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EXHIBIT 1.1
U.S. AND INTERNATIONAL UNDERWRITING AGREEMENT
March -, 2000
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
CIBC World Markets Corp.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
E * OFFERING Corp.
As Representatives of the several U.S. Underwriters
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Limited
CIBC World Markets Inc.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
As Representatives of the several International Managers
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. INTRODUCTORY. Healthstream, Inc., a Tennessee corporation (the
"Company"), proposes to issue and sell to the several Underwriters (as defined
below) - shares of its Common Stock, no par value per share (the "Common
Shares"). It is understood that, subject to the conditions hereinafter stated:
(a) - Common Shares (the "U.S. Firm Shares") will be sold to the several U.S.
Underwriters named in Schedule A hereto (the "U.S. Underwriters") in connection
with the offering (the "U.S. Offering") and sale of such U.S. Firm Shares in the
United States and (b) - Common Shares (the "International Firm Shares") will be
sold to the several International Managers named in Schedule B hereto (the
"International Managers") in connection with the offering (the "International
Offering" and, together with the U.S. Offering, the "Offering") and sale of such
International Firm Shares outside the United States. FleetBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), CIBC World Markets Corp., ▇.▇. ▇▇▇▇▇▇▇▇ &
Co. and E*OFFERING Corp. shall act as the representatives (the "U.S.
Representatives") of the several U.S. Underwriters and FleetBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ International Limited, CIBC World Markets Inc. and ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
shall act as the representatives (the "International Representatives") of the
several International Managers. The U.S. Representatives and the International
Representatives are hereinafter collectively referred to as the
"Representatives". The U.S. Underwriters and the International Managers are
hereinafter collectively referred to as the "Underwriters".
In addition, as set forth below the Company proposes to issue and sell:
(a) to the U.S. Underwriters, at the option of the U.S. Representatives, an
aggregate of not more than - Common Shares (the "U.S. Option Shares"), and (b)
to the International Managers, at the option of the International
Representatives, an aggregate of not more than - Common Shares (the
"International Option Shares").
The U.S. Firm Shares and the U.S. Option Shares are hereinafter called
the "U.S. Shares"; the International Firm Shares and the International Option
Shares are hereinafter collectively referred to as the "International Shares";
the U.S. Firm Shares and the International Firm Shares are hereinafter
collectively referred to as the "Firm Shares"; the U.S. Option Shares and the
International Option Shares are hereinafter collectively referred to as the
"Option Shares". The U.S. Shares and the International Shares are hereinafter
collectively referred to as the "Shares".
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The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-1
(File No. 333-8839), which contains the form of prospectuses, subject to
completion, to be used in connection with the public offering and sale of the
Shares (it being understood that the International Shares are being registered
under the Securities Act of 1933 and the rules and regulations promulgated
thereunder (collectively, the "Securities Act")). Each such prospectus, subject
to completion, used in connection with such public U.S. Offering and public
International Offering is called a "preliminary prospectus". Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act, including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A under the
Securities Act, is called the "Registration Statement". Any registration
statement filed by the Company pursuant to Rule 462(b) under the Securities Act
is called the "Rule 462(b) Registration Statement", and from and after the date
and time of filing of the Rule 462(b) Registration Statement the term
"Registration Statement" shall include the Rule 462(b) Registration Statement.
The form of prospectus relating to the U.S. Shares, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under
the Securities Act or, if no such filing is required, as included in the
Registration Statement, is called the "U.S. Prospectus", and the form of
prospectus relating to the International Shares is called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus are
hereinafter collectively referred to as the "Prospectuses". All references in
this Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectuses or any amendments or
supplements to any of the foregoing, shall include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
System ("▇▇▇▇▇").
The Company hereby confirms its agreements with the
Underwriters as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
ACQUIRED ENTITIES.
The Company hereby represents, warrants and covenants to each
Underwriter as follows:
(a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending, contemplated or threatened by the Commission.
Each of the preliminary prospectuses and the Prospectuses when
filed complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to ▇▇▇▇▇ (except as may be permitted by
Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of
the Shares. Each of the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto, at the time it became
effective and at all subsequent times, complied and will comply in all material
respects with the Securities Act and did not and will not contain any 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. Each
of the preliminary prospectuses, as of its date, and the Prospectuses, each as
amended or supplemented, as of its date and at all subsequent times through the
30th day after the date hereof, did not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The representations and warranties set forth in
the two immediately preceding sentences do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectuses,
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or any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by the Representatives expressly for use therein. There are no
contracts or other documents required to be described in the Prospectuses or to
be filed as exhibits to the Registration Statement which have not been described
or filed as required.
(b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives four complete conformed copies of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and each of the preliminary prospectuses and the Prospectuses, as
amended or supplemented, in such quantities and at such places as the
Representatives have reasonably requested for each of the Underwriters.
(c) Distribution of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than the preliminary prospectuses, the
Prospectuses or the Registration Statement.
(d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, [except as rights to
indemnification hereunder may be limited by applicable law and] except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.
(e) Authorization of the Shares To Be Sold by the Company. The Shares
to be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement, will be validly issued, fully paid
and nonassessable.
(f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offerings contemplated by this Agreement.
(g) No Material Adverse Change. Subsequent to the respective dates as
of which information is given in the Prospectuses: (i) there has been no
material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business, operations or prospects, whether or not arising
from transactions in the ordinary course of business, of the Company and its
subsidiaries, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.
(h) Independent Accountants.
(i) Ernst & Young LLP, who has expressed its opinion with respect
to the financial statements (which term as used in this Agreement
includes the related notes thereto) of the Company, SilverPlatter
Education, Inc., a Delaware corporation ("SilverPlatter") and Quick
Study, Inc., a Delaware corporation ("Quick Study"), filed with the
Commission as a part of
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the Registration Statement and included in the Prospectuses, are
independent public or certified public accountants as required by the
Securities Act.
(ii) ▇▇▇▇ ▇▇▇▇▇▇ Trabitt LLP, who has expressed its opinion
with respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) of Multimedia Marketing,
Inc. d/b/a/ m3 the Healthcare Learning Company, a Delaware corporation
(the "Healthcare Learning Company" and, together with SilverPlatter and
Quick Study, the "Acquired Entities"), filed with the Commission as a
part of the Registration Statement and included in the Prospectuses,
are independent public or certified public accountants as required by
the Securities Act.
(i) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectuses present fairly (i) the consolidated financial position of
the Company and its subsidiaries as of and at the dates indicated and the
results of their operations and cash flows for the periods specified and (ii)
present fairly the consolidated financial position of the Acquired Entities and
their respective subsidiaries as of and at the dates indicated and the results
of their operations and cash flows for the periods specified. The financial
statements of the Company and the financial statements of the Acquired Entities
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial statements or
supporting schedules are required to be included in the Registration Statement.
The financial data set forth in the Prospectuses under the captions "Summary
Financial Data", "Capitalization" and "Selected Financial Data" fairly present
the information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.
The pro forma condensed financial statements of the Company and its
subsidiaries and the related notes thereto included under the caption "Summary
Financial Data" and elsewhere in the Prospectuses and in the Registration
Statement present fairly the information contained therein, have been prepared
in accordance with the Commission's rules and guidelines with respect to pro
forma financial statements and have been properly presented 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. No other pro forma
financial information is required to be included in the Registration Statement
pursuant to Regulation S-X.
(j) Company's and Acquired Entities' Accounting Systems. The Company
and each of its subsidiaries and the Acquired Entities and each of their
respective subsidiaries maintain a system of 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.
(k) Subsidiaries of the Company. The Company does not own or control,
directly or indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21 to the Registration Statement.
(l) Incorporation and Good Standing of the Company, the Acquired
Entities and their Subsidiaries. Each of the Company, the Acquired Entities and
their subsidiaries has been duly organized and is validly existing as a
corporation or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction in which it is organized with full corporate
power and authority to own its properties and conduct its business as described
in the Prospectuses, and
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is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such qualification.
