1
EXHIBIT 1.1
===============================================================================
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
Dated: August , 1997
================================================================================
2
TABLE OF CONTENTS
Page
U.S. PURCHASE AGREEMENT .............................................. 1
SECTION 1. Representations and Warranties ......................... 4
(a) Representations and Warranties by the Company .............. 4
(i) Compliance with Registration Requirements .......... 4
(ii) Incorporated Documents ............................. 5
(iii) Independent Accountants ............................ 5
(iv) Financial Statements ............................... 6
(v) No Material Adverse Change in Business ............. 6
(vi) Good Standing of the Company and
the Subsidiaries.................................... 7
(vii) Capitalization ..................................... 8
(viii) Authorization of Agreement ......................... 8
(ix) Authorization and Description of Securities......... 8
(x) Absence of Defaults and Conflicts .................. 9
(xi) Certain Tax Matters ................................ 9
(xii) Absence of Proceedings ............................. 10
(xiii) Accuracy of Exhibits ............................... 10
(xiv) Possession of Intellectual Property ................ 10
(xv) Absence of Further Requirements .................... 10
(xvi) Possession of Licenses and Permits ................. 11
(xvii) Title to Property .................................. 11
(xviii) Investment Company Act ............................. 11
(xix) Environmental Laws ................................. 11
(xx) Compliance with Regulation M ....................... 12
(b) Representations and Warranties by the
Selling Shareholders....................................... 12
(i) Accurate Disclosure ................................ 12
(ii) Authorization of Agreements ........................ 12
(iii) Good and Marketable Title .......................... 13
(iv) Due Execution of Power of
Attorney and Custody Agreement...................... 13
(v) Absence of Manipulation ............................ 14
(vi) Absence of Further Requirements .................... 14
(vii) Certificates Suitable for Transfer ................. 15
(viii) No Association with NASD ........................... 15
(c) Officer's Certificates ............................. 15
-i-
3
Page
SECTION 2. Sale and Delivery to U.S.
Underwriters; Closing....................... 15
(a) Initial Securities ............................. 15
(b) Option Securities .............................. 16
(c) Payment ........................................ 16
(d) Denominations; Registration .................... 17
SECTION 3. Covenants of the Company ................... 17
(a) Compliance with Securities Regulations and
Commission Requests............................. 17
(b) Filing of Amendments ........................... 18
(c) Delivery of Registration Statements ............ 18
(d) Delivery of Prospectuses ....................... 18
(e) Continued Compliance with Securities Laws ...... 19
(f) Blue Sky Qualifications ........................ 19
(g) Rule 158 ....................................... 20
(h) Use of Proceeds ................................ 20
(i) Listing ........................................ 20
(j) Restriction on Sale of Securities .............. 20
(k) Reporting Requirements ......................... 20
SECTION 4. Payment of Expenses ............................ 20
(a) Expenses ....................................... 20
(b) Expenses of the Selling Shareholders ........... 21
(c) Termination of Agreement ....................... 21
(d) Allocation of Expenses ......................... 22
SECTION 5. Conditions of U.S. Underwriters' Obligations .. 22
(a) Effectiveness of Registration Statement ........ 22
(b) Opinion of Counsel for Company ................. 22
(c) Opinion of Counsels for the Selling Shareholders 23
(d) Opinion of Counsel for U.S. Underwriters ....... 23
(e) Officers' Certificate .......................... 23
(f) Certificate of Selling Shareholders ............ 24
(g) Accountant's Comfort Letter .................... 24
(h) Bring-down Comfort Letter ...................... 24
(i) Approval of Listing ............................ 24
(j) No Objection ................................... 24
(k) Lock-up Agreements ............................. 24
(l) Purchase of Initial International Securities ... 25
-ii-
4
Page
(m) Conditions to Purchase of U.S. Option
Securities.................................................. 25
(i) Officers' Certificate ................................. 25
(ii) Opinion of Counsel for Company ........................ 25
(iii) Opinion of Counsel for U.S. Underwriters .............. 25
(iv) Bring-down Comfort Letter ............................. 25
(n) Additional Documents ....................................... 26
(o) Termination of Agreement ................................... 26
SECTION 6. Indemnification ............................................ 26
(a) Indemnification of U.S. Underwriters ....................... 26
(b) Indemnification of Company, Directors,
Officers and Selling Shareholders........................... 28
(c) Actions against Parties; Notification ...................... 28
(d) Settlement without Consent if Failure to Reimburse.......... 29
(e) Other Agreements with Respect to Indemnification............ 29
SECTION 7. Contribution ............................................... 29
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery............................................ 32
SECTION 9. Termination of Agreement ................................... 32
(a) Termination; General ......................................... 32
(b) Liabilities .................................................. 32
SECTION 10. Default by One or More of the U.S. Underwriters............. 33
SECTION 11. Default by One or More of the Selling Shareholders.......... 33
SECTION 12. Notices .................................................... 34
SECTION 13. Parties .................................................... 34
SECTION 14. Information Supplied by the Selling Shareholders............ 34
SECTION 15. GOVERNING LAW AND TIME ..................................... 34
SECTION 16. Effect of Headings ......................................... 34
-iii-
5
Page
SCHEDULES
Schedule A -List of Underwriters .................... Sch A-1
Schedule B -List of Selling Shareholders ............ Sch B-1
Schedule C -Pricing Information ..................... Sch C-1
Schedule D -List of Subsidiaries .................... Sch D-1
Schedule E -List of Persons Subject to Lock-up....... Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel .... A-1
Exhibit B - Form of Opinion for the Selling
Shareholders' Counsel................... B-1
Exhibit C - Form of Lock-up Letter................... C-1
-iv-
6
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
(a Delaware corporation)
3,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
Dated: August , ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ Wheels International, Inc., a Delaware corporation (the "Company"),
and ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Selling
Shareholders") confirm their respective agreements with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear,
▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. (collectively, the "U.S.
Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to (i) the sale by the
Company and each Selling Shareholder, acting severally and not jointly, and the
purchase by the U.S. Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $0.01 per share, of the
Company ("Common Stock") set forth in Schedules A and B hereto and (ii) the
grant by the Company to the U.S. Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 450,000 additional shares of Common Stock solely to cover
over-allotments, if any. The aforesaid 3,000,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 450,000 shares of Common Stock subject to the option described
in Section 2(b) hereof (the "U.S. Option Securities") are hereinafter called,
collectively, the "U.S. Securities."
It is understood that the Company and the Selling Shareholders are
concurrently entering into an agreement dated
7
the date hereof (the "International Purchase Agreement") providing for the sale
by the Company and each Selling Shareholder of an aggregate of 779,502 shares
of Common Stock (the "Initial International Securities") through arrangements
with certain underwriters outside the United States and Canada (the
"International Managers") and the grant by the Company to the International
Managers, acting severally and not jointly, of an option to purchase all or any
part of the International Managers' pro rata portion of up to 116,925
additional shares of Common Stock solely to cover overallotments, if any (the
"International Option Securities" and together, with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company is not obligated to sell, and
the U.S. Underwriters are not obligated to purchase, any Initial U.S.
Securities unless all of the Initial International Securities are
contemporaneously purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in
such capacity, the "Global Coordinator").
The Company and the Selling Shareholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon
as the U.S. Underwriters 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-3 (No. 333-31669) covering the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule
424(b)") of the 1933 Act Regulations or (ii) if the Company has elected to rely
upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term
sheet (a "Term
-2-
8
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical
to the Form of U.S. Prospectus, except for the front cover and back cover pages
and the information under the caption "Underwriting", "Legal Matters",
"Experts" and the inclusion in the Form of International Prospectus of a
section under the caption "Certain United States Federal Tax Consequences for
Non-U.S. Stockholders". The information included in such prospectus or in such
Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective (a) pursuant to
paragraph (b) of Rule 430A is referred to as "Rule 430A Information" or (b)
pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434 Information."
Each Form of U.S. Prospectus and Form of International Prospectus used before
such registration statement became effective, and any prospectus that omitted,
as applicable, the Rule 430A Information or the Rule 434 Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
Form of U.S. Prospectus and the final Form of International Prospectus,
including the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, in the form first furnished to the Underwriters
for use in connection with the offering of the Securities is herein called the
"U.S. Prospectus" and the "International Prospectus," respectively, and
collectively, the "Prospectuses." If Rule 434 is relied on, the term "U.S.
Prospectus" and "International Prospectus" shall refer to the preliminary U.S.
Prospectus dated August 4, 1997 and the preliminary International Prospectus
dated August 4, 1997, respectively, each together with the applicable Term
Sheet and all references in this Agreement to the date of such Prospectuses
shall mean the date of the applicable Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the U.S. Prospectus, the International Prospectus or any Term Sheet
or any amendment or supplement to any of the foregoing shall (i) be deemed to
include the copy
-3-
9
filed with the Commission pursuant to its Electronic Data Gathering, Analysis
and Retrieval system ("▇▇▇▇▇") and (ii) be deemed not to include the forms of
preliminary Prospectuses dated July 23, 1997.
All references in this Agreement to financial statements
and schedules and other information which is "contained," "included" or "stated"
in the Registration Statement, any preliminary prospectus (including the Form of
U.S. Prospectus and the Form of International Prospectus) or the Prospectuses
(or other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which is
incorporated by reference in the Registration Statement, any preliminary
prospectus (including the Form of U.S. Prospectus and the Form of International
Prospectus) or the Prospectuses, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectuses shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectuses, as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each U.S.
Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will com-
-4-
10
ply 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 the Prospectuses nor any amendments or supplements
thereto, at the time the Prospectuses or any amendments or supplements
thereto were issued and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the U.S. Prospectus made in reliance upon and
in conformity with information furnished to the Company in writing by any
Underwriter expressly for use in the Registration Statement or the U.S.
Prospectus.
Each preliminary prospectus and the prospectuses filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectuses, 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 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectuses, at the time the
Registration Statement became effective, at the time the Prospectuses
were issued and at the Closing Time (and, if any U.S. Option Securities
are purchased, at the Date of Delivery), 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.
