Exhibit 1.1
SHARES
----------------
THE YANKEE CANDLE COMPANY, INC.
COMMON STOCK $.01 PAR VALUE
UNDERWRITING AGREEMENT
, 1999
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, 1999
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇ Sachs International
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
THE YANKEE CANDLE COMPANY, INC., a Massachusetts corporation (the
"COMPANY"), proposes to issue and sell to the several Underwriters (as defined
below), and certain shareholders of the Company (the "SELLING SHAREHOLDERS")
named in Schedule I hereto severally propose to sell to the several
Underwriters, an aggregate of ________________ shares of the Common Stock, $.01
par value, of the Company (the "FIRM SHARES"), of which ____________ shares are
to be issued and sold by the Company and ____________ shares are to be sold by
the Selling Shareholders, each Selling Shareholder selling the amount set forth
opposite such Selling Shareholder's name in Schedule I hereto.
It is understood that, subject to the conditions hereinafter stated,
____________ Firm Shares (the "U.S. FIRM SHARES") will be sold to the several
U.S. Underwriters named in Schedule II hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and __________ Firm Shares (the "INTERNATIONAL SHARES") will
be sold to the several International Underwriters named in Schedule III hereto
(the "INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of
such International Shares outside the United States and Canada to persons other
than United States and Canadian Persons. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇▇▇▇, Sachs & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. shall act as representatives (the
"U.S. REPRESENTATIVES") of the several U.S. Underwriters, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Co. International Limited, ▇▇▇▇▇▇▇ Sachs International and ▇▇▇▇▇▇▇ ▇▇▇▇▇
International shall act as representatives (the "INTERNATIONAL REPRESENTATIVES")
of the several International Underwriters. The U.S. Underwriters and the
International Underwriters are hereinafter collectively referred to as the
Underwriters.
The Selling Shareholders also propose to sell to the several U.S.
Underwriters not more than an additional __________ shares of Common Stock, $.01
par value, of the Company (the "ADDITIONAL SHARES") if and to the extent that
the U.S. Representatives shall have determined to exercise, on behalf of the
U.S. Underwriters, the right to purchase such shares of common stock granted to
the U.S. Underwriters in Section 3 hereof. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "SHARES." The shares of
Common Stock, $.01 par value of the Company to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to as the
"COMMON STOCK." The Company and the Selling Shareholders are hereinafter
sometimes collectively referred to as the "SELLERS".
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The registration
statement contains two prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used in connection with the
offering and sale of Shares in the United States and Canada to United States and
Canadian Persons, and the international prospectus, to be used in connection
with the offering and sale of Shares outside the United States and Canada to
persons other than United States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for the outside front
cover page. The registration statement as amended at the time it becomes
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION
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STATEMENT"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") has agreed to
reserve a portion of the Shares to be purchased by it under this Agreement for
sale to the Company's directors, officers, employees and business associates and
other parties related to the Company (collectively, "PARTICIPANTS"), as set
forth in the Prospectus under the heading "Underwriters" (the "DIRECTED SHARE
PROGRAM"). The Shares to be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ pursuant to the Directed
Share Program are hereinafter referred to as the "DIRECTED SHARES." Any Directed
Shares not orally confirmed for purchase by any Participants by the end of the
business day on which this Agreement is executed will be offered to the public
by the Underwriters as set forth in the Prospectus.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the Company's knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, will
not contain, as of the relevant effective date, 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,
(ii) the Registration Statement and the Prospectus comply and, as
amended or supplemented, if applicable, will comply, as of the relevant
effective date or filing date, in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain, as of the
relevant filing date, any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its
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incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(d) The Company does not have any significant subsidiaries
within the meaning of Regulation S-X under the Securities Act.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) Upon the filing of the Restated Articles of Organization
of the Company, the authorized capital stock of the Company will
conform as to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock".
(g) The shares of Common Stock (including the Shares to be
sold by the Selling Shareholders) outstanding prior to the issuance of
the Shares to be sold by the Company have been duly authorized and,
when issued, will be validly issued, fully paid and non-assessable.
(h) The Shares to be sold by the Company have been duly
authorized and, when issued and delivered against payment therefor in
accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights.
(i) The Shares issuable upon the exercise of options to be
exercised by certain of the Selling Shareholders (the "OPTIONS") will
be issued pursuant to the Stock Option Agreements which will be entered
into by the Company and such Selling Shareholders (the "OPTION
AGREEMENTS"); the Option Agreements were duly authorized by the
Company, and will, when executed and delivered by the parties thereto,
constitute valid and binding instruments enforceable against the
Company in accordance with their terms subject, as to the enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Options and the Option Agreements conform in
all material respects to the descriptions thereof in the Prospectus.
