--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
▇▇▇▇▇▇ COMMUNICATIONS, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
Dated: September [_], 1997
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TABLE OF CONTENTS
INTERNATIONAL PURCHASE AGREEMENT .......................................................................... 1
SECTION 1. Representations and Warranties......................................................... 4
(a) Representations and Warranties by the Company and the Partnership...................... 4
(i) Compliance with Registration Requirements.................................... 4
(ii) Independent Accountants...................................................... 5
(iii) Financial Statements......................................................... 6
(iv) No Material Adverse Change in Business....................................... 6
(v) Good Standing of the Company................................................. 7
(vi) Good Standing of Subsidiaries................................................ 7
(vii) Capitalization............................................................... 7
(viii) Authorization................................................................ 8
(ix) Authorization and Description of Securities.................................. 8
(x) Absence of Defaults and Conflicts............................................ 8
(xi) Absence of Labor Dispute..................................................... 9
(xii) Absence of Proceedings....................................................... 9
(xiii) Accuracy of Exhibits......................................................... 10
(xiv) Possession of Intellectual Property.......................................... 10
(xv) Absence of Further Requirements.............................................. 10
(xvi) Possession of Licenses and Permits........................................... 11
(xvii) Title to Property............................................................ 11
(xviii) Investment Company Act....................................................... 11
(xix) Environmental Laws........................................................... 12
(xx) Registration Rights.......................................................... 12
(xxi) Certain Contracts............................................................ 12
(xxii) Compliance with Laws......................................................... 13
(xxiii) Taxes........................................................................ 13
(xxiv) Insurance.................................................................... 13
(b) Representations, Warranties and Covenants by the Selling Shareholders.................. 13
(i) Authorization of Agreements.................................................. 13
(ii) Good and Valid Title......................................................... 14
(iii) Due Execution of Custody Agreement and Power of Attorney..................... 14
(iv) Absence of Manipulation...................................................... 15
(v) Absence of Further Requirements.............................................. 15
(vi) Certificates Suitable for Transfer; Instruments of Transfer.................. 15
(vii) No Association with NASD..................................................... 15
i
(c) Additional Representations and Warranties by the Option Selling Shareholders......[CARAT] 16
(d) Additional Representations and Warranties.............................................. 16
(e) Officer's Certificates................................................................. 17
(f) Agreements of the International Managers............................................... 17
SECTION 2. Sale and Delivery to International Managers; Closing................................... 17
(a) Initial Securities..................................................................... 17
(b) Option Securities...................................................................... 18
(c) Payment................................................................................ 18
(d) Denominations; Registration............................................................ 19
SECTION 3. Covenants of the Company and the Partnership........................................... 19
(a) Compliance with Securities Regulations and Commission Requests......................... 19
(b) Filing of Amendments................................................................... 20
(c) Delivery of Registration Statements.................................................... 20
(d) Delivery of Prospectuses............................................................... 20
(e) Continued Compliance with Securities Laws.............................................. 21
(f) Blue Sky Qualifications................................................................ 21
(g) Rule 158............................................................................... 22
(h) Use of Proceeds........................................................................ 22
(i) Listing................................................................................ 22
(j) Restriction on Sale of Securities...................................................... 22
(k) Reporting Requirements................................................................. 23
SECTION 4. Payment of Expenses.................................................................... 23
(a) Expenses............................................................................... 23
(b) Expenses of the Selling Shareholders................................................... 23
(c) Termination of Agreement............................................................... 24
(d) Allocation of Expenses................................................................. 24
SECTION 5. Conditions of International Managers' Obligations...................................... 24
(a) Effectiveness of Registration Statement................................................ 24
(b) Opinion of Counsel for Company......................................................... 24
(c) Opinions of Counsel for the Selling Shareholders....................................... 25
(d) Opinion of Counsel for International Managers.......................................... 25
(e) Officers' Certificate.................................................................. 26
(f) Certificate of Selling Shareholders.................................................... 26
(g) Accountant's Comfort Letter............................................................ 27
(h) Bring-down Comfort Letter.............................................................. 27
(i) Approval of Listing.................................................................... 27
(j) No Objection........................................................................... 27
(k) Lock-up Agreements..................................................................... 27
(l) Form W-9............................................................................... 27
(m) Purchase of Initial U.S. Securities.................................................... 27
(n) Conditions to Purchase of International Option Securities.............................. 27
ii
(o) Additional Documents................................................................... 29
(p) Termination of Agreement............................................................... 29
SECTION 6. Indemnification........................................................................ 29
(a) Indemnification of International Managers.............................................. 29
(b) Indemnification of International Managers by the Non-Executive Selling Shareholders.... 32
(c) Indemnification of Company, Directors and Officers and Selling Shareholders............ 33
(d) Actions against Parties; Notification.................................................. 33
(e) Settlement without Consent if Failure to Reimburse..................................... 34
(f) Other Agreements with Respect to Indemnification....................................... 34
SECTION 7. Contribution........................................................................... 34
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......................... 36
SECTION 9. Termination of Agreement............................................................... 37
(a) Termination; General................................................................... 37
(b) Liabilities............................................................................ 37
SECTION 10. Default by One or More of the International Managers................................... 37
SECTION 11. Default by One or More of the Selling Shareholders or the Company...................... 38
SECTION 12. Notices................................................................................ 39
SECTION 13. Parties................................................................................ 39
SECTION 14. GOVERNING LAW AND TIME................................................................. 40
SECTION 15. Effect of Headings..................................................................... 40
SCHEDULES
Schedule A - List of International Managers.................................................. Sch A-1
Schedule B - List of Selling Shareholders.................................................... Sch B-1
Schedule C - Pricing Information............................................................. Sch C-1
Schedule D - List of Persons Subject to Lock-up.............................................. Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel................................................. A-1
Exhibit B - Form of Opinion of Selling Shareholders' Counsel..................................... B-1
Exhibit C- Form of Lock-up Letter............................................................... C-1
Exhibit D - Form of Pledgee Lock-up Letter....................................................... D-1
iii
▇▇▇▇▇▇ COMMUNICATIONS, INC.
(a Delaware corporation)
[ ] Shares of Common Stock
(Par Value $.001 Per Share)
INTERNATIONAL PURCHASE AGREEMENT
--------------------------------
September [_], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇, Sachs International
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇▇▇▇ Securities
Bear, ▇▇▇▇▇▇▇ International Limited
as Lead Managers of the several International Managers
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ Communications, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇
Communications, L.P., a Delaware limited partnership (the "Partnership"), ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the persons listed in Schedule B hereto
(collectively, the "Selling Shareholders") confirm their respective agreements
with ▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other
international underwriters named in Schedule A hereto (collectively, the
"International Managers", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇
Lynch, Goldman, Sachs International, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited,
▇▇▇▇▇▇▇▇▇▇ Securities and Bear, ▇▇▇▇▇▇▇ International Limited are acting as
representatives (in such capacity, the "Lead Managers"), with respect to (i) the
sale by the Company and the Selling Shareholders other than C.E. and USN College
Marketing
(each as hereinafter defined) (collectively, the "Initial Selling
Shareholders"), acting severally and not jointly, and the purchase by the
International Managers, acting severally and not jointly, of the respective
numbers of shares of Common Stock, par value $.001 per share, of the Company
("Common Stock") set forth in Schedules A and B hereto and (ii) the grant by
C.E., LLC, a [Delaware] limited liability company ("C.E."), and USN College
Marketing, L.P., a Delaware limited partnership ("USN College Marketing" and,
together with C.E., the "Option Selling Shareholders") to the International
Managers, acting severally and not jointly, of the option described in Section
2(b) hereof to purchase all or any part of [ ] additional shares of Common
Stock to cover over-allotments, if any. The aforesaid [ ] shares of
Common Stock (the "Initial International Securities") to be purchased by the
International Managers and all or any part of the [ ] shares of Common
Stock subject to the option described in Section 2(b) hereof (the "International
Option Securities") are hereinafter called, collectively, the "International
Securities".
