EXHIBIT 1(a)
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United Rentals, Inc.
(A Delaware Corporation)
5,600,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
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Dated: December , 1997
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties......................... 4
(a) Representations and Warranties by the Company........... 4
(i) Compliance with Registration Requirements..... 4
(ii) Independent Accountants....................... 5
(iii) Financial Statement........................... 5
(iv) No Material Adverse Change in Business........ 5
(v) Good Standing of the Company.................. 6
(vi) Good Standing of Subsidiaries................. 6
(vii) Capitalization................................ 6
(viii) Authorization of Agreement.................... 7
(ix) Authorization and Description of Securities... 7
(x) Absence of Defaults and Conflicts............. 7
(xi) Absence of Labor Dispute...................... 8
(xii) Absence of Proceedings........................ 8
(xiii) Accuracy of Exhibits.......................... 8
(xiv) Possession of Intellectual Property........... 8
(xv) Absence of Further Requirements............... 9
(xvi) Possession of Licenses and Permits............ 9
(xvii) Title to Property............................. 9
(xviii) Compliance with Cuba Act...................... 10
(xix) Investment Company Act..................... 10
(xx) Environmental Laws............................... 10
(xxi) Registration Rights........................ 11
(b) Officer's Certificates ................................ 11
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing........ 11
(a) Initial Securities..................................... 11
(b) Option Securities...................................... 11
(c) Payment................................................ 12
(d) Denominations; Registration............................ 12
SECTION 3. Covenants of the Company............................... 13
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(a) Compliance with Securities Regulations and Commission
Requests............................................... 13
(b) Filing of Amendments................................... 13
(c) Delivery of Registration Statements.................... 13
i
(d) Delivery of Prospectuses................................ 14
(e) Continued Compliance with Securities Laws............... 14
(f) Blue Sky Qualifications................................. 14
(g) Rule 158................................................ 15
(h) Use of Proceeds......................................... 15
(i) Listing................................................. 15
(j) Restriction on Sale of Securities....................... 15
(k) Reporting Requirements.................................. 15
(l) Compliance with NASD Rules.............................. 16
(m) Compliance with Rule 463................................ 16
SECTION 4. Payment of Expenses..................................... 16
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(a) Expenses................................................ 16
(b) Termination of Agreement................................ 27
SECTION 5. Conditions of U.S. Underwriters' Obligations............ 17
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(a) Effectiveness of Registration Statement................. 17
(b) Opinion of Counsel for Company.......................... 17
(c) Opinion of Counsel for U.S. Underwriters................ 18
(d) Officers' Certificate................................... 18
(e) Accountant's Comfort Letter............................. 18
(f) Bring-down Comfort Letter............................... 18
(g) Approval of Listing.....................................
(h) No Objection............................................ 19
(i) Lock-up Agreements...................................... 19
(j) Purchase of Initial International Securities............ 19
(k) Conditions to Purchase of U.S. Option Securities........ 19
(l) Additional Documents.................................... 20
(m) Termination of Agreement................................ 20
SECTION 6. Indemnification......................................... 20
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(a) Indemnification of U.S. Underwriters.................... 20
(b) Indemnification of Company, Directors and Officers...... 22
(c) Actions against Parties; Notification................... 22
(d) Settlement without Consent if Failure to Reimburse ..... 23
(e) Indemnification for Reserved Securities................. 23
SECTION 7. Contribution............................................ 23
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SECTION 8. Representations, Warranties and Agreements to Survive
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Delivery................................................ 24
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ii
SECTION 9. Termination of Agreement................................ 25
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(a) Termination; General.................................... 25
(b) Liabilities............................................. 25
SECTION 10. Default by One or More of the U.S. Underwriters........ 25
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SECTION 11. Notices................................................ 26
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SECTION 12. Parties................................................ 26
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SECTION 13. Governing Law and Time................................. 26
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SECTION 14. Effect of Headings..................................... 26
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SCHEDULES
Schedule A........................................................Sch A-1
Schedule B........................................................Sch B-1
Schedule C........................................................Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's Counsel....................A-1
Exhibit A-2 - Form of Opinion of Company's Counsel....................A-2
Exhibit B - Form of Lock-up Letter....................................B-1
ANNEX
Annex A - Form of Accountants' Comfort Letter Pursuant to Section
5(e)............................................................Annex A-1
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United Rentals, Inc.
(a Delaware corporation)
5,600,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
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December , 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
as U.S. Representatives of the several U.S. Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
United Rentals, Inc., a Delaware corporation (the "Company"), confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other U.S. Underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom ▇▇▇▇▇▇▇ Lynch, Donaldson, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation and Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. are acting as representatives (in
such capacity, the "U.S. Representatives"), with respect to the issue and sale
by the Company and the purchase by the U.S. Underwriters, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value $.01
per share, of the Company ("Common Stock") set forth in said Schedule A, and
with respect to 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 840,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 5,600,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S.
1
Underwriters and all or any part of the 840,000 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 is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 1,400,000 shares of
Common Stock (the "Initial International Securities") through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers") for which ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
International and Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. are acting as lead managers (the
"Lead 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 210,000 additional shares of Common Stock solely to cover over-allotments,
if any (the "International Option Securities" and, together with the U.S. Option
Securities, the "Option Securities"). The Initial International Securities and
the International Option Securities are hereinafter called the "International
Securities". It is understood that the Company 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". 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 understands that the U.S. Underwriters propose to make a
public offering of the U.S. Securities as soon as the U.S. Representatives deem
advisable after this Agreement has been executed and delivered.