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(j) The unissued shares of Common Stock issuable upon the
exercise of the Options have been duly and validly authorized and
reserved for issuance, and at the time such Shares are to be sold by
the Selling Shareholders, such Shares will have been delivered in
accordance with the provisions of the Option Agreements and will be
duly and validly issued, fully paid and non-assessable and will conform
in all material respects to the description thereof in the Prospectus.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
organization or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except for the filing
by the Secretary of the Commonwealth of Massachusetts of the Company's
Restated Articles of Organization (as described in the Prospectus), the
registration under the Securities Act of the Shares, the registration
of the Common Stock under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), the approval for listing of the Common
Stock by the New York Stock Exchange, Inc. (the "NYSE") and such
consents, approvals, authorizations, registrations or qualifications as
may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Shares.
(l) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(m) Other than as set forth in the Registration Statement or
the Prospectus, there are no legal or governmental proceedings pending
or, to the Company's knowledge, threatened to which the Company is a
party or to which any of the properties of the Company is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described, and there are no statutes,
regulations, contracts or other documents that are required to be
described in the Registration Statement
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or the Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required.
(n) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(o) The Company is not, and after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be required to be
registered as, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(p) The Company has good and marketable title in fee simple to
all real property owned by it and good and marketable title to all
personal property owned by it which is material to the business of the
Company, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or such as do
not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease by the
Company are held by it under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property and buildings by the
Company, in each case except as described in or contemplated by the
Prospectus.
(q) The Company owns or possesses, or can acquire on
reasonable terms, all material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by it in connection with the business now operated
by it, and the Company has not received any notice of infringement of
or conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries,
taken as a whole.
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(r) No material labor dispute with the employees of the
Company exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company, is imminent.
(s) Except as described in or contemplated by the Prospectus,
the Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
prudent and customary in the businesses in which it is engaged.
(t) Except as described in the Prospectus, the Company
possesses all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary
to conduct its business, and the Company has not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.
(u) Except as described in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), the Company has not sold, issued or distributed any shares
of Common Stock during the six-month period preceding the date hereof,
including any sales pursuant to Rule 144A under, or Regulation D or S
of, the Securities Act, other than shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(v) Deloitte & Touche LLP, Ernst & Young LLP and Fisk, Bilton,
▇▇▇▇▇ & Co., P.C., each of whom have certified certain financial
statements of the Company and its subsidiaries, are each independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder.
(w) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where
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such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(x) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) which would, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(y) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(z) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
(aa) The Company has reviewed its operations to evaluate the
extent to which the business or operations of the Company will be
affected by the "Year 2000 Problem" (that is, any significant risk that
the computer hardware or software applications used by the Company will
not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000); as a result of such
review, the Company has no reason to believe, and does not believe,
that there are any issues related to the Company's preparedness to
address the Year 2000 Problem that are of a character required to be
described or referred to in the Registration Statement or the
Prospectus which have not been described in the Registration Statement
or the Prospectus.
(bb) The Registration Statement, the Prospectus and any
preliminary prospectus comply in all material respects, and any
amendments or supplements thereto will comply, as of the relevant
effective date or filing date, in all material respects, with any
applicable laws or regulations of any jurisdiction in which the
Prospectus or any
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preliminary prospectus, as amended or supplemented, if applicable, is
distributed in connection with the Directed Share Program.
(cc) No consent, approval, authorization, 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.
(dd) 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 to alter the customer's or supplier's level or type of
business with the Company, or (ii) a trade journalist or publication to
write or publish favorable information about the Company or its
products.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each
of the Selling Shareholders represents and warrants to and agrees with each of
the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement, the Custody Agreement signed by such Selling
Shareholder and BankBoston, NA, as Custodian, relating to the deposit
of the Shares to be sold by such Selling Shareholder (the "CUSTODY
AGREEMENT") and the Power of Attorney appointing certain individuals as
such Selling Shareholder's attorneys-in-fact (the "ATTORNEYS-IN-FACT")
to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement (the "POWER OF
ATTORNEY") will not contravene any provision of applicable law, or the
certificate of incorporation or by-laws of such Selling Shareholder (if
such Selling Shareholder is a corporation), or the partnership
agreement or articles of partnership of such Selling Shareholder (if
such Selling Shareholder is a partnership), or any agreement or other
instrument binding upon such Selling Shareholder or any judgment, order
or decree of any governmental body, agency or court having jurisdiction
over such Selling Shareholder, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is
required for the performance by such Selling Shareholder of its
obligations under this Agreement or the Custody Agreement or Power of
Attorney of such Selling Shareholder, except for the filing by the
Secretary of the Commonwealth of Massachusetts of the
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Company's Restated Articles of Organization (as described in the
Prospectus), the registration under the Securities Act of the Shares,
the registration of the Common Stock under the Exchange Act, the
approval for listing of the Common Stock by the NYSE and such consents,
approvals, authorizations, registrations or qualifications as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(c) Certificates in negotiable form representing shares of
common stock of Yankee Candle Holdings Corp. ("HOLDINGS") or shares of
common stock, no par value, of the Company, in each case, which will be
exchanged for the Shares to be sold by such Selling Shareholder
hereunder other than any such Shares to be issued upon the exercise of
Options, have been, and, with respect to each of the Selling
Shareholders who is selling Shares on the exercise of Options that duly
completed and executed irrevocable Option exercise notices, in the
forms specified by the relevant Option Agreement, with respect to all
of the Shares to be sold by such Selling Shareholder hereunder which
are not represented by certificates have been, placed in custody under
the Custody Agreement.
