connection with the authorization,
issuance and sale of the Securities, and by the Company at or prior to the
Closing Date in connection with the authorization and delivery of this
Agreement shall be reasonably satisfactory in form and substance to you
and to your counsel.
(i) The Securities shall have been duly authorized for listing on
the New York Stock Exchange (the "NYSE"), at or by the Closing Date and
any shares of Conversion Stock will be duly authorized for listing on the
NYSE upon any conversion of the Securities, subject only to official
notice of issuance thereof and notice of a satisfactory distribution of
the Securities or the Conversion Stock.
(j) Prior to the Closing Date, the Company shall have furnished to
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. such further information, certificates and documents as
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. may reasonably request.
(k) The Lock-Up Agreements executed by (i) each of the Company's
executive officers and directors listed in Schedule III hereto and (ii) by
each of OII
22
Associates, L.P., OII Associates II, L.P. and KKR Partners II, L.P. in
favor of the Underwriters relating to sales of shares of Common Stock of
the Company shall have been delivered to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and shall be in
full force and effect on the Closing Date.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement, this Agreement may be
terminated by you on notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party, except as provided in Section 6 herein. Notwithstanding any
such termination, the provisions of Sections 1(a) and 8 herein shall remain in
effect. Notice of such termination shall be given to the Company in writing or
by telephone confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing
Date.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 herein is not satisfied,
because of any termination pursuant to Section 10(a) herein or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision herein other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all documented out-of-pocket expenses (including fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To prepare the Prospectus, including any amendment or supplement
thereto, in a form approved by the Underwriters and to file such
Prospectus pursuant to Rule 424(b) under the Securities Act not later than
the Commission's close of business on the second business day following
the execution and delivery of this Agreement or, if applicable, such
earlier time as may be required under the Securities Act; to make no
further amendment or any supplement to the Registration Statement or to
the Prospectus except as permitted herein;
23
(b) To furnish to each of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and its counsel, without
charge, one signed copy of the Registration Statement (including exhibits
thereto) and for delivery to each other Underwriter a conformed copy of
the Registration Statement (without exhibits thereto) and, during the
period mentioned in paragraph (d) below, as many copies of the Preliminary
Prospectus and the Prospectus and any supplements and amendments thereto
or to the Registration Statement as you may reasonably request.
(c) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object.
(d) If, during such period after the first date of the public
offering of the Securities, as in the opinion of counsel for the
Underwriters, the Preliminary Prospectus or the Prospectus is required by
law to be delivered in connection with sales by an Underwriter or a
dealer, any event shall occur or condition exist as a result of which it
is necessary to amend or supplement the Preliminary Prospectus or the
Prospectus, as the case may be, in order to make the statements therein,
in the light of the circumstances when the Preliminary Prospectus or the
Prospectus, as the case may be, is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Preliminary Prospectus or the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Securities may have been sold by you on behalf of the Underwriters
and to any other dealers upon request, either amendments or supplements to
the Preliminary Prospectus or the Prospectus, as the case may be, so that
the statements therein as so amended or supplemented will not, in the
light of the circumstances when the Preliminary Prospectus or the
Prospectus, as the case may be, is delivered to a purchaser, be misleading
or so that the Preliminary Prospectus or the Prospectus, as amended or
supplemented, as the case may be, will comply with law.
(e) From the date of this Agreement, and for so long as a
Preliminary Prospectus or a Prospectus is required to be delivered in
connection with the sale of Securities covered by this Agreement, the
Company will notify you immediately, and confirm the notice in writing,
(i) of the effectiveness of any amendment to
24
the Registration Statement, (ii) of the mailing or the delivery to the
Commission for filing of any supplement to the Preliminary Prospectus or
the Prospectus or any document to be filed pursuant to the Exchange Act
which will be incorporated by reference into the Registration Statement,
Preliminary Prospectus or the Prospectus, (iii) of the receipt of any
comments from the Commission with respect to the Registration Statement,
the Preliminary Prospectus or the Prospectus, (iv) of any request by the
Commission for any amendment to the Registration Statement or any
amendment or supplement to the Preliminary Prospectus or the Prospectus or
for additional information and (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose. The Company will
make every commercially reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain, as soon as
possible, the lifting thereof.
