EXHIBIT 1.01
Rio Hotel & Casino, Inc.
3,000,000 Shares*
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
November __, 19
Salomon Brothers Inc
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Rio Hotel & Casino, Inc., a Nevada corporation (the "Company"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, 3,000,000 shares of Common Stock, $.01 par value ("Common
Stock") of the Company (said shares to be issued and sold by the Company being
hereinafter called the "Underwritten Securities"). The Company also proposes to
grant to the Underwriters an option to purchase up to 450,000 additional shares
of Common Stock (the "Option Securities"; the Option Securities, together with
the Underwritten Securities, being hereinafter called the "Securities"). To the
extent there are no additional Underwriters listed on Schedule I other than you,
the term Representatives as used herein shall mean you, as Underwriters, and the
terms Representatives and Underwriters shall mean either the singular or plural
as the context requires. Any reference herein to the Registration Statement, a
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference herein to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
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* Plus an option to purchase from Rio Hotel & Casino, Inc., up to 450,000
additional shares to cover over-allotments.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, each Underwriter as set forth below in this Section.
Certain terms used in this Section 1 are defined in Section 17 hereof.
(a) The Company meets the requirements for use of Form S-3 under the Act
and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (file number ) on such Form,
including a related preliminary prospectus, for the registration under the
Act of the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, including a related preliminary prospectus,
each of which has previously been furnished to you. The Company will next
file with the Commission one of the following: (i) prior to the Effective
Date of such registration statement, a further amendment to such
registration statement, including the form of final prospectus, (ii) a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4), or
(iii) a final prospectus in accordance with Rules 415 and 424(b)(2) or (5).
In the case of clause (ii), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall
contain all Rule 430A Information, together with all other such required
information, and, except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. If the Registration
Statement contains the undertaking specified by Regulation S-K Item 512(a),
the Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(1)(x).
(b) It is understood that a form of prospectus is to be used in
connection with the offering and sale of the Securities to United States
and Canadian Persons (as defined herein) which, for purposes of
distribution to Canadian Persons, shall have a Canadian "wrap-around" (the
"Canadian Offering Memorandum"). Insofar as they relate to offers or sales
of Securities in Canada, all references herein to the Preliminary
Prospectus and the Prospectus shall include the Canadian Offering
Memorandum.
(c) On the Effective Date, the Registration Statement did or will, and
when the Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date (as defined herein) and on any date on which
shares sold in respect of the Underwriters' over-allotment option are
purchased, if such date is not the Closing Date (a "settlement date"), the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Exchange Act
and the respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and, on the Effective Date, the Prospectus, if
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not filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
---------
however, that the Company makes no representations or warranties as to the
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information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished herein or in writing to the Company by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Prospectus (or any
supplement thereto).
(d) This Agreement has been duly authorized, executed and delivered by
the Company; no consent, approval, authorization, qualification, filing
with or order or permit of any court or any governmental, regulatory or
administrative agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act or under the Nevada Gaming Control Act and the rules and
regulations thereunder and such as may be required under the blue sky or
real estate syndication laws or rules of any jursidiction in connection
with the purchase and distribution of the Securities by the Underwriters in
the manner contemplated in this Agreement and in the Prospectus; neither
the issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or its Subsidiaries pursuant to, the charter or by-laws of the Company or
its subsidiaries or the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company or its
subsidiaries is a party or bound or to which its property is subject, or
any statute, law, rule, regulation, judgment, order or decree applicable to
the Company or its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or its subsidiaries or any of its or
their properties.
(e) There is no pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries of a character
required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no franchise, contract
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required. The Company has no reason to
believe that the Nevada Gaming Commission, the Nevada State Gaming Control
Board, the ▇▇▇▇▇ County Liquor and Gaming Licensing Board or any other
governmental agencies are investigating the Company or any related parties,
other than in ordinary course administrative reviews or in any ordinary
course review of the transactions contemplated herein.
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(f) Except as disclosed in or specifically contemplated by the
Prospectus, the Company and its subsidiaries have sufficient trademarks,
trade names, patent rights, copyrights, licenses, approvals and
governmental authorizations (including, without limitation, all
authorizations from Nevada gaming and liquor authorities) to conduct their
businesses as now conducted; the Company's and its subsidiaries'
controlling persons, key employees and stockholders have all necessary
permits, licenses and other authorizations required by applicable law for
the Company and its subsidiaries to conduct their businesses as now
conducted; the expiration of any trademarks, trade names, patent rights,
copyrights, licenses, approvals or government authorizations would not have
a material adverse effect on the condition (financial or otherwise),
business, results of operations or prospects of the Company or its
subsidiaries; the Company has no knowledge that any of its stockholders is
unsuitable or may be deemed unsuitable by the Nevada Gaming Commission or
the Nevada State Gaming Control Board.