(d) The shares represented by the certificates or the
irrevocable Option exercise notice, in either case held in custody for
such Selling Shareholder under the Custody Agreement, are subject to
the interests of the Underwriters hereunder, and the arrangements made
by such Selling Shareholders for such custody, and the appointment by
such Selling Shareholder of the Attorneys-in-Fact by the Power of
Attorney, are to that extent irrevocable. Each of the Selling
Shareholders specifically agrees that the obligations of the Selling
Shareholders hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any individual Selling
Shareholder, or, in the case of an estate or trust, by the death or
incapacity of any executor or trustee or the termination of such estate
or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of
any other event. If any individual Selling Shareholder or any such
executor or trustee should die or become incapacitated, or if any such
estate or trust should be terminated, or if any such partnership or
corporation should be dissolved, or if any other such event should
occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of such
Selling Shareholder in accordance with the terms and conditions of this
Agreement and of the Custody Agreement, and actions taken by the
Attorneys-in-Fact pursuant to the Power of Attorney shall be as valid
as if such death, incapacity, termination, dissolution or other event
had not occurred, regardless of
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whether or not the Custodian, the Attorneys-in-Fact, or any of them,
shall have received notice of such death, incapacity, termination,
dissolution or other event.
(e) On the Closing Date, such Selling Shareholder will have,
(i) valid title to the Shares (other than the Shares, if any, to be
issued upon exercise of Options) to be sold by such Selling
Shareholder, (ii) valid title to the Options, if any, to be exercised
in respect of the Shares to be sold by such Selling Shareholder, (iii)
assuming due issuance by the Company of any Shares to be issued upon
exercise of Options, valid title to the Shares issued upon exercise of
such Options to be sold by such Selling Shareholder and (iv) the legal
right and power, and all authorization and approval required by law, to
enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(f) The Custody Agreement and Power of Attorney have been duly
authorized, executed and delivered by such Selling Shareholder and are
valid and binding agreements of such Selling Shareholder.
(g) Immediately prior to the Closing, such Selling Shareholder
will have good and valid title to the Shares to be sold by such Selling
Shareholder hereunder, free and clear of all liens, encumbrances,
equities or claims, except for those arising under this Agreement, the
Custody Agreement and the Power of Attorney; and, upon payment therefor
and the delivery to the Depositary Trust Company ("DTC") or its agent
of the Shares registered in the name of Cede & Co. or such other
nominee designated by DTC, both as provided for herein, and the
crediting of the Shares to the Underwriters' accounts with DTC, Cede &
Co. or such other nominee designated by DTC will be a "protected
purchaser" of the Shares (as defined in Section 8-303 of the Uniform
Commercial Code as in effect in the State of New York (the "UCC")), the
Underwriters will acquire a valid "security entitlement" (within the
meaning of Section 8-501 of the UCC) to the Shares, and no action based
on an "adverse claim" (as defined in Section 8-102 of the UCC) may be
asserted against the Underwriters with respect to such security
entitlement (assuming that the Underwriters are without notice of any
such adverse claim);
(h) To the extent that any statements or omissions made in the
Registration Statement, any preliminary prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Shareholder expressly for use therein, such preliminary
prospectus
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and the Registration Statement did, and the Prospectus and any further
amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act and the rules and regulations
of the Commission thereunder and will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
3. AGREEMENTS TO SELL AND PURCHASE. Each Seller, severally and not
jointly, hereby agrees to sell to the several Underwriters, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally
and not jointly, to purchase from such Seller at $_____ a share (the "PURCHASE
PRICE") the respective numbers of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by such Seller as the number of Firm
Shares set forth in Schedules II and III hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, each Selling Shareholder,
severally, and not jointly, hereby agrees to sell to the U.S. Underwriters the
Additional Shares, and the U.S. Underwriters shall have a one-time right to
purchase, severally and not jointly, up to [15% of global offering] Additional
Shares at the Purchase Price. If the U.S. Representatives, on behalf of the U.S.
Underwriters, elect to exercise such option, the U.S. Representatives shall so
notify the Attorneys-in-Fact in writing not later than 30 days after the date of
this Agreement, which notice shall specify the number of Additional Shares to be
purchased by the U.S. Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Shares may be purchased as provided in Section 5
hereof solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each U.S. Underwriter agrees, severally and not jointly, to purchase
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as the U.S. Representatives may determine) that bears the same
proportion to the total number of Additional Shares to be purchased as the
number of U.S. Firm Shares set forth in Schedule II hereto opposite the name of
such U.S. Underwriter bears to the total number of U.S. Firm Shares.