(iii) Independent Accountants. The accountants who certified the
financial statements and supporting sched-
-5-
11
ules included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The audited consolidated financial
statements and schedules of each of the Company and Lemmerz Holding GmbH
("Lemmerz") included in the Registration Statement and the Prospectuses
present fairly the consolidated financial position, results of operations
and cash flows of the Company and Lemmerz, respectively, at the dates and
for the periods to which they relate and have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a
consistent basis, except as otherwise stated therein; the unaudited
consolidated financial statements and the related notes of the Company
and Lemmerz included in the Registration Statement and the Prospectuses
present fairly the consolidated financial position, results of operations
and cash flows of the Company and Lemmerz, respectively, at the dates and
for the periods to which they relate, subject to year-end audit
adjustments, and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as otherwise
stated therein and have been prepared on a basis substantially consistent
with that of the audited financial statements referred to above except as
otherwise stated therein; to the best knowledge of the Company, after due
inquiry, the summary and selected financial and statistical data included
in the Registration Statement and the Prospectuses present fairly the
information shown therein and have been prepared and compiled on a basis
consistent with the audited and unaudited financial statements included
therein, except as otherwise stated therein.
The pro forma financial statements and other pro forma financial
information (including the notes thereto) included in the Registration
Statement and the Prospectuses (A) have been prepared in accordance with
applicable requirements of Rule 11-02 of Regulation S-X promulgated under
the 1933 Act and (B) have been properly computed on the bases described
therein; the assumptions used in the preparation of the pro forma
financial statements and other pro forma financial information included
in the Registration Statement and the Prospectuses are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(v) No Material Adverse Change in Business. Subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectuses and except as described therein, (A) the
Company and its
-6-
12
Subsidiaries (as hereinafter defined),taken as a whole, have not incurred
any material liabilities or obligations, direct or contingent, or entered
into any material transactions, in either case whether or not in the
ordinary course of business, and (B) the Company and the Subsidiaries
have not purchased any of their respective outstanding capital stock, or
declared, paid or otherwise made any dividend or distribution of any kind
on any of their respective capital stock or otherwise.
(vi) Good Standing of the Company and the Subsidiaries. The Company
and each of the Subsidiaries that is a corporation organized under the
laws of a jurisdiction of the United States has been duly incorporated
and the Company and each Subsidiary that is a corporation organized under
the laws of a jurisdiction of the United States is validly existing in
good standing as a corporation under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own
its properties and conduct its business as now conducted as described in
the Prospectuses, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not, individually or in the aggregate, have a material adverse
effect on the business, condition (financial or other) or results of
operations of the Company and the Subsidiaries, taken as a whole (any
such event a "Material Adverse Effect"); the Company and each of the
Subsidiaries that is not a corporation organized under the laws of a
jurisdiction of the United States has been duly organized and is validly
existing under the laws of the jurisdiction in which it is so organized,
with the requisite power and authority to own its properties and conduct
its business as now conducted and as described in the Prospectuses;
except as set forth in Schedule D hereto (collectively, the
"Subsidiaries"), the Company does not have any subsidiaries or own
directly or indirectly any of the capital stock or other equity
securities of any other person; all of the outstanding shares of capital
stock of the Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and were not issued in violation of any
preemptive or similar rights and, except pursuant to the Amended and
Restated Credit Agreement, dated as of June 30, 1997 (the "Credit
Agreement"), among the Company, Canadian Imperial Bank of Commerce,
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation, Dresdner Bank AG and the several
lenders thereunder, are owned free and clear of all liens, encumbrances,
equities and restrictions on transferability (other than those imposed by
the 1933 Act and the state securities or "Blue Sky" laws); except as set
forth in the
-7-
13
Prospectuses, no options, warrants or other rights to purchase from the
Company or any Subsidiary, agreements or other obligations of the Company
or any Subsidiary or other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership
interests in any Subsidiary, are outstanding.
(vii) Capitalization. The Company had, as of the date specified
therein, the authorized, issued and outstanding capital stock of the
Company set forth in the Prospectuses in the column entitled "Actual"
under the caption "Capitalization." The shares of issued and outstanding
capital stock, including the Securities to be purchased by the
Underwriters from the Selling Shareholders, have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company, including the
Securities to be purchased by the Underwriters from the Selling
Shareholders, was issued in violation of the preemptive or other similar
rights of any securityholder of the Company; except as set forth in the
Prospectuses, no options, warrants or other rights to purchase from the
Company, agreements or other obligations of the Company, or other rights
to convert any obligation into, or exchange any securities for, shares of
capital stock in the Company are outstanding.
(viii) Authorization of Agreement. The Company has the requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(ix) Authorization and Description of Securities. The Securities to
be purchased by the U.S. Underwriters and the International Managers from
the Company have been duly authorized for issuance and sale to the U.S.
Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and in the International Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to
the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company.
-8-
14
(x) Absence of Defaults and Conflicts. None of the Company or the
Subsidiaries is (i) in violation of its certificate of incorporation or
bylaws, (ii) in violation of any statute, judgment, decree, order, rule
or regulation applicable to it or any of its properties or assets, which
violation would, individually or in the aggregate, have a Material
Adverse Effect, or (iii) in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate or agreement or
instrument to which it is a party or to which it is subject, which
default would, individually or in the aggregate, have a Material Adverse
Effect; the execution, delivery and performance by the Company of the
Purchase Agreements and the consummation by the Company of the
transactions contemplated hereby and thereby and the fulfillment of the
terms hereof and thereof, will not violate, conflict with or constitute
or result in a breach of or a default under (or an event that, with
notice or lapse of time, or both, would constitute a breach of or a
default under) any of (a) the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, or agreement or instrument to which the Company or any the
Subsidiaries is a party or to which any of their respective properties or
assets are subject, which violation, conflict, breach or default would,
individually or in the aggregate, have a Material Adverse Effect, (b) the
certificate of incorporation or bylaws of the Company or any of the
Subsidiaries or (c) (assuming compliance with all applicable state
securities and "Blue Sky" laws) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or other body
applicable to the Company or the Subsidiaries or any of their respective
properties or assets, which violation, conflict, breach or default would,
individually or in the aggregate, have a Material Adverse Effect.
(xi) Certain Tax Matters. The Company and each of the Subsidiaries
has filed all necessary federal, state and foreign income and franchise
tax returns, except where the failure to so file such returns would not,
individually or in the aggregate, have a Material Adverse Effect; and,
other than taxes due thereon or tax deficiencies which the Company or any
Subsidiary reasonably believe that it has provided adequate reserves, has
paid all taxes due thereon and there is no tax deficiency that has been
asserted against the Company or any Subsidiary that would, individually
or in the aggregate, have a Material Adverse Effect.
-9-
15
(xii) Absence of Proceedings. Except as described in the
Prospectuses, there is not pending or, to the best knowledge of the
Company, threatened any action, suit, proceeding, inquiry or
investigation, governmental or otherwise, to which the Company or any of
the Subsidiaries is a party, or to which their respective properties or
assets are subject, before or brought by any court, arbitrator or
governmental agency or body, that, if determined adversely to the Company
or the Subsidiaries, would, individually or in the aggregate, have a
Material Adverse Effect or that seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale by the
Company of the Securities to be sold hereunder or the consummation by the
Company of the transactions described in the Prospectuses under the
caption "Use of Proceeds."
(xiii) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectuses or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xiv) Possession of Intellectual Property. The Company and the
Subsidiaries possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and know-how
that are necessary to conduct their business as described in the
Prospectuses; except as set forth in the Prospectuses, none of the
Company or the Subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with)
asserted rights of others with respect to any patents, trademarks,
service marks, trade names, copyrights or know-how that, if such
assertion of infringement or conflict were sustained, would, individually
or in the aggregate, have a Material Adverse Effect.
(xv) Absence of Further Requirements. Except as set forth in the
Prospectuses, no consent, approval, authorization or order of any court
or governmental agency or body is required for the performance of the
Purchase Agreements by the Company or for the consummation by the Company
of any of the transactions contemplated hereby and thereby, except for
(i) such consents, approvals, authorizations or orders as have been
obtained or made under the 1933 Act or the 1933 Act Regulations or as may
be required under state securities or "Blue Sky" laws in connection with
the purchase and distribution of the Securities by the Underwriters and
(ii) such other consents, approvals, authorizations or orders, including,
without limitation, such as may be required for the quotation of the
Securi-
-10-
16
ties on the Nasdaq National Market, all of which have been obtained or
made or will have been obtained or made at or prior to the Closing Time
with respect to the Initial Securities and at or prior to the relevant
Date of Delivery with respect to the Option Securities.
(xvi) Possession of Licenses and Permits. The Company and each of
the Subsidiaries has obtained all licenses, permits, franchises and other
governmental authorizations, the lack of which would, individually or in
the aggregate, have a Material Adverse Effect.
(xvii) Title to Property. The Company and each of the Subsidiaries
has good and marketable title to all real property described in the
Prospectuses as being owned by it and good and marketable title to the
leasehold estate in the real property described therein as being leased
by it, free and clear of all liens, charges, encumbrances or
restrictions, except, in each case, pursuant to the Credit Agreement, as
described in the Prospectuses or such as would not, individually or in
the aggregate, have a Material Adverse Effect.
(xviii) Investment Company Act. None of the Company or the
Subsidiaries is required to register as an "investment company" or a
company "controlled by" an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(xix) Environmental Laws. Except as disclosed in the Prospectuses
and except as would not, individually or in the aggregate, have a
Material Adverse Effect, (A) the Company and each of the Subsidiaries is
in compliance with all applicable Environmental Laws, (B) the Company and
each of the Subsidiaries has made all filings and provided all notices
required under any applicable Environmental Laws, and has all permits,
authorizations and approvals required under any applicable Environmental
Laws and is in compliance with their requirements, (C) there are no
pending or, to the best knowledge of the Company, after due inquiry,
threatened Environmental Claims against the Company or any of the
Subsidiaries and (D) none of the Company or the Subsidiaries has
knowledge of any circumstances with respect to any of their respective
properties or operations that could reasonably be anticipated to form the
basis of an Environmental Claim against any of them or any of their
subsidiaries or any of their respective properties or operations and the
business operations relating thereto which Environmental Claims would,
individually or in the aggregate, have a Material Adverse Effect.