It is understood that the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders are concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company and the Initial Selling Shareholders, acting
severally and not jointly, of an aggregate of [ ] shares of Common Stock
(the "Initial U.S. Securities") through arrangements with certain underwriters
in the United States and Canada (the "U.S. Underwriters") for which ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs
& Co., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇▇▇▇▇▇▇ Securities and Bear,
▇▇▇▇▇▇▇ & Co. Inc. are acting as representatives (the "U.S. Representatives")
and the grant by the Option Selling Shareholders to the U.S. Underwriters,
acting severally and not jointly, of an option to purchase all or any part of
the U.S. Underwriters' pro rata portion of up to [ ] additional shares
of Common Stock solely to cover over-allotments, if any (the "U.S. Option
Securities" and, together with the International Option Securities, the "Option
Securities"). The Initial U.S. Securities and the U.S. Option Securities are
hereinafter called the "U.S. Securities". It is understood that the Company
[CARAT] and the Initial Selling Shareholders are not obligated to sell, and the
International Managers are not obligated to purchase, any Initial International
Securities unless all of the Initial U.S. Securities are contemporaneously
purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities and
the Initial U.S. Securities are hereinafter collectively called the "Initial
Securities", and the International Securities and the U.S. Securities are
hereinafter collectively called the "Securities". The
2
Selling Shareholders other than C.E. are hereinafter collectively called the
"Non-Executive Selling Shareholders".
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (in
such capacity, the "Global Coordinator").
The Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders understand that the International Managers propose to make
an offering of the International Securities as soon as the Lead Managers deem
advisable after this Agreement has been executed and delivered.
The offering of the International Securities is expected to close
concurrently with the offering of the Structured Yield Product Exchangeable for
Stock (the "STRYPES") of the ▇▇▇▇▇▇ STRYPES Trust (the "Trust") described in the
Registration Statement (as hereinafter defined). In the STRYPES transaction,
D.M.S. Endowment, LLC ("Endowment"), a Delaware limited liability company of
which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ are the beneficial owners, and
certain other stockholders of the Company will enter into a forward purchase
contract (the "Contract") with the Trust. Pursuant to the Contract, Endowment
may deliver up to [3,100,000] shares of Common Stock, assuming full exercise of
the over-allotment option in the STRYPES offering. In the STRYPES transaction,
Endowment will receive at the closing thereof proceeds of $[
] million, $[ ] million if such over-allotment option is
exercised in full. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ respective pro
rata share, calculated on the basis of his or her ownership interest in
Endowment, of the proceeds to be received by Endowment in the STRYPES
transaction is hereinafter referred to as "STRYPES Proceeds."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-33691) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule
3
434 and Rule 424(b). Two forms of prospectus are to be used in connection with
the offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus") and one relating to the U.S.
Securities (the "Form of U.S. Prospectus"). The Form of International Prospectus
is identical to the Form of U.S. Prospectus, except for the front cover and back
cover pages and the information under the caption "Underwriting". The
information included in any such prospectus or in any such Term Sheet, as the
case may be, that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective (a) pursuant to paragraph (b) of Rule 430A is
referred to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule
434 is referred to as "Rule 434 Information." Each Form of International
Prospectus and Form of U.S. Prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto and schedules thereto at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final Form
of International Prospectus and the final Form of U.S. Prospectus in the forms
first furnished to the Underwriters for use in connection with the offering of
the Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus [CARAT] dated August 29, 1997
[CARAT] and preliminary U.S. Prospectus [CARAT] dated August 29, 1997,
respectively, each together with the applicable Term Sheet, and all references
in this Agreement to the date of such Prospectuses shall mean the date of the
applicable Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the International
Prospectus, the U.S. Prospectus or any Term Sheet or any amendment or supplement
to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("▇▇▇▇▇").
Capitalized terms used herein without definition have the respective
meanings specified therefor in the Prospectuses.
4
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company and the Partnership.
Each of the Company and the Partnership, jointly and severally, represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if
any) referred to in Section 2(b), hereof and agrees with each International
Manager, as follows:
(i) Compliance with Registration Requirements. Each of the
-----------------------------------------
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company or the Partnership, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Neither of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements thereto were issued and at the Closing Time (and,
if any International Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading. If Rule 434 is used, the Company will comply
with the requirements of Rule 434 and the Prospectuses shall not be
"materially different", as such term is used in Rule 434, from the
prospectuses included in the Registration Statement at the time it became
effective. The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement or the
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any
5
International Manager through the Lead Managers expressly for use in the
Registration Statement or the International Prospectus.
Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectuses delivered to the Underwriters
for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
--------------------
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules included in the Registration
Statement present fairly in accordance with GAAP the information required
to be stated therein. The selected financial data and the summary
financial information included in the Prospectuses present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the Registration
Statement. The financial statements have been prepared in accordance with
the Commission's rules and guidelines with respect to combined financial
statements and have been properly compiled on the bases described therein.
The pro forma financial data included in the Registration Statement and the
Prospectuses present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein.
6
(iv) No Material Adverse Change in Business. Since June 30, 1997 or
--------------------------------------
such later dates as of which information is given in the Registration
Statement and the Prospectuses, except as otherwise stated therein, (A)
-
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
-
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) there has been no
-
dividend or distribution of any kind declared, paid or made by the Company
or any subsidiary on any class of its capital stock or any partnership
interest, as the case may be.
(v) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectuses and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(vi) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
listed on Exhibit 21 to the Registration Statement (each, a "Subsidiary"
and, collectively, the "Subsidiaries") has been duly organized and is
validly existing as a corporation or partnership, as the case may be, in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, has corporate or partnership, as the case
may be, power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses and is duly qualified
as a foreign corporation or partnership, as the case may be, to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
all of the issued and outstanding capital stock of each corporate
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company directly or indirectly through
subsidiaries, and all of the
7
partnership interests of the Partnership have been duly authorized and
validly issued and are owned by the Company, directly or indirectly through
▇▇▇▇▇▇ Marketing Services, Inc., in each case free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
none of the outstanding shares of capital stock or partnership interests,
as the case may be, of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such Subsidiary. The
only subsidiaries of the Company are (a) the subsidiaries, listed on
Exhibit 21 to the Registration Statement and (b) certain other subsidiaries
which, considered in the aggregate as a single subsidiary, do not
constitute a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X.
(vii) Capitalization. The authorized, issued and outstanding capital
--------------
stock of the Company is as set forth in the Prospectuses in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectuses or
pursuant to the exercise of convertible securities or options referred to
in the Prospectuses). The shares of issued and outstanding capital stock of
the Company, including the Securities to be purchased by the Underwriters
from the Selling Shareholders, have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares of
capital stock of the Company, including the Securities to be purchased by
the Underwriters from the Selling Shareholders, was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(viii) Authorization. This Agreement and the U.S. Purchase Agreement
-------------
have been duly authorized, executed and delivered by the Company and the
Partnership. The performance of this Agreement and the U.S. Purchase
Agreement and the consummation of the transactions contemplated in this
Agreement, the U.S. Purchase Agreement and the Registration Statement
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectuses
under the caption "Use Of Proceeds") and compliance by the Company and the
Partnership with its obligations under this Agreement and the U.S. Purchase
Agreement have been duly authorized by the Company and the Partnership,
respectively.
(ix) Authorization and Description of Securities. The Securities to
-------------------------------------------
be purchased by the International Managers and the U.S. Underwriters from
the Company have been duly authorized for issuance and sale to the
International
8
Managers pursuant to this Agreement and the U.S. Underwriters pursuant to
the U.S. Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to this Agreement and the U.S. Purchase Agreement,
respectively, against payment of the consideration set forth herein and the
U.S. Purchase Agreement, respectively, will be validly issued, fully paid
and non-assessable; the Common Stock conforms to all statements relating
thereto contained in the Prospectuses and such description conforms to the
rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the preemptive
or other similar rights of any securityholder of the Company.
(x) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of the Subsidiaries is in violation of its charter or by-laws or
partnership agreement, as the case may be, or in default in the performance
or observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or any
of the Subsidiaries is subject (collectively, "Agreements and
Instruments"), except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated in this Agreement, the U.S. Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use of Proceeds") and
compliance by the Company and the Partnership with their respective
obligations under this Agreement and the U.S. Purchase Agreement have been
duly authorized by all necessary corporate or partnership, as the case may
be, action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Effect), nor will such action result in any violation of the provisions of
the charter or by-laws or partnership agreement, as the case may be, of the
Company or any Subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality
9
or court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any Subsidiary.