Each Seller hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
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ending 180 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Shares to
be sold hereunder, (B) the issuance by the Company of shares of Common Stock
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised in
writing, (C) the granting of stock options and/or restricted stock units
pursuant to the Company's existing employee benefit plans and to directors in
connection with their initial appointment to the Company's Board of Directors,
provided that such options (other than options granted to directors in
connection with their initial appointment to the Company's Board of Directors)
do not become exercisable and such units do not vest during such 180-day period,
or (D) transactions by any person other than the Company relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the offering of the Shares. In addition, each Selling Shareholder
agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of
the Underwriters, it will not, during the period ending 180 days after the date
of the Prospectus, make any demand for, or exercise any right with respect to,
the registration of any shares of Common Stock, or any security convertible into
or exercisable or exchangeable for Common Stock.
4. TERMS OF PUBLIC OFFERING. The Sellers are advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Sellers are further
advised by you that the Shares are to be offered to the public initially at
U.S.$_____ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected
by you at a price that represents a concession not in excess of U.S.$____ a
share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of U.S.$____ a share, to
any Underwriter or to certain other dealers.
5. PAYMENT AND DELIVERY. Payment for the Firm Shares to be sold by
each Seller shall be made to such Seller in Federal or other funds immediately
available in New York City against delivery of such Firm Shares for the
respective accounts of the several Underwriters at 10:00 a.m., New York City
time, on [3 business days or, if the offering is priced after 4:30 p.m. Eastern
Time,
13
4 business days after the date of the Underwriting Agreement] or at such other
time on the same or such other date, not later than [5 business days after
previous date] as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Selling
Shareholders in Federal or other funds immediately available in New York City
against delivery of such Additional Shares for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on the date specified in
the notice described in Section 3 or at such other time on the same or on such
other date, in any event not later than [10 business days after expiration of
greenshoe option] as shall be designated in writing by the U.S. Representatives.
The time and date of such payment are hereinafter referred to as the "OPTION
CLOSING DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
6. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Sellers to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [_______] (New York City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized
14
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date:
(i) a certificate, dated the Closing Date and signed
by an executive officer of the Company, to the effect set
forth in clause (a)(i) above and to the effect that the
representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and
that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date; and
(ii) a certificate, dated the Closing Date and signed
by each Selling Shareholder that the representations and
warranties of such Selling Shareholder contained in this
Agreement are true and correct as of the Closing Date and that
such Selling Shareholder has complied with all of the
agreements and satisfied all of the conditions on its part to
be performed or satisfied hereunder on or before the Closing
Date.
The officers signing and delivering each such certificate may
rely upon the best of his or her knowledge as to proceedings
threatened.
(c) The reorganization of the Company and liquidation of
Holdings as described under the caption "Description of Capital Stock"
in the Prospectus shall have been consummated in accordance with
applicable law; and the Company shall have entered into the Credit
Agreement described in the Prospectus on terms substantially as
described in the Prospectus.
15
(d) The Underwriters shall have received on the Closing Date
an opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel
for the Company, dated the Closing Date, to the effect that:
(i) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law
or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its
subsidiaries which has been identified to such counsel in a
certificate provided by the Chief Financial Officer of the
Company as material to the Company and its subsidiaries, taken
as a whole, or, to the best of such counsel's knowledge, any
judgment, order or decree which has been identified to such
counsel in a certificate provided by the Chief Financial
Officer of the Company of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary,
and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is
required for the performance by the Company of its obligations
under this Agreement, except those that have been made or
obtained, and such consents, approvals, authorizations,
registrations or qualifications as may be required by the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares by the U.S.
Underwriters;
(ii) the statements (A) in the Prospectus under the
caption "Description of the Credit Agreement" and (B) in the
Registration Statement in Item 15, in each case insofar as
such statements constitute summaries of the legal matters or
documents referred to therein, fairly summarize in all
material aspects the matters referred to therein;
(iii) the statements in the Prospectus under the
caption "United States Federal Tax Considerations for
Non-United States Holders" fairly summarize in all material
respects the matters referred to therein;
(iv) such counsel does not know of any legal or
governmental proceedings pending to which the Company is a
party that are required to be described in the Registration
Statement or the Prospectus and are not so described;
16
(v) the Company is not, and after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
required to register as, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(vi) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any opinion), as of their respective effective or
filing dates, appear on their face to be responsive as to form
in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder,
(B) has no reason to believe that (except for financial
statements and schedules and other financial and statistical
data as to which such counsel need not express any opinion or
belief) the Registration Statement and the Prospectus included
therein at the time the Registration Statement became
effective 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 and
(C) has no reason to believe that (except for financial
statements and schedules and other financial and statistical
data as to which such counsel need not express any opinion or
belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company; and
(viii) the Option Agreements constitute valid and
binding instruments enforceable against the Company in
accordance with their terms subject, as to enforcement, to (A)
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting creditors'
rights generally and (B) general principles of equity (whether
considered in a proceeding at law or in equity).