-11-
17
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any federal, state, local
or municipal statute, law, rule, regulation, ordinance, code or rule and
any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment binding on
the Company or any of the Subsidiaries relating to pollution or
protection of the environment or health or safety or any chemical,
material or substance that is subject to regulation thereunder.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, written notices
of responsibility, information requests, liens, written notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
(xx) Compliance with Regulation M. None of the Company or the
Subsidiaries or any of their directors, officers or controlling persons,
has taken, directly or indirectly, any action designed, or that might
reasonably be expected, to cause or result, under the 1933 Act or
otherwise, in, or that has constituted, stabilization or manipulation of
the price of any security of any Company to facilitate the sale or resale
of the Securities (it being understood that no representation or warranty
is made as to any actions by the Underwriters) in violation of Regulation
M promulgated under the 1933 Act.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING SHAREHOLDERS. Each
Selling Shareholder represents and warrants, severally and not jointly, to each
U.S. Underwriter as of the date hereof and as of the Closing Time, and agrees
with each U.S. Underwriter, as follows:
(i) Accurate Disclosure. Such Selling Shareholder has reviewed and
is familiar with the Registration Statement and the Prospectuses and none
of the Prospectuses nor any amendments or supplements thereto include any
untrue statement of a material fact 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. The
representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement or the
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by such Selling Shareholder expressly
for use in the Registration Statements or the Prospectuses.
(ii) Authorization of Agreements. Such Selling Shareholder has the
full legal capacity to enter into the
-12-
18
Purchase Agreements, a Power of Attorney (the "Power of Attorney") and,
if applicable, a Custody Agreement (the "Custody Agreement") and to sell,
transfer and deliver the Securities to be sold by such Selling
Shareholder hereunder. The execution and delivery of the Purchase
Agreements, the Power of Attorney and, if applicable, the Custody
Agreement and the sale and delivery of the Securities to be sold by such
Selling Shareholder and the consummation of the transactions contemplated
herein and compliance by such Selling Shareholder with its obligations
hereunder 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
Shareholder 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 Shareholder is a party or by which
such Selling Shareholder may be bound, or to which any of the property or
assets of such Selling Shareholder is subject, nor will such action
result in any violation of any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties or assets.
(iii) Good and Marketable Title. Such Selling Shareholder has, and
will at the Closing Time have, good and marketable title to the
Securities to be sold by such Selling Shareholder under the Purchase
Agreements, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to the Purchase Agreements and, with respect to each of ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, the Option Agreement, dated as of
July 30, 1997 (the "Option Agreement"), among the Company and each such
Selling Shareholder; and upon delivery of such Securities and payment of
the purchase price therefor as contemplated in the Purchase Agreements,
each of the Underwriters will receive good and marketable title to the
Securities purchased by it from such Selling Shareholder, free and clear
of any security interest, mortgage, pledge, lien, charge, claim, equity
or encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement. Such
Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Underwriters, the Power of Attorney with
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, each as attorney-in-fact (each
an "Attorney-in-Fact") and, if applicable, the Custody Agreement
-13-
19
with the Company, as custodian (the "Custodian"); if such Selling
Shareholder has executed the Custody Agreement, the Custodian is
authorized to deliver the Securities to be sold by such Selling
Shareholder hereunder and to accept payment therefor; each
Attorney-in-Fact is authorized to execute and deliver this Agreement and
the certificate referred to in Section 5(f) on behalf of such Selling
Shareholder, to sell, assign and transfer to the U.S. Underwriters and
the International Managers the Securities to be sold by such Selling
Shareholder hereunder and under the International Purchase Agreement, to
determine the purchase price to be paid by the Underwriters to such
Selling Shareholder, as provided in Section 2(c) hereof and of the
International Purchase Agreement, to authorize the delivery of the
Securities to be sold by such Selling Shareholder hereunder and under the
International Purchase Agreement, to accept payment therefor and, in the
case of ▇▇. ▇▇▇▇▇, to exercise his options in order to sell the
Securities to be sold by him pursuant to the Purchase Agreements and
otherwise to act on behalf of the Selling Shareholder in connection with
this Agreement and the International Purchase Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Securities.
(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 Shareholder of
its obligations under the Purchase Agreements, in the Power of Attorney
or, if applicable, the Custody Agreement, or in connection with the sale
and delivery by such Selling Shareholder of the Securities under the
Purchase Agreements or the consummation by such Selling Shareholder of
the transactions contemplated by the Purchase Agreements, except for (i)
such as may have previously been made or obtained under the 1933 Act or
the 1933 Act Regulations or as may be required under state securities or
"Blue Sky" laws in connection with the purchase and sale of the
Securities by the Underwriters and (ii) such others as may be required,
all of which have been obtained or made or will have been obtained or
made at or prior to the Closing Time.
-14-
20
(vii) Certificates Suitable for Transfer. In the case of ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ only, certificates for all of the
Securities to be sold by such Selling Shareholder pursuant to the
Purchase Agreements, 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 the Purchase Agreements.
(viii) No Association with NASD. Neither such Selling Shareholder
nor any of his or her affiliates directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(a) of the By-laws of the National Association of
Securities Dealers, Inc.), any member firm of the National Association of
Securities Dealers, Inc.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any
officer of the Company delivered to the U.S. Underwriters or to counsel
for the U.S. Underwriters shall be deemed a representation and warranty by the
Company to each U.S. Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the U.S. Underwriters or to counsel for the U.S. Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by such Selling Shareholder to each U.S. Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to U.S.
Underwriters; Closing.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and each Selling Shareholder, severally and not jointly,
agree to sell to each U.S. Underwriter, severally and not jointly, and each
U.S. Underwriter, severally and not jointly, agrees to purchase from the
Company and each Selling Shareholder, at the price per share set forth in
Schedule C, that proportion of the number of Initial U.S. Securities set forth
in Schedule B opposite the name of the Company or each Selling Shareholder, as
the case may be, which the number of Initial U.S. Securities set forth in
Schedule A opposite the name of such U.S. Underwriter, plus any additional
number of Initial U.S. Securities which such U.S. Underwriter may elect to
purchase pursuant to the provisions of Section 10 hereof, bears to the total
number of Initial U.S. Securities, subject, in each case, to such adjustments
among the U.S. Underwriters as the Global Coordinator in
-15-
21
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 Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 450,000 shares of
Common Stock, as set forth in Schedule B, at the price per share set forth in
Schedule C, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial U.S. Securities but not
payable on the U.S. Option Securities. The option hereby granted will expire
30 days after the date hereof and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial U.S. Securities
upon notice by the Global Coordinator to the Company setting forth the number
of U.S. Option Securities as to which the several U.S. Underwriters are then
exercising the option and the time and date of payment and delivery for such
U.S. Option Securities. Any such time and date of delivery for the U.S. Option
Securities (a "Date of Delivery") shall be determined by the Global
Coordinator, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of
the U.S. Option Securities, each of the U.S. Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of U.S. Option
Securities then being purchased which the number of Initial U.S. Securities set
forth in Schedule A opposite the name of such U.S. Underwriter bears to the
total number of Initial U.S. Securities, subject in each case to such
adjustments as the Global Coordinator in its discretion shall make to eliminate
any sales or purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇ 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 U.S. Option Securities
are purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates
-16-
22
for, such U.S. Option Securities shall be made at the above-mentioned offices,
or at such other place as shall be agreed upon by the Global Coordinator and
the Company, on each Date of Delivery as specified in the notice from the
Global Coordinator to the Company.
Payment shall be made to the Company and each Selling Shareholder
by wire transfer of immediately available funds to bank accounts
designated by the Company and each Selling Shareholder, as the case may be,
against delivery to the U.S. Underwriters for their respective accounts of
certificates for the U.S. Securities to be purchased by them. Payment in
respect of the Securities shall be made in United States dollars. ▇▇▇▇▇▇▇
▇▇▇▇▇, individually and not as representative of the U.S. Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
U.S. Securities or the U.S. Option Securities, if any, to be purchased by any
U.S. Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such U.S. Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Underwriters may request
in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the
Initial U.S. Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Underwriters 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 U.S. Underwriter 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
-17-
23
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, whether pursuant to the 1933 Act, the
1934 Act or otherwise, will furnish the Global Coordinator with copies of
any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such
document to which the Global Coordinator or counsel for the U.S.
Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or will deliver to the U.S. Underwriters and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts. The copies of
the Registration Statement and each amendment thereto furnished to the
U.S. Underwriters will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act
-18-
24
or the 1934 Act, such number of copies of the U.S. Prospectus (as
amended or supplemented) as such U.S. Underwriter may reasonably request.
The U.S. Prospectus and any amendments or supplements thereto furnished
to the U.S. Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act
and the 1934 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement, the
International Purchase Agreement and in the Prospectuses. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters or for the Company, to amend
the Registration Statement or amend or supplement any Prospectus in order
that the Prospectuses will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
necessary, in the opinion of such counsel, at any such time to amend the
Registration Statement or amend or supplement any Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will promptly prepare and file with the Commission, subject
to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement
or the Prospectuses comply with such requirements, and the Company will
furnish to the U.S. Underwriters such number of copies of such amendment
or supplement as the U.S. Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will cooperate with the
Underwriters in arranging for the qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Underwriters may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities by the Underwriters; provided, however,
that in connection therewith the Company shall not be required to qualify
as a foreign corporation or dealer in any jurisdiction in which it is not
so qualified, to file any general consent to service of process in any
jurisdiction or to take any other action that would subject it to service
of process or to taxation
-19-
25
in respect to doing business in any jurisdiction in which it is not
otherwise subject.
(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.
(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 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. During the period from the
date of the Prospectuses to the date which is 120 days thereafter, the
Company will not, without the prior written consent of the Global
Coordinator, directly or indirectly, sell, offer to sell, grant any
option for the sale of or otherwise dispose of, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable
for Common Stock. The foregoing sentence shall not apply to (A) the
Securities to be sold hereunder, (B) the purchase of shares of Common
Stock pursuant to the Option Agreement, (C) any shares of Common Stock
issued by the Company upon the exercise of any option under the 1992 Plan
or the 1996 Plan (as defined in the Prospectuses), or (D) any shares of
Common Stock issued upon conversion of the shares of the Company's Class
A Preferred Stock outstanding on the date hereof.
(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 1934 Act Regulations.
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, in-
-20-
26
cluding (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 U.S. Underwriters and the International
Managers, (iv) the fees and disbursements of the Company's counsel, accountants
and other advisors, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Underwriters
in connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing 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 and (x) the fees
and expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market.
(b) EXPENSES OF THE SELLING SHAREHOLDERS. Each Selling Shareholder will
pay all expenses incident to the performance of its obligations under, and the
consummation of the transactions contemplated by this Agreement (other than any
stamp duties, capital duties and stock transfer taxes, if any, payable upon the
sale of the Securities to the U.S. Underwriters) including the fees and
disbursements of its counsel and accountants.
(c) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Underwriters in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company and, in the event that such termination results
from any act or omission of one or more Selling Shareholders, such Selling
Shareholder(s), shall reimburse the U.S. Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.