(m) Capitalization of the Company's Subsidiaries and the Acquired
Entities. All the outstanding shares of each subsidiary of the Company and of
the Acquired Entities have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in the
Prospectuses, all outstanding shares of capital stock of the subsidiaries of the
Company and all outstanding shares of capital stock of the Acquired Entities are
owned by the Company either directly or through wholly owned subsidiaries free
and clear of any security interests, claims, liens or encumbrances.
(n) No Prohibition from Paying Dividends or Making Other Distributions.
No subsidiary of the Company and none of the Acquired Entities is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary's or Acquired Entity's
capital stock, from repaying to the Company any loans or advances to such
subsidiary or such Acquired Entity from the Company or from transferring any of
such subsidiary's or such Acquired Entity's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated by
the Prospectuses.
(o) Capitalization and Other Capital Stock Matters. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectuses under the caption "Capitalization" (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the
Prospectuses or upon exercise of outstanding options described in the
Prospectuses). The Common Shares (including the Shares) conform in all material
respects to the description thereof contained in the Prospectuses. All of the
issued and outstanding Common Shares have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with
federal and state securities laws. None of the outstanding Common Shares were
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those accurately described in the
Prospectuses. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectuses accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(p) Stock Exchange Listing. The Shares have been approved for inclusion
on The Nasdaq National Market ("Nasdaq"), subject only to official notice of
issuance.
(q) No Consents, Approvals or Authorizations Required. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the transactions
contemplated herein, except such as have been obtained or made under the
Securities Act and such as may be required (i) under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Shares by
the Underwriters in the manner contemplated here and in the Prospectuses, (ii)
by the National Association of Securities Dealers, Inc. (the "NASD") and (iii)
by the federal and provincial laws of Canada.
(r) Non-Contravention of Existing Instruments Agreements. Neither the
issue and sale of the Shares nor the consummation of the Offering or any other
of the transactions herein contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of
its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or bound or to which its or their property is subject or
(iii) any statute, law, rule, regulation, judgment, order or decree applicable
to the Company
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or any of its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its subsidiaries or any of its or their properties.
(s) No Defaults or Violations. None of the Company, any Acquired Entity
nor any subsidiary of the Company or any Acquired Entity is in violation or
default of (i) any provision of its charter or by-laws, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company, such Acquired Entity or such
subsidiary or any of its properties, as applicable, except any such violation or
default which would not, singly or in the aggregate, result in a Material
Adverse Change except as otherwise disclosed in the Prospectuses.
(t) No Actions, Suits or Proceedings. No action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company, any Acquired Entity, or any of their respective
subsidiaries or its or any of their respective property is pending or threatened
that (i) could reasonably be expected to have a Material Adverse Effect on the
performance of this Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to result in a Material
Adverse Effect.
(u) All Necessary Permits, Etc. The Company, the Acquired Entities and
each of their respective subsidiaries possess such valid and current
certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company, any Acquired Entity nor any of their
respective subsidiaries has received any notice of proceedings relating to the
revocation or modification of, or noncompliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could result in a Material Adverse
Change.
(v) Title to Properties. The Company, the Acquired Entities and each of
their respective subsidiaries has good and marketable title to all the
properties and assets reflected as owned in the financial statements referred to
in Section 1(h) above (or elsewhere in the Prospectuses), in each case free and
clear of any security interests, mortgages, liens, encumbrances, equities,
claims and other defects; the real property, improvements, equipment and
personal property held under lease by the Company, the Acquired Entities or any
of their respective subsidiaries are held under valid and enforceable leases.
(w) Tax Law Compliance. The Company, the Acquired Entities and their
respective subsidiaries have filed all necessary federal, state and foreign
income and franchise tax returns and have paid all taxes required to be paid by
any of them and, if due and payable, any related or similar assessment, fine or
penalty levied against any of them. The Company and each of the Acquired
Entities has made adequate charges, accruals and reserves in the applicable
financial statements referred to in Section 1(h) above in respect of all
federal, state and foreign income and franchise taxes for all periods as to
which the tax liability of the Company, the Acquired Entities or any of their
respective subsidiaries has not been finally determined. The Company is not
aware of any tax deficiency that has been or might be asserted or threatened
against the Company or any Acquired Entity that could result in a Material
Adverse Change.
(x) Intellectual Property Rights. The Company, the Acquired Entities
and their respective subsidiaries each owns or possesses adequate rights to use
all patents, patent rights or licenses, inventions, collaborative research
agreements, trade secrets, know-how, trademarks, service marks, trade names and
copyrights which are necessary to conduct its businesses as described in the
Registration Statement and Prospectuses; the expiration of any patents, patent
rights, trade secrets, trademarks, service marks, trade names or copyrights
would not result in a Material Adverse Change that is not otherwise disclosed in
the Prospectuses; none of the Company or any Acquired
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Entity has received any notice of, nor has knowledge of, any infringement of or
conflict with asserted rights of the Company or any Acquired Entity by others
with respect to any patent, patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names or copyrights; and none of the Company or
any Acquired Entity has received any notice of, nor has knowledge of, any
infringement of or conflict with asserted rights of others with respect to any
patent, patent rights, inventions, trade secrets, know-how, trademarks, service
marks, trade names or copyrights which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, might have a Material
Adverse Effect. There is no claim being made against the Company or any Acquired
Entity regarding patents, patent rights or licenses, inventions, collaborative
research, trade secrets, know-how, trademarks, service marks, trade names or
copyrights. The Company, the Acquired Entities and their respective subsidiaries
do not in the conduct of their business as now or proposed to be conducted as
described in the Prospectuses infringe or conflict with any right or patent of
any third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company
or any of its subsidiaries.
(y) Y2K. There are no Y2K issues related to the Company, or any of
their respective subsidiaries, that (i) are of a character required to be
described or referred to in the Registration Statement or Prospectuses by the
Securities Act or by the Exchange Act or the rules and regulations of the
Commission thereunder which have not been accurately described in the
Registration Statement or Prospectuses or (ii) might reasonably be expected to
result in any Material Adverse Change or that might materially affect their
properties, assets or rights.
(z) No Transfer Taxes or Other Fees. There are no transfer taxes or
other similar fees or charges under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Shares.
(aa) Company Not an "Investment Company". The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and after receipt of
payment for the Shares will not be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act and will conduct its business in a manner so that will not become
subject to the Investment Company Act.
(bb) Insurance. The Company, the Acquired Entities and their respective
subsidiaries each are insured by recognized, financially sound and reputable
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but, not limited to, policies covering real and personal
property owned or leased by the Company, the Acquired Entities and their
respective subsidiaries against theft, damage, destruction, acts of vandalism
and earthquakes, general liability and Directors and Officers liability. The
Company has no reason to believe that it, each Acquired Entity or any subsidiary
will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. None of the
Company, any Acquired Entity nor any subsidiary has been denied any insurance
coverage which it has sought or for which it has applied.
(cc) Labor Matters. No labor disturbance by the employees of the
Company, the Acquired Entities or any of their subsidiaries exists or is
imminent; and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Acquired Entity's principal
suppliers that might be expected to result in a Material Adverse Change.
(dd) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.
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(ee) Lock-Up Agreements. Each officer and director of the Company and
each beneficial owner of one or more percent of the outstanding issued share
capital of the Company has agreed to sign an agreement substantially in the form
attached hereto as Exhibit A (the "Lock-up Agreements"). The Company has
provided to counsel for the Underwriters a complete and accurate list of all
securityholders of the Company and the number and type of securities held by
each securityholder. The Company has provided to counsel for the Underwriters
true, accurate and complete copies of all of the Lock-up Agreements presently in
effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or other stockholders from any
Lock-up Agreements currently existing or hereafter effected without the prior
written consent of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(ff) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company, the Acquired Entities or any
subsidiary or any other person required to be described in the Prospectuses
which have not been described as required.
(gg) Officers Certificates. Any certificate signed by an officer of the
Company and delivered to the Representatives or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company to each
Underwriter as to the matters set forth therein.
(hh) No Unlawful Contributions or Other Payments. Neither the Company,
any Acquired Entity nor any of its subsidiaries nor any employee or agent of the
Company or any subsidiary, has made any contribution or other payment to any
official of, or candidate for, any federal, state or foreign office in violation
of any law or of the character required to be disclosed in the Prospectuses.