(e) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇ and ▇▇▇▇ LLP, special Massachusetts counsel for the
Company, dated the Closing Date, to the effect that:
17
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction listed on an exhibit to such opinion, which,
to such counsel's knowledge, constitute the only jurisdictions
in the United States in which the Company owns or leases real
property, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(ii) the Shares to be sold by the Selling
Stockholders have been duly authorized and are validly issued,
fully paid and non-assessable;
(iii) the Shares to be sold by the Company have been
duly authorized and, when issued and delivered against payment
therefor in accordance with the terms of this Agreement, will
be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive
or similar rights under Massachusetts law or the Company's
Articles of Organization or By-laws;
(iv) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of the
Articles of Organization or By-laws of the Company;
(v) the statements in the Prospectus under the
caption "Description of Capital Stock", insofar as such
statements constitute summaries of the documents referred to
therein, fairly summarize the documents referred to therein;
(vi) the statements in the Registration Statement in
Item 14 state the general effect of the Articles of
Organization, indemnity agreements and Underwriting Agreement
referred to therein as required in Item 702 of Regulation S-K
under the Securities Act;
18
(vii) the Options have been duly authorized and
granted pursuant to the Option Agreements and constitute valid
and binding obligations of the Company, and the Option
Agreements have been duly authorized, executed and delivered
by the Company;
(viii) the Shares issuable upon the exercise of the
Options have been duly and validly authorized and reserved for
issuance, and, if issued in accordance with the terms of the
Options, at the time such Shares are to be sold by the Selling
Shareholders, such Shares will be duly and validly issued,
fully paid and non-assessable; and
(ix) the authorized capital stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus under the
caption "Description of Capital Stock".
(f) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇ ▇▇▇▇▇, counsel to the Company, dated the Closing
Date, to the effect that:
(i) the Company has good and marketable title in fee
simple to all real property owned by it and good and
marketable title to all personal property owned by it which is
material to the business of the Company, in each case free and
clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially
affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease
by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made
of such property and buildings by the Company, in each case
except as described in or contemplated by the Prospectus; and
(ii) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which any of the properties of the Company is subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described.
19
(g) The Underwriters shall have received on the Closing Date
an opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel
for each of Forstmann Little & Co. Equity Partnership-V, L.P. and
Forstmann Little & Co. Subordinated Debt and Equity Management Buyout
Partnership-VI, L.P. (the "FL SHAREHOLDERS"), dated the Closing Date,
to the effect that:
(i) this Agreement has been duly authorized, executed
and delivered by or on behalf of each of the FL Shareholders;
(ii) the execution and delivery by each FL
Shareholder of, and the performance by such FL Shareholder of
its obligations under, this Agreement and the Custody
Agreement and Power of Attorney of such FL Shareholder will
not contravene any provision of applicable law, or the
partnership agreement of such FL Shareholder, or, to the best
of such counsel's knowledge, any agreement or other instrument
identified to such counsel in a certificate provided by a
general partner of such FL Shareholder, binding upon such FL
Shareholder or, to the best of such counsel's knowledge, any
judgment, order or decree identified to such counsel in a
certificate provided by a general partner of such FL
Shareholder, of any governmental body, agency or court having
jurisdiction over such FL Shareholder, and no consent,
approval, authorization or order of, or qualification with,
any governmental body or agency is required for the
performance by such FL Shareholder of its obligations under
this Agreement or the Custody Agreement or Power of Attorney
of such FL Shareholder, except those that have been made or
obtained, and such consents, approvals, authorizations,
registrations or qualifications as may be required by the
securities or Blue Sky laws of the various states in
connection with offer and sale of the Shares;
(iii) the Custody Agreement and the Power of Attorney
of each FL Shareholder have been duly authorized, executed and
delivered by such FL Shareholder and are valid and binding
agreements of such FL Shareholder in accordance with their
terms, subject as to enforcement, to (A) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting creditors' rights
generally and (B) general principles of equity (whether
considered in a proceeding at law or in equity); and
20
(iv) immediately prior to the Closing, the FL
Shareholders will have good and valid title to the Shares to
be sold by the FL Shareholders hereunder, free and clear of
all liens, encumbrances, equities or claims, except for those
arising under this Agreement, the Custody Agreement and the
Power of Attorney; and, upon payment therefor and the delivery
to DTC or its agent of the Shares registered in the name of
Cede & Co. or such other nominee designated by DTC, both as
provided for herein, and the crediting of the Shares to the
Underwriters' accounts with DTC, Cede & Co. or such other
nominee designated by DTC will be a "protected purchaser" of
the Shares (as defined in Section 8-303 of the UCC), the
Underwriters will acquire a valid "security entitlement"
(within the meaning of Section 8-501 of the UCC) to the
Shares, and no action based on an "adverse claim" (as defined
in Section 8-102 of the UCC) may be asserted against the
Underwriters with respect to such security entitlement
(assuming that the Underwriters are without notice of any such
adverse claim).