(f) The Company will comply to the best of its ability with the
Securities Act and the Exchange Act and the regulations thereunder so as
to permit the completion of the distribution of the Securities as
contemplated in this Agreement and the Prospectus; and the Company, during
the period when the Preliminary Prospectus and the Prospectus is required
to be delivered under the Securities Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13 or 14 of
the Exchange Act within the time periods required under the Exchange Act.
(g) The Company will endeavor to qualify the Securities for offer
and sale under the state securities or blue sky laws of such jurisdictions
as you shall reasonably request and to maintain such qualifications in
effect for as long as may be required for the distribution of the
Securities by the Underwriters; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. The Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Securities have been qualified as above provided.
(h) With respect to each sale of Securities, the Company will make
generally available to its security holders as soon as practicable but in
any event not later than 90 days after the close of the period
25
covered thereby a consolidated earnings statement for a twelve-month
period beginning after the effective date (as defined in Rule 158(c) under
the Securities Act) of the Registration Statement relating to such
Securities, but not later than the first day of the Company's fiscal
quarter next following such effective date and that otherwise satisfies
the provisions of Section 11(a) of the Securities Act and the regulations
thereunder.
(i) The Company will use the proceeds received from the sale of the
Securities in the manner specified in the Prospectus under the heading
"Use of Proceeds."
(j) For a period of five years after the Closing Date, if so
requested, the Company will furnish to each of you copies of all annual
reports, quarterly reports and current reports filed with the Commission
on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the Commission, and such other documents, reports and
information as shall be furnished by the Company to the holders of the
Securities or to security holders of its respective publicly issued
securities generally.
(k) To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and
filing of the Registration Statement including all financial statements,
schedules and exhibits and the Prospectus and all amendments and
supplements thereto; (ii) the preparation, issuance and delivery to you of
the Securities; (iii) the fees and disbursements of the Company's counsel
and accountants; (iv) the qualification of the Securities under the state
securities or blue sky laws in accordance with the provisions of Section
6(g) herein, including filing fees and the fees and disbursements of
counsel for the Underwriters in connection therewith and in connection
with the preparation of the preliminary and final state securities laws or
blue sky surveys (the "Blue Sky Surveys") or any Legal Investment
Memoranda; (v) the printing and delivery to the Underwriters in quantities
as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of each Preliminary Prospectus and the Prospectus
and any amendments or supplements thereto; (vi) the printing and delivery
to the Underwriters of copies of the Blue Sky Surveys or any Legal
Investment Memoranda; (vii) any fees charged by rating agencies for the
rating of the Securities or the listing, if any, of the Securities on the
NYSE; (viii) the filing fees and expenses, if any, incurred with respect
to any filing with the National Association of Securities Dealers,
26
Inc. (the "NASD") made in connection with the offering of the Securities;
and (ix) any expenses incurred by the Company in connection with a "road
show" presentation to potential investors.
(l) For a period of 90 days after the date of this Agreement, the
Company will not offer, sell, contract to sell, pledge, hypothecate, grant
any option to purchase or otherwise dispose of, directly or indirectly, or
file with the Commission a registration statement under the Securities Act
(other than on Form S-8 relating to resales of securities as described in
the general instructions to Form S-8) relating to any shares of Common
Stock or securities convertible or exchangeable into or exercisable for
any shares of Common Stock, without the prior written consent of ▇▇▇▇▇
▇▇▇▇▇▇ Inc., except (i) grants of employee stock options and other awards
pursuant to the terms of stock option plans in effect on the date hereof
or described in the Prospectus, (ii) sales and issuances of securities
pursuant to the exercise of any such options or awards or the exercise of
any other stock options or awards outstanding on the date hereof, (iii)
the issuance and/or sale of Common Stock pursuant to existing employee
benefit plans of the Company, (iv) the issuance and/or sale of Common
Stock upon the exercise of the respective rights of the holders of the
Company's Series A Exchangeable Preferred Stock, par value $.01 per share,
Series B Exchangeable Preferred Stock, par value $.01 per share, Series C
Exchangeable Preferred Stock, and the Convertible Preferred Stock, par
value $.01 per share, to exchange their shares of Exchangeable or
Convertible Preferred Stock, as the case may be, into shares of Common
Stock, (v) the issuance and/or sale of Common Stock upon the exercise of
any of the Company's warrants or options outstanding on the date hereof
and (vi) in connection with a bona fide loan transaction which does not
permit the pledgee, directly or indirectly, to offer, sell, contract to
sell or otherwise dispose of any interest in such shares or securities
during such 90 day period;
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers and
employees of each Underwriter and each person who controls any Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
27
untrue statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any amendment