(ii) ERISA Compliance. The Company, such Acquired Entity and their
subsidiaries and any "employee benefit plan" (as defined under the Employee
Retirement Income Security Act of 1974, as amended, and the regulations and
published interpretations thereunder (collectively, "ERISA")) established or
maintained by the Company, the Acquired Entities, their subsidiaries or their
"ERISA Affiliates" (as defined below) are in compliance in all material respects
with ERISA. "ERISA Affiliate" means, with respect to the Company, an Acquired
Entity or a subsidiary, any member of any group of organizations described in
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the
"Code") of which the Company, such Acquired Entity or such subsidiary is a
member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, the Acquired Entities, their
subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, the Acquired Entities, their
subsidiaries or any of their ERISA Affiliates, if such "employee benefit plan"
were terminated, would have any "amount of unfounded benefit liabilities" (as
defined under ERISA). Neither the Company, the Acquired Entities, their
subsidiaries nor any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan" or (ii) Sections
412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established
or maintained by the Company, the Acquired Entities, their subsidiaries or any
of their ERISA Affiliates that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(jj) Consents Required in Connection with the Directed Share Program.
No consent, approval, authorization or order of, or qualification with, any
governmental body or agency, other than those obtained, is required in
connection with the offering of the Directed Shares in any jurisdiction where
the Directed Shares are being offered.
(kk) No Improper Influence in Connection with the Directed Share
Program. The Company has not offered, or caused ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to offer,
Shares to any person pursuant to the Directed Share Program with the specific
intent to unlawfully influence (i) a customer or supplier of the Company or any
Acquired Entity to alter the customer's or supplier's level or type of
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business with the Company or any Acquired Entity or (ii) a trade journalist or
publication to write or publish favorable information about the Company or any
Acquired Entity or their products.
SECTION 2. PURCHASE, SALE AND DELIVERY OF THE U.S. SHARES AND THE
INTERNATIONAL SHARES.
(a) The Firm Shares. The Company agrees to issue and sell to the
several U.S. Underwriters and the several International Managers the U.S. Firm
Shares and the International Firm Shares, respectively, upon the terms herein
set forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
(i) the several U.S. Underwriters agree, severally and not jointly, to purchase
from the Company the respective number of U.S. Firm Shares set forth opposite
their names on Schedule A hereto and (ii) the several International Managers
agree, severally and not jointly, to purchase from the Company the several
number of International Firm Shares set forth opposite their names on Schedule B
hereto. The purchase price per Firm Share to be paid by the several Underwriters
to the Company shall be $-.
(b) The First Closing Date. Delivery of the Firm Shares to be purchased
by the Underwriters and payment therefor shall be made by the Company and the
Representatives at 7:00 a.m. San Francisco time, at the offices of Cravath,
Swaine & ▇▇▇▇▇ (or at such other place as may be agreed upon among the
Representatives and the Company), (i) on the third (3rd) full business day
following the first day that Shares are traded, (ii) if this Agreement is
executed and delivered after 1:30 P.M., San Francisco time, the fourth (4th)
full business day following the day that this Agreement is executed and
delivered or (iii) at such other time and date not later than seven (7) full
business days following the first day that Shares are traded as the
Representatives and the Company may determine (or at such time and date to which
payment and delivery shall have been postponed pursuant to Section 8 hereof),
such time and date of payment and delivery being herein called the "Closing
Date"; provided, however, that if the Company has not made available to the
Representatives copies of the Prospectuses within the time provided in Section
2(g) and 3(e) hereof, the Representatives may, in their sole discretion,
postpone the Closing Date until no later that two (2) full business days
following delivery of copies of the Prospectuses to the Representatives.
(c) The Option Shares; the Second Closing Date. In addition, on the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option (i) to the several U.S. Underwriters to purchase,
severally and not jointly, up to an aggregate of - U.S. Option Shares from the
Company at the purchase price per share to be paid by the U.S. Underwriters for
the U.S. Firm Shares and (ii) to the several International Managers to purchase,
severally and not jointly, up to an aggregate of - International Option Shares
from the Company at the purchase price per share to be paid by the International
Managers for the International Firm Shares. The option granted hereunder is for
use by the Underwriters solely in covering any over-allotments in connection
with the sale and distribution of the Firm Shares. The option granted hereunder
may be exercised at any time upon notice by the U.S. Representatives or the
International Representatives, as the case may be, to the Company, which notice
may be given at any time within 30 days from the date of this Agreement. The
time and date of delivery of the Option Shares, if subsequent to the First
Closing Date, is called the "Second Closing Date" and shall be determined by the
U.S. Representatives or the International Representatives, as the case may be,
and shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Option Shares are to be purchased,
(i) each Underwriter agrees, severally and not jointly, to purchase the number
of Option Shares (subject to such adjustments to eliminate fractional shares as
the U.S. Representatives or the International Representatives, as the case may
be, may determine) that bears the same proportion to the total number of Option
Shares to be purchased as the number of Firm Shares set forth (A) on Schedule A
opposite the name of such U.S. Underwriter bears to the total number of U.S.
Firm Shares and (B) on Schedule B opposite the name of such International
Manager bears to the total number of International Firm Shares, and (ii) the
Company agrees to sell the number of Option Shares as set forth in the paragraph
"Introductory" of this Agreement. The U.S.
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Representatives and the International Representatives may cancel their
respective options at any time prior to their expiration by giving written
notice of such cancellation to the Company.
(d) Public Offering of the Shares. The Representatives hereby advise
the Company that the Underwriters intend to offer for sale to the public, as
described in the Prospectuses, their respective portions of the Shares as soon
after this Agreement has been executed and the Registration Statement has been
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) Payment for the Shares. Payment for the Shares shall be made at the
First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer in immediately available funds to the order of the Company.
It is understood that the Representatives have been authorized, for
their own account and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for, the
Firm Shares and any Option Shares the Underwriters have agreed to purchase.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Shares to
be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall not
relieve such Underwriter from any of its obligations under this Agreement.
(f) Delivery of the Shares. The Company shall deliver, or cause to be
delivered, a credit representing the Firm Shares to an account or accounts at
The Depository Trust Company, as designated by the Representatives for the
accounts of the Representatives and the several Underwriters at the First
Closing Date, against the irrevocable release of a wire transfer of immediately
available funds for the amount of the purchase price therefor. The Company shall
also deliver, or cause to be delivered, a credit representing the Option Shares
the Underwriters have agreed to purchase at the First Closing Date (or the
Second Closing Date, as the case may be), to an account or accounts at The
Depository Trust Company as designated by the Representatives for the accounts
of the Representatives and the several Underwriters, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. Time shall be of the essence, and delivery at the time
and place specified in this Agreement is a further condition to the obligations
of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00
noon on the second business day following the date the Shares are released by
the Underwriters for sale to the public, the Company shall deliver or cause to
be delivered copies of the Prospectuses in such quantities and at such places as
the Representatives shall request.
SECTION 3. COVENANTS OF THE COMPANY.
A. COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each U.S. Underwriter
and each International Manager as follows:
(a) Registration Statement Matters. The Company will (i) use its best
efforts to cause a registration statement on Form 8-A (the "Form 8-A
Registration Statement") as required by the Securities Exchange Act of 1934 (the
"Exchange Act") to become effective simultaneously with the Registration
Statement, (ii) use its best efforts to cause the Registration Statement to
become effective or, if the procedure in Rule 430A of the Securities Act is
followed, to prepare and timely file with the Commission under Rule 424(b) under
the Securities Act a Prospectus in a form approved by the Representatives
containing information previously omitted at the time of effectiveness of the
Registration Statement in reliance on Rule 430A of the Securities Act and (iii)
not file any
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amendment to the Registration Statement or supplement to the Prospectuses of
which the Representatives shall not previously have been advised and furnished
with a copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Securities Act. If the Company
elects to rely on Rule 462(b) under the Securities Act, the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) under the Securities Act prior to the time confirmations are sent or
given, as specified by Rule 462(b)(2) under the Securities Act, and shall pay
the applicable fees in accordance with Rule 111 under the Securities Act.