(xi) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any Subsidiary exists or, to the knowledge of the Company
or the Partnership, is imminent, and neither the Company nor the
Partnership is aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, manufacturers, customers or
contractors, which, in either case, might reasonably be expected to result
in a Material Adverse Effect.
(xii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company or the Partnership, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement and the U.S. Purchase Agreement [CARAT] or
the performance by the Company or the Partnership of its obligations
hereunder or thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which
any of their respective properties or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xii) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and the
-----------------------------------
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or
10
other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither the
Company nor the Partnership has received any notice or is otherwise aware
of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of the Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xv) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required by or on behalf of the Company or the Partnership
for the performance by the Company or the Partnership of its obligations
hereunder, in connection with the offering, issuance or sale of the
Securities under this Agreement and the U.S. Purchase Agreement or the
consummation of the transactions contemplated by this Agreement and the
U.S. Purchase Agreement, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations and foreign
or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company and the
----------------------------------
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and the
Subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of the
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xvii) Title to Property. The Company and the Subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and the
Subsidiaries and good title to all other properties owned by them, in each
case,
11
free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectuses, including those disclosed in the financial
statements and the related notes included therein, or (b) do not, singly or
in the aggregate, 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 or any of the Subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectuses, are in full force and
effect, and neither the Company nor the Partnership has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any Subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xviii) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectuses
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xix) Environmental Laws. Except as described in the Registration
------------------
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of the
Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and the Subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or
12
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of the Subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of the Subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xx) Registration Rights. Except as described in the Registration
-------------------
Statement and the Prospectuses, there are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xxi) Certain Contracts. Each of the Company's contracts with AT&T
-----------------
Communications, Inc. ("AT&T") have been duly executed and delivered by each
of the Partnership or the Company, as the case may be, and, to the
knowledge of the Company and the Partnership, by AT&T and are in full force
and effect. There does not exist any default, event or condition that,
after notice or lapse of time or both, could give rise under either such
contract to any claim by any person against the Company or any subsidiary
or would constitute a default thereunder on the part of the Company or any
subsidiary or any other party thereto.
(xxii) Compliance with Laws. Each of the Company and the Subsidiaries
--------------------
is in compliance with all applicable laws, statutes, ordinances, rules or
regulations of any applicable jurisdiction, the enforcement of which,
singly or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
(xxiii) Taxes. Each of the Company and the Subsidiaries has filed all
-----
material federal, state, local and foreign income and franchise tax returns
required to be filed by it and has paid all taxes shown as due thereon,
other than taxes which are being contested in good faith or state
withholding taxes and for both of which adequate reserves have been
established in accordance with GAAP; and neither the Company nor the
Partnership has knowledge of any tax deficiency which has been or might be
asserted or threatened against the Company or any Subsidiary other than
those for which adequate reserves have been established in accordance with
GAAP. Adequate charges, accruals and reserves have been provided for in
the financial statements referred to in Section 1(a)(iii) hereof in
13
respect of all material federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or any Subsidiary has
not been finally determined or remains open to examination by applicable
taxing authorities.
(xxiv) Insurance. Each of the Company and the Subsidiaries carries or
---------
is entitled to the benefits of insurance in such amounts and covering such
risks as it reasonably believes are sufficient to cover potential losses or
damages, and all such insurance is in full force and effect.
(b) Representations, Warranties and Covenants by the Selling Shareholders.
Each Selling Shareholder severally represents and warrants to each International
Manager as of the date hereof, as of the Closing Time, and, if the Selling
Shareholder is selling International Option Securities on a Date of Delivery, as
of each such Date of Delivery, and agrees with each International Manager, as
follows:
(i) Authorization of Agreements. Each Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and a Custody
Agreement and Power of Attorney (the "Custody Agreement and Power of
Attorney") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement, the U.S. Purchase Agreement and the Custody Agreement and Power
of Attorney and the sale and delivery of the Securities to be sold by such
Selling Shareholder and the consummation by such Selling Shareholder of the
transactions contemplated herein, in the U.S. Purchase Agreement and in the
Registration Statement and compliance by such Selling Shareholder with its
obligations hereunder have been duly authorized by each Selling Shareholder
that is not an individual and do not and will not, whether with or without
the giving of notice or passage of time or both, result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities to
be sold by such Selling Shareholder, nor will such action result in any
violation of the provisions of the charter or by-laws or other
organizational instrument of such Selling Shareholder, if applicable, or,
to the best of such Selling Shareholder's knowledge, any applicable treaty,
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over such Selling Shareholder or any of its properties.
(ii) Good and Valid Title. Such Selling Shareholder has and will at
--------------------
the Closing Time and, if any International Option Securities are purchased,
such Option Selling Shareholder will on the Date of Delivery have good and
valid title to the Securities to be sold by such Selling Shareholder
hereunder, free and clear
14
of any security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind, other than pursuant to this Agreement or the
Custody Agreement and Power of Attorney; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such International Manager has no notice of any
adverse claim, each of the International Managers will receive good and
valid title to the Securities purchased by it from such Selling
Shareholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iii) Due Execution of Custody Agreement and Power of Attorney. Such
--------------------------------------------------------
Selling Shareholder has duly executed and delivered, in the forms
heretofore furnished to the Lead Managers, the Custody Agreement and Power
of Attorney with ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, or
any of them, as attorneys-in-fact (the "Attorneys-in-Fact") and American
Stock Transfer and Trust Company, as custodian (the "Custodian"); the
Custodian is authorized to deliver the Securities to be sold by such
Selling Shareholder hereunder and to accept payment therefor, pursuant to
the Custody Agreement and Power of Attorney; and each Attorney-in-Fact is
authorized to execute and deliver this Agreement and the certificate
referred to in Section 5(f) or that may be required pursuant to Sections
[CARAT] 5(n) (in the case of any Option Selling Shareholder) and 5(o) on
behalf of such Selling Shareholder, to sell, assign and transfer to the
International Managers the Securities to be sold by such Selling
Shareholder hereunder, to determine the purchase price to be paid by the
International Managers to such Selling Shareholder, as provided in Section
2 hereof, to authorize the delivery of the Securities to be sold by such
Selling Shareholder hereunder, to accept payment therefor, and otherwise to
act on behalf of such Selling Shareholder in connection and in accordance
with this Agreement and the Custody Agreement and Power of Attorney.
(iv) Absence of Manipulation. Such Selling Shareholder has not
-----------------------
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(v) Absence of Further Requirements. [CARAT] To the best of such
-------------------------------
Selling Shareholder's knowledge, no filing with, or consent, approval,
authorization, order, registration, qualification or decree of, any court
or governmental authority or agency, domestic or foreign, is necessary or
required by such Selling Shareholder for the performance by such Selling
15
Shareholder of its obligations hereunder or in the Custody Agreement and
Power of Attorney, or in connection with the offering, sale and delivery of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement and the U.S. Purchase Agreement, except such
as may have previously been made or obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or state securities laws.
(vi) Certificates Suitable for Transfer; Instruments of Transfer.
-----------------------------------------------------------
Certificates for all of the Securities sold by such Selling Shareholder
pursuant to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank, or, in the case of uncertificated stock, duly executed stock powers,
in each case with signatures guaranteed (or notarized, in the case of any
such Selling Shareholder not resident in the United States), have been
placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities or stock powers to the
International Managers pursuant to this Agreement and the Custody Agreement
and Power of Attorney.
(vii) No Association with NASD. Except as described in the
------------------------
Registration Statement and the Prospectuses, neither such Selling
Shareholder nor any of its affiliates directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the NASD), any member firm of the
NASD, except that ▇▇▇▇▇▇ ▇▇▇ is an officer of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation and NatWest Ventures [CARAT] Investments Limited is
an affiliate of certain member firms of the NASD.