thereof, or in the Preliminary Prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representative
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representative
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth in (i) the first sentence of the last paragraph of text on the cover
page of the Prospectus concerning the terms of the offering by the Underwriters,
(ii) the last paragraph on page S-2 of the Prospectus, concerning stabilization
and over-allotment by the Underwriters and (iii) the second paragraph of text
under the caption "Underwriters" in the Prospectus Supplement, concerning the
terms of the offering by the Underwriters in the Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Prospectus or the Prospectus, and you, as the
Representative, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
28
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any
29
reason, the Company and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the Underwriters
may be subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and by the Underwriters from the offering of
the Securities; provided, however, that in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating to the offering
of the Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
Underwriter hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Underwriters shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the
Underwriters in connection with the statements or omissions which resulted in
such Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to information provided by the Company or the
Underwriters. The Company and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls an
Underwriter within the meaning of either the Securities Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
each officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Survival. The indemnity and contribution provisions contained in
Section 8 herein and the representations, warranties and other statements of the
30
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (c) acceptance of and payment for any of
the Securities.
10. Termination. ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. may terminate this Agreement by
notice to the Company, at any time at or prior to the Closing Date (a) if there
has been, since the respective dates as of which information is given in the
Registration Statement or the Prospectus, any Material Adverse Change, or any
development involving a prospective Material Adverse Change or (b) if there has
occurred any new outbreak of hostilities or escalation of existing hostilities
or other calamity or crisis the effect of which on the financial markets in the
United States is such as to make it, in your judgment, impracticable to market
the Securities or enforce contracts for the sale of the Securities, or (c) if
trading in any securities of the Company has been suspended on any exchange or
in any over-the-counter market or by the Commission, or if trading generally on
the NYSE has been suspended, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices for securities have been required, by such
exchange or by order of the Commission or any other governmental authority or
(d) if a general moratorium on commercial banking activities in New York State
has been declared by either federal or New York State authorities.
11. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
31
Section 11, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representative shall determine in order that the required
changes in the Registration Statement and the Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
12. Notices. In all dealings hereunder, you shall act on behalf of
each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by ▇▇▇▇▇ ▇▇▇▇▇▇ Inc..
All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be given (and shall be
deemed to have been given upon receipt) by delivery in person, by cable, by
telecopy, ny telegram, by telex or by registered or certified mail (postage
prepaid, return receipt requested) to the applicable party at the addresses
indicated below:
(a) if to the Underwriters:
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel,
Investment Banking Division
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to the Company:
▇▇▇▇▇-Illinois, Inc.
One ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
General Counsel
32
with a copy to:
Kohlberg Kravis & ▇▇▇▇▇▇▇ & Co.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Partner
and with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 herein, and no
other person will have any right or obligation hereunder.
14. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
15. Time of the Essence. Time shall be of the essence of this
Agreement.
16. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
17. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
▇▇▇▇▇-ILLINOIS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇ BROTHERS INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
For itself and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
SCHEDULE I
Number of Number of Option
Underwritten Securities to be Purchased
Securities to be if Maximum Option
Underwriters Purchased Securities Exercised
------------ ---------------- --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc................... 2,800,001 367,500
BT Alex. ▇▇▇▇▇ Incorporated........ 1,733,333 227,500
▇▇▇▇▇▇▇, Sachs & Co................ 1,733,333 227,500
▇▇▇▇▇▇ Brothers Inc................ 1,733,333 227,500
--------- ---------
Total.............................. 8,000,000 1,050,000
========= =========
Schedule II
Upon the consummation of the Offerings (as defined in the
Prospectus), 100% of the shares of capital stock of each Significant Subsidiary
will be, directly or indirectly, owned by the Company free and clear of any
material lien, except that the Company owns approximately 99% of the outstanding
shares of AVIR S.p.A.
SCHEDULE III
Executive Officers and Directors
Who Have Executed Lock-Up Agreements
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