The Company and the U.S. Underwriters agree that up to 700,000 shares of
the Initial U.S. Securities to be purchased by the U.S. Underwriters (the
"Reserved Securities") shall be reserved for sale by the Underwriters to certain
employees, directors, and business associates of, and certain other persons
designated by, the Company, as part of the distribution of the Securities by the
Underwriters, subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of Securities
Dealers, Inc. (the "NASD") and all other applicable laws, rules and regulations.
To the extent that such Reserved Securities are not orally confirmed for
purchase by such employees, directors, and business associates of, and certain
other persons designated by, the Company by the end of the first business day
after the date of this
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Agreement, such Reserved Securities will be offered to the public as part of the
public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-39117) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). Two
forms of prospectus are to be used in connection with the offering and sale of
the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus is identical to
the Form of U.S. Prospectus, except for the front cover and back cover pages and
the information under the caption "Underwriting." The information included in
any such prospectus or in any such Term Sheet, as the case may be, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated December 3, 1997 and the
preliminary International Prospectus dated December 3, 1997, respectively, each
together with the applicable Term Sheet and all references in this Agreement to
the date of such Prospectuses shall mean the date of the applicable Term Sheet.
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the U.S. Prospectus, the International Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
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SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company represents
and warrants to each U.S. Underwriter as of the date hereof (and agrees that
each such representation and warranty will be deemed to be made by the Company
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. Each of the
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Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any U.S. Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Prospectuses, any
preliminary prospectuses and any supplement thereto or prospectus wrapper
prepared in connection therewith, at their respective times of issuance
and at the Closing Time, complied and will comply in all material respects
with any applicable laws or regulations of Switzerland in connection with
the offer and sale of Reserved Securities. Neither of the Prospectuses nor
any amendments or supplements thereto (including any prospectus wrapper),
at the time the Prospectuses or any amendments or supplements thereto were
issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If Rule 434
is used, the Company will comply with the requirements of Rule 434 and the
Prospectuses shall not be "materially different", as such term is used in
Rule 434, from the prospectuses included in the Registration Statement at
the time it became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement or the U.S. Prospectus.
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Each preliminary prospectus and the prospectuses filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectuses delivered
to the Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified
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the financial statements and supporting schedules of the Company and its
subsidiaries included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. Each of the historical financial
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statements included in the Registration Statement and Prospectus, together
with related schedules and Notes, present fairly (on a consolidated basis
where so indicated) the financial condition of the entity or entities to
which such financial statement purports to relate (the "Reported Entity")
at the date(s) indicated and the statement of operations (or income or
earnings as indicated in the applicable financial statement) and cash
flows and (in the case of a Reported Entity for which a statement of
stockholders' equity is included) stockholders' equity (and partners'
capital if so indicated in the applicable financial statement) of the
Reported Entity for the period(s) specified; said financial statements
have been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as otherwise indicated in such financial statements). Any
supporting schedules included in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
selected historical financial data and the summary historical financial
information included in the Prospectuses present fairly the information
shown therein and, in the case of historical financial data or information
of the Company, have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement. The
pro forma financial statements and the related notes thereto included in
the Registration Statement and the Prospectuses present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(iv) No Material Adverse Change in Business. Since the
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respective dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or to the best knowledge
of the Company business prospects of the Company and its subsidiaries
considered as one
5
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(v) Good Standing of the Company. The Company has been duly
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organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the
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Company has been duly organized and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectuses and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of each such subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity (except for
any security interest or pledge contemplated by the Credit Agreement filed
as Exhibit 10(a) to the Registration Statement); none of the outstanding
shares of capital stock of any subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such subsidiary. The
only subsidiaries of the Company (other than inactive subsidiaries) are
the subsidiaries listed on Exhibit 21 to the Registration Statement.
(vii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectuses under
"Description of Capital Stock--General" (except for subsequent issuances,
if any, pursuant to this Agreement, pursuant to reservations, agreements
or employee benefit plans referred to in the Prospectuses or pursuant to
the exercise of convertible securities, warrants or options referred to in
the Prospectuses). The shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully
paid and non-
6
assessable; none of the outstanding shares of capital stock of the Company
was issued in violation of the preemptive or other similar rights of any
security holder of the Company. All sales of the Company's capital stock
prior to the date hereof were either (1) made pursuant to a registration
statement filed by the Company with the Commission under the 1933 Act or
(2) at all relevant times exempt from the registration requirements of the
1933 Act and in case (1) and (2) duly registered with or the subject of an
available exemption from the registration requirements of the applicable
state securities or blue sky laws.