-21-
27
(d) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and any Selling Shareholder may make
regarding the allocation of such costs and expenses.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
obligations of the several U.S. Underwriters hereunder are subject to
the representations and warranties of the Company and each of the Selling
Shareholders contained in Section 1 hereof which are qualified as to materiality
being true and correct, and those not so qualified being true and correct in all
material respects, the accuracy of the representations and warranties in
certificates of any officer of the Company or any Subsidiary of the Company or
on behalf of each Selling Shareholder delivered pursuant to the provisions
hereof, to the performance in all material respects by the Company of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission, and
any request on the part of the Commission for additional information
shall have been complied with to the reasonable satisfaction of counsel
to the U.S. Underwriters. A prospectus containing the Rule 430A
Information shall have been filed with the Commission in accordance with
Rule 424(b) (or a post-effective amendment providing such information
shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon
Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the U.S.
Underwriters shall have received the favorable opinion, dated as of
Closing Time, of (i) Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, counsel for
the Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, to the effect set forth in Exhibit A-1 hereto and to such
further effect as counsel to the U.S. Underwriters may reasonably request
and (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, general counsel of the Company in form and
substance satisfactory to counsel for the U.S. Underwriters, to the
effect set forth in Exhibit A-2 hereto and to such further effect as
counsel to the U.S. Underwriters may reasonably request.
-22-
28
(c) OPINION OF COUNSELS FOR THE SELLING SHAREHOLDERS. At Closing
Time, the U.S. Underwriters shall have received the favorable opinion,
dated as of Closing Time, of (i) Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, and (ii) Foster,
Swift, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇.▇. counsel for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, each in form
and substance satisfactory to counsel for the U.S. Underwriters, to the
effect set forth in Exhibit B hereto and to such further effect as
counsel to the U.S. Underwriters may reasonably request.
(d) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. At Closing Time, the
U.S. Underwriters shall have received the favorable opinion, dated as of
Closing Time, of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, with respect to the matters set forth in clauses (i), (ii),
(iii), (iv) and (viii) (with respect to clause (viii), solely as to the
information in the Prospectuses under the caption "Description of Capital
Stock-Common Stock") and the last paragraph of Exhibit A-1 hereto. In
giving such opinion, such counsel will express no opinion as to 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. 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.
(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 business, condition, financial or otherwise, or results of operations
of the Company and its Subsidiaries, taken as a whole, whether or not
arising in the ordinary course of business, and the U.S. Underwriters
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
in Section 1(a) hereof which are qualified as to materiality are true and
correct, and those not so qualified are true and correct in all material
respects with the same force and effect as though expressly made at and
as of Closing Time, (iii) the Company has complied in all material
respects 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 pro-
-23-
29
ceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(f) CERTIFICATE OF SELLING SHAREHOLDERS. At Closing Time, the U.S.
Underwriters shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the
effect that (i) the representations and warranties of such Selling
Shareholder contained in Section 1(b) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing
Time and (ii) such Selling Shareholder has complied in all material
respects with all agreements and all conditions on its part to be
performed under this Agreement at or prior to Closing Time.
(g) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this Agreement, the U.S. Underwriters shall have received from KPMG Peat
Marwick LLP and KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprufungsgesellschaft (the "Independent Accountants") letters
dated such date, in form and substance satisfactory to the U.S.
Underwriters, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectuses.
(h) BRING-DOWN COMFORT LETTER. At Closing Time, the U.S.
Underwriters shall have received from the Independent Accountants
letters, 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.
(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 U.S.
Underwriters shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule E hereto.
-24-
30
(l) PURCHASE OF INITIAL INTERNATIONAL SECURITIES.
Contemporaneously with the purchase by the U.S. Underwriters of the
Initial U.S. Securities under this Agreement, the International Managers
shall have purchased the Initial International Securities under the
International Purchase Agreement.
(m) CONDITIONS TO PURCHASE OF U.S. OPTION SECURITIES. In the event
that the U.S. Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the U.S. Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall
be true and correct in all material respects as of each Date of Delivery
and, at the relevant Date of Delivery, the U.S. Underwriters 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) Opinion of Counsel for Company. The favorable opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company,
together with the favorable opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, general
counsel to the Company, each in form and substance satisfactory to
counsel for the U.S. Underwriters, dated such Date of Delivery,
relating to the U.S. Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, counsel for the U.S.
Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section
5(d) hereof.
(iv) Bring-down Comfort Letter. A letter from the Independent
Accountants, in form and substance satisfactory to the U.S.
Underwriters and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the U.S.
Underwriters pursuant to Section 5(g) hereof, except that the
"specified date" in the letter furnished pursuant
-25-
31
to this paragraph 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 U.S. Underwriters shall have been furnished with
such additional documents and certificates 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 each of the Selling Shareholders in connection with the
issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the U.S. Underwriters and counsel
for the U.S. Underwriters.
(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 U.S. Option Securities on a Date of Delivery which is after
the Closing Time, the obligations of the several U.S. Underwriters to
purchase the relevant U.S. Option Securities, may be terminated by the
U.S. Underwriters by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) INDEMNIFICATION OF U.S. UNDERWRITERS. Subject to the
qualifications set forth below, the Company and each Selling Shareholder,
severally and not jointly, agrees to indemnify and hold harmless each U.S.
Underwriter and each person, if any, who controls any U.S. Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material
-26-
32
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;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of
the Company and such Selling Shareholder; and
(iii) against any and all expense whatsoever, as incurred (including
the reasonable and documented 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 loss,
liability, claim, damage or expense 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
Underwriter expressly for use in the Registration Statement (or any amendment
thereto), including in the Rule 430A Information and the Rule 434 Information,
if applicable, or in any preliminary prospectus or the Prospectuses (or in any
amendment or supplement thereto; provided, further, that each Selling
Shareholder shall indemnify and hold harmless the U.S. Underwriters pursuant to
this Section 6(a) only with respect to untrue statements or omissions or
alleged untrue statements or omissions, made in the Registration Statement (or
amendment thereto) or in any preliminary prospectus or the Prospectuses (or in
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Selling Shareholder
expressly for use in the Registration Statement (or any amendment thereto) or
in any preliminary prospectus or the Prospectuses (or in any amendment or
supplement thereto).
-27-
33
Notwithstanding the provisions of this Section 6(a), the liability of a
Selling Shareholder to all parties for indemnification under this Section 6(a)
(or for breach of the representation and warranty of such Selling Shareholder
set forth in Section 1(b)) shall not exceed in any event the proceeds (net of
underwriting discounts and commissions) from the Securities sold by such
Selling Shareholder to the U.S. Underwriters pursuant to this Agreement.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS, OFFICERS AND SELLING
SHAREHOLDERS. Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
and each Selling Shareholder against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or in any amendment thereto), including in the Rule 430A Information and the
Rule 434 Information, if applicable, or in any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter expressly for use in the Registration Statement (or any amendment
thereto) or in such preliminary prospectus or the Prospectuses (or in 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. 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 simi-
-28-
34
lar 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
(or any other release reasonably acceptable to the indemnified party) 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. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, an indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case 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 any Selling
Shareholder with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason, other than as a result of the first proviso to
Section 6(a), unavailable
-29-
35
to or insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party,
as incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, by the Selling Shareholders and by the U.S.
Underwriters from the offering of the U.S. 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, of the Selling Shareholders and of the U.S. Underwriters 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, by the Selling Shareholders
and by the U.S. Underwriters in connection with the offering of the U.S.
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the Selling Shareholders and the total underwriting discount
received by each of the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering price
of the U.S. Securities as set forth on such cover.
The relative fault of the Company, of the Selling Shareholders and of the
U.S. Underwriters shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Selling Shareholders or by the U.S. Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, each Selling Shareholder and the U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the U.S. Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other ex-
-30-
36
penses 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 U.S. Underwriter
shall be required to (i) contribute any amount in excess of the amount by which
the total price at which the U.S. Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission or (ii)
contribute any amount in excess of their proportionate share of the aggregate
amount of any losses, liabilities, claims, damages and expenses referred to
above which proportionate share shall be deemed to be equal to the proportion
that total underwriting discounts received by such U.S. Underwriters bears to
the aggregate initial offering price of the U.S. Securities, in each case as
set forth on the cover of the U.S. Prospectus.
Notwithstanding the provisions of this Section 7, no Selling Shareholder
shall be required to contribute any amount in excess of the proceeds (net of
underwriting discounts and commissions) from the Securities sold by such
Selling Shareholder to the U.S. Underwriters pursuant to this Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The Selling Shareholders' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial U.S.
Securities set forth opposite their respective names in Schedule B hereto and
not joint.
-31-
37
The provisions of this Section shall not affect any agreement among the
Company and any Selling Shareholder 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 any
Selling Shareholder submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any U.S. Underwriter or controlling person, or by or on behalf of the Company
or any Selling Shareholder, and shall survive delivery of the Securities to the
U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) TERMINATION; GENERAL. The U.S. Underwriters may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time
at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is
given in the U.S. Prospectus, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its Subsidiaries, taken as a whole, 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 U.S. Underwriters, 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, 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
-32-
38
and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under
this Agreement (the "Defaulted Securities"), the U.S. Underwriters shall have
the right, but not the obligation, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting U.S. Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the U.S. Underwriters shall not have completed such
arrangements within such 24-hour period, then this Agreement shall terminate
without liability on the part of any non-defaulting U.S. Underwriter.
No action pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either (i) the U.S. Underwriters or (ii) the Company shall have
the right to postpone the Closing Time or a Date of Delivery 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
arrangement.
SECTION 11. Default by One or More of the Selling Shareholders. If one or
more Selling Shareholder(s) shall fail at Closing Time to sell and deliver the
number of Securities which such Selling Shareholder(s) are obligated to sell
hereunder, then the U.S. Underwriters may, at option of the U.S. Underwriters,
by notice from the Global Coordinator to the Company, either (a) 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 (b) elect to purchase the Securities which the Company and any
non-defaulting Selling Shareholders have agreed to sell hereunder. No action
taken pursuant to this Section 11 shall relieve the Selling Shareholder(s) so
defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Shareholder as referred to in
this Section 11, each of the U.S. Underwriters and the Company shall have the
right to postpone the Closing Time 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.
-33-
39
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to them at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of; notices to the Company shall be
directed to it at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention
of General Counsel and with a copy to Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq.; notices to ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ shall be directed
to them c/o Herrn ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇, Lemmerz Holding GmbH, Postfach 1125,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of Germany and notices to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
shall be directed to him at.