(h) The Underwriters shall have received on the Closing Date
an opinion of Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel
for each of the Selling Shareholders other than the FL Shareholders
(the "OTHER SHAREHOLDERS"), dated the Closing Date, to the effect that:
(i) this Agreement has been duly executed and
delivered by or on behalf of each of the Other Shareholders;
(ii) the Custody Agreement and the Power of Attorney
of each Other Shareholder have been duly executed and
delivered by such Other Shareholder and are valid and binding
agreements of such Other Shareholder in accordance with their
terms, subject as to enforcement, to (i) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting creditors' rights
generally and (ii) general principles of equity (whether
considered in a proceeding at law or in equity); and
(iii) immediately prior to the Closing, the Other
Shareholders will have good and valid title to the Shares to
be sold by the Other Shareholders hereunder, free and clear of
all liens, encumbrances, equities or claims, except for those
arising under this Agreement, the Custody Agreement and the
Power of Attorney; and, upon payment therefor and the delivery
to DTC or its agent of the Shares registered in the name of
Cede & Co. or
21
such other nominee designated by DTC, both as provided for
herein, and the crediting of the Shares to the Underwriters'
accounts with DTC, Cede & Co. or such other nominee designated
by DTC will be a "protected purchaser" of the Shares (as
defined in Section 8-303 of the UCC), the Underwriters will
acquire a valid "security entitlement" (within the meaning of
Section 8-501 of the UCC) to the Shares, and no action based
on an "adverse claim" (as defined in Section 8-102 of the UCC)
may be asserted against the Underwriters with respect to such
security entitlement (assuming that the Underwriters are
without notice of any such adverse claim).
(i) The Underwriters shall have received on the Closing Date
an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
6(d)(ii) (but only as to the statements in the Prospectus under the
caption "Underwriters") and 6(d)(vi).
With respect to Section 6(d)(vi) above, Fried, Frank, Harris, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification, except as specified. With respect to Sections 6(g) and 6(h) above,
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ may rely, with respect to factual
matters and to the extent such counsel deems appropriate, upon the
representations of each Selling Shareholder contained herein and in the Custody
Agreement and Power of Attorney of such Selling Shareholder and in other
documents and instruments; PROVIDED that copies of such Custody Agreements and
Power of Attorney and of any such other documents and instruments shall be
delivered to you and shall be in form and substance satisfactory to your
counsel.
The opinions described in Sections 6(d), 6(e), 6(f), 6(g) and 6(h)
above shall be rendered to the Underwriters at the request of the Company or one
or more of the Selling Shareholders, as the case may be, and shall so state
therein.
(j) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Deloitte & Touche LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the
22
Registration Statement and the Prospectus; PROVIDED that such letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
(k) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and the shareholders, officers and
directors of the Company who are not selling shares of Common Stock in
the offering relating to sales and certain other dispositions of shares
of Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the
Closing Date.
(l) The several obligations of the U.S. Underwriters to
purchase Additional Shares hereunder are subject to the delivery to the
U.S. Representatives on the Option Closing Date of such documents as
they may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares
and other matters related to the issuance of the Additional Shares.
7. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by
23
an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if,
in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law,
forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Shares may have
been sold by you on behalf of the Underwriters and to any other dealers
upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in light of the circumstances when the Prospectus is
delivered to a purchaser, be misleading or so that the Prospectus, as
amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending [date one year after the end of the
Company's fiscal quarter in which the Closing will occur] that
satisfies the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(f) Upon delivery to the Company of the irrevocable Option
exercise notices referred to in Section 2 hereof and the receipt of the
appropriate instructions from the Attorneys-in-Fact, to issue the
Shares relating thereto in accordance with the provisions of the
applicable Option Agreement, and, notwithstanding any other provision
of such Option Agreement, to deliver the Shares to you as contemplated
in the Custody Agreement.
(g) To place stop transfer orders on any Directed Shares that
have been sold to Participants subject to the three month restriction
on sale, transfer, assignment, pledge or hypothecation imposed by NASD
Regulation, Inc. under its Interpretative Material 2110-1 on
free-riding and withholding to the extent necessary to ensure
compliance with the three month restrictions.
24
(h) To comply with all applicable securities and other laws,
rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share
Program.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Sellers
agree with one another and with the Underwriters that (a) the Company
will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel, and the Company's accountants in
connection with the registration and delivery of the Shares under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon,
except as provided below, (iii) the cost of printing or producing any
Blue Sky or Legal Investment memorandum in connection with the offer
and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale
under state securities laws as provided in Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and
in connection with the Blue Sky or Legal Investment memorandum, (iv)
all filing fees and the reasonable fees and disbursements of counsel to
the Underwriters incurred in connection with the review and
qualification of the offering of the Shares by the National Association
of Securities Dealers, Inc., (v) all fees and expenses in connection
with the preparation and filing of the registration statement on Form
8-A relating to the Common Stock and all costs and expenses incident to
listing the Shares on the NYSE and other national securities exchanges
and foreign stock exchanges, (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar or depositary, (viii) the costs and expenses of the
Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, (ix) all fees and disbursements
25
of counsel incurred by the Underwriters in connection with the
Directed Share Program and stamp duties, similar taxes or duties or
other taxes, if any, incurred by the Underwriters in connection with
the Directed Share Program, (x) all fees, disbursements and expenses
of one counsel for the Selling Shareholders selected by the FL
Shareholders (which counsel may be counsel to the Company), (xi) all
other costs and expenses incident to the performance of the
Company's or the Selling Shareholders' obligations hereunder for
which provision is not otherwise made in this Section 7, and (b)
each Selling Shareholder shall pay or cause to be paid any fees,
disbursements and expenses of counsel for such Selling Shareholder
other than as specified in clause (x) above. In connection with
clause (ii) of the preceding sentence, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ agrees to pay
New York State stock transfer tax, and the Company agrees to
reimburse ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ for associated carrying costs if such tax
payment is not rebated on the day of payment and for any portion of
such tax payment not rebated. It is understood, however, that except
as provided in this Section, Section 8 entitled "Indemnity and
Contribution", and the last paragraph of Section 11 below, the
Underwriters will pay all of their costs and expenses, including
fees and disbursements of their counsel, stock transfer taxes
payable on resale of any of the Shares by them and any advertising
expenses connected with any offers they may make.