(viii) Authorization of Agreement. This Agreement and the
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International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) Authorization and Description of Securities. The
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Securities to be purchased by the U.S. Underwriters and the International
Managers from the Company have been duly authorized for issuance and sale
to the U.S. Underwriters pursuant to this Agreement and the International
Managers pursuant to the International Purchase Agreement, respectively,
and, when issued and delivered by the Company pursuant to this Agreement
and the International Purchase Agreement, respectively, against payment of
the consideration set forth herein and the International Purchase
Agreement, respectively, will be validly issued, fully paid and
non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to the
rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any security holder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor
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any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property
or assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the International Purchase Agreement and
the consummation of the transactions contemplated in this Agreement, the
International Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of a
portion of the proceeds from the sale of the Securities to repay
indebtedness as described in the Prospectuses under the caption "Use of
Proceeds") and compliance by the Company with its obligations under this
Agreement and the International Purchase Agreement have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or
7
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the
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employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit,
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proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement or the performance by the Company of its obligations hereunder
or thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which
any of their respective property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiii) Accuracy of Representations and Warranties. To the
------------------------------------------
knowledge of the Company, the representations and warranties made by each
of the Initial Acquired Companies (as defined in the Registration
Statement and the Prospectuses) and the selling stockholders in the
respective agreements pursuant to which the Company acquired the Initial
Acquired Companies did not as of the respective dates thereof contain any
inaccuracies that might, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
--------------------
documents which are required to be described in the Registration Statement
or the Prospectuses or to be filed as exhibits thereto which have not been
so described and filed as required.
8
(xv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale
of the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, except (i) such as
have been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations, the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") and foreign or
state securities or blue sky laws and (ii) such as may have been obtained
under the laws and regulations of Switzerland, pursuant to the offering of
the Reserved Securities.
(xvii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to so possess such Government Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have,
singly or in the aggregate, a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
9
(xviii) Title to Property. The Company and its subsidiaries
-----------------
have good and marketable title to all real property described in the
Prospectus as owned by the Company and its subsidiaries and good title to
all other properties described in the Prospectus as owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses or are not required to be described therein
pursuant to the 1933 Act or the 1933 Act Regulations or (b) do not, singly
or in the aggregate, materially interfere with the use made and proposed
to be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Prospectuses, are in full force and effect, and neither the Company nor
any subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any
such lease or sublease, which claim, if upheld, would result in a Material
Adverse Effect.
(xix) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xx) Environmental Laws. Except as described in the
------------------
Registration Statement or except as would not, singly or in the aggregate,
result in a Material Adverse Effect or except as would not be required to
be described in the Registration Statement or the Prospectuses pursuant to
the 1933 Act or the 1933 Act Regulations: (A) neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or
foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) neither the
Company nor any of its subsidiaries is lacking any permits, authorizations
and approvals required under any applicable Environmental Laws or are in
violation of the requirements of such Environmental Laws, (C) there are no
pending or to the best knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters,
10
claims, liens, notices of noncompliance or violation, investigation or
proceedings relating to any Environmental Law against the Company or any
of its subsidiaries and (D) to the knowledge of the Company there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxi) Statistical and Market Data. Nothing has come to the
--------------------------
attention of the Company that has caused the Company to believe that the
statistical and market-related data included in the Prospectus are not
based on or derived from sources that are reliable and accurate in all
material respects.
(xxii) Taxes. The Company and each of its subsidiaries have
-----
filed all necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to extensions) and
have paid all taxes shown as due thereon or with respect to the Company or
any of its properties (except where the failure to so file or pay would
not, singly or in the aggregate, have a Material Adverse Effect), and
there is no tax deficiency that has been, or to the knowledge of the
Company is likely to be, asserted against the Company, any of its
subsidiaries or any of their properties or assets that would result in a
Material Adverse Effect, except for taxes that are being contested in good
faith by appropriate proceedings and with respect to which the Company has
established adequate reserves in accordance with GAAP.
(xxiii) Insurance. Neither the Company nor any subsidiary has
---------
received notice from any insurer providing insurance coverage for the
Company and its Subsidiaries or agent of such insurer that capital
improvements or other expenditures will have to be made in order to
continue present insurance coverage, except such as could not reasonably
be expected, singularly or in the aggregate, to have a Material Adverse
Effect.
(xxiv) Maintenance of Sufficient Internal Controls. The
-------------------------------------------
Company and its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxv) Registration Rights. There are no persons with
-------------------
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
11
(xxvi) Fees. Other than pursuant to this Agreement, the
----
International Purchase Agreement or as described in the Registration
Statement and the Prospectuses, there are no contracts, agreements or
understandings between either the Company or its subsidiaries and any
person that give rise to a valid claim against the Company, any of its
subsidiaries or any of the Underwriters for a brokerage commission,
finder's fee or other like payment relating to the transactions
contemplated hereby.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company 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 agrees 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, at the price per share set forth in Schedule B, the number of Initial
U.S. Securities set forth in Schedule A opposite the name of such U.S.
Underwriter, plus any additional number of Initial U.S. Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(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 840,000 shares of
Common Stock at the price per share set forth in Schedule B, 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 earlier than
three or later than seven full business days after the exercise of said option
or at such earlier time as may be agreed upon by the Global Coordinator and the
Company, 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
12
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
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, 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 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 by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each U.S.
------------------------
Underwriter as follows:
13
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall
become effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary prospectus, or of the suspension of the qualification of
the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly
whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the U.S.
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the U.S. Representatives and counsel for the
U.S. Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and signed
copies of all consents and certificates of experts, and will also deliver
to the U.S. Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S.