(b) Securities Act Compliance. The Company will advise the
Representatives promptly (i) when the Registration Statement or any
post-effective amendment thereto shall have become effective, (ii) of receipt of
any comments from the Commission, (iii) of any request of the Commission for
amendment of the Registration Statement or for supplement to either of the
Prospectuses or for any additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of either of the Prospectuses or of the institution of any
proceedings for that purpose. The Company will use its best efforts to prevent
the issuance of any such stop order preventing or suspending the use of either
of the Prospectuses and to obtain as soon as possible the lifting thereof, if
issued.
(c) Blue Sky Compliance. The Company will cooperate with the
Representatives and counsel for the Underwriters in endeavoring to qualify the
Shares for sale under the securities laws of such jurisdictions (both national
and foreign) as the Representatives may reasonably have designated in writing
and will make such applications, file such documents, and furnish such
information as may be reasonably required for that purpose, provided the Company
shall not be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction where it is not now so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports and other documents, as are or
may be required to continue such qualifications in effect for so long a period
as the Representatives may reasonably request for distribution of the Shares.
(d) Amendments and Supplements to the Prospectuses and Other Securities
Act Matters. The Company will comply with the Securities Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectuses. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Representatives or counsel for the Underwriters, it becomes
necessary to amend or supplement either of the Prospectuses in order to make the
statements therein, in the light of the circumstances existing at the time the
Prospectuses are delivered to a purchaser, not misleading, or, if it is
necessary at any time to amend or supplement either of the Prospectuses to
comply with any law, the Company promptly will prepare and file with the
Commission, and furnish at its own expense to the Underwriters and to dealers,
an appropriate amendment to the Registration Statement or supplement to such
Prospectus so that such Prospectus as so amended or supplemented will not, in
the light of the circumstances when it is so delivered, be misleading, or so
that such Prospectus will comply with the law.
(e) Copies of any Amendments and Supplements to the Prospectuses. The
Company agrees to furnish the Representatives, without charge, during the period
beginning on the date hereof and ending on the later of the First Closing Date
or such date, as in the opinion of counsel for the Underwriters, the
Prospectuses are no longer required by law to be delivered in connection with
sales by an Underwriter or dealer (the "Prospectus Delivery Period"), as many
copies of the Prospectuses and any amendments and supplements thereto as the
Representatives may request.
(f) Insurance. The Company shall (i) obtain Directors and Officers
liability insurance in the minimum amount of $10 million which shall apply to
the offering and sale of Shares contemplated hereby and (ii) cause ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ to be added to such policy such that up to
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$500,000 of its expenses pursuant to section 7(a) shall be paid directly by such
insurer and (iii) shall cause ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to be added as an additional
insured to such policy in respect of the offering contemplated hereby.
(g) Notice of Subsequent Events. If at any time during the ninety (90)
day period after the Registration Statement becomes effective, any rumor,
publication or event relating to or affecting the Company or any Acquired Entity
shall occur as a result of which, in your opinion, the market price of the
Common Shares has been or is likely to be materially affected (regardless of
whether such rumor, publication or event necessitates a supplement to or
amendment of either of the Prospectuses), the Company will, after written notice
from you advising the Company to the effect set forth above, forthwith prepare,
consult with you concerning the substance of and disseminate a press release or
other public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(h) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectuses.
(i) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Shares.
(j) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending March 31, 2001 that satisfies the provisions of Section 11(a) of the
Securities Act.
(k) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and Nasdaq
all reports and documents required to be filed under the Exchange Act.
(l) Agreement Not to Offer or Sell Additional Securities. The Company
will not offer, sell or contract to sell, or otherwise dispose of or enter into
any transaction which is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due
to cash settlement or otherwise by the Company or any affiliate of the Company
or any person in privity with the Company or any affiliate of the Company)
directly or indirectly, or announce the offering of, any other Common Shares or
any securities convertible into, or exchangeable for, Common Shares; provided,
however, that the Company may (i) issue and sell Common Shares pursuant to any
director or employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the date of the Prospectuses and
described in the Prospectuses so long as none of those shares may be transferred
and the Company shall enter stop transfer instructions with its transfer agent
and registrar against the transfer of any such Common Shares and (ii) the
Company may issue Common Shares issuable upon the conversion of securities or
the exercise of warrants outstanding at the date of the Prospectuses and
described in the Prospectuses. These restrictions terminate after the close of
trading of the Shares on the 180th day of (and including) the day the Shares
commenced trading on Nasdaq (the "Lock-Up Period").
(m) Future Reports to the Representatives. During the period of five
years hereafter the Company will furnish to the Representatives (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.
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(n) Exchange Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and within
the time periods required by the Exchange Act.
(o) Directed Share Program. The Company (i) will indemnify ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ for any losses incurred in connection with the Directed Share Program,
(ii) will comply with all applicable securities and other applicable laws, rules
and regulations in each jurisdiction in which the Directed Shares are offered in
connection with the Directed Share Program and (iii) will pay all reasonable
fees and disbursements of counsel incurred by the Underwriters in connection
with the Directed Share Program and any stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Underwriters in connection with the
Directed Share Program.
SECTION 4. CONDITIONS OF THE OBLIGATIONS OF THE U.S. UNDERWRITERS AND
THE INTERNATIONAL MANAGERS.
The obligations of the several Underwriters to purchase and pay for
the Shares as provided herein on the First Closing Date and, with respect to the
Option Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the First Closing Date as though then
made and, with respect to the Option Shares, as of the Second Closing Date as
though then made, to the timely performance by the Company of its covenants and
other obligations hereunder, and to each of the following additional conditions:
(a) Compliance with Registration Requirements; No Stop Order, No
Objection from the NASD. The Registration Statement shall have become effective
prior to the execution of this Agreement, or at such later date as shall be
consented to in writing by you; and no stop order suspending the effectiveness
thereof shall have been issued and no proceedings for that purpose shall have
been initiated or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectuses or
otherwise) shall have been complied with to the satisfaction of Underwriters'
Counsel; and the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(b) Corporate Proceedings. All corporate proceedings and other legal
matters in connection with this Agreement, the form of Registration Statement
and the Prospectuses, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to Underwriters'
Counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date, or the Second
Closing Date, as the case may be, there shall not have been any Material Adverse
Change in the condition (financial or otherwise), earnings, operations, business
or business prospects of the Company, the Acquired Entities and their
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectuses, which, in your sole judgment, is
material and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectuses.
(d) Opinion of Counsel for the Company. You shall have received on the
First Closing Date or the Second Closing Date, as the case may be, an opinion of
Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC, counsel for the Company, substantially in the form of
Exhibit B attached hereto, dated the First Closing Date, or the Second Closing
Date, addressed to the Underwriters and with reproduced copies or signed
counterparts thereof for each of the Underwriters.
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Counsel rendering the opinion contained in Exhibit B may rely as to
questions of law not involving the laws of the United States, the State of
Delaware, the State of Tennessee or the State of New York upon opinions of local
counsel, and as to questions of fact upon representations or certificates of
officers of the Company and the Acquired Entities, and of government officials,
in which case their opinion is to state that they are so relying and that they
have no knowledge of any material misstatement or inaccuracy in any such
opinion, representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, as Representatives of the
Underwriters, and to Underwriters' Counsel.
(e) Opinion of Counsel for the Underwriters. You shall have received on
the First Closing Date or the Second Closing Date, as the case may be, an
opinion of Cravath, Swaine & ▇▇▇▇▇, counsel for the Underwriters, substantially
in the form of Exhibit C hereto. The Company shall have furnished to such
counsel such documents as they may have requested for the purpose of enabling
them to pass upon such matters.