SECTION 13. Parties. This Agreement shall inure to the benefit of and be
binding upon the U.S. Underwriters, the Company and each Selling Shareholder
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the U.S. Underwriters, the Company and each Selling
Shareholder and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the U.S. Underwriters, the Company and each Selling
Shareholder and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from any U.S. Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. Information Supplied by the Selling Shareholders. The
statements set forth under the caption "Principal and Selling Stockholders"
concerning a Selling Stockholder contained in any preliminary prospectus, the
Prospectuses, the Registration Statement and any amendments or supplement
thereto constitute the only information furnished by such Selling Stockholder
for purposes of this Agreement.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 16. 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.
-34-
40
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
each Selling Shareholder a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the U.S.
Underwriters, the Company and each Selling Shareholder in accordance with its
terms.
Very truly yours,
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
By:_____________________________________
Title:
THE
SELLING SHAREHOLDERS
By:_____________________________________
as Attorney-in-Fact acting on behalf
of the Selling Shareholders named in
Schedule B hereto.
-35-
41
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By:_____________________________________
Authorized Signatory
-36-
42
SCHEDULE A
Number of
Initial U.S.
Name of U.S. Underwriters Securities
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated................................
Bear, ▇▇▇▇▇▇▇ & Co., Inc. .....................
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ..........................
_________
Total.......................................... _________
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
Number of Initial U.S.
Securities to be Sold
▇▇▇▇▇ WHEELS
INTERNATIONAL, INC.
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ _________
Total.....................
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
3,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities shall be
$.
2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $, being an amount equal to the initial
public offering price set forth above less $ per share [(the "Net Proceeds Per
Share")]; provided that the purchase price per share for any U.S. Option
Securities purchased upon the exercise of the over-allotment option described
in Section 2(b) shall be reduced by an amount per share equal to any dividends
or distributions declared by the Company and payable on the Initial U.S.
Securities but not payable on the U.S. Option Securities[; and provided
further, that in the event that the Net Proceeds Per Share is greater than $30,
then, for each of the U.S. Securities sold by each of ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇, respectively, the U.S. Underwriters shall pay to the
Company the amount by which Net Proceeds Per Share is greater than $30 per
share](1).
-------------
(1) Include only if Net Proceeds Per Share exceeds $30.
Sch C-1
45
SCHEDULE D
Company Subsidiaries
▇▇▇▇▇ Wheels International - California, Inc.
▇▇▇▇▇ Wheels International - Michigan, Inc.
▇▇▇▇▇ Wheels International - Indiana, Inc.
▇▇▇▇▇ Wheels International - Georgia, Inc.
▇▇▇▇▇ Wheels International - Mexico, Inc.
HWI (Europe), Ltd.
▇▇▇▇▇ Wheels, S.p.A.
▇▇▇▇▇ Wheels Autokola NH, as
Reliable Transportation Components Inc.
▇▇▇▇▇ Wheels International - Missouri, Inc.
▇▇▇▇▇ Wheels International - Kentuckulus, Inc.
▇▇▇▇▇ Wheels Aftermarket, Inc.
▇▇▇▇▇ Wheels Japan Limited
▇▇▇▇▇ Wheels de Espana, S.A.
HWI Service Corporation
▇▇▇▇▇ Wheels Foreign Sales Corp.
Motor Wheel Corporation
MWC Acquisition Sub, Inc.
Motor Wheel de Mexico, S.A. de C.V.
Motor Wheel Corporation of Canada, Ltd.
AMW Holdings, Inc.
HL Holdings BV
HL Holdings de Espana
HL Holding Germany GmbH
▇▇▇▇▇ Wheels Hungary Consulting Limited Liability Company
Newco No. 17 Vermogensverwaltungs GmbH (post-Acquisition)
Newco No. 18 Vermogensverwaltungs GmbH (post-Acquisition)
Lemmerz Holding GmbH
Metaalgieterij ▇▇▇▇▇▇ B.V.
Lemmerz Espanola ▇.▇.
▇▇▇▇▇▇▇-Werke GmbH
Lemmerz-Werke Wohnungsbaugesellschaft mbH
Lemmerz Service System N.V.
Lemmerz Belgie N.V.
Lemmerz Comerico e Participacoes SRL
Lemmerz Canada Inc.
PSW Prazisions-und Spezialwerkzeuge AG
Lemmerz-Inci-Jany Sanayi A.S.
Company Joint Venture and Other Interests
Numbers in parentheses represent percent of total owned by the Company or one
of its subsidiaries.
▇▇▇▇▇ Wheels de Venezuela, C.A. (49)
▇▇▇▇▇ Wheels de Mexico, S.A. de C.V. (40)
Aluminum Wheel Technology, Inc. (50)
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇ Tool Company (30)
▇▇▇▇▇ Wheels do Brasil, Ltda. (49)
Continental Lemmerz (Portugal), Componentes para
Automoveis, Lda. (49)
Borlem S.A. Empreendimentos Industriais (45)
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Industries (25)
Kalyani-Lemmerz Ltd. (25)
Jantas Jant Sanayi ve Ticaret S.A. (25)
Siam Lemmerz Co., Ltd. (25)
Additional Information
See Section 4.3(c), paragraph (ii), of the disclosure schedule provided by
Lemmerz pursuant to the acquisition agreement dated as of June 6, 1997 among
the Company, Cromodoro Wheels S.p.A., and the shareholders of Lemmerz (the
"Acquisition Agreement") regarding certain qualifying shares held by third
parties in certain subsidiaries of Lemmerz.
Sch D-2
47
SCHEDULE E
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ Fund II, L.P.
TSG Capital Fund II, L.P.
CIBC WG Argosy Merchant Fund 2, L.L.C.
Nomura Holding America, Inc.
Chase Equity Associates, L.P.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇ (▇▇▇) ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Sch ▇-▇
▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF COMPANY'S
COUNSEL TO BE DELIVERED
PURSUANT TO SECTION 5(b)
(i) The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized by the
Company and, when issued and delivered by the Company pursuant to the
U.S. Purchase Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth in the U.S.
Purchase Agreement and the International Purchase Agreement,
respectively, will be validly issued, 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.
(ii) the Company has the requisite corporate power and authority to
execute, deliver and perform its obligations under the U.S. Purchase
Agreement and the International Purchase Agreement. The U.S. Purchase
Agreement and the International Purchase Agreement have been duly
authorized by the Company and, when executed and delivered by the
Company, will constitute a valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms except
that (a) we express no opinion as to the enforceability of any rights to
contribution or indemnity provided for in any such agreement to the
extent any such rights are violative of any law, rule or regulation or
the public policy underlying any law, rule or regulation (including
federal or state securities law, rule or regulation) and (b) enforcement
thereof may be limited by (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding at law or in equity).
(iii) 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
49
-2-
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and, to the
best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(iv) The Registration Statement, as of its effective date, and the
Prospectuses, as of their respective dates, excluding the documents
incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectuses filed with the Commission
through the date hereof, excluding the documents incorporated by
reference therein (other than the financial statements and schedules
included therein or omitted therefrom, as to which we express no opinion)
appear on their face to be appropriately responsive in all material
respects to the requirements of the 1933 Act and the 1933 Act
Regulations, except that we do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement and the Prospectuses other than, to the extent set
forth in paragraph (viii) below, those made in the Prospectuses under the
caption "Description of Capital Stock".
(v) 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.
(vi) No Governmental Approval is required for the performance by the
Company of its obligations under the U.S. Purchase Agreement, the
International Purchase Agreement or the consummation of the transactions
contemplated thereby relating to the Securities, other than under the
1933 Act and the 1933 Act Regulations which have been obtained.
As used in such counsel's opinion, (a) the term "Applicable Laws"
means, to the extent specifically referred to herein, the General
Corporation Law of the State of Delaware, and those laws of the State of
New York and the United States of America, in each case, that, in our
experience, are normally applicable to transactions of the type provided
for by the Purchase Agreements but, without our having made any special
investigation with respect to any other laws; provided that "Applicable
Laws" does not include any [federal or] state securities laws or blue sky
50
-3-
laws of any jurisdiction, anti-fraud laws of any jurisdiction, rules and
regulations of the National Association of Securities Dealers, Inc.; (b)
the term "Governmental Authority" means any Delaware, New York or United
States federal executive, legislative, judicial, administrative or
regulatory body; and (c) the term "Governmental Approval" means any
authorization, approval, consent or order of, or filing with, any
Governmental Authority under Applicable Laws, other than any such
authorization, approval, consent, order or filing which may have become
applicable to the Company or any of its Subsidiaries as a result of the
involvement by any Selling Shareholder or any Underwriter in the
transactions contemplated by the Purchase Agreements or because of the
legal or regulatory status of, or any other facts specifically pertaining
to, any Selling Shareholder or any Underwriter.
(vii) The execution, delivery and performance by the Company of the
U.S. Purchase Agreement and the International Purchase Agreement and the
consummation by the Company of the transactions contemplated thereby,
will not violate or conflict with the Restated Certificate of
Incorporation or Amended and Restated By-laws of the Company.
(viii) The statements set forth in the Prospectuses under the
caption "Description of Capital Stock" insofar as such statements
constitute a summary of the terms of the Company's Restated Certificate
of Incorporation and Amended and Restated By-laws, fairly summarize such
terms in all material respects.
(ix) None of the Company or the Subsidiaries is required to register
as an "investment company" or a company "controlled by" an "investment
company" as such terms are defined in the Investment Company Act of 1940,
as amended.
In addition, we have participated in conferences with officers and
other representatives of the Company, representatives of the independent public
accountants and representatives of the Underwriters at which the contents of
the Registration Statement and the Prospectuses were discussed and, although we
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or Prospectuses (except as indicated in clause (viii) above) and have
not made any independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to the extent we deemed
51
-4-
appropriate upon the statements of officers and other representatives of the
Company) no facts have come to our attention that have caused us to believe
that the Registration Statement at the time it became effective, or any post
effective amendment thereto as of its date, 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 either
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 in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that we express no opinion on or belief with respect to the financial
statements or other financial and statistical data or information included or
incorporated by reference in the Registration Statement or the Prospectuses or
the exhibits to the Registration Statement).