(c) Additional Representations and Warranties by the Option Selling
Shareholders. Each Option Selling Shareholder further severally represents and
warrants to each International Manager as of the date hereof, as of the Closing
Time, and, if the Option Selling Shareholder is selling International Option
Securities on a Date of Delivery, as of each such Date of Delivery, and agrees
with each International Manager, that, during a period of 90 days from the date
of the Prospectuses, such Option Selling Shareholder will not, without the prior
written consent of the Global Coordinator, (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 or otherwise transfer or
dispose of, directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii)
--
16
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of the Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise; provided that any Option Selling Shareholder
--------
may, at any time after 30 days from the date of the Closing Time, pledge as
security for borrowed money (x) up to 50%, in the case of C.E., and (y) all, in
the case of USN College Marketing, or its partners, of the shares of Common
Stock then owned by such Option Selling Shareholder to any commercial banking
institution that is a member of the Federal Reserve System or any institutional
lender that makes loans secured by margin securities in the ordinary course of
business having combined capital and surplus in excess of $500,000,000 (a
"Pledgee") as long as such Pledgee shall have agreed in writing to be bound by
the obligations and restrictions applicable to the Common Stock under this
Section 1(c) and the Lead Managers shall have received an agreement
substantially in the form of Exhibit D hereto signed by such Pledgee. The
foregoing sentence shall not apply to (x) the Securities to be sold hereunder or
(y) the STRYPES of the Trust described in the prospectus dated the date of this
Agreement relating to the STRYPES.
(d) Additional Representations and Warranties. Each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E., USN College Marketing, A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇ further severally represents and warrants to each International Manager
as of the date hereof, as of the Closing Time, and (in the case of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E. and USN College Marketing), if C.E. or USN
College Marketing, as the case may be, is selling International Option
Securities on a Date of Delivery, as of each such Date of Delivery, and agrees
with each International Manager, that, to the best of its, his or her knowledge,
as the case may be, the representations and warranties of the Company and the
Partnership contained in Section 1(a) hereof are true and correct; it, he or
she, as the case may be, has reviewed and is familiar with the Registration
Statement and the Prospectuses and the Prospectuses do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and such person is not prompted to sell the
Securities to be sold by it, he or she, as the case may be, hereunder or to
participate in the STRYPES offering, as the case may be, by any information
concerning any of the Company or any of its subsidiaries which is not set forth
in the Prospectuses. [CARAT] The representations and warranties in this
subsection shall not apply to statements in or omissions from the Registration
Statement or the International Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
International Manager through the Lead Managers expressly for use in the
Registration Statement or the International Prospectus.
17
(e) Officer's Certificates. Any certificate signed by any officer of the
Company or the Partnership delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers shall be deemed a
representation and warranty by the Company or the Partnership, as the case may
be, to each International Manager as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Shareholder as such and
delivered to the Global Coordinator, the Lead Managers or to counsel for the
International Managers pursuant to the terms of this Agreement shall be deemed a
representation and warranty by such Selling Shareholder to each International
Manager as to matters covered thereby.
(f) Agreements of the International Managers. Each International Manager,
severally and not jointly, agrees with the Company and the Partnership that such
International Manager will not offer or sell, directly or indirectly,
International Securities, nor distribute or publish the International Prospectus
or any other offering material or advertisements in connection with the
International Securities, in or from any country or jurisdiction except in
compliance in all material respects with any applicable rules and regulations of
any such country or jurisdiction. Each International Manager will comply with
all applicable laws and regulations, and make or obtain all necessary filings,
consents or approvals, in each jurisdiction in which such International Manager
offers, sells or delivers International Securities.
SECTION 2. Sale and Delivery to International Managers; Closing.
----------------------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company and the Initial Selling Shareholders, severally and not
jointly, agree to sell to each International Manager, severally and not jointly,
and each International Manager, severally and not jointly, agrees to purchase
from the Company and the Initial Selling Shareholders, at the price per share
set forth in Schedule C, that proportion of the number of Initial International
Securities set forth in Schedule B opposite the name of the Company or the
Initial Selling Shareholders, as the case may be, which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager, plus any additional number of Initial International
Securities which such International Manager may become obligated to purchase
pursuant to the provisions of Section 10 hereof, bears to the total number of
Initial International Securities, subject, in each case, to such adjustments
among the International Managers as the Lead Managers in their sole discretion
shall make to eliminate any sales or purchases of fractional securities.
18
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Option Selling Shareholders, acting severally and not jointly,
hereby grant an option to the International Managers, severally and not jointly,
to purchase up to an additional [ ] shares of Common Stock, as set
forth in Schedule B, at the price per share set forth in Schedule C. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Initial International Securities upon notice by the Global Coordinator to
the Company and the Option Selling Shareholders setting forth the number of
International Option Securities as to which the several International Managers
are then exercising the option and the time and date of payment and delivery for
such International Option Securities. Any such time and date of delivery for
the International Option Securities (a "Date of Delivery") shall be determined
by the Global Coordinator, but shall not be later than seven full business days
after the exercise of said option, nor in any event prior to the Closing Time,
as hereinafter defined. If the option is exercised as to all or any portion of
the International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of Initial
International Securities set forth in Schedule A opposite the name of such
International Manager bears to the total number of Initial International
Securities, subject in each case to such adjustments as the Global Coordinator
in its discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Debevoise & ▇▇▇▇▇▇▇▇, 875 Third Avenue, New York, New York, or at such other
place as shall be agreed upon by the Global Coordinator and the Company, at 9:00
A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Global Coordinator and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company and the Option Selling Shareholders.
19
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Custodian pursuant to each Selling Shareholder's Custody
Agreement and Power of Attorney against delivery to the Lead Managers for the
respective accounts of the International Managers of certificates for the
International Securities to be purchased by them. It is understood that each
International Manager has authorized the Lead Managers, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Initial International Securities and the International Option Securities, if
any, which it has agreed to purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as
representative of the International Managers, may (but shall not be obligated
to) make payment of the purchase price for the Initial International Securities
or the International Option Securities, if any, to be purchased by any
International Manager whose funds have not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
International Securities and the International Option Securities, if any, will
be made available for examination and packaging by the Lead Managers in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company and the Partnership. Each of the
--------------------------------------------
Company and the Partnership, jointly and severally, covenants with each
International Manager as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b) hereof, will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Global Coordinator immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement, shall become
effective, or any supplement to the Prospectuses or any amended
Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to
the Prospectuses or for additional information, and (iv) of the issuance by
the Commission of any stop order suspending the
20
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of
the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for
any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and,
in the event that it was not, it will promptly file such prospectus. The
Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof
at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global
Coordinator notice of the Company's intention to file or prepare any
amendment to the Registration Statement (including any filing under Rule
462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectuses, will furnish the Global Coordinator with
copies of any such documents a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file or use any
such document to which the Global Coordinator or counsel for the
International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished
or will deliver to the Lead Managers and counsel for the International
Managers, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the Lead
Managers, without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the International Managers. The copies of the Registration Statement and
each amendment thereto furnished to the International Managers will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the
Company and the Partnership hereby consent to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
International
21
Manager, without charge, during the period when the International
Prospectus is required to be delivered under the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 Act"), such number of copies of
the International Prospectus (as amended or supplemented) as such
International Manager may reasonably request. The International Prospectus
and any amendments or supplements thereto furnished to the International
Managers will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted
by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement, the U.S. Purchase Agreement and in the Prospectuses. If at any
time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement any Prospectus in order that
the Prospectuses will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement any Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b)
hereof, such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to
the International Managers such number of copies of such amendment or
supplement as the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts,
in cooperation with the International Managers, to qualify the Securities
for offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as the Global Coordinator may
designate and to maintain such qualifications in effect for such period
after the effective date of the Registration Statement and any Rule 462(b)
Registration Statement as the Prospectuses are required by the 1933 Act or
such state securities laws to be delivered in connection with sales of the
Securities by any underwriter or dealer; provided, however, that the
Company shall not be obligated to file any general
22
consent to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for the period specified above.