14
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 or
the Securities Exchange Act of 1934 (the "1934 Act"), such number of
copies of the U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request. The U.S. Prospectus and any amendments
or supplements thereto furnished to the U.S. Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(e) Continued Compliance with Securities Laws. The Company
will comply with the 1933 Act and the 1933 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in
this Agreement, the International Purchase Agreement and in the
Prospectuses. If at any time when a prospectus is required by the 1933 Act
to be delivered in 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 use its best
efforts, in cooperation with the U.S. Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws of
such states and other jurisdictions (domestic or foreign) as the Global
Coordinator may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective
date of the Registration Statement and any Rule 462(b) Registration
Statement; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
15
a period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(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
the listing of the Common Stock (including the Securities) on the New York
Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectuses, the Company will not, without the
prior written consent of the Global Coordinator on behalf of the
Underwriters, (i) directly or indirectly, offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant for the sale of or
otherwise dispose of or transfer any share of Common Stock or any
securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or hereafter acquired or with respect to which
the power of disposition is acquired, or file any registration statement
under the 1933 Act with respect to any of the foregoing (other than as
contemplated in (E), (F) and (G) below), (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by
delivery of Common Stock or other securities, in cash or otherwise, or
(iii) waive any Stockholder Lock-up Agreement (as such term is defined in
the Registration Statement and the Prospectuses). Clauses (i) and (ii) of
the foregoing sentence shall not limit the Company's ability (A) to sell
the Securities hereunder or under the International Purchase Agreement,
(B) to issue shares of Common Stock upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectuses, (C) to grant stock options under the 1997
Stock Option Plan (as such term is defined in the Registration Statement
and the Prospectuses), (D) to issue shares of Common Stock as
consideration for future acquisitions, provided, however, that the Company
may not issue in excess of 500,000 shares for acquisitions unless the
recipients of such excess shares enter into agreements containing the
limitations set forth in the first sentence of this paragraph with respect
to such additional shares, (E) to file a shelf registration statement
pursuant to Rule 415 under the 1933 Act relating to (a) shares of Common
Stock outstanding as of the date of the Prospectuses and (b) shares of
Common Stock underlying warrants or convertible notes outstanding as of
the date of the Prospectuses, provided, however, that no sales of Common
Stock may be made pursuant
16
to such registration statement during the period of 180 days from the date
of the Prospectuses, (F) to file a registration statement under the 1933
Act with respect to shares of Common Stock or other securities to be
issued after the date hereof as consideration for an acquisition or with
respect to the potential resale of shares issued after the date hereof as
consideration for an acquisition, provided, however, that no sales may be
made pursuant to such registration statement except to the extent
permitted by clause (D) hereof, or (G) file a registration statement under
the 1933 Act registering the shares of Common Stock that may be issued
pursuant to options granted or to be granted under the 1997 Stock Option
Plan. In addition to the foregoing, the Company will (i) require any
individual who becomes an officer or director of the Company and purchases
shares of Common Stock of the Company subsequent to the date of the
Prospectuses to enter into a Lock-up Agreement in the form contained in
Exhibit B hereto and (ii) in the event any registration rights are granted
by the Company in regard to shares of Common Stock issuable upon the
conversion of any outstanding securities of the Company (as contemplated
in (B) above, and including, but not limited to, a $300,000 principal
amount note issued as consideration for the acquisition of one of the
Initial Acquired Companies), also require the holders of shares of Common
Stock that are the subject of such registration rights to enter into a
Lock-up Agreement in the form of Exhibit B hereto.
(k) Reporting Requirements. The Company, during the period
when the Prospectuses are required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the rules and regulations of the Commission thereunder.
(l) Compliance with NASD Rules. The Company will ensure that
the Reserved Securities will be restricted as required by the NASD or the
NASD rules from sale, transfer, assignment, pledge or hypothecation for a
period of three months following the date of this Agreement. The
Underwriters will notify the Company as to which Reserved Securities will
need to be so restricted under applicable NASD rules. At the request of
the Underwriters, the Company will direct the transfer agent to place a
stop transfer restriction upon such securities for up to three months as
specified by the Underwriters. Without the prior written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇, the Company will not release any such stop transfer or any
lock-up agreement entered into for the purpose of complying with NASD
rules and requirements. Should the Company release, or seek to release,
any of the Reserved Securities from the foregoing restrictions, the
Company agrees to reimburse the Underwriters for any reasonable expenses
(including, without limitation, legal expenses) they incur in connection
with such release.
(m) Compliance with Rule 463. The Company will file with the
Commission such information as may be required pursuant to Rule 463 of the
1933 Act Regulations.
17
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, the International Purchase Agreement, the
Inter-Syndicate 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 NASD of the terms of the sale of the Securities, (x) the
fees and expenses incurred in connection with the listing of the Securities on
the New York Stock Exchange and (xi) all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in
connection with matters related to the Reserved Securities which are designated
by the Company for sale to certain employees, directors and business associates
of, and certain other persons designated by, the Company.
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the U.S. Underwriters for all of
their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The obligations
--------------------------------------------
of the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance 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
18
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) Opinions of Counsel for Company. At Closing Time, the U.S.
Representatives shall have received the favorable opinions, dated as of
Closing Time, of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and Weil,
Gotshal & ▇▇▇▇▇▇ LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letters for each of the other
U.S. Underwriters to the effect set forth in Exhibits A-1 and A-2,
respectively, hereto and to such further effect as counsel to the U.S.