52
EXHIBIT A-2
FORM OF OPINION OF GENERAL COUNSEL
OF THE COMPANY TO BE DELIVERED PURSUANT
TO SECTION 5(b)
(i) The Company and each of the Subsidiaries has been duly
incorporated and is validly existing in good standing, as a corporation
under the laws of its jurisdiction of incorporation, with the requisite
corporate power and authority to own its properties and conduct its
business as described in the Prospectuses and is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect; the outstanding shares of capital stock
of the Company (including the Securities to be purchased by the
Underwriters from the Selling Shareholders) and the Subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable and were not issued in violation of any preemptive or
similar rights and, in the case of the Subsidiaries, except in connection
with the Amended Credit Agreement (as defined in the Prospectuses), are
owned free and clear of all liens, encumbrances, equities and
restrictions on transferability (other than those imposed by the 1933 Act
and the state securities or "Blue Sky" laws); to the best of my
knowledge, except as set forth in the Prospectuses, no options, warrants
or other rights to purchase from the Company or any Subsidiary or,
agreements or other obligations of the Company or any Subsidiary to issue
or other rights to cause the Company, to convert any obligation into, or
exchange any securities for, shares of capital stock or ownership
interests in the Company or any Subsidiary are outstanding.
(ii) The issuance and sale of the Securities by the Company and the
sale of the Securities by the Selling Shareholders is not subject to the
preemptive or other similar rights of any securityholder of the Company.
(iii) No consent, approval, authorization or order of any
governmental agency or body, or to the best of such counsel's knowledge,
any court, is required for the performance of any of the U.S. Purchase
Agreement, the International Purchase Agreement or any of the agreements
contemplated thereby or delivered in connection therewith, or the
consummation of the transactions contemplated thereby,
A-1
53
except such as may be required and have been obtained as described in the
Prospectuses or under the 1933 Act and the 1933 Act Regulations, or as
may be required under state securities or "Blue Sky" laws as to which
such counsel need express no opinion.
(iv) None of the Company or the Subsidiaries is (a) in violation of
its certificate of incorporation or bylaws, (b) in violation of any
statute, judgment, decree, order, rule or regulation applicable to any of
its properties or assets, which violation would, individually or in the
aggregate, have a Material Adverse Effect or (c) in breach of or in
default under any material contract, indenture, mortgage, deed of trust,
loan agreement, note, lease, license, franchise agreement, permit,
certificate or other material agreement or instrument to which it is a
party or to which it is subject, which breach or default would
individually or in the aggregate, have a Material Adverse Effect.
(v) The execution, delivery and performance by the Company of the
U.S. Purchase Agreement, the International Purchase Agreement and the
consummation by the Company of the transactions contemplated thereby and
the fulfillment of the terms thereof, will not violate, conflict with or
constitute or result in a breach of or a default under (or an event that
with notice or lapse of time, or both, would constitute a breach of or a
default under) any of the terms or provisions of (a) any material
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement or other material agreement or instrument to which
the Company or any of the Subsidiaries is a party or to which any of
their respective properties or assets are subject or (b) to the best of
such counsel's knowledge (assuming compliance with all applicable Federal
and state securities and "Blue Sky" laws) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to the Company or any of the Subsidiaries or any of their
respective properties or assets, which violation, conflict, breach or
default would, individually or in the aggregate, have any Material
Adverse Effect.
(vi) Except as described in the Prospectuses, there are no legal or
governmental proceedings pending or threatened to which the Company or
any of the Subsidiaries is a party or to which the respective properties
or assets of the Company or the Subsidiaries are subject that are
required to be described in the Prospectuses that are not described
therein, or that seek to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Securities to the
Underwriters or the
A-2
54
consummation of the transactions described in the Prospectuses under the
captions "Use of Proceeds"; and no contract, agreement or other document
is required to be described in the Registration Statement or the
Prospectuses or to be filed as an exhibit to the Registration Statement
that is not described therein or filed as required.
I have participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants for the Company, outside counsel for the Company, your
counsel and your representatives at which the contents of the Registration
Statement and the Prospectuses and related matters were discussed and, although
I am not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectuses, I advise you that, on the basis of the foregoing,
no facts have come to my attention that lead me to believe that the Registration
Statement at the time it became effective, or any post effective amendment
thereto as of its date, 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 either 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 I have not been requested to and
do not make any comment with respect to the financial statements and the notes
thereto and other financial and accounting information included or incorporated
by reference in the Registration Statement or the Prospectuses or the exhibits
to the Registration Statement).
A-3
55
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDER(S)
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) The Power of Attorney [and Custody Agreement] has been duly executed
and delivered by the Selling Shareholder(s) and constitutes the legal, valid
and binding agreement of the Selling Shareholder(s).
(ii) The U.S. Purchase Agreement and the International Purchase Agreement
have been duly executed and delivered by or on behalf of the Selling
Shareholder(s).
(iii) The execution, delivery and performance of the U.S. Purchase
Agreement, the International Purchase Agreement, the Power of Attorney [and
Custody Agreement] and the sale and delivery of the Securities and the
consummation of the transactions contemplated in the U.S. Purchase Agreement
and the International Purchase Agreement and in the Registration Statement and
compliance by the Selling Shareholder(s) with its/their obligations under the
U.S. Purchase Agreement and the International Purchase Agreement do not and
will not, whether with or without the giving of notice or 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 or any property or assets of the Selling Shareholder(s) pursuant to,
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other instrument or agreement to which the Selling
Shareholder(s) is a party or by which he/she may be bound, or to which any of
the property or assets of the Selling Shareholder(s) may be subject nor will
such action result in any violation of any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative or
court decree having jurisdiction over the Selling Shareholder(s) or any of
his/her properties.
(iv) By delivery of a certificate or certificates therefor the Selling
Shareholder(s) will transfer to the U.S. Underwriters and the International
Managers who have purchased such Securities pursuant to the U.S. Purchase
Agreement and the International Purchase Agreement, respectively, (without
notice of any defect in the title of the Selling Shareholder(s) and who are
otherwise bona fide purchasers for purposes of the Uniform Commercial Code)
valid and marketable title to such Securities, free and clear of any pledge,
lien, security interest, charge, claim, equity or encumbrance of any kind.
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by ▇▇▇▇▇
Wheels International, Inc.
Dear Sirs:
The undersigned, a stockholder of ▇▇▇▇▇ Wheels International, Inc., a
Delaware corporation (the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear,
▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. propose to enter into a U.S.
Purchase Agreement (the "U.S. Purchase Agreement") with the Company and the
Selling Shareholders named therein providing for the public offering of shares
of the Company's common stock, par value $.01 per share (the "Common Stock").
Simultaneously, ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, Bear, ▇▇▇▇▇▇▇ International
Limited and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International propose to enter into an International
Purchase Agreement (the "International Purchase Agreement" and, together with
the U.S. Purchase Agreement, the "Purchase Agreements") with the Company and
the Selling Shareholders named therein providing for the public offering of
shares of Common Stock. Capitalized terms used herein without definition shall
have the meanings assigned thereto in the Purchase Agreements. In recognition
of the benefit that such offerings will confer upon the undersigned as a
stockholder 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 that, during the period from the date of the
Prospectuses to the date which is 120
C-1
57
days thereafter, the undersigned will not, without the prior written consent of
the Global Coordinator, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any shares of the 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. The foregoing sentence shall not apply (A) with respect to either
of ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, to (1) the Securities to be sold
under the Purchase Agreements or (2) any shares of Common Stock sold or
purchased upon exercise of the Option (as defined in the Option Agreement,
dated as of July 30, 1997, among the Company, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇) or (B) with respect to any of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇-Lemerz, to any shares of
Common Stock issued upon conversion of the shares of the Company's Class A
Preferred Stock outstanding on the date hereof.
Very truly yours,
Signature:___________________________
Print Name:__________________________
C-2
58
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
CUSTODY AGREEMENT
THIS AGREEMENT, dated as of August , 1997, among ▇▇▇▇▇ Wheels
International, Inc., a Delaware corporation (the "Company"), the undersigned
stockholder of the Company (the "Selling Stockholder") and the Company, solely
in its capacity as custodian (the "Custodian").
W I T N E S S E T H:
WHEREAS, the Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-3, including amendments
(the "Registration Statement"), in connection with the proposed offer and sale
to the public of shares of its Common Stock, par value $.01 per share (the
"Common Stock"), to be offered and sold by the Company and by and on behalf of
the Selling Stockholder and the other selling stockholders named in the
Registration Statement (the "Public Offering"); and
WHEREAS, the Selling Stockholder owns certain duly authorized, issued and
outstanding shares of Common Stock; and
WHEREAS, to induce ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. (the "U.S.
Underwriters") and ▇▇▇▇▇▇▇ ▇▇▇▇▇, Bear, ▇▇▇▇▇▇▇ International Limited and
▇▇▇▇▇▇▇ ▇▇▇▇▇ International (the "International Managers" and, collectively
with the U.S. Underwriters, the "Underwriters") as underwriters of the proposed
Public Offering to enter into the Purchase Agreements referred to in Section 3
hereof and to assure the Underwriters that the shares of Common Stock to be
offered by the Selling Stockholder will be delivered to the Underwriters at the
closing of the Public Offering and to provide for the orderly processing of the
Registration Statement and sale of such shares of Common Stock, it is necessary
and in the best interests of the Selling Stockholder, the other selling
stockholders and the Company to enter into the following agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth and other good and valuable consideration the
receipt of which is hereby acknowledged, the parties hereto agree as follows:
59
-2-
1. Appointment of Custodian. The Custodian is hereby appointed to act and
to hold and dispose of the shares of the Selling Stockholder's Common Stock to
be offered and sold under the terms of the Registration Statement pursuant to
the instructions of an attorney-in-fact for the Selling Stockholder (the
"Attorney-in-Fact") appointed by the Selling Stockholder pursuant to a Power of
Attorney executed by the Selling Stockholder and attached hereto as Appendix I,
all in accordance with the terms and conditions of this Agreement and any
amendments or supplements hereto given to the Custodian in writing and signed
by the Attorney-in-Fact acting on behalf of the Selling Stockholder.