(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received
by the Company from the sale of the Securities in the manner specified in
the Prospectuses under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 90 days
from the date of the Prospectuses, neither the Company nor the Partnership
will, without the prior written consent of the Global Coordinator, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii)
enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
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 Securities to be sold
hereunder or under the U.S. Purchase Agreement, (B) any options to purchase
shares of Common Stock granted or shares of Common Stock sold pursuant to
any employee benefit plan of the Company whether existing at the date of
this Agreement or adopted subsequent hereto and the filing of any
registration statement on Form S-8 related thereto or (C) any option or
warrant to purchase shares of Common Stock or
23
shares of Common Stock issued or sold in connection with an acquisition by
the Company and the filing of any registration statement on Form S-4 in
connection therewith as long as all executive officers, directors and other
affiliates of the person being acquired have agreed in writing to be bound
by the obligations and restrictions of the foregoing sentence of this
Section 3(j).
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the rules and regulations of the Commission thereunder.
SECTION 4. Payment of Expenses. (a) Expenses. The Company and the
-------------------
Partnership, jointly and severally, will pay all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing (or reproduction) and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing (or reproduction) and delivery
to the Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters and the transfer of the Securities between the U.S. Underwriters
and the International Managers, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing (or reproduction) and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the NASD of the terms of the sale
of the Securities, and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
24
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
severally and not jointly, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the Securities to the
International Managers, and their transfer between Underwriters pursuant to any
agreement between Underwriters, and (ii) the fees and disbursements of their
respective counsel and accountants, except in each case as otherwise provided in
any agreement between the Company and any Selling Shareholder.
(c) Termination of Agreement. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5 (other than Section
5(j)), Section 9(a)(i) or Section 11 hereof, the Company, the Partnership and
the Selling Shareholders, severally and not jointly, shall reimburse the
International Managers for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the International Managers,
except as otherwise provided in any agreement between the Company and any
Selling Shareholder.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company, the Partnership and the Selling
Shareholders may make for the sharing of such costs and expenses.
SECTION 5. Conditions of International Managers' Obligations. The
-------------------------------------------------
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of the Company, the Partnership,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders contained in
Section 1 hereof or in certificates of any officer of the Company or the
Partnership or by or on behalf of any Selling Shareholder delivered pursuant to
the provisions hereof, to the performance by the Company and the Partnership of
their covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
International Managers. A prospectus containing the Rule 430A Information
shall have been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the
25
requirements of Rule 430A) or, if the Company has elected to rely upon Rule
434, a Term Sheet shall have been filed with the Commission in accordance
with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Lead
Managers shall have received the favorable opinion and letter, in each case
dated as of Closing Time, of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for
the Company, in form and substance satisfactory to counsel for the
International Managers, together with signed or reproduced copies of such
opinion and letter for each of the other International Managers to the
effect set forth in Exhibit A-1 and Exhibit A-2, respectively, hereto. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law and the
Revised Uniform Limited Partnership Act of the State of Delaware, upon the
opinions of counsel satisfactory to the Lead Managers. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(c) Opinions of Counsel for the Selling Shareholders. At Closing
Time, the Lead Managers shall have received the favorable opinions, dated
as of Closing Time, of (i) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for
C.E., USN College Marketing, ▇▇▇▇▇ ▇▇▇▇▇▇▇ [CARAT] and A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
(ii) [CARAT] ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Kotel, counsel for the former shareholders
of ▇▇▇▇▇ Holdings Limited (except 3i Group plc and NatWest Ventures
Investment Limited), (iii) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for 3i Group plc and
NatWest Ventures Investment Limited, (iv) Rosenman & Colin LLP, counsel for
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Charitable Foundation,
(v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Green, counsel for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (vi) [ ] and
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ [CARAT], ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Ltd., counsel for ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, (vii) Weil, Gotshal & ▇▇▇▇▇▇ LLP and ▇ ▇ ▇▇▇▇▇▇ & Co. [CARAT],
counsel for the former shareholders of Bounty Group Holdings Limited and
(viii) [ ], counsel for ▇▇▇▇▇▇ ▇▇▇, in each case in form and substance
satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letter for each of the other
International Managers, to the effect set forth in Exhibit B hereto. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law, the
Revised Uniform Limited Partnership Act and the Limited Liability Company
Act of the State of Delaware, as applicable, upon the opinions
26
of counsel satisfactory to the Lead Managers. Such counsel may also state
that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of the Selling
Shareholders or officers of the Company and its subsidiaries and
certificates of public officials.
(d) Opinion of Counsel for International Managers. At Closing Time,
the Lead Managers shall have received the favorable opinion, dated as of
Closing Time, of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the International
Managers, together with signed or reproduced copies of such letter for each
of the other International Managers with respect to the matters set forth
in clauses 1, 2, 4 (as to the [CARAT] third [CARAT] clause thereof), 5
(solely as to preemptive or other similar rights arising by operation of
law or under the charter or by-laws of the Company), 8 through 10,
inclusive, 11, 13 (solely as to the information in the Prospectus under
"Description of Capital Stock-- Common Stock") and Exhibit A-2 hereto. In
giving such opinion such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law and the
Revised Uniform Limited Partnership Act of the State of Delaware, upon the
opinions of counsel satisfactory to the Lead Managers. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectuses, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Lead Managers shall have received a certificate of each of (x) the
Chairman of the Board, the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company and (y)
the President or a Vice President of the Partnership and of the chief
financial or chief accounting officer of the Partnership, in each case
dated as of Closing Time and to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1(a) hereof are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) the Company or the
Partnership, as the case may be, has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
27
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(f) Certificate of Selling Shareholders. At the Closing Time, the
Lead Managers shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect
that (i) the representations and warranties of each Selling Shareholder
contained in Section 1(b), 1(c) and 1(d) [CARAT] hereof are true and
correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) each Selling Shareholder has
complied in all material respects with all agreements and all conditions on
its part to be performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Lead Managers shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP a letter dated such date, in form and substance satisfactory to the
Lead Managers, together with signed or reproduced copies of such letter for
each of the other International Managers, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
the Prospectuses.
(h) Bring-down Comfort Letter. At Closing Time, the Lead Managers
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (g) of this Section, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(j) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the Lead
Managers shall have received an agreement substantially in the form of
Exhibit C hereto signed by the persons listed on Schedule D hereto.
28
(l) Form W-9. At or prior to Closing Time, the Lead Managers shall
have received from each Selling Shareholder a properly completed and
executed United States Treasury Form W-9 or Form W-8, as applicable.
(m) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International
Securities under this Agreement, the U.S. Underwriters shall have purchased
the Initial U.S. Securities under the U.S. Purchase Agreement.
(n) Conditions to Purchase of International Option Securities. In
the event that the International Managers exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International
Option Securities, the representations and warranties of the Company, the
Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Option Selling
Shareholders contained herein and the statements in any certificates
furnished by any of them hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, and the Lead
Managers shall have received:
(i) Officers' Certificates. A certificate, dated such Date of
----------------------
Delivery, of each of (x) the Chairman of the Board, President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company and (y) the President or a Vice
President of the Partnership and of the chief financial or chief
accounting officer of the Partnership, in each case confirming that
the certificate delivered at the Closing Time pursuant to Section 5(e)
hereof remains true and correct as of such Date of Delivery.
(ii) Certificate of the Option Selling Shareholders. A certificate,
----------------------------------------------
dated such Date of Delivery, of an Attorney-in-Fact on behalf of each
Option Selling Shareholder, in each case confirming that the
certificate delivered at Closing Time pursuant to Section 5(f) hereof
remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion of ▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for the Company, in form and
substance satisfactory to counsel for the International Managers,
dated such Date of Delivery, relating to the International Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(b) hereof.
29
(iv) Opinion of Counsel for the Option Selling Shareholders. The
------------------------------------------------------
favorable opinion of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, counsel for the
Option Selling Shareholders, in form and substance satisfactory to
counsel for the International Managers, dated such Date of Delivery,
relating to the International Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the
respective opinions required by Section 5(c) hereof.
(v) Opinion of Counsel for International Managers. The favorable
---------------------------------------------
opinion of Debevoise & ▇▇▇▇▇▇▇▇, counsel for the International
Managers, dated such Date of Delivery, relating to the International
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(d)
hereof.