Underwriters may reasonably request. In giving such opinions, such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, the federal law of the United
States and the General Corporation Law of the State of Delaware, upon the
opinions of counsel reasonably satisfactory to counsel to the U.S.
Underwriters. Such counsel may also state that, insofar as such opinions
involve factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for U.S. Underwriters. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel
for the U.S. Underwriters, together with signed or reproduced copies of
such letter for each of the other U.S. Underwriters in form and substance
reasonably satisfactory to the U.S. Underwriters. In giving such opinion
such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, the federal law
of the United States and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the U.S.
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the U.S. Representatives shall have received a
certificate of the Chief Executive Officer of the Company and of the Chief
Financial Officer of the Company, dated as of
19
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 are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company has complied
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 proceedings for that purpose have been
instituted or are pending or, to the best knowledge of the Company, are
contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the execution
of this Agreement, the U.S. Representatives shall have received from Ernst
& Young LLP, ▇▇▇▇▇▇▇, ▇▇▇▇ & Co. PA, KPMG Peat Marwick LLP and ▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLP letters dated such date, in form and substance satisfactory
to the U.S. Representatives, together with signed or reproduced copies of
such letters for each of the other U.S. Underwriters, to the effect set
forth in Annex A hereto, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements audited by such accountants and
certain financial information contained in the Registration Statement and
the Prospectuses.
(f) Bring-down Comfort Letters. At Closing Time, the U.S.
Representatives shall have received from Ernst & Young LLP, ▇▇▇▇▇▇▇, ▇▇▇▇
& Co. PA, KPMG Peat Marwick LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP letters, dated as
of Closing Time, to the effect that they reaffirm the statements made in
the letters furnished pursuant to subsection (e) of this Section 5, except
that the specified date referred to shall be a date not more than three
business days prior to Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(h) 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.
(i) Lock-up Agreements. At the date of this Agreement, the
U.S. Representatives shall have received an agreement substantially in the
form of Exhibit B hereto signed by each of the persons listed on Schedule
C hereto.
(j) 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.
20
(k) 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 or any subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the U.S. Representatives
shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the Chief Executive Officer of the Company and of the
Chief Financial Officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinions of
-------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP and Weil, Gotshal & ▇▇▇▇▇▇
LLP, counsel for the Company, in form and substance reasonably
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
opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
----------------------------------------
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP, 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(c)
hereof.
(iv) Bring-down Comfort Letters. Letters from Ernst & Young LLP,
--------------------------
▇▇▇▇▇▇▇, ▇▇▇▇ & Co. PA, KPMG Peat Marwick LLP and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, in form and substance satisfactory to the U.S. Representatives
and dated such Date of Delivery, substantially in the same form and
substance as the letters furnished to the U.S. Representatives
pursuant to Section 5(f) hereof, except that the "specified date" in
the letters furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may reasonably 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 in
connection with the issuance and sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
U.S. Representatives and counsel for the U.S. Underwriters.
21
(m) 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 Option Securities, may be terminated by the U.S.
Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company 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 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, arising out of (A) the violation of any
applicable laws or regulations of Switzerland as a result of the offering
of the Reserved Securities and (B) any untrue statement or alleged untrue
statement of a material fact included in any supplement or prospectus
wrapper material distributed in Switzerland in connection with the
reservation and sale of the Reserved Securities to certain employees,
directors and business associates of, and certain other persons designated
by, the Company or the omission or alleged omission therefrom of a
material fact necessary to make the statements therein, when considered in
conjunction with the Prospectuses or preliminary prospectuses, not
misleading;
(iii) 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 or in connection
22
with any violation of the nature referred to in Section 6(a)(ii)(A)
hereof; provided that (subject to Section 6(d) below) any such settlement
is effected with the written consent of the Company; and
(iv) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission or in connection with any
violation of the nature referred to in Section 6(a)(ii)(A) hereof, to the
extent that any such expense is not paid under (i), (ii) or (iii) 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
U.S. Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto);
provided, further, that the Company will not be liable to any Underwriter or any
-------- -------
person controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented) at or
prior to the written confirmation of the sale of such Securities to such person
in any case where such delivery of the Prospectus (as amended or supplemented)
is required by the Act, unless such failure to deliver the Prospectus (as
amended or supplemented) was a result of noncompliance by the Company with
Sections 5(d) or 5(e) of this Agreement.
(b) Indemnification of Company, Directors and Officers. 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 against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary U.S. prospectus or
the U.S. Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Company by such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
23
(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 (subject to the following sentence) 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. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel satisfactory to such indemnified party;
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
and provided, further, that if the defendants in any such action include both
-------- -------
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances; After
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the U.S. Representatives in the case of paragraph (a) of this
Section 6, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. The indemnifying party will not
be liable for the costs and expenses of any settlement of such action effected
by such indemnified party without the consent of the indemnifying party.
24
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Reserved Securities. In connection with the offer
and sale of the Reserved Securities, the Company agrees, promptly upon a
request, in writing to indemnify and hold harmless the Underwriters from and
against any and all losses, liabilities, claims, damages and expenses incurred
by them as a result of the failure of certain employees, directors and business
associates of, and certain other persons designated by, the Company to pay for
and accept delivery of Reserved Securities which, by the end of the first
business day following the date of this Agreement, were subject to a properly
confirmed agreement to purchase.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the U.S. Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the U.S.