2. Deposit of Shares. As soon as possible after the execution of this
Agreement and in no event later than August 15, 1997, the Selling Stockholder
shall deposit with the Custodian certificates representing at least the number
of shares of Common Stock set forth opposite such Selling Stockholder's name on
Exhibit A hereto, registered in its name (or the names of its nominee if
properly identified) and duly endorsed in blank for transfer by separate stock
power. The stock certificates and the separate endorsed stock powers should be
delivered to the Custodian at the address set forth in Section 10 hereof for
deposit with the Custodian. Thereafter, upon the reasonable request of the
Custodian, the Selling Stockholder agrees to furnish any other documentation
which the transfer agent of the Company may request in order to assure the sale
and transfer of such shares of Common Stock. Such minimum numbers of shares of
Common Stock which are to be deposited with the Custodian by the Selling
Stockholder in accordance with the foregoing are hereinafter collectively
referred to as the "Deposit Stock."
The Deposit Stock represented by the certificates so deposited with the
Custodian by the Selling Stockholder are subject to the interests hereunder of
the Underwriters; provided, however, that until payment by the Underwriters of
the purchase price for the shares, the Selling Stockholder shall remain the
owner of the Deposit Stock and shall have the right to vote such shares and to
receive all dividends and distributions therefrom; however, until such payment
in full has been made or until the Purchase Agreements have been terminated,
the Selling Stockholder agrees that the undersigned will not give, sell,
pledge, hypothecate, grant any lien (other than to the Company) on, transfer,
deal with or contract with respect to the shares to be sold by the Selling
Stockholder pursuant to the Purchase Agreements or any interest therein, except
in accordance with the Purchase Agreements and the Option Agreement
60
-3-
(as defined in the Purchase Agreements); the arrangements for the custody and
delivery of such certificates made by the Selling Stockholder hereunder are not
subject to termination by any acts of the Selling Stockholder, or by operation
of law, whether by the death or incapacity of such Selling Stockholder or the
occurrence of any other event, except as provided in Section 4 hereof; and if
any such death, incapacity or any other such event shall occur before the
delivery of such shares hereunder, the Custodian is nevertheless fully
authorized and directed to deliver certificates for such shares in accordance
with the terms and conditions of this Agreement and the Purchase Agreements as
if such death, incapacity or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such death,
incapacity or other event.
3. Purchase Agreements. The Selling Stockholder acknowledges receipt of a
draft of a U.S. purchase agreement among the Company, the Selling Stockholder,
the other selling stockholders and the U.S. Underwriters relating to the
offering of shares of Common Stock and the purchase thereof by the several U.S.
Underwriters, a copy of which is attached hereto as Appendix II-A, and an
international purchase agreement among the Company, the Selling Stockholder,
the other selling stockholders and the International Managers relating to the
offer of shares of Common Stock and the purchase thereof by the several
International Managers, a copy of which is attached hereto as Appendix II-B.
The definitive purchase agreements, to be in substantially the form of such
drafts (the "Purchase Agreements"), will set forth the terms and conditions of
the sale and purchase of said shares and provide for the rights and
responsibilities, and the representations, warranties, covenants and
indemnities, which will be expected of the Selling Stockholder in connection
therewith. It is understood that the Purchase Agreements will be executed by
the U.S. Underwriters and the International Managers, respectively, and by the
Company, and by an Attorney-in-Fact on behalf of the Selling Stockholder,
effective on the date that the Registration Statement becomes effective with
the Commission, at which time the price to be paid to the Selling Stockholder
by the Underwriters for the Common Stock being offered will be inserted in the
Purchase Agreements. The Selling Stockholder hereby approves the drafts of the
Purchase Agreements attached hereto as Appendix II, together with any and all
such changes thereto as are approved by any Attorney-in-Fact.
4. Custodian to Act on Direction of Attorneys-in-Fact. The
Attorneys-in-Fact, and each of them, have been
61
-4-
authorized pursuant to the Power of Attorney referred to in Section 1 to
execute and deliver the Purchase Agreements on behalf of the Selling
Stockholder who has executed such Power of Attorney and to direct at the
Closing Time referred to in the Purchase Agreements the release of all or part
of the Deposit Stock to the Underwriters pursuant to the terms of the Purchase
Agreements. The Custodian is hereby authorized and directed to deliver the
Deposit Stock pursuant to instructions from the Underwriters at the Closing
Time referred to in the Purchase Agreements upon receipt of a wire transfer of
immediately available funds, in an amount sufficient to pay the Selling
Stockholder the aggregate purchase price for the Deposit Stock purchased at
such Closing Time. The Custodian shall have no liability whatsoever for
releasing the Deposit Stock to the Underwriters in accordance with the
provisions of the foregoing sentence. If the Purchase Agreements shall not be
entered into or the transactions contemplated thereby shall not have been
consummated on or prior to November 30, 1997, then the Custodian shall promptly
return to the Selling Stockholder all of the Deposit Stock held by the
Custodian for the Selling Stockholder at the address set forth on the signature
page hereto, and shall destroy all stock powers relating thereto delivered to
it pursuant to Section 2 hereof. Upon the delivery of all of the Deposit Stock
to the Selling Stockholder in accordance with this Section 4, the Custodian
shall have no further responsibility hereunder.
5. Representations and Warranties of Selling Stockholder. The
Selling Stockholder hereby represents and warrants to each Underwriter as
follows:
(a) Each of the representations and warranties of the Selling
Stockholder set forth in Section 1(b) of the Purchase Agreements (in the
form of such agreements provided to the undersigned) is true and correct;
(b) This Agreement has been duly executed and delivered by the
Selling Stockholder and constitutes a legal and binding obligation of the
Selling Stockholder, enforceable in accordance with its terms; and
(c) The Selling Stockholder has full legal right and capacity to
execute this Agreement (including the Irrevocable Power of Attorney of
Selling Stockholder), to enter into the Purchase Agreements and to sell,
transfer, assign and deliver the Common Stock to be sold by the Selling
Stockholder in accordance with the Purchase Agreements and each of the
Underwriters will receive good and marketable
62
-5-
title to such Common Stock purchased by it pursuant to the Purchase
Agreements.
The Selling Stockholder hereby further covenants that the foregoing
representations and warranties will be true and correct on the date the
Purchase Agreements are executed and at the Closing Time referred to in the
Purchase Agreements and shall survive the sale and delivery of the Deposit
Stock and the termination of this Agreement.
For purposes of rendering an opinion pursuant to the Purchase Agreements,
counsel for the undersigned may rely on the representations and warranties of
the undersigned set forth herein and in the Purchase Agreements as if said
representations and warranties had been set forth in a separate certificate
directed to said counsel at and as of the Closing Time; and for purposes of
delivering any certificate on behalf of the undersigned which may be required
in connection with the delivery of the Deposit Stock, pursuant to the Purchase
Agreements, the Attorneys-in-Fact may rely on the representations and
warranties of the Selling Stockholder set forth herein and in the Purchase
Agreements as if said representations and warranties had been set forth in a
separate certificate directed to the Attorneys-in-Fact at the Closing Time.
6. Payment to Selling Stockholder.
(a) The Selling Stockholder hereby directs the Custodian to receive
payment for such Selling Stockholder's shares of Deposit Stock, such payment to
be made by the several Underwriters by wire transfer in immediately available
funds for the purchase price of the Deposit Stock upon delivery of the
appropriate number of shares of Deposit Stock, all in accordance with the terms
and conditions of the Purchase Agreements and Section 4 hereof.
(b) Upon receipt of such payment from the Underwriters by the Custodian,
the Custodian shall promptly forward to the Selling Stockholder by wire
transfer the purchase price for her shares of Deposit Stock, as set forth in
the Purchase Agreements as executed. The Selling Stockholder may make such
other suitable arrangements with the Custodian, at the Stockholder's own
expense, if any, for the delivery of such purchase price as shall be acceptable
to the Custodian.
7. Return of Common Stock. Promptly after the Closing Time, the Custodian
shall return to the Selling Stockholder at the address set forth on the
signature page hereto
63
-6-
any shares of Common Stock deposited by the Selling Stockholder which are not
sold pursuant to the Purchase Agreements. Upon the delivery of all of the
Deposit Stock to the Selling Stockholder in accordance with this Section 7, the
Custodian shall have no further responsibility hereunder.
8. Expenses. The Company shall pay all such expenses incident to the
Public Offering as provided for in Section 4 of the Purchase Agreements and all
fees and expenses, if any, of the Custodian.
9. Extent of Duties and Obligations of Custodian. In all respects, the
duties and obligations of the Custodian shall be determined solely by the
express provisions of this Agreement, and the Custodian shall not be liable for
any act or failure to act on its part hereunder except for its negligence or
willful misconduct, as finally adjudicated by a court of competent
jurisdiction, and shall be fully protected, as against the Selling Stockholder
and the Company, in any such action as the Custodian may take hereunder in
reliance on advice of accountants, attorneys or other independent experts
selected by it (which may include attorneys employed by the Custodian or
outside counsel). No implied covenants or obligations shall be read into this
Agreement against the Custodian. None of the provisions contained in this
Agreement shall require the Custodian to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties, or in the exercise of any of its rights or powers, hereunder.
Nothing in this Agreement, expressed or implied, shall give or be
construed to give any person, firm or corporation, other than the parties
hereto, the Underwriters, the Attorneys-in-Fact, Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP, as counsel to the Company, Foster, Swift, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇.▇., as
counsel for ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, as counsel
for ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
as counsel to the Underwriters, any legal or equitable right, remedy or claim
under or in respect of this Agreement or under or in respect of any covenant,
condition or provision herein contained.
10. Effective Date of Agreement. This Agreement shall become effective
with respect to the Selling Stockholder upon receipt of a copy of this
Agreement, duly executed by the Selling Stockholder, by the Custodian at the
following address:
64
-7-
▇▇▇▇▇ Wheels International, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
11. Definitions. The words "it" and "its" shall be construed, where
appropriate, to be singular or plural, or masculine, feminine or neuter.
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. Counterparts. This Agreement may be signed in various counterparts
which together shall constitute one and the same Agreement.
14. Successors. This Agreement shall be binding upon the undersigned and
the heirs, legal representatives, distributees, successors and permitted
assigns of the undersigned; provided, however, that neither this Agreement nor
any right or obligation hereunder may be assigned by any party hereto without
the prior written consent of the other parties hereto.
15. Notices. Notices to the Custodian and the Selling Stockholders shall
not be deemed to be given until actually received by them. Whenever the time
for giving a notice falls upon a Saturday, Sunday or holiday, such time shall
be extended to the next business day.
16. Specific Performance. The parties hereto agree that money damages
would be inadequate for any breach of any provision hereof. In the event of a
breach by any party hereto of any of the provisions hereof, the Company, the
Selling Stockholders and the Custodian, and their respective successors and
assigns, may, in addition to any other rights and remedies available to any of
them (whether at law or in equity), apply to any court of competent
jurisdiction for specific performance or injunctive relief in order to enforce,
or prevent any violation of, any provision hereof.