(vi) Bring-down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, in
-------------------------
form and substance satisfactory to the Lead Managers and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Lead Managers pursuant to Section 5(g) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(o) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the International Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company, the Partnership and the Selling Shareholders in connection
with the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(p) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities on a Date of Delivery which is after Closing Time, the
obligations of the several International Managers to purchase the relevant
Option Securities, may be terminated by the Lead Managers by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
30
SECTION 6. Indemnification.
---------------
(a) Indemnification of International Managers. The Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, jointly and
severally, agree to indemnify and hold harmless each International Manager, its
directors, officers and employees, and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) hereof) any such settlement is effected with the written consent of
the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇;
and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that (a) this indemnity agreement shall not apply to any
-------- -------
loss, liability, claim, damage or expense (x) to the extent arising out of any
untrue statement or omission or alleged untrue statement or
31
omission made in reliance upon and in conformity with written information
furnished to the Company by any International Manager through the Lead Managers
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the International Prospectus (or any amendment
or supplement thereto) and (y) with respect to any preliminary prospectus to the
extent that any such loss, liability, claim, damage or expense of such
International Manager results solely from the fact that such International
Manager sold Securities to a person as to whom the Company shall establish that
there was not sent by commercially reasonable means, at or prior to the written
confirmation of such sale, a copy of the International Prospectus in any case
where such delivery is required by the 1933 Act, if the Company has previously
furnished copies thereof in sufficient quantity to such International Manager
and the loss, claim, damage or liability of such International Manager results
from an untrue statement or omission of a material fact contained in the
preliminary prospectus that was corrected in the International Prospectus, (b)
C.E.'s aggregate liability under this Section 6 shall be limited to an amount
equal to C.E.'s net proceeds (after deducting the underwriting discount, but
before deducting expenses) ("C.E.'s Proceeds") from the sale of C.E.'s
Securities pursuant to this Agreement, (c) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ aggregate
liability under this Section 6 shall be limited to an amount equal to his
STRYPES Proceeds from the STRYPES transaction (after deducting his pro rata
share, calculated on the basis of his ownership interest in Endowment, of any
indemnification that Endowment has paid under section 6(a) of the purchase
agreement for the STRYPES transaction), and (d) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇ aggregate
liability under this Section 6 shall be limited to an amount equal to (i) C.E.'s
Proceeds plus (ii) an amount equal to her STRYPES Proceeds from the STRYPES
transaction (after deducting her pro rata share, calculated on the basis of her
ownership interest in Endowment, of any indemnification that Endowment has paid
under section 6(a) of the purchase agreement for the STRYPES transaction).
In making a claim for indemnification under this Section 6 (other than
pursuant to clause (a)(iii) of this Section 6), or contribution under Section 7,
by the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
the indemnified parties may proceed against either (i) the Company and/or the
Partnership and C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or (ii) the Company
and/or the Partnership only, but may not proceed solely against C.E., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. In the event that the indemnified parties are
entitled to seek indemnity or contribution hereunder against any loss,
liability, claim, damage and expense incurred with respect to a final judgment
from a trial court, then, as a precondition to any indemnified party obtaining
indemnification or contribution from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, the indemnified parties shall first obtain a final judgment from a trial
court that such
32
indemnified parties are entitled to indemnity or contribution under this
Agreement with respect to such loss, liability, claim, damage or expense (the
"Final Judgment") from the Company and/or the Partnership and C.E., ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and shall seek to satisfy such Final Judgment in
full from the Company and/or the Partnership by making a written demand upon the
Company and/or the Partnership for such satisfaction. Only in the event such
Final Judgment shall remain unsatisfied in whole or in part 45 days following
the date of receipt by the Company and/or the Partnership of such demand shall
any indemnified party have the right to take action to satisfy such Final
Judgment by making demand directly on C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (but only if and to the extent the Company and/or the Partnership have
not already satisfied such Final Judgment, whether by settlement, release or
otherwise). The indemnified parties may exercise this right to first seek to
obtain payment from the Company and/or the Partnership and thereafter obtain
payment from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ without regard to the
pursuit by any party of its rights to the appeal of such Final Judgment. The
indemnified parties shall, however, be relieved of their obligation to first
obtain a Final Judgment, seek to obtain payment from the Company and/or the
Partnership with respect to such Final Judgment or, having sought such payment,
to wait such 45 days after failure by the Company and/or the Partnership to
satisfy immediately any such Final Judgment if (i) the Company or the
Partnership files a petition for relief under the United States Bankruptcy Code
(the "Bankruptcy Code"), (ii) an order for relief is entered against the Company
or the Partnership in an involuntary case under the Bankruptcy Code, (iii) the
Company or the Partnership makes an assignment for the benefit of its creditors,
or (iv) any court orders or approves the appointment of a receiver or custodian
for the Company or the Partnership or a substantial portion of either of their
assets. The foregoing provisions of this paragraph are not intended to require
any indemnified party to obtain a Final Judgment against the Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ before obtaining
reimbursement of expenses pursuant to clause (a)(iii) of this Section 6.
However, the indemnified parties shall first seek to obtain such reimbursement
in full from the Company and/or the Partnership by making a written demand upon
the Company and/or the Partnership for such reimbursement. Only in the event
such expenses shall remain unreimbursed in whole or in part 45 days following
the date of receipt by the Company and/or the Partnership of such demand shall
any indemnified party have the right to receive reimbursement of such expenses
from C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ by making written demand
directly on C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (but only if and to the
extent the Company and/or the Partnership have not already satisfied the demand
for reimbursement, whether by settlement, release or otherwise). The indemnified
parties shall, however, be relieved of their obligation to first seek to obtain
such reimbursement in full from the Company and/or the Partnership or, having
made written demand therefor, to wait such 45 days
33
after failure by the Company and/or the Partnership to reimburse immediately
such expenses if (i) the Company or the Partnership files a petition for relief
under the Bankruptcy Code, (ii) an order for relief is entered against the
Company or the Partnership in an involuntary case under the Bankruptcy Code,
(iii) the Company or the Partnership makes an assignment for the benefit of its
creditors, or (iv) any court orders or approves the appointment of a receiver or
custodian for the Company or the Partnership or a substantial portion of its
assets.
(b) Indemnification of International Managers by the Non-Executive Selling
Shareholders. Each Non-Executive Selling Shareholder, severally and not
jointly, agrees to indemnify and hold harmless each International Manager, its
directors, officers and employees, and each person, if any, who controls any
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, with respect to any untrue statement or
omission, or alleged untrue statement or omission, contained in the Registration
Statement (or any amendment thereto), including the Rule 430 Information and the
Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of such Non-Executive Selling Shareholder expressly for use therein; provided,
--------
however, that (x) this indemnity agreement shall not apply to any loss,
-------
liability, claim, damage or expense (i) to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) and (ii) with respect to any preliminary prospectus to the extent that
any such loss, liability, claim, damage or expense of such International Manager
results solely from the fact that such International Manager sold Securities to
a person as to whom the Company shall establish that there was not sent by
commercially reasonable means, at or prior to the written confirmation of such
sale, a copy of the International Prospectus in any case where such delivery is
required by the 1933 Act, if the Company has previously furnished copies thereof
in sufficient quantity to such International Manager and the loss, claim, damage
or liability of such International Manager results from an untrue statement or
omission of a material fact contained in the preliminary prospectus that was
corrected in the International Prospectus, and (y) each Non-Executive Selling
Shareholder's aggregate liability under this Section 6(b) shall be limited to an
amount equal to the net proceeds (after deducting the underwriting discount, but
before deducting expenses) received by such Non-Executive Selling Shareholder
from the Sale of Securities pursuant to this Agreement.
34
(c) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each International Manager severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and
each Selling Shareholder against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary international prospectus or the
International Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
International Manager through the Lead Managers expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the International Prospectus (or any amendment or supplement thereto).