Underwriters on the other hand in connection with the statements or omissions,
or in connection with any violation of the nature referred to in Section
6(a)(ii)(A) hereof, which resulted in such losses, liabilities, claims, damages
or expenses, as well as any other relevant equitable considerations.
25
The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company 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 or any violation of the nature referred to in Section
6(a)(ii)(A) hereof.
The Company and the U.S. Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the U.S. Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no U.S. Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the U.S. Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such U.S. Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
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'
26
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.
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 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, and shall survive delivery of the
Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the 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 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the U.S. Underwriters. If one or
-----------------------------------------------
more of the U.S. Underwriters shall fail at Closing Time or a Date of Delivery
to purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
27
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing Time,
the obligation of the U.S. Underwriters to purchase and of the Company to
sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇; and notices to the Company shall be directed to it at Four ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with
copies to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and
-------
be binding upon the U.S. Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or
28
corporation, other than the U.S. Underwriters and the Company 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 and the Company 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 13. 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 14. 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.
29
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
UNITED RENTALS, INC.
By_________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
DEUTSCHE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By________________________________
Authorized Signatory
For themselves and as U.S. Representatives of the
other U.S. Underwriters named in Schedule A hereto.
30
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated............................
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation.....
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc............................
Total ...................................................... 5,600,000
===========
Sch A-1
SCHEDULE B
United Rentals, Inc.
5,600,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $ .
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $ , being an amount equal to the initial public
offering price set forth above less $ per share; provided that the purchase
price per share for any 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 Securities but not payable on the Option Securities.
Sch B-1
SCHEDULE C
List of persons and entities
subject to lock-up
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. Garruth
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Equus II Partnership
Sch C-1
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
As to various questions of fact material to our opinion, we have relied
upon the certificates of officers and upon certificates of public officials.
With regard to the due incorporation of corporations (other than the Company)
and the good standing of corporations (other than the Company), we have (subject
to the next sentence) relied entirely upon certificates of public officials.
With regard to the tax good standing of certain corporations (other than the
Company), we have relied solely upon a certificate of an officer of such
corporation to the effect that the corporation has filed the most recent annual
report required by the law of such jurisdiction and that all franchise taxes
required to be paid under such law have been paid. We have also examined such
corporate documents and records and other certificates, and have made such
investigations of law, as we have deemed necessary in order to render the
opinion hereinafter set forth. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the legal
capacity of natural persons and the conformity to the originals of all documents
submitted to us as copies. We have also assumed that all documents examined by
us have been duly and validly authorized, executed and delivered by each of the
parties thereto other than the Company.
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Description of Capital
Stock--General" (except for subsequent issuances, if any, pursuant to the
Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities, warrants or options referred to in the
Prospectus); the shares of issued and outstanding capital stock of the
Company have been
A-1-1
duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of the Company was
issued in violation of any preemptive or other similar rights of any
security holder of the Company arising by statute or the Company's
certificate of incorporation or by-laws or, to the best of our knowledge,
any other preemptive or other similar rights of any security holder of the
Company.
(v) The Securities have been duly authorized for issuance and sale
to the Underwriters pursuant to the Purchase Agreement and, when issued
and delivered by the Company pursuant to the Purchase Agreement against
payment of the consideration set forth in the Purchase Agreement, will be
validly issued and fully paid and non-assessable and no holder of the
Securities is or will be subject to personal liability by reason of being
such a holder.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights of any security holder of the Company arising by
statute or the Company's certificate of incorporation or by-laws or, to
the best of our knowledge, any other preemptive or other similar rights of
any security holder of the Company.
(vii) Each subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
so to qualify or to be in good standing would not result in a Material
Adverse Effect; except as otherwise disclosed in the Registration
Statement and other than as contemplated by the Credit Agreement of the
Company filed as Exhibit 10(a) to the Registration Statement, all of the
issued and outstanding capital stock of each subsidiary has been duly
authorized and validly issued, is fully paid and non-assessable and, to
the best of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive
or similar rights of any security holder of such subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been
made in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration
A-1-2
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus and each amendment or
supplement to the Registration Statement and Prospectus as of their
respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to
which we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the New York Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any subsidiary is a party, or to which the property
of the Company or any subsidiary is subject, before or brought by any
court or governmental agency or body, domestic or foreign, which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Purchase Agreement or the performance by the Company
of its obligations thereunder.
(xiv) The information in the Prospectus under "Dividend Policy" and
"Description of Capital Stock", "Certain Charter and By-Law Provisions",
and in the Registration Statement under Item 14 and Item 15, insofar as
they purport to constitute a summary of the terms of the Common Stock, the
provisions of the Company's certificate of incorporation or By-laws or
specific provisions of the Delaware General Corporation Law referred to
therein, are accurate summaries in all material respects of such terms or
provisions, as the case may be.
(xv) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws.
(xvi) To the best of our knowledge, neither the Company nor any
subsidiary is in default in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement,
A-1-3
note, lease or other agreement or instrument that is described or referred
to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement
which violations or defaults are required to be described in the
prospectus and are not so described or would, individually or in the
aggregate, have a Material Adverse Effect or effect the validity of the
Securities.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act
and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance or sale of the Securities.