The provisions of this section shall not supercede or otherwise affect
any agreement that the Sellers may otherwise have for the allocation of such
expenses among themselves.
8. INDEMNITY AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, 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) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), 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, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; PROVIDED, HOWEVER, that the foregoing indemnity agreement with
respect to any preliminary
26
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(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, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Sections 7(a) or 7(c) hereof.
(b) Each of the FL Shareholders, severally in proportion to the number
of Shares to be sold by such FL Shareholders hereunder, agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, 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) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), 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, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information (i) relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein or (ii) furnished to the Company in writing by an
Other Shareholder for use in the preparation of the answers in the Registration
Statement or the Prospectus to Item 7 of Form S-1; PROVIDED, HOWEVER, that the
foregoing indemnity agreement with respect to any preliminary prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended for
supplemented if the Company or the Selling Shareholders 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, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities, unless such failure
is the result of noncompliance by the Company with Sections 7(a) or 7(c) hereof;
PROVIDED FURTHER, HOWEVER, that with respect to any amount due an indemnified
person under this paragraph (b), each
27
FL Shareholder shall be liable only to the extent of the net proceeds received
by such FL Shareholder from the sale of such FL Shareholder's Shares.
(c) Each Other Shareholder agrees, severally in proportion to the
number of Shares to be sold by such Other Shareholder, to indemnify and hold
harmless each Underwriter and the Company, its directors, its officers who sign
the Registration Statement, and each person, if any, who controls the Company
and any Underwriter, as the case may be, within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, 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) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), 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, but only with reference to information
relating to such Other Shareholder furnished in writing by or on behalf of such
Other Shareholder expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto;
PROVIDED, HOWEVER, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Shares, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended for supplemented if the Company or the Selling
Shareholders 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, at or prior to the written confirmation of the
sale of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving ruse to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Sections 7(a) or 7(c) hereof; PROVIDED FURTHER, HOWEVER, that
with respect to any amount due an indemnified person under this paragraph (c),
each Other Shareholder shall be liable only to the extent of the net proceeds
received by such Other Shareholder from the sale of such Other Shareholder's
Shares.
(d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Shareholders, the directors of the
Company, the officers of the Company who sign the Registration Statement and
each person, if any, who controls the Company or any Selling Shareholder within
the meaning of either Section 15 of the Securities Act or Section 20 of the
28
Exchange Act 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) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), 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,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(e) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a), 8(b), 8(c) or 8(d), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, (ii) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder within
the meaning of either such section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriters and such control persons of any Underwriters such firm shall be
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇. In the case of any such separate firm
for the Company, and such directors, officers and control persons of the
Company, such firm shall be designated in writing by the Company. In the
29
case of any such separate firm for the Selling Shareholders and such control
persons of any Selling Shareholders, such firm shall be designated in writing by
the persons named as Attorneys-in-Fact for the Selling Shareholders under the
Power of Attorney. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, 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 from and against any loss or
liability 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 the second and third sentences of this paragraph, 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 30 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 of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(f) To the extent the indemnification provided for in Section 8(a),
8(b), 8(c) or 8(d) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the Shares
or (ii) if the allocation provided by clause 8(f)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(f)(i) above but also the relative
fault of the indemnifying party or parties on the one hand and of the
indemnified party or parties on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Sellers and the total underwriting
discounts and commissions received by the Underwriters, in each
30
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. The relative fault of the Sellers
on the one hand and the Underwriters on the other hand 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 Sellers or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(g) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 8 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 that does not take account of the
equitable considerations referred to in Section 8(f). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, 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 Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter, any Selling Shareholder or any person
controlling any Selling Shareholder, or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Shares.
31
9. DIRECTED SHARE PROGRAM INDEMNIFICATION. (a) The Company agrees to
indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and each person, if any, who controls
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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) caused by the
failure of any Participant to pay for and accept delivery of Directed Shares
that the Participant 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
the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities.