(f) Accountants' Comfort Letter. (i) You shall have received on the
First Closing Date and on the Second Closing Date, as the case may be, a letter
from Ernst & Young LLP addressed to the U.S. Representatives and the
International Representatives, dated the First Closing Date or the Second
Closing Date, as the case may be, confirming that they are independent certified
public accountants with respect to the Company, SilverPlatter and Quick Study
within the meaning of the Securities Act and the applicable published Rules and
Regulations and based upon the procedures described in such letter delivered to
you concurrently with the execution of this Agreement (herein called the "E&Y
Original Letter"), but carried out to a date not more than four (4) business
days prior to the First Closing Date or the Second Closing Date, as the case may
be, (A) confirming, to the extent true, that the statements and conclusions set
forth in the E&Y Original Letter are accurate as of the First Closing Date or
the Second Closing Date, as the case may be, and (B) setting forth any revisions
and additions to the statements and conclusions set forth in the E&Y Original
Letter which are necessary to reflect any changes in the facts described in the
E&Y Original Letter since the date of such letter, or to reflect the
availability of more recent financial statements, data or information. The
letter shall disclose any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, SilverPlatter and its subsidiaries
considered as one enterprise and Quick Study and its subsidiaries considered as
one enterprise, from that set forth in the Registration Statement or
Prospectuses, which, in your sole judgment, is material and adverse and that
makes it, in your sole judgment, impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectuses. The E&Y
Original Letter shall be addressed to or for the use of the Underwriters in form
and substance satisfactory to the Underwriters and shall (A) represent, to the
extent true, that they are independent certified public accountants with respect
to the Company, SilverPlatter and Quick Study, within the meaning of the
Securities Act and the applicable published Rules and Regulations thereto and
(B) set forth in their opinion with respect to their examination of the
consolidated balance sheet of each of the Company, SilverPlatter and Quick
Study, as of December 31, 1999 and related consolidated statements of
operations, shareholders' equity, and cash flows for the twelve (12) months
ended December 31, 1999. In addition, you shall have received from Ernst & Young
LLP a letter addressed to the Company, SilverPlatter and Quick Study, and made
available to you for the use of the Underwriters stating that their review of
the Company's systems of internal accounting controls, to the extent they are
deemed necessary in establishing the scope of their examination of the
Company's, SilverPlatter's and Quick Study's consolidated financial statements
as of December 31, 1999, did not disclose any weaknesses in internal controls
that they considered to be material weaknesses.
(ii) You shall have received on the First Closing Date and on
the Second Closing Date, as the case may be, a letter from ▇▇▇▇ ▇▇▇▇▇▇ Trabitt
LLP addressed to the U.S. Representatives and the International Managers, dated
the First Closing Date or the Second Closing Date, as the case may be,
confirming that they are independent certified public accountants with respect
to the Healthcare Learning Company within the meaning of the Securities Act and
the applicable published Rules and Regulations and based upon the procedures
described in such letter
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delivered to you concurrently with the execution of this Agreement (herein
called the "▇▇▇▇ ▇▇▇▇▇▇ Original Letter"), but carried out to a date not more
than four (4) business days prior to the First Closing Date or the Second
Closing Date, as the case may be, (A) confirming, to the extent true, that the
statements and conclusions set forth in the ▇▇▇▇ ▇▇▇▇▇▇ Original Letter are
accurate as of the First Closing Date or the Second Closing Date, as the case
may be, and (B) setting forth any revisions and additions to the statements and
conclusions set forth in the ▇▇▇▇ ▇▇▇▇▇▇ Original Letter which are necessary to
reflect any changes in the facts described in the ▇▇▇▇ ▇▇▇▇▇▇ Original Letter
since the date of such letter, or to reflect the availability of more recent
financial statements, data or information. The letter shall disclose any change
in the condition (financial or otherwise), earnings, operations, business or
business prospects of the Healthcare Learning Company and its subsidiaries
considered as one enterprise from that set forth in the Registration Statement
or Prospectuses, which, in your sole judgment, is material and adverse and that
makes it, in your sole judgment, impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectuses. The ▇▇▇▇
▇▇▇▇▇▇ Original Letter shall be addressed to or for the use of the Underwriters
in form and substance satisfactory to the Underwriters and shall (A) represent,
to the extent true, that they are independent certified public accountants with
respect to the Healthcare Learning Company within the meaning of the Securities
Act and the applicable published Rules and Regulations thereto and (B) set forth
in their opinion with respect to their examination of the consolidated balance
sheet of the Healthcare Learning Company as of December 31, 1999 and related
consolidated statements of operations, shareholders' equity, and cash flows for
the twelve (12) months ended December 31, 1999. In addition, you shall have
received from ▇▇▇▇ ▇▇▇▇▇▇ Trabitt LLP a letter addressed to the Healthcare
Learning Company and made available to you for the use of the Underwriters
stating that their review of the Healthcare Learning Company's system of
internal accounting controls, to the extent they are deemed necessary in
establishing the scope of their examination of the Healthcare Learning Company's
consolidated financial statements as of December 31, 1999, did not disclose any
weaknesses in internal controls that they considered to be material weaknesses.
(g) Officers' Certificate. You shall have received on the First Closing
Date and the Second Closing Date, as the case may be, a certificate of the
Company, dated the First Closing, Date or the Second Closing Date, as the case
may be, signed by the Chief Executive Officer and Chief Financial Officer of the
Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company and the
Acquired Companies in this Agreement are true and correct, as made on
and as of the First Closing Date or the Second Closing Date, as the
case may be, and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the First Closing Date or the Second Closing Date, as
the case may be;
(ii) 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 threatened under the Act;
(iii) When the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such certificate, the
Registration Statement and the Prospectuses, and any amendments or
supplements thereto, contained all material information required to be
included therein by the Securities Act and in all material respects
conformed to the requirements of the Securities Act, the Registration
Statement and the Prospectuses, and any amendments or supplements
thereto, did not and does not include any 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, since the effective date of the Registration Statement, there has
occurred no event required to be set forth in an amended or
Supplemented Prospectus which has not been so set forth; and
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectuses, there has not
been (a) any material adverse
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change in the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries
considered as one enterprise, SilverPlatter and its subsidiaries
considered as one enterprise, Quick Study and its subsidiaries
considered as one enterprise, or the Healthcare Learning Company and
its subsidiaries considered as one enterprise, (b) any transaction that
is material to the Company and its subsidiaries considered as one
enterprise, SilverPlatter and its subsidiaries considered as one
enterprise, Quick Study and its subsidiaries considered as one
enterprise, or the Healthcare Learning Company and its subsidiaries
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiaries considered as one
enterprise, SilverPlatter and its subsidiaries considered as one
enterprise, Quick Study and its subsidiaries considered as one
enterprise, or the Healthcare Learning Company and its subsidiaries
considered as one enterprise, incurred by the Company or its
subsidiaries, SilverPlatter and its subsidiaries, Quick Study and its
subsidiaries or the Healthcare Learning Company and its subsidiaries,
respectively, except obligations incurred in the ordinary course of
business, (d) any change in the capital stock or outstanding
indebtedness of the Company or any of its subsidiaries, SilverPlatter
or any of its subsidiaries, Quick Study or any of its subsidiaries or
the Healthcare Learning Company or any of its subsidiaries,
respectively, that is material to the Company and its subsidiaries,
SilverPlatter and its subsidiaries, Quick Study and its subsidiaries
and the Healthcare Learning Company and its subsidiaries, respectively,
considered as one enterprise, (e) any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any
of its subsidiaries, SilverPlatter or any of its subsidiaries, Quick
Study or any of its subsidiaries or the Healthcare Learning Company or
any of its subsidiaries or (f) any loss or damage (whether or not
insured) to the property of the Company, SilverPlatter, Quick Study,
the Healthcare Learning Company or any of their subsidiaries, which has
been sustained or will have been sustained which has a material adverse
effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries
considered as one enterprise, SilverPlatter and its subsidiaries
considered as one enterprise, Quick Study and its subsidiaries
considered as one enterprise, or the Healthcare Learning Company and
its subsidiaries considered as one enterprise.
(h) Lock-up Agreement from Certain Stockholders of the Company. The
Company shall have obtained and delivered to you an agreement substantially in
the form of Exhibit A attached hereto from each officer and director of the
Company and each beneficial owner of one or more percent of the outstanding
issued share capital of the Company.