(xviii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of a portion of the net
proceeds from the sale of the Securities to repay outstanding indebtedness
as described in the Prospectus under the caption "Use Of Proceeds") and
compliance by the Company with its obligations under the Purchase
Agreement (A) after reasonable investigation do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined
in Section 1(a)(x) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to us, to which
the Company or any subsidiary is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (except for such conflicts, breaches or defaults,
Repayment Events or liens, charges or encumbrances that would not have a
Material Adverse Effect), (B) result in any violation of the provisions of
the charter or by-laws of the Company or any subsidiary, or (C) to the
best of our knowledge, result in any violation of the provisions of any
applicable law, statute, rule or regulation of the United States of
America or included in the Delaware General Corporate Law (except we
express no opinion as to "blue sky" laws), judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or operations.
(xix) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
A-1-4
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
(xxi) We have reviewed the Prospectus and the Registration Statement
and participated in discussions with your representatives and those of the
Company, its accountants and its other counsel. Although we have not
undertaken, except as otherwise indicated in this opinion, to investigate
or verify independently, and do not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of the information that we gained in
the course of the performance of such services and our representation of
the Company, we confirm to you that nothing that came to our attention in
the course of such review or representation has caused us to belief that
(i) the Registration Statement or any amendment thereto, including the
Rule 430A Information and Rule 434 Information (if applicable), (except
for financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we need make no statement), at
the time such Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and
schedules and other financial data included therein or omitted therefrom,
as to which we need make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading or (ii) that there are any
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto or that any descriptions of or references to any of the
foregoing are not correct in all material respects.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF COMPANY'S
COUNSEL TO BE DELIVERED PURSUANT
TO SECTION 5(b)
(i) The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as described in the Prospectuses and to enter into and
perform its obligations under the Purchase Agreements.
(ii) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectuses under the caption entitled "Description of
Capital Stock-General" (except for subsequent issuances pursuant to the Purchase
Agreements or pursuant to reservations, agreements, rights, or stock option or
employee benefit plans referred to in the Prospectuses, or pursuant to the
exercise of convertible securities, warrants, rights or options referred to in
the Prospectuses, or pursuant to an adjustment to the amount of the Stock
Consideration (as defined in the Prospectuses)). All of the issued and
outstanding shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable; and none of the outstanding
shares of capital stock of the Company were issued in violation of preemptive
rights pursuant to law or in the Company's certificate of incorporation or
by-laws.
(iii) The Securities have been duly authorized and, when issued and
delivered as contemplated by the Purchase Agreements against payment of the
consideration therefor set forth in the Purchase Agreements, will be validly
issued, fully paid and nonassessable and free of preemptive rights pursuant to
law or in the Company's certificate of incorporation or by laws, and no holder
of the Securities is or will be subject to personal liability solely by reason
of being such a holder.
(iv) The execution, delivery and performance of the Purchase Agreements by
the Company have been duly authorized by all necessary corporate action on the
part of the Company. The Purchase Agreements have been duly and validly executed
and delivered by the Company.
(v) We have been informed that the Registration Statement was declared
effective under the 1933 Act as of __:__ _ . m. on December __, 1997, and to our
knowledge, as of 10:00 a.m. on the date hereof, no stop order suspending the
effectiveness of the Registration Statement has been issued under the 1933 Act
and, to our knowledge, no proceedings for that purpose have been instituted or
are pending or threatened by the Commission. The Prospectuses have been filed
with the Commission pursuant to Rule 424(b) under the 1933 Act.
(vi) The Registration Statement and the Prospectuses (except for the
financial statements and the notes thereto and the other financial, statistical
and accounting data included in the Registration Statement or the Prospectuses,
as to which we express no opinion) comply as to
form in all material respects with the requirements of the 1933 Act and the
rules and regulations thereunder.
(vii) The statements contained in the Prospectuses under the captions
"Dividend Policy," "Description of Capital Stock," "Certain Charter and By-Law
Provisions" and "Certain United States Federal Tax Considerations," and in Part
II of the Registration Statement under Item 14 and Item 15, insofar as they
purport to describe the provisions of the documents referred to therein or
matters of federal or Delaware corporate law, constitute a fair summary thereof
in material respects; and all descriptions in the Registration Statement of
contracts or agreements to which the Company or any of its subsidiaries is a
party are accurate in all material respects.
(viii) No consent, approval, waiver, license or authorization or other
action by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company of the Purchase Agreements or the consummation by the Company of
the transactions contemplated thereby, except for filings and other actions
required under or pursuant to (i) the 1933 Act and the rules and regulations
promulgated thereunder, which have been made or obtained, and (ii) the 1934 Act
and the rules and regulations promulgated thereunder, any other federal or state
securities or "blue sky" laws, and the rules of the New York Stock Exchange, as
to which we express no opinion.
(ix) The Company is not an "investment company" or an entity "controlled"
by an investment company", as such terms are defined in the 1940 Act.
(x) To our knowledge, there are no persons with registrations rights or
other similar rights to have any securities registered pursuant to the
Registration Statement.
(xi) We have participated in conferences with directors, officers and
other representatives of the Company, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectuses and related matters
were discussed, and, although we have not independently verified and are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectuses (except to the extent specified in the foregoing opinions), no
facts have come to our attention which lead us to believe that the Registration
Statement, on the effective date thereof, 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 contained therein not misleading or that the
Prospectuses, on the date thereof or on the date hereof, contained or contain an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that we express no view with respect to the
financial statements and related notes, the financial statement schedules and
A-2-2
the other financial, statistical and accounting data included in the
Registration Statement or Prospectuses).