65
-8-
IN WITNESS WHEREOF, the parties have duly executed this Custody Agreement
as of the day and year first above written.
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
By:_________________________________
Name:
Title:
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
as Custodian
By:_________________________________
Name:
Title:
SELLING STOCKHOLDER
______________________________
Name:
Address:
66
EXHIBIT A
Number of
Selling Stockholder Securities
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ 814,400
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇ 814,400
67
APPENDIX I
▇▇▇▇▇ WHEELS INTERNATIONAL, INC.
Public Offering of Common Stock
Irrevocable Power of Attorney of Selling Stockholder
▇▇▇▇▇ Wheels International, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned stockholder of ▇▇▇▇▇ Wheels International, Inc., a
Delaware corporation (the "Company"), understands that it is contemplated that
the undersigned stockholder of the Company (the "Selling Stockholder") will
sell shares of Common Stock, par value $.01 per share (the "Common Stock"), of
the Company to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ("▇▇▇▇▇▇▇
▇▇▇▇▇"), Bear ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. (the "U.S.
Underwriters") and ▇▇▇▇▇▇▇ ▇▇▇▇▇, Bear, ▇▇▇▇▇▇▇ International Limited and
▇▇▇▇▇▇▇ ▇▇▇▇▇ International (the "International Managers" and, collectively
with the U.S. Underwriters, the "Underwriters"), which the Underwriters propose
to offer and sell to the public. The undersigned also understands that, in
connection with such offer and sale, the Company has filed a Registration
Statement ("Registration Statement") with the Securities and Exchange
Commission ("Commission") to register the shares to be offered under the
Securities Act of 1933.
[Concurrently with the execution and delivery of this Power of Attorney,
the undersigned is also executing and delivering a Custody Agreement (the
"Custody Agreement") pursuant to which certificates for at least the number of
shares of Common Stock to be sold by the undersigned as set forth at the end of
this instrument are being deposited with ▇▇▇▇▇ Wheels International, Inc., as
custodian ("Custodian").](1)
----------------------------
(1) Brackets indicate material to be deleted or added in ▇▇. ▇▇▇▇▇'▇ Power of
Attorney.
68
-2-
1. In connection with the foregoing, the undersigned hereby
irrevocably constitutes and appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ as attorneys-in-fact (individually, an "Attorney" and, collectively,
the "Attorneys") of the undersigned, with full power and authority to act,
together or alone, including full power of substitution, in the name of and for
and on behalf of the undersigned with respect to all matters arising in
connection with the sale of Common Stock by the undersigned, including, but not
limited to, the power and authority to take any and all of the following
actions:
(a) to sell, assign and transfer to the Underwriters pursuant to the
Purchase Agreements (defined below) the number of shares of Common Stock
of the Company to be sold to the Underwriters specified below [and
represented by the certificates deposited by the undersigned with the
Custodian pursuant to the Custody Agreement], at a purchase price per
share to be paid by the Underwriters, as determined by negotiation among
the Company, the Attorneys and the Underwriters; provided, however, that
the Selling Stockholder will be deemed to have granted the Attorney the
power to sell the Common Stock at the price and with such other terms as
may be determined by the Attorney (but excluding any change in the number
of shares of Common Stock to be sold by the Selling Stockholder);
(b) for the purpose of effecting such sale, to make, execute,
deliver and perform the undersigned's obligations under a U.S. Purchase
Agreement substantially in the form attached hereto as Appendix II-A and
an International Purchase Agreement substantially in the form attached
hereto as Appendix II-B (such agreements, in the form in which executed,
being herein called the "Purchase Agreements"), receipt of copies of
which is hereby acknowledged, among the Company, the Selling Stockholder,
the other selling stockholders named therein and the U.S. Underwriters
and the International Managers, respectively, containing such additions
to or changes in the terms, provisions and conditions thereof as the
Attorneys, or any one of them, in their or his sole discretion shall
determine, including, the purchase price per share to be paid by the
Underwriters and including any additions to or changes in the terms,
provisions and conditions thereof relating to the public offering of such
shares by the Underwriters (but excluding any change in the number of
shares of Common Stock to be sold by the Selling Stockholder);
69
-3-
(c) to arrange for, prepare or cause to be prepared a registration
statement under the Securities Act of 1933, as amended (the "Act"),
covering the offering and sale of the Common Stock by the Selling
Stockholder (the "Registration Statement") and all amendments thereto,
and to take all necessary action with respect to such Registration
Statement as may be necessary or desirable;
(d) to give such orders and instructions to [the Custodian and] the
transfer agent for the Common Stock as the Attorneys, or any one of them,
in their or his sole discretion shall determine, with respect to (i) the
transfer on the books of the Company of the shares of Common Stock of the
Company to be sold by the undersigned to the Underwriters in order to
effect such sale including giving the name in which new certificates for
such shares are to be issued and the denominations thereof, (ii) the
delivery to or for the account of the Underwriters of certificates for
such shares against receipt [by the Custodian] of the purchase price to
be paid therefor, (iii) the remittance to the undersigned of new
certificates representing that number of shares of Common Stock, if any,
that is in excess of the number of shares sold by the undersigned to the
Underwriters and (iv) the receipt and acknowledgment of the receipt of
the proceeds from the sale of the Common Stock;
(e) to retain (at its expense) legal counsel in connection with any
and all matters referred to herein (which counsel may, but need not, be
counsel for the Company and the Selling Stockholder and the other selling
stockholders);
(f) [to execute and deliver any amendment to the Custody Agreement;
provided, however, that no such amendment shall change the number of
shares of Common Stock to be sold by the undersigned;]
[(f) to exercise, in whole or in part, the option to purchase
150,702 shares of Common Stock granted to the Selling Stockholder
pursuant to the Employment Agreement dated as of July 1, 1996 between MWC
Holdings, Inc., as predecessor of the Company, and the Selling
Stockholder, such exercise to be effective immediately prior to the sale
of such shares to the Underwriters pursuant to the Purchase Agreements,
and to take any and all actions necessary to effect such exercise,
including, without limitation, giving the notice to the Company of such
exercise
70
-4-
and paying the exercise price for each share of Common Stock issued upon
exercise of such option with funds provided by the Selling Stockholder,
including by authorizing the Underwriters to pay the aggregate exercise
price to the Company from funds otherwise payable to the Selling
Stockholder pursuant to the Purchase Agreements;]
(g) to endorse (in blank or otherwise) on behalf of the undersigned
the certificate or certificates representing the shares of Common Stock
to be sold by the undersigned, or a stock power or powers attached to
such certificate or certificates;
(h) to make, acknowledge, verify and file on behalf of the
undersigned applications, consents to service of process and such other
documents, undertakings or reports as may be required by law with state
commissioners or officers administering state securities laws; and
(i) to make, exchange, acknowledge and deliver all such other
contracts, powers of attorney, orders, receipts, notices, requests,
instructions, certificates, letters and other writings, including
communications to the Commission, and amendments to one or both of the
Purchase Agreements and in general to do all things and to take all
actions, that the Attorneys, or any one of them, in their or his sole
discretion may consider necessary or proper in connection with or to
carry out the aforesaid sale of shares of Common Stock to the
Underwriters and the public offering thereof, as fully as could the
undersigned if personally present and acting.
2. This Power of Attorney and all authority conferred hereby are
granted and conferred subject to the interests of the Underwriters and
in consideration of those interests, and for the purpose of completing the
transactions contemplated by the Purchase Agreements and this Power of
Attorney; this Power of Attorney and all authority conferred hereby shall be
irrevocable and shall not be terminated by the undersigned or by operation of
law, whether by the death or incapacity of the undersigned, or by the
occurrence of any other event. If any event described in the preceding
sentence shall occur before the delivery of the shares of Common Stock to be
sold by the undersigned under the Purchase Agreements, certificates for such
shares of Common Stock shall be delivered by or on behalf of the undersigned in
accordance with the terms and conditions of the Purchase Agreements [and the
Custody Agreement], and all other actions required to be taken under the
▇▇
-▇-
▇▇▇▇▇▇▇▇ Agreements [and the Custody Agreement] shall be taken, and action
taken by the Attorneys, or any one of them, pursuant to this Power of Attorney
shall be as valid as if such event had not occurred, whether or not the
[Custodian or the] Attorneys, or any one of them, shall have received notice of
such event.
Notwithstanding the foregoing, if the Purchase Agreements shall not be
entered into or the transactions contemplated thereby shall not have been
consummated on or prior to November 30, 1997, then this Power of Attorney shall
automatically terminate, subject, however, to all lawful action done or
performed by the Attorneys, or any one of them, pursuant to this Power of
Attorney on or prior to such date.
3. The undersigned ratifies all that the Attorneys, or any one of them,
shall do pursuant to paragraphs 1 and 2 of this Power of Attorney.
4. The Attorneys shall be entitled to act and rely upon any statement,
request, notice or instructions respecting this Power of Attorney given to the
Attorneys by the undersigned; provided, however, that the Attorneys shall not
be entitled to act on any statement or notice to the Attorneys with respect to
the Closing Time under the Purchase Agreements, or with respect to the
termination of the Purchase Agreements, or advising that the Purchase
Agreements have not been executed and delivered, unless such statement or
notice shall have been confirmed in writing to the Attorneys by the
Underwriters.
5. The undersigned hereby agrees to indemnify and hold harmless the
Attorneys against any and all expenses, losses, claims, damages or liabilities,
joint or several, to which they may become subject insofar as such expenses,
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any action taken or omitted to be taken by said
Attorneys pursuant hereto, except if, and to extent that, such expenses,
losses, claims, damages or liabilities shall have been finally adjudicated by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of said Attorneys. It is understood that the Attorneys
(acting in that capacity alone) shall serve without compensation.
6. In acting hereunder, the Attorneys may rely on the representations,
warranties and agreements of the undersigned made in the Purchase Agreements
[or the Custody Agreement] and may assume that such representations, warranties
and
72
-6-
agreements have not changed and remain in full force and effect through and
including November 30, 1997 (unless notified in writing).
73
-7-
7. This Power of Attorney shall be governed by, and construed in
accordance with, the laws of the State of New York.
Date:_________________________
___________________________________
Signature
Address:
Number of Shares
of Common Stock to Be
Sold to Underwriters:
______________ Shares
74
APPENDIX II
[Form of Purchase Agreements]