(i) Stock Exchange Listing. The Shares shall have been approved for
inclusion on Nasdaq, subject only to official notice of issuance.
(j) Compliance with Prospectus Delivery Requirements. The Company shall
have complied with the provisions of Sections 2(g) and 3(e) hereof with respect
to the furnishing of the Prospectuses.
(k) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, as the case may be, the Representatives and counsel
for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to
pass upon the issuance and sale of the Shares as contemplated herein, or in
order to evidence the accuracy of any of the representations and warranties, or
the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 4 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Option Shares, at any time prior to the
Second Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 5 (Payment of Expenses),
Section 6 (Reimbursement of
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Underwriters' Expenses), Section 7 (Indemnification and Contribution) and
Section 10 (Representations and Indemnities to Survive Delivery) shall at all
times be effective and shall survive such termination.
SECTION 5. PAYMENT OF EXPENSES.
The Company agrees to pay all costs, fees and expenses incurred in
connection with the performance of its obligations hereunder and in connection
with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Common Shares (including
all printing and engraving costs), (ii) all fees and expenses of the registrar
and transfer agent of the Common Shares, (iii) all necessary issue, transfer and
other stamp taxes in connection with the issuance and sale of the Shares to the
Underwriters, (iv) all fees and expenses of the Company's counsel, independent
public or certified public accountants and other advisors, (v) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each preliminary
prospectus and the Prospectuses, and all amendments and supplements thereto, and
this Agreement, (vi) all costs and expenses incurred by Underwriters' counsel in
connection with the Directed Share Program, (vii) all filing fees, attorneys'
fees and expenses incurred by the Company or the Underwriters in connection with
qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Shares for offer and sale under the
state securities or blue sky laws or the provincial securities laws of Canada or
any other country, and, if requested by the Representatives, preparing and
printing a "Blue Sky Survey", an "International Blue Sky Survey" or other
memorandum, and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (viii) the filing fees incident
to, and the reasonable fees and expenses of counsel for the Underwriters in
connection with, the NASD review and approval of the Underwriters' participation
in the offering and distribution of the Common Shares, (ix) the fees and
expenses associated with including the Common Shares on Nasdaq, (x) all costs
and expenses incident to the travel and accommodation of the Company's employees
on the "roadshow", and (xi) all other fees, costs and expenses referred to in
Item 13 and Item 14 of Part II of the Registration Statement. Except as provided
in this Section 5, Section 6, and Section 7 hereof, the Underwriters shall pay
their own expenses, including the fees and disbursements of their counsel.
SECTION 6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES.
If this Agreement is terminated by the Representatives pursuant to
Section 4, Section 8 or Section 9, or if the sale to the Underwriters of the
Shares on the First Closing Date is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company agrees to reimburse the
Representatives and the other Underwriters (or such Underwriters as have
terminated this Agreement with respect to themselves), severally, upon demand
for all out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Shares, including but not limited to fees and
disbursements of counsel, printing expenses, travel and accommodation expenses,
postage, facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of the Underwriters.
(1) The Company agrees to indemnify and hold harmless each Underwriter,
its officers and employees, and each person, if any, who controls any
Underwriter within the meaning of the Securities Act and the Exchange Act
against any loss, claim, damage, liability or expense, as incurred, to which
such Underwriter or such controlling person may become subject, under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the
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written consent of the Company, which consent shall not be unreasonably
withheld), insofar as such loss, claim, damage, liability or expense (or actions
in respect thereof as contemplated below) arises out of or is based (i) upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, or any amendment thereto, including any information
deemed to be a part thereof pursuant to Rule 430A under the Securities Act, 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
(ii) upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (iii) in whole or
in part upon any inaccuracy in the representations and warranties of the Company
and the Acquired Entities contained herein; or (iv) in whole or in part upon any
failure of the Company to perform its obligations hereunder or under law; or (v)
any untrue statement or alleged untrue statement of any material fact contained
in any audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company including, without
limitation, slides, videos, films or tape recordings, used in connection with
the marketing of the Shares, including without limitation, statements
communicated to securities analysts employed by the Underwriters; or (vi) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i), (ii), (iii), (iv) or (v) above, provided that the Company
shall not be liable under this clause (vi) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) as such expenses are
reasonably incurred by such Underwriter or such controlling person in connection
with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the
foregoing indemnity agreement shall not apply to any loss, claim, damage,
liability or expense to the extent, but only to the extent, arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company by the Representatives expressly for use in
the Registration Statement, any preliminary prospectus or the Prospectuses (or
any amendment or supplement thereto); and provided, further, that with respect
to any preliminary prospectus, the foregoing indemnity agreement shall not inure
to the benefit of any Underwriter from whom the person asserting any loss,
claim, damage, liability or expense purchased Shares, or any person controlling
such Underwriter, if copies of the Prospectuses were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectuses (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, and if the
Prospectuses (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage, liability or expense. The indemnity agreement
set forth in this Section 7(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectuses (or any amendment or
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supplement thereto), in reliance upon and in conformity with written information
furnished to the Company by the Representatives expressly for use therein; and
to reimburse the Company, or any such director, officer or controlling person
for any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. The indemnity agreement set forth in this Section
7(b) shall be in addition to any liabilities that each Underwriter may otherwise
have.
(c) Information Provided by the Underwriters. The Company and each
person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act, hereby acknowledges that the only information that the
Underwriters have furnished to the Company expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectuses (or any amendment or
supplement thereto) are the statements set forth in the fourth paragraph under
the caption "Underwriting" in the Prospectuses; and the Underwriters confirm
that such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 7 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, 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 a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
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 the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the case of Section 7(b) and Section
8), representing the indemnified parties who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
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(e) Settlements. The indemnifying party under this Section 7 shall not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(d) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 60 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding 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.
(f) Contribution. If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party under
Section 7(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by such party on the one hand and the Underwriters on
the other from the offering of the Shares. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law then
each indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the such party on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities, (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company the "control" Stockholders on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(f) were determined by pro
rata allocation (even if the 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(f). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to above in
this Section 7(f) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (f), (i) no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Shares
purchased by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section 7(f)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(g) Timing of Any Payments of Indemnification. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 7 shall be paid by the
indemnifying party to the indemnified party as such losses, claims,
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damages, liabilities or expenses are incurred, but in all cases, no later than
forty-five (45) days of invoice to the indemnifying party.
(h) Survival. The indemnity and contribution agreements contained in
this Section 7 and the representation and warranties set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any persons
controlling the Company, (ii) acceptance of any Shares and payment therefor
hereunder, and (iii) any termination of this Agreement. A successor to any
Underwriter, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 7.
(i) Acknowledgments of Parties. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 7, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 7 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and Prospectuses as required by
the Securities Act and the Exchange Act.
(j) Indemnification for Direct Share Program. The Company agrees to
indemnify and hold harmless ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and its affiliates and each
person, if any, who controls ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or its affiliates within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act ("▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Entities"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) (i) caused by any untrue statement or alleged untrue
statement of a material fact contained in any material prepared by or with the
consent of the Company for distribution to participants in connection with the
Directed Share Program, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) the failure of any participant to pay
for and accept delivery of Directed Shares that the participant has agreed to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program other than losses, claims, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Entities.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL UNDERWRITERS.
If, on the First Closing Date or the Second Closing Date, as the
case may be, any one or more of the several Underwriters shall fail or refuse to
purchase Shares that it or they have agreed to purchase hereunder on such date,
and the aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
and Schedule B hereto bears to the aggregate number of Firm Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as may be specified by the Representatives with the consent of the
non-defaulting Underwriters, to purchase the Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the First Closing Date or the Second Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
and the aggregate number of Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Shares to be purchased on such date, and
arrangements satisfactory to the Representatives and the Company for the
purchase of such Shares are not made within 48 hours after such default, this
Agreement shall terminate without liability of any party to any other party,
except that the provisions of Section 5, and Section 7 shall at all times be
effective and shall survive such termination. In any such case either the
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Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectuses or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed
to include any person substituted for a defaulting Underwriter under this
Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT.