(g) The Company and its subsidiaries are conducting business in
compliance with all applicable laws, rules and regulations of the
jurisdictions in which they are conducting business, including, without
limitation, all applicable local, state and federal gaming, liquor and
environmental laws and regulations, except where the failure to be so in
compliance would not materially adversely affect the condition (financial
or otherwise), business, results of operations or prospects of the Company
and its subsidiaries, taken as a whole.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at a purchase price of $ __ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not
jointly, up to 450,000 shares of Option Securities at the same purchase
price per share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in
the sale of the Underwritten Securities by the Underwriters. Said option
may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Prospectus upon written or
telegraphic notice by the Representatives to the Company setting forth the
number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. Delivery
of certificates for the shares of Option Securities, and payment therefor,
shall be made as provided in Section 3 hereof. The number of shares of the
Option Securities to be purchased by each Underwriter shall be the same
percentage of
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the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten Securities, subject to such adjustments as you in your
absolute discretion shall make to eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
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Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on November __,
1997, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives on the
date specified by the Representatives (which shall be within three Business Days
after exercise of said option), against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Company by wire transfer payable in same-day funds to an account
specified by the Company. Delivery of the Underwritten Securities and the
Option Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct. If settlement for
the Option Securities occurs after the Closing Date, the Company will deliver to
the Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
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Underwriters propose to offer the Securities for sale to the public as set
forth in the Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
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(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your review prior
to filing and will not file any such proposed amendment or supplement to
which you reasonably and timely object. Subject to the foregoing sentence,
if the
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Registration Statement has become or becomes effective pursuant to
Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, shall have
become effective, (ii) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been filed
with the Commission, (iii) when, prior to termination of the offering of
the Securities, any amendment to the Registration Statement shall have been
filed or become effective, (iv) of any request by the Commission or its
staff for any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or of any
additional information, (v) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Prospectus to comply with the
Act or the Exchange Act or the respective rules thereunder, the Company
promptly will (i) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 5, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, conformed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Prospectus and the Prospectus and
any supplement thereto as the Representatives may reasonably request.
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The Company will pay one-half of the expenses of printing or other
production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities and will pay any
fee of the National Association of Securities Dealers, Inc., in connection
with its review of the offering.
(f) The Company will not, for a period of 120 days following the
Execution Time, without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in private with the Company or any
affiliate of the Company) directly or indirectly, or announce the offering
of, any other shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
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Company may issue Common Stock issuable upon the conversion of securities
or the exercise of options that are (i) outstanding at the Execution Time
or (ii) issued pursuant to employee stock option plans existing at the
Execution Time.
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the
Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Prospectus, or any supplement thereto, is required pursuant
to Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened.
(b) The Company shall have furnished to the Representatives the opinion
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, dated the
Closing Date, to the effect that:
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(i) each of the Company and Rio Properties, Inc. a Nevada corporation,
and [the entity holding the golf course] (individually a "Subsidiary" and
collectively the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full corporate
power and authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or leases
material properties or conducts material business and where the failure to
be so qualified would have a material adverse affect on the operations of
the Company;
(ii) all the outstanding shares of capital stock of each Subsidiary have
been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectus, all
outstanding shares of capital stock of the Subsidiaries are owned by the
Company directly free and clear of any perfected security interest and, to
the knowledge of such counsel, any other security interests, claims, liens
or encumbrances;
(iii) the Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable; the Securities have been
duly and validly authorized, and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Securities have been duly authorized for listing,
subject to official notice of issuance, on the New York Stock Exchange; the
certificates for the Securities are in valid and sufficient form; and the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in the Company are outstanding;
(iv) to the knowledge of such counsel, there is no pending or threatened
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
subsidiaries of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is
no franchise, contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required and none of
the Company, the Subsidiaries or any party related to the Company or the
Subsidiaries is being investigated by the Nevada Gaming Commission, the
Nevada State Gaming Control Board, the ▇▇▇▇▇ County Liquor and Licensing
Board or any other governmental agency, other than
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in ordinary course administrative reviews or in any ordinary course review
of the transactions contemplated herein; and the statements in the
Prospectus under the headings "Business--Regulation and Licensing,"
"Business--Legal Proceedings," "Risk Factors--Nevada Gaming Regulations,"
and "Risk Factors--Regulatory Disposition" fairly summarize the matters
therein described;
(v) the Registration Statement has become effective under the Act; any
required filing of the Prospectus, and any supplements thereto, pursuant to
Rule 424 has been made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no proceedings
for that purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and other
financial information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
applicable requirements of the Act and the Exchange Act and the respective
rules thereunder; and such counsel has no reason to believe that on the
Effective Date or at the Execution Time the Registration Statement contains
or contained any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus as of its date
and on the Closing Date includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (in each case, other than the financial statements and other
financial information contained therein, as to which such counsel need
express no opinion);
(vi) this Agreement has been duly authorized, executed and delivered by
the Company;
(vii) the Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, qualification, filing with
or order or permit of any court or any governmental, regulatory or
administrative agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act or under the Nevada Gaming Control Act and the rules and
regulations thereunder and such as may be required under the blue sky or
real estate syndication laws or rules of any jurisdiction in connection
with the purchase and distribution of the Securities by the Underwriters in
the manner contemplated in this Agreement and in the Prospectus.