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-2-3
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS AND OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(i)
Exhibit B
December , 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, and
Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.,
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Initial Public Offering by United Rentals, Inc.
-------------------------------------------------------
Ladies and Gentlemen:
The undersigned, a stockholder and an officer and/or director of United
Rentals, Inc., a Delaware corporation (the "Company"), understands that ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇"), ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, and Deutsche
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $.01 per share (the
"Common Stock"). In recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder and an officer and/or director of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters named
in the Purchase Agreement, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of
B-1
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise.
Nothing contained herein limits the ability of the undersigned (i) to
transfer shares of Common Stock in a private placement pursuant to an exemption
from the registration requirements of the 1933 Act or (ii) to pledge shares of
Common Stock as security of indebtedness, provided, however, in either case the
transferee or pledgee agrees to be bound by the limitations contained herein.
Very truly yours,
Signature:
Print Name:
B-2
Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
We are independent public accountants with respect to the Company
within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations
(i) in our opinion, the audited financial statements and the related
financial statement schedules included in the Registration Statement and
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the published rules
and regulations thereunder;
(ii) on the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim financial statements of the Company for
the period ended September 30, 1997, included in the Registration
Statement and the Prospectus (collectively, the "Quarterly Financials"), a
reading of the minutes of all meetings of the stockholders and directors
of the Company and its subsidiaries and the Audit and Compensation
Committees of the Company's Board of Directors and any subsidiary
committees since October 1, 1997, inquiries of certain officials of the
Company and its subsidiaries responsible for financial and accounting
matters, a review of interim financial information in accordance with
standards established by the American Institute of Certified Public
Accountants in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the period ended September 30,
1997 and such other inquiries and procedures as may be specified in such
letter, nothing came to our attention that caused us to believe that:
(A) the Quarterly Financials included in the Registration Statement
and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations or any material modifications should be made to
the financial statements included in the Registration Statement and
the Prospectus for them to be in conformity with generally accepted
accounting principles; or
(B ) at September 30, 1997 and at a specified date not more than
five days prior to the date of this Agreement, there was any change
in the [cash and cash equivalents, net rental equipment, total
assets, debt or stockholders' equity] of the Company and its
subsidiaries or any decrease in the [cash and cash equivalents, net
rental equipment or total assets] of the Company and its
subsidiaries or any increase in the [debt or stockholders' equity]
of the Company and its subsidiaries, in each case as compared with
amounts shown in the latest balance sheet included in the
Registration Statement, except in each case for changes, decreases
or increases that the Registration Statement discloses have occurred
or may occur;
Annex A-1
(iii) based upon the procedures set forth in clause (ii) above and a
reading of the Selected Historical and Pro Forma Consolidated Financial
Information included in the Registration Statement and a reading of the
financial statements from which such data were derived, nothing came to
our attention that caused us to believe that the Selected Historical and
Pro Forma Consolidated Financial Information included in the Registration
Statement do not comply as to form in all material respects with the
disclosure requirements of Item 301 of Regulation S-K of the 1933 Act ,
that the amounts included in the Selected Historical and Pro Forma
Consolidated Financial Information are not in agreement with the
corresponding amounts in the audited financial statements for the
respective periods or that the financial statements not included in the
Registration Statement from which certain of such data were derived are
not in conformity with generally accepted accounting principles;
(iv) we have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified herein.
nothing came to our attention that caused us to believe that this
information does not comply as to form in all material respects with the
disclosure requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K;
(v) based upon the procedures set forth in clause (ii) above, a
reading of the unaudited financial statements of the Company for the most
recent period that have not been included in the Registration Statement
and a review of such financial statements in accordance with SAS 71,
nothing came to our attention that caused us to believe that the unaudited
amounts for [total revenues, total cost of operations, operating income
(loss), income (loss) before income taxes, net income (loss) or earnings
(loss) per share] for the most recent period do not agree with the amounts
set forth in the unaudited consolidated financial statements for those
periods or that such unaudited amounts were not determined on a basis
substantially consistent with that of the corresponding amounts in the
audited financial statements;
(vi) we are unable to and do not express any opinion on the pro
forma financial information (the "Pro Forma Statements") included in the
Registration Statement or on the pro forma adjustments applied to the
historical amounts included in the Pro Forma Statement; however, for
purposes of this letter we have:
(A) read the Pro Forma Statements;
(B) performed an audit of the financial statements to which
the pro forma adjustments were applied;
Annex A-2
(C) made inquiries of certain officials of the Company who
have responsibility for financial and accounting matters about the
basis for their determination of the pro forma adjustments and
whether the Pro Forma Statements complies as to form in all material
respects with the applicable accounting requirements of Rule 11-02
of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the
pro forma adjustments to the historical amounts in the Pro Forma
Statements; and on the basis of such procedures and such other
inquiries and procedures as specified herein, nothing came to our
attention that caused us to believe that the Pro Forma Statements
included in the Registration Statement do not comply as to form in
all material respects with the applicable requirements of Rule 11-02
of Regulation S-X or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements; and
(vii) in addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are specified
herein, and have compared certain of such items with, and have found such
items to be in agreement with, the accounting and financial records of the
Company.
Annex A-3