This Agreement may be terminated by the Representatives by notice
given to the Company if (a) at any time after the execution and delivery of this
Agreement and prior to the First Closing Date (i) trading or quotation in any of
the Company's securities shall have been suspended or limited by the Commission
or by Nasdaq, or trading in securities generally on either Nasdaq or the New
York Stock Exchange shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the NASD, (ii) a general banking moratorium shall have been
declared by any of federal, New York, Delaware, Tennessee or California
authorities; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective change in United States' or
international political, financial or economic conditions, as in the judgment of
the Representatives is material and adverse and makes it impracticable or
inadvisable to market the Common Shares in the manner and on the terms
contemplated in the Prospectuses or to enforce contracts for the sale of
securities; (iv) in the judgment of the Representatives there shall have
occurred any Material Adverse Change; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the judgment of the Representatives may interfere materially
with the conduct of the business and operations of the Company regardless of
whether or not such loss shall have been insured or (b) in the case of any of
the events specified 9(a)(i) through (v), such event singly or together with any
other event, makes it, in your judgment, impracticable or inadvisable to market
the Common Shares in the manner and on the terms contemplated in the
Prospectuses. Any termination pursuant to this Section 9 shall be without
liability on the part of (x) the Company to any Underwriter, except that the
Company shall be obligated to reimburse the expenses of the Representatives and
the Underwriters pursuant to Sections 5 and 6 hereof, (y) any Underwriter to the
Company or any person controlling the Company, or (z) of any party hereto to any
other party except that the provisions of Section 7 shall at all times be
effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties
and other statements of the Company or any person controlling the Company, of
its officers, of the Acquired Entities and of the several Underwriters set forth
in or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter, the
Acquired Entities or the Company or any of its or their partners, officers or
directors or any controlling person, as the case may be, and will survive
delivery of and payment for the Shares sold hereunder and any termination of
this Agreement.
SECTION 11. NOTICES.
All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:
If to the Representatives:
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FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone:(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Company:
HEALTHSTREAM, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
SECTION 12. SUCCESSORS.
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 8
hereof, and to the benefit of the employees, officers and directors and
controlling persons referred to in Section 7, and to their respective
successors, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares as such from any
of the Underwriters merely by reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY.
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) Governing Law. This agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
(b) Consent to Jurisdiction. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California in each case located in the City and County of
San Francisco (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in the
United States irrevocably appoints CT Corporation System,
24
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which currently maintains a San Francisco office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of San Francisco.
SECTION 15. GENERAL PROVISIONS.
This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. This Agreement may be executed in two or more counterparts, each
one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be
amended or modified unless in writing by all of the parties hereto, and no
condition herein (express or implied) may be waived unless waived in writing by
each party whom the condition is meant to benefit. Section headings herein are
for the convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.
[The remainder of this page has been intentionally left blank.]
25
25
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
HEALTHSTREAM, INC.
By:
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the U.S. Representatives as of the date first above written.
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
CIBC WORLD MARKETS CORP.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
E * OFFERING CORP.
On their behalf and on behalf of each of the several U.S. Underwriters named in
Schedule A hereto.
BY FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By:
------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and
accepted by the International Representatives as of the date first above
written.
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
CIBC WORLD MARKETS INC.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
On their behalf and on behalf of each of the International Managers
named in Schedule B hereto.
BY FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
CIBC WORLD MARKETS INC.
▇.▇. ▇▇▇▇▇▇▇▇ & CO.
By:
--------------------------------
Name:.
Title:
26
SCHEDULE A
NUMBER OF U.S. FIRM
U. S. UNDERWRITERS SHARES TO BE PURCHASED
-------------------------------------------------- ----------------------
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC................
CIBC WORLD MARKETS CORP...........................
▇.▇. ▇▇▇▇▇▇▇▇ & CO................................
E * OFFERING CORP.................................
-------------------
Total....................................
===================
27
SCHEDULE B
NUMBER OF INTERNATIONAL FIRM
INTERNATIONAL MANAGERS SHARES TO BE PURCHASED
------------------------------------------------- ----------------------------
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
INTERNATIONAL LIMITED..........................
CIBC WORLD MARKETS INC...........................
▇.▇. ▇▇▇▇▇▇▇▇ & CO...............................
-------------
Total...................................
=============
28
EXHIBIT A
LOCK-UP AGREEMENT
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
CIBC World Markets Corp.
▇.▇. ▇▇▇▇▇▇▇▇ & Co.
E* OFFERING Corp.
As Representatives of the Several Underwriters
c/o FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
RE: HealthStream, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain
shares of Common Stock of the Company ("Common Stock") or securities convertible
into or exchangeable or exercisable for Common Stock. The Company proposes to
carry out a public offering of Common Stock (the "Offering") for which you will
act as the representatives (the "Representatives") of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned
and will benefit the Company by, among other things, raising additional capital
for its operations. The undersigned acknowledges that you and the other
underwriters are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering and in
entering into underwriting arrangements with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees
that the undersigned will not offer to sell, contract to sell, or otherwise
sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable for shares of Common Stock (collectively, "Securities") now
owned or hereafter acquired directly by such person or with respect to which
such person has or hereafter acquires the power of disposition, otherwise than
(i) as a bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) as a distribution to partners or
shareholders of such person, provided that the distributees thereof agree in
writing to be bound by the terms of this restriction, (iii) with respect to
sales or purchases of Common Stock acquired on the open market, (iv) with
respect to shares received in the Directed Share Program or (v) with the prior
written consent of FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. The foregoing
restrictions will terminate after the close of trading of the Common Stock on
the 180th day of (and including) the day the Common Stock commenced trading on
the Nasdaq National Market (the "Lock-Up" Period). The foregoing restriction has
been expressly agreed to preclude the holder of the Securities from engaging in
any hedging or other transaction which is designed to or reasonably expected to
lead to or result in a Disposition of Securities during the Lock-up Period, even
if such Securities would be disposed of by someone other than such holder. Such
prohibited hedging or other transactions would include, without limitation, any
short sale (whether or not against the box) or any purchase, sale or grant of
any right (including, without limitation, any put or call option) with respect
to any Securities or with respect to any security (other than a broad-based
market basket or index) that included, relates to or derives any significant
part of its value from Securities. The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of shares of Common Stock or Securities held by
the undersigned except in compliance with the foregoing restrictions.
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This agreement is irrevocable and will be binding on the
undersigned and the respective successors, heirs, personal representatives, and
assigns of the undersigned. In the event the Offering has not occurred on or
before April 15, 2000 this Lock-Up Agreement shall be of no further force or
effect.
Dated
----------------------------
--------------------------------------
Printed Name of Holder
By:
-----------------------------------
Signature
--------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
30
EXHIBIT B
MATTERS TO BE COVERED IN THE OPINION OF BASS, ▇▇▇▇▇ & ▇▇▇▇ PLC
(i) The Company, each Acquired Entity and each Significant Subsidiary
(as that term is defined in Item 3-01 of Regulation S-X of the Act) has
been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation;
(ii) The Company, each Acquired Entity and each Significant Subsidiary
has the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectuses;
(iii) The Company, each Acquired Entity and each Significant Subsidiary
is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction, if any, in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a Material Adverse Effect. To such
counsel's knowledge, neither the Company nor any Acquired Entity owns
or controls, directly or indirectly, any corporation, association or
other entity;
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectuses under the caption
"Capitalization" as of the dates stated therein, the issued and
outstanding shares of capital stock of the Company outstanding prior to
the issuance of the Shares have been duly and validly issued and are
fully paid and nonassessable, and, to such counsel's knowledge, will
not have been issued in violation of or subject to any preemptive right
arising under the certificate of incorporation or Tennessee General
Corporation Law, co-sale right, right of first refusal or other similar
right, other than any registration rights described in Opinion (xx)
hereof;
(v) All issued and outstanding shares of capital stock of each
Significant Subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and, to such
counsel's knowledge, have not been issued in violation of or subject to
any preemptive right arising under the certificate of incorporation or
Tennessee General Corporation Law, co-sale right, right of first
refusal or other similar right, other than any registration rights
described in Opinion (xx) hereof and are owned by the Company free and
clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest;
(vi) All issued and outstanding shares of capital stock of each
Acquired Entity have been duly authorized and validly issued and are
fully paid and nonassessable, and to such counsel's knowledge have not
been issued in violation of or subject to any preemptive right arising
under such Acquired Entity's certificate of incorporation or law of the
jurisdiction of incorporation of such Acquired Entity, co-sale right,
right of first refusal or other similar right, other than any
registration rights described in Opinion (xx) hereof;
(vii) The Firm Shares or the Option Shares, as the case may be, to be
issued by the Company pursuant to the terms of this Agreement have been
duly authorized and, upon issuance and delivery against payment
therefor in accordance with the terms hereof, will be duly and validly
issued and fully paid and nonassessable, and will not have been issued
in violation of or subject to any preemptive right, co-sale right,
right of first refusal or other similar right, other than any
registration rights described in Opinion (xx) hereof.