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) or (b)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 6(c) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought
35
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested in accordance with this Agreement an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(f) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company, the Partnership,
C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders with
respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
------------
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders on the one hand and the International Managers on the other
hand from the offering of the Securities pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, the
Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling
Shareholders on the one hand and of the International Managers on the other hand
in connection with the statements or omissions, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
36
The relative benefits received by the Company, the Partnership, C.E.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders on the one hand
and the International Managers on the other hand in connection with the offering
of the International Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the International Securities pursuant to this Agreement (after deducting the
underwriting discount, but before deducting expenses) received by the Company,
the Partnership, C.E. and the Selling Shareholders (and, in the case of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, his STRYPES Proceeds and, in the case of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, C.E.'s
Proceeds plus her STRYPES Proceeds) and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or by the Selling Shareholders in writing or by the
International Managers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
the Selling Shareholders and the International Managers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (x) no International
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public
37
were offered to the public exceeds the amount of any damages which such
International Manager has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission, and (y) no
Non-Executive Selling Shareholder shall be required to contribute any amount in
excess of such Non-Executive Selling Shareholder's net proceeds (after deducting
the underwriting discount, but before deducting expenses) from the sale of
Securities pursuant to this Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement among the
Company, the Partnership, C.E., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement or in certificates of officers of the Company or the Partnership or
the Selling Shareholders submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any investigation made by or on behalf
of any International Manager or controlling person, or by or on behalf of the
Company or any controlling person, the Partnership or the Selling Shareholders,
and shall survive delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Lead Managers may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
-
has been, since the time of execution of this Agreement or since the respective
dates as of
38
which information is given in the International Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority, or (iv)
if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If one
----------------------------------------------------
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period,
then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of International Securities to be purchased on such date, each
of the non-defaulting International Managers shall be obligated, severally
and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting International Managers, or
39
(b) if the number of Defaulted Securities exceeds 10% of the
number of International Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which occurs after the
Closing Time, the obligation of the International Managers to purchase and
of the Company to sell the Option Securities to be purchased and sold on
such Date of Delivery shall terminate without liability on the part of any
non-defaulting International Manager.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "International
Manager" includes any person substituted for an International Manager under this
Section 10.
SECTION 11. Default by One or More of the Selling Shareholders or the
---------------------------------------------------------
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
-------
of Delivery to sell and deliver the number of Securities that such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, the
remaining Selling Shareholders shall have the right to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number of Securities to be sold by all Selling Shareholders as set forth in
Schedule B hereto. In the event that a Selling Shareholder or Selling
Shareholders shall so fail, and the remaining Selling Shareholders do not
exercise such right to increase the number of Securities to be sold by them, and
the Company does not exercise the right hereby granted to sell the Securities
that the defaulting Selling Shareholders are obligated to sell hereunder, then
the International Managers may, at the option of the Lead Managers, by notice
from the Lead Managers to the Company and the non-defaulting Selling
Shareholders, either (i) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (ii) elect to purchase the
Securities which the non-defaulting Selling Shareholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Shareholder so defaulting from liability, if any, in respect of such
default. If the remaining Selling Shareholders exercise
40
the right to sell the Securities that such defaulting Selling Shareholder is
obligated to sell hereunder, as used herein the term "Selling Shareholder" shall
not include such defaulting Selling Shareholder for purposes of determining
compliance with all agreements and conditions to be performed by the Selling
Shareholders hereunder.
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the Lead Managers, the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectuses or in any other documents
or arrangements.
(b) If the Company shall fail at Closing Time to sell the number of
Securities that it is obligated to sell hereunder, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections 1, 4, 6, 7 and 8 shall remain
-------- -------
in full force and effect. No action taken pursuant to this Section shall relieve
the Company or the Partnership from liability, if any, in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers at North Tower,
World Financial Center, New York, New York 10281-1201, attention of Syndicate
Operations; notices to the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be directed to the Company at Two Democracy Center, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of A.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and notices to the Selling Shareholders shall be directed to
the Selling Shareholders care of the Company at the foregoing address, attention
of A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
SECTION 13 Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the International Managers, the Company, the Partnership,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers, the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling Shareholders and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the International Managers, the
41
Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the Selling
Shareholders and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any International Manager shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14 GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15 Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
42
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the International Managers,
the Company, the Partnership, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and the
Selling Shareholders in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇ COMMUNICATIONS, INC.
By___________________________
Name:
Title:
▇▇▇▇▇▇ COMMUNICATIONS, L.P.
By___________________________
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By_____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
For himself and as Attorney-in-Fact
acting on behalf of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By___________________________
As Attorney-in-Fact acting on behalf
of the Selling Shareholders named in
Schedule B hereto
43
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By _____________________________
Attorney-in-Fact
For themselves and as Lead Managers of the
other International Managers named
in Schedule A hereto.
44
SCHEDULE A
Number of
Initial
International
Name of International Manager Securities
----------------------------- ----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International..................................
▇▇▇▇▇▇▇ Sachs International...........
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited...................
▇▇▇▇▇▇▇▇▇▇ Securities........................................
Bear, ▇▇▇▇▇▇▇ International Limited..........................
[Other International Underwriters]...........................
--------
Total.....................................................
[CARAT] ========
Sch A-1
SCHEDULE B
Number of Initial Maximum Number of
International International Option
Securities to be Sold Securities to be Sold
-------------------- ---------------------
▇▇▇▇▇▇ Communications, Inc..... -
C.E., LLC...................... -
USN College Marketing, L.P.....
▇▇▇▇▇ ▇▇▇▇▇▇▇.................. -
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇............. -
▇▇▇▇▇▇ ▇▇▇..................... -
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇......... -
▇▇▇▇ ▇▇▇▇▇▇ Bigg............... -
▇▇▇▇ Madoc Hansel.............. -
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ Kitcatt..... -
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇........... -
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.... -
▇▇▇. ▇. ▇▇▇▇▇.................. -
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.............. -
Mrs. B.R. ▇▇▇▇▇▇............... -
▇▇▇. ▇.▇. ▇▇▇▇▇▇............... -
Mrs. C.M. Kitcatt.............. -
▇▇▇▇▇▇▇ ▇▇▇▇ Godwell Boss...... -
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇................ -
ATB 1995 Settlement............ -
▇▇▇. ▇.▇. ▇▇▇▇▇▇ Bigg.......... -
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇............... -
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇............... -
▇. ▇▇▇▇▇ Settlement............ -
3i Group plc................... -
NatWest Ventures Investments
Limited...................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇▇▇.................... -
A. Styler...................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇....................... -
Sch B-1
▇. ▇▇▇▇▇▇▇▇▇................... -
▇. ▇▇▇......................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇........................ -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇...................... -
K. Pembroke.................... -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇........................ -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇▇.................... -
P. Pembroke.................... -
▇. ▇▇▇▇▇▇...................... -
S. Priestnall.................. -
▇. ▇▇▇▇........................ -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇...................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇........................ -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇▇▇▇..................... -
▇. ▇▇▇▇▇▇▇▇▇................... -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇▇▇▇▇.................... -
▇. ▇▇▇▇........................ -
▇. ▇▇▇▇▇....................... -
▇. ▇▇▇▇▇▇▇▇▇................... -
Sch B-2
▇. ▇▇▇▇▇▇▇▇.................... -
▇▇▇▇▇▇ ▇▇▇▇▇................... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇................. -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇............... -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Charitable -
Foundation................... -
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇............... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇...... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Interest in -
Possession Trust -1.......... -
Second ▇▇▇▇▇ ▇▇▇▇▇▇▇ Fund...... -
Second ▇▇▇▇▇ ▇▇▇▇▇▇▇ Fund II... -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇........ -
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement -
of 23/6/97................... -
The ▇▇▇▇▇ ▇▇▇▇▇▇▇ No. 2 -
Settlement of 27/6/97........ -
Emmadin Trust.................. -
▇▇▇▇ D'Inverno Settlement...... -
Pearl ▇▇▇▇▇ ▇▇▇▇▇▇............. -
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇............ -
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇............ -
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Settlement.. -
Bounty Group Employee Share -
Scheme Trustee Limited....... -
▇▇▇▇▇▇ ▇▇▇▇▇▇.................. -
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇........ -
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇............. -
Natalie ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇...... -
Lucie ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇......... -
------- -------
Total..........................
======= =======
Sch B-3
SCHEDULE C
▇▇▇▇▇▇ COMMUNICATIONS, INC.
[_] Shares of Common Stock
(Par Value $.001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $[_].