(ix) neither the issue and sale of the Securities, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the
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terms hereof will conflict with, result in a breach or violation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Company or its Subsidiaries pursuant to, the charter or by-laws of
the Company or its subsidiaries or the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument known to such
counsel and to which the Company or its subsidiaries is a party or bound or
to which its property is subject, or any statute, law, rule, regulation,
judgment, order or decree known by us to be applicable to the Company or
its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company or its subsidiaries or any of its or their properties; and
(x) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Nevada or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References to the
Prospectus in this paragraph (b) include any supplements thereto at the Closing
Date.
(c) The Representatives shall have received from Cleary, Gottlieb, ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of the Company, dated the
Closing Date, to the effect that the signers of such certificate have carefully
examined the Registration Statement, the Prospectus, any supplements to the
Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
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(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
in the Prospectus (exclusive of any supplement thereto), there has been
no material adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(e) At the Execution Time and at the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
shall have furnished to the Representatives letters, dated respectively as
of the Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act and the
respective applicable published rules and regulations thereunder and that
they have performed a review of the unaudited interim financial information
of the Company for the three-month period ended March 31, 1997, the six
month period ended June 30, 1997 and the nine-month period ended September
30, 1997, and as at September 30, 1997, in accordance with Statement on
Accounting Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply in form in
all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; their
review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial
information; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders, directors and the audit committee of
the Company and the Subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting matters
of the Company and its subsidiaries as to transactions and events
subsequent to December 31, 1996, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements included or incorporated
in the Registration Statement and the Prospectus do not comply in form
in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with
respect to
11
financial statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to September 30, 1997,
there were any changes, at a specified date not more than three days
prior to the date of the letter, in the capital stock, long-term debt or
in consolidated net current assets or stockholders' equity of the
Company and subsidiaries as compared with the amounts shown on the
September 30, 1997 consolidated balance sheet included or incorporated
in the Registration Statement and the Prospectus, or for the period from
October 1, 1997 to such specified date there were any decreases, as
compared with the corresponding period in the preceding quarter in
consolidated net sales, operating profit, or in the total or per-share
amounts of net income, except in all instances for changes or decreases
set forth in such letter, in which case the letter shall be accompanied
by an explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives; or
(3) the information, if any, included or incorporated by reference
in the Registration Statement and Prospectus in response to Regulation
S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive Compensation) and Item
503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial
or statistical information derived from the general accounting records of
the Company and its subsidiaries) set forth in the Registration Statement
and the Prospectus, including the information set forth under the captions
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business" in the Prospectus, agrees with the accounting
records of the Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been
12
(i) any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto) the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement
thereto).
(g) At the Execution Time, the Company shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
each executive officer and director of the Company addressed to the
Representatives, in which each such person agrees not to offer, sell,
contract to sell, pledge or otherwise dispose of, or file a registration
statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to, any
shares of capital stock of the Company or any securities convertible into
or exercisable or exchangeable for such capital stock, or publicly announce
an intention to effect any such transaction, for a period of 120 days after
the date of this Agreement, other than (i) any shares of Common Stock to be
sold hereunder, (ii) any option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus to which
this Agreement relates and (iii) other than shares of Common Stock disposed
of as bona fide gifts approved by Salomon Brothers Inc (provided that
requests for such approval shall be acted upon promptly).