(viii) The Company has the corporate power and authority to enter into
this Agreement and to issue, sell and deliver to the Underwriters the
Shares to be issued and sold by it hereunder;
(ix) This Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as rights to
indemnification
31
2
hereunder may be limited by applicable law and except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally or by
general equitable principles (whether relief is sought in a proceeding
at law or in equity);
(x) The Registration Statement has become effective under the Act and,
to such counsel's knowledge, 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 threatened under
the Securities Act;
(xi) The 8-A Registration Statement complied as to form in all material
respects with the requirements of the Exchange Act; the 8-A
Registration Statement has become effective under the Exchange Act; and
the Firm Shares or the Option Shares have been validly registered under
the Securities Act and the Rules and Regulations of the Exchange Act
and the applicable rules and regulations of the Commission thereunder;
(xii) The Registration Statement and the Prospectuses, and each
amendment or supplement thereto (other than the financial statements
(including supporting schedules) and financial data derived therefrom
as to which such counsel need express no opinion), as of the effective
date of the Registration Statement, complied as to form in all material
respects with the requirements of the Securities Act and the applicable
Rules and Regulations;
(xiii) The information in the Prospectuses under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel
and is a fair summary of such matters and conclusions; and the forms of
certificates evidencing the Common Stock and filed as exhibits to the
Registration Statement comply with Tennessee law;
(xiv) The description in the Registration Statement and the
Prospectuses of the charter and bylaws of the Company and of statutes
are accurate and fairly present the information required to be
presented by the Securities Act;
(xv) There are no agreements, contracts, leases or documents to which
the Company, or any Acquired Entity or any of their subsidiaries is a
party of a character required to be described or referred to in the
Registration Statement or Prospectuses or to be filed as an exhibit to
the Registration Statement which are not described or referred to
therein or filed as required;
(xvi) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the
Company's indemnification obligations hereunder, concerning which no
opinion need be expressed) will not (a) result in any violation of the
Company's charter or bylaws or (b) result in a material breach or
violation of any of the terms and provisions of, or constitute a
default under, any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument
to which the Company is a party or by which its properties are bound,
or any applicable statute, rule or regulation known to such counsel or
any order, writ or decree of any court, government or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries, or over any of their properties or operations;
(xvii) No consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body having
jurisdiction over the Company, the Acquired Entities or any of their
subsidiaries, or over any of their properties or operations is
necessary in connection with the consummation by the Company of the
transactions herein contemplated, except (i) such as have been obtained
under the Securities Act, (ii) such as may be required under state or
other securities or Blue Sky laws in connection with the
32
3
purchase and the distribution of the Shares by the Underwriters, (iii)
such as may be required by the NASD and (iv) such as may be required
under the federal or provincial laws of Canada;
(xviii) There are no legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries of a
character required to be disclosed in the Registration Statement or the
Prospectuses by the Securities Act, other than those described therein;
(xix) Neither the Company nor any of its subsidiaries is presently (a)
in material violation of its respective charter or bylaws, or (b) in
material breach of any applicable statute, rule or regulation known or
any order, writ or decree of any court or governmental agency or body
having jurisdiction over the Company, the Acquired Entities or any of
their subsidiaries, or over any of their properties or operations; and
(xx) Except as set forth in the Registration Statement and
Prospectuses, no holders of Common Shares or other securities of the
Company have registration rights with respect to securities of the
Company and, except as set forth in the Registration Statement and
Prospectuses, all holders of securities of the Company having rights
known to such counsel to registration of such shares of Common Shares
or other securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering
contemplated thereby, waived such rights or such rights have expired by
reason of lapse of time following notification of the Company's intent
to file the Registration Statement or have included securities in the
Registration Statement pursuant to the exercise of and in full
satisfaction of such rights.
(xxi) The Company is not and, after giving effect to the offering and
the sale of the Shares and the application of the proceeds thereof as
described in the Prospectuses, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended.
(xxii) Each of the Company and the Acquired Entities owns or possesses
sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights
(collectively, "Intellectual Property Rights") reasonably necessary to
conduct their business as now conducted; and the expected expiration of
any such Intellectual Property Rights would not result in a Material
Adverse Effect. Neither the Company nor any Acquired Entity has
received any notice of infringement or conflict with asserted
Intellectual Property Rights of others, which infringement or conflict,
if the subject of an unfavorable decision, would result in a Material
Adverse Effect. Each of the Company's and the Acquired Entities'
discoveries, inventions, products, or processes referred to in the
Registration Statement or Prospectuses do not infringe or conflict with
any right or patent which is the subject of a patent application known
to the Company.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company and the Acquired Entities, at which
such conferences the contents of the Registration Statement and Prospectuses and
related matters were discussed, and although they have not verified the accuracy
or completeness of the statements contained in the Registration Statement or the
Prospectuses, nothing has come to the attention of such counsel which leads them
to believe that, at the time the Registration Statement became effective and at
all times subsequent thereto up to and on the First Closing Date or Second
Closing Date, as the case may be, the Registration Statement and any amendment
or supplement thereto (other than the financial statements including supporting
schedules and other financial and statistical information derived therefrom, as
to which such counsel need express no comment) contained any 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 at the
First Closing Date or the Second Closing Date, as the case may be, the
Registration Statement, the Prospectuses and any
33
4
amendment or supplement thereto (except as aforesaid) contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
34
EXHIBIT C
MATTERS TO BE COVERED IN THE OPINION OF CRAVATH, SWAINE & ▇▇▇▇▇
(i) The Shares to be issued by the Company have been duly authorized
and, upon issuance and delivery and payment therefor in accordance with
the terms of the Underwriting Agreement, will be validly issued, fully
paid and nonassessable.
(ii) The Registration Statement complied as to form in all material
respects with the requirements of the Act; the Registration Statement
has become effective under the Securities Act and, to such counsel's
knowledge, no stop order proceedings with respect thereto have been
instituted or threatened or are pending under the Securities Act.
(iii) The 8-A Registration Statement complied as to form in all
material respects with the requirements of the Exchange Act; the 8-A
Registration Statement has become effective under the Exchange Act; and
the Shares have been validly registered under the Securities Act and
the Rules and Regulations of the Exchange Act and the applicable rules
and regulations of the Commission thereunder;
(iv) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
Such counsel shall state that such counsel has reviewed the
opinion addressed to the Representatives from Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC and
furnished to you in accordance with the provisions of the Underwriting
Agreement. Such opinions appear on their face to be appropriately responsive to
the requirements of the Underwriting Agreement.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Company Counsel and the independent certified
public accountants of the Company, at which such conferences the contents of the
Registration Statement and Prospectuses and related matters were discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectuses, nothing has come to
the attention of such counsel which leads them to believe that, at the time the
Registration Statement became effective and at all times subsequent thereto up
to and on the First Closing Date or Second Closing Date, as the case may be, the
Registration Statement and any amendment or supplement thereto (other than the
financial statements including supporting schedules and other financial and
statistical information derived therefrom, as to which such counsel need express
no comment) contained any 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 at the First Closing Date or the Second
Closing Date, as the case may be, the Registration Statement, the Prospectuses
and any amendment or supplement thereto (except as aforesaid) contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.