(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity in respect of which
indemnity may be sought pursuant to Section 9(a), the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
seeking indemnity, shall promptly notify the Company in writing and the Company,
upon request of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity, shall retain counsel reasonably
satisfactory to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity to represent the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity unless (i) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities. Any such
separate firm for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities shall be designated in writing by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The Company shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Company agrees to
indemnify the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time a ▇▇▇▇▇▇
32
▇▇▇▇▇▇▇ Entity shall have requested the Company to reimburse it for fees and
expenses of counsel as contemplated by the second and third sentences of this
paragraph, the Company 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 30 days after receipt by the Company of the aforesaid
request and (ii) the Company shall not have reimbursed the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
in accordance with such request prior to the date of such settlement. The
Company shall not, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, effect
any settlement of any pending or threatened proceeding in respect of which any
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity is or could have been a party and indemnity could have
been sought hereunder by such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity, unless such settlement
includes an unconditional release of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from all
liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 9(a) is
unavailable to a ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company in lieu of
indemnifying the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity thereunder, shall contribute to the
amount paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 9(c)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(c)(i) above but also the
relative fault of the Company on the one hand and of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities
on the other hand in connection with any statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand in connection with
the offering of the Directed Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Directed Shares (before
deducting expenses) and the total underwriting discounts and commissions
received by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities for the Directed Shares, bear to the
aggregate Public Offering Price of the Directed Shares. If the loss, claim,
damage or liability is caused by an untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact, the
relative fault of the Company on the one hand and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement or the omission or alleged omission
relates to information supplied by the Company or by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
33
(d) The Company and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities agree that it would not
be just or equitable if contribution pursuant to this Section 9 were determined
by PRO RATA allocation (even if the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 9(c). The amount
paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall
be required to contribute any amount in excess of the amount by which the total
price at which the Directed Shares distributed to the public were offered to the
public exceeds the amount of any damages that such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity has
otherwise been required to pay. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(e) The indemnity and contribution provisions contained in this Section
9 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
10. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
NYSE, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and (b) in the case of any of the events specified in
clauses 10(a)(i) through 10(a)(iv), such event, singly or together with any
other such event, makes it, in your judgment, impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus.
11. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
34
If, on the Closing Date or the Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth 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 Shares set forth
opposite their respective names in Schedule I or Schedule II 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 you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; PROVIDED that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you, the
Company and the Selling Shareholders for the purchase of such Firm Shares are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter, the Company or
the Selling Shareholders. In any such case either you or the Company shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
If, on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase in the absence of such default. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Sellers will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses
35
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering contemplated
hereunder.
12. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
14. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
36
Very truly yours,
THE YANKEE CANDLE
COMPANY, INC.
By:
-------------------------------
Name:
Title:
The Selling Shareholders named in
Schedule I hereto, acting severally
By:
-------------------------------
Attorney-in-Fact
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇ INCORPORATED
Acting severally on behalf of themselves and the
several U.S. Underwriters named in Schedule
II hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
-------------------------------
Name:
Title:
37
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO.
INTERNATIONAL LIMITED
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
Acting severally on behalf of themselves and the
several International Underwriters named in
Schedule III hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
By:
-------------------------------
Name:
Title:
38
SCHEDULE I
NUMBER OF FIRM SHARES
SELLING SHAREHOLDER TO BE SOLD
----------------------------------- ---------------------------
FL SELLING SHAREHOLDERS
Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership-VI,
L.P.......................................
Forstmann Little & Co. Equity Partnership-V,
L.P.......................................
OTHER SELLING SHAREHOLDERS
[NAMES OF OTHER SELLING
SHAREHOLDERS].....................................
------------------------
Total.................................... ------------------------
------------------------
SCHEDULE II
U.S. UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------------------------------- ---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated............
▇▇▇▇▇▇▇, Sachs & Co. .......................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated...................... ---------------------------
Total U.S. Firm Shares.............. ---------------------------
---------------------------
2
SCHEDULE III
INTERNATIONAL UNDERWRITERS
NUMBER OF FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------------------------------- ---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited....
▇▇▇▇▇▇▇ Sachs International...................
▇▇▇▇▇▇▇ ▇▇▇▇▇ International...................
----------------------------
Total International Firm Shares...... ----------------------------
----------------------------
EXHIBIT A
[FORM OF LOCK-UP LETTER]
, 199
------------ -
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇ Sachs International
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL")
propose to enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT")
with Yankee Candle Company, Inc., a Massachusetts corporation (the "COMPANY")
providing for the public offering (the "PUBLIC OFFERING") by the several
Underwriters, including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL (the "UNDERWRITERS") of ___
shares (the "SHARES") of the Common Stock, par value $.01 per Share, of the
Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 days after the date of the final prospectus
relating to the Public Offering (the "PROSPECTUS"), (1) offer, pledge, sell,
contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or (2)
enter into any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Shares to the Underwriters pursuant to the Underwriting Agreement or (b)
transactions relating to shares of Common Stock or other securities acquired
in open market transactions after the completion of the Public Offering. In
addition, the undersigned agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into
or exercisable or exchangeable for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
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Name
------------------------------------
Address
2