(h) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(i) The Company shall have caused the Securities to be eligible for
trading on upon issuance.
(j) On the Closing Date, the Company shall have furnished to the
Representatives evidence satisfactory to the Representatives of the payment
of at least $_____ million of the principal amount outstanding under the
Rio Bank Loan (as defined in the Prospectus).
(k) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as
the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and
13
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Salomon Brothers Inc on demand for all reasonable out-of-
pocket expenses (including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed purchase and
sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls any Underwriter within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
-------- -------
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Company acknowledges that the
statements set
14
forth in the last paragraph of the cover page regarding
delivery of the Securities, the stabilization legend in block capital
letters on page 2 and, under the heading "Underwriting", (i) the sentences
related to concessions and reallowances and (ii) the paragraph related to
stabilization in any Preliminary Prospectus and the Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be responsible for
the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
-------------------
counsel shall be satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right
to employ separate counsel (including local counsel), and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict
of interest, (ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
(iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters agree to
contribute to the aggregate losses,
15
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from
the offering of the Securities; provided, however, that in no case shall
-------- -------
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Underwriters in
connection with the statements or omissions which resulted in such Losses
as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses) received by it, and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the
cover page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one
hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 8, each
person who controls an Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter,
and each person who controls the Company within the meaning of either the
Act or the Exchange Act, each officer of the Company who shall have signed
the Registration Statement and each director of the Company shall have the
same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail
-------------------------
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event
-------- -------
16
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited (including
pursuant to the circuit breaker rules) or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Representatives, impractical or inadvisable to proceed with the offering or
delivery of the Securities as contemplated by the Prospectus (exclusive of any
supplement thereto).
11. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Salomon Brothers Inc, General Counsel (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, care of Salomon Brothers
Inc, at Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel; or, if sent to the Company, will be mailed, delivered or telefaxed to
-------------------
[facsimile number] and confirmed to it at, attention of
the Legal Department.
13. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
17
14. Applicable Law. This Agreement will be governed by and construed in
--------------
accordance with the laws of the State of New York.
15. Counterparts. This Agreement may be signed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
--------
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
-----------
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus included
in the Registration Statement at the Effective Date that omits Rule 430A
Information.
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
18
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules promulgated
under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"United States or Canadian Person" shall mean any person who is a
national or resident of the United States or Canada, any corporation,
partnership, or other entity created or organized in or under the laws of
the United States or Canada or of any political subdivision thereof, or any
estate or trust the income of which is subject to United States or Canadian
Federal income taxation, regardless of its source (other than any non-
United States or non-Canadian branch of any United States or Canadian
Person), and shall include any United States or Canadian branch of a person
other than a United States or Canadian Person. "U.S." or "United States"
shall mean the United States of America (including the states thereof and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction.
18. Canada. Each of the Underwriters hereby covenants and agrees that it
------
will not distribute the Securities in such a manner as to require the filing of
a prospectus or similar document (excluding a private placement offering
memorandum) with respect to the Securities under the laws of any Province or
Territory in Canada.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
Rio Hotel & Casino, Inc.
By:
--------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
19
Salomon Brothers Inc
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By: Salomon Brothers Inc
By:
-------------------------
Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
20
SCHEDULE I
----------
NUMBER OF SHARES
TO BE
UNDERWRITERS PURCHASED
------------ -------------------
Salomon Brothers Inc...................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.....
--------------------
TOTAL 3,000,000
EXHIBIT A
[Letterhead of officer, director or major shareholder of
Rio Hotel & Casino, Inc.
Rio Hotel & Casino, Inc.
Public Offering of Common Stock
-------------------------------
, 19
Salomon Brothers Inc
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between Rio Hotel &
Casino, Inc., a Nevada Corporation (the "Company"), and each of you as
representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Salomon Brothers Inc, offer, sell, contract to sell, pledge or
otherwise dispose of, or file a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act with respect to, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock, or publicly announce an intention to effect any such transaction, for a
period of 120 days after the date of this Agreement, other than (i) any shares
of Common Stock to be sold hereunder, (ii) any option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectus to which this Agreement relates and (iii) shares of Common Stock
disposed of as bona fide gifts approved by Salomon Brothers Inc (provided that
requests for such approval shall be acted upon promptly).
If for any reason the Underwriting Agreement shall be terminated prior
to the Closing Date (as defined in the Underwriting Agreement), the agreement
set forth above shall likewise be terminated.
Yours very truly,
[Signature of executive officer or
director]
[Name and address of executive officer or
director]