2. The purchase price per share for the International Securities to
be paid by the several International Managers shall be $[_], being an
amount equal to the initial public offering price set forth above less
$[_] per share.
Sch C-1
SCHEDULE ▇
▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇▇▇ Marketing Services, Inc.
▇▇▇▇▇▇ Communications, L.P.
C.E., LLC
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
USN College Marketing, L.P.
MBZ Trust of 1996
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
A. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Sch D-1
Exhibit A-1
FORM OF OPINION OF ▇▇▇▇ [CARAT] ▇▇▇▇▇▇▇ [CARAT] ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the
U.S. Purchase Agreement and the International Purchase Agreement.
3. The Company is in good standing in each jurisdiction that issued a
Company Good Standing Certificate.
4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any,
pursuant to the U.S. Purchase Agreement and the International Purchase
Agreement or pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectuses or pursuant to the exercise of
convertible securities or options referred to in the Prospectuses);
the shares of issued and outstanding capital stock of the Company
outstanding prior to the issuance of the Company Shares have been duly
authorized and validly issued and are fully paid and non-assessable
and no holder of the Company Shares is or will be subject to personal
liability by reason of being such a holder; the Company Shares have
been duly authorized and, when issued and delivered to the U.S.
Underwriters and the International Managers in accordance with the
terms of the U.S. Purchase Agreement and the International Purchase
Agreement, will be validly issued, fully paid and nonassessable; and
none of the outstanding shares of capital stock of the Company was
issued in violation of any preemptive rights under the General
Corporation Law of the State of Delaware.
5. To our knowledge, when issued and delivered to the U.S. Underwriters
and the International Managers against payment therefor in accordance
with the
A-1-1
terms of the U.S. Purchase Agreement and the International Purchase
Agreement, the issuance and sale of the Company Shares by the Company
will not be subject to any preemptive or other similar contractual
rights that would entitle any person to acquire any of the Company
Shares upon the issuance and sale by the Company.
6. Each Subsidiary is validly existing as a corporation or partnership,
as the case may be, in good standing under the laws of the
jurisdiction of incorporation, has corporate or partnership, as the
case may be, power and authority to own, lease and operate its
properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation or
partnership, as the case may be, to transact business and is in good
standing in each jurisdiction that issued a Subsidiary Good Standing
Certificate.
7. All of the issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and non-
assessable and, based upon our review of the capital stock records of
the Subsidiaries, is owned by the Company directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. All of the partnership
interests are authorized under the Partnership Agreement and, based
upon our review of the Partnership's records, are owned by ▇▇▇▇▇▇
Marketing Services, Inc. as the corporate general partner and by the
Company as the sole limited partner, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity. None
of the outstanding shares of capital stock of any Subsidiary was
issued in violation of the preemptive or similar rights of any
securityholder of such subsidiary.
8. The U.S. Purchase Agreement and the International Purchase Agreement
have been duly authorized, executed and delivered by the Company and
the Partnership. The performance by the Company and the Partnership of
their respective obligations under the U.S. Purchase Agreement and the
International Purchase Agreement and the consummation of the
transactions contemplated therein and compliance by the Company and
the Partnership with their obligations under the U.S. Purchase
Agreement and the International Purchase Agreement have been duly
authorized by the Company and the Partnership, respectively.
9. The Registration Statement was declared effective under the 1933 Act
on September [CARAT][ ], 1997, the U.S. Prospectus was filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations on
September [CARAT][ ],
A-1-2
1997 and, to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for
that purpose is pending or threatened by the Commission.
10. The Registration Statement and the Prospectuses as of their respective
effective or issue dates (except for the financial statements and the
notes thereto and the supporting schedules and other financial data
included therein, as to which we express no opinion) comply as to form
in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations.
11. The form of certificate used to evidence the Common Stock complies in
all material respects with the requirements of the General Corporation
Law of the State of Delaware, any applicable requirements of the
Certificate of Incorporation and Bylaws of the Company and the
requirements of the New York Stock Exchange.
12. To our knowledge, except as set forth in the Prospectuses, there is
not pending any action, suit, proceeding, inquiry or investigation to
which the Company or any subsidiary is a party, or to which the
property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or
foreign which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably be expected to materially
and adversely affect the properties or assets of the Company and its
subsidiaries considered as one enterprise, or the consummation of the
transactions contemplated in the U.S. Purchase Agreement and the
International Purchase Agreement or the Exchange Agreement or the
performance by the Company or the Partnership of their respective
obligations thereunder.
13. The information in the Prospectuses under "Risk Factors - Government
Regulation," "Risk Factors - Shares Eligible For Future Sale, STRYPES
Offering and Registration Rights," "Risk Factors - Effect of Certain
Charter and Bylaw Provisions," "Business - Government Regulation,"
"Business -Properties," "Business - Legal Proceedings," "Description
of Capital Stock," "Shares Eligible for Future Resale," and
"Considerations for Non-United States Holders" and in the Registration
Statement under Item 14 and Item 15, to the extent that it describes
matters of law, summaries of legal matters, the Company's Certificate
of Incorporation or Bylaws, or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material
respects.
A-1-3
14. To our knowledge, there are no statutes or regulations that are
required to be described in the Prospectuses that are not described as
required.
15. The descriptions in the Prospectuses of contracts and other legal
documents to which the Company or any subsidiary is a party are
accurate in all material respects. To our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in
the Prospectuses or to be filed as exhibits thereto other than those
described or referred to in the Prospectuses or filed as exhibits to
the Registration Statement, and the descriptions thereof or references
thereto are accurate in all material respects.
16. To our knowledge, neither the Company nor any Subsidiary is in
violation of its charter or bylaws, and the Partnership is not in
violation of its Partnership Agreement, and no default by the Company
or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectuses or filed as an exhibit to
the Registration Statement.
17. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any domestic court or
governmental authority or agency (other than under the 1933 Act and
the 1933 Act Regulations and the Securities Exchange Act of 1934,
which have been obtained, or as may be required under the securities
or blue sky laws of the various states, as to which we express no
opinion) is necessary or required in connection with the due
authorization, execution and delivery of the U.S. Purchase Agreement
and the International Purchase Agreement by the Company and the
Partnership, or for the offering, issuance, sale or delivery by the
Company of the Company Shares to the U.S. Underwriters and the
International Managers in accordance with the U.S. Purchase Agreement
and the International Purchase Agreement.
18. The execution, delivery and performance of the U.S. Purchase Agreement
and the International Purchase Agreement by the Company and the
Partnership, and the consummation of the transactions contemplated
therein by the Company and the Partnership, and the compliance by the
Company and the Partnership with their respective obligations under
the U.S. Purchase Agreement and the International Purchase Agreement,
do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict
A-1-4
with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(x) of the Purchase Agreements) under or, to
our knowledge, result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any Subsidiary under any indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their properties is
or may be bound, or to which any of them or their properties may be
subject, that is filed as an exhibit to the Registration Statement or
which is otherwise known to us, except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a
Material Adverse Effect, nor will such action result in any violation
of the provisions of the charter or bylaws or Partnership Agreement,
as the case may be, of the Company or any Subsidiary or any applicable
law, statute, rule, regulation (other than the blue sky or securities
laws or regulations of the various states, as to which we express no
opinion), judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties, assets or operations.
19. To our knowledge, other than as described in the Prospectuses, there
are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the 1933 Act (other than
rights which have been waived or satisfied).
20. The Company is not and, immediately after receiving the proceeds from
the sale of the Company Shares, will not be an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇ the primary purpose of our professional engagement was not to
establish or confirm factual matters or financial or accounting matters and
because of the wholly or partially non-legal character of many of the statements
contained in the Registration Statement or the Prospectuses, we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectuses and we make no representation that we have independently verified
the accuracy, completeness or fairness of such statements. Without limiting the
foregoing, we assume no responsibility for, and have not independently verified,
the accuracy, completeness or fairness of the financial statements and the notes
thereto and the schedules and other financial data included in the Registration
Statement and we have not examined the accounting or financial records from
which such financial statements, notes, schedules and data are derived.
However, on the basis of our participation, as counsel to the Company,
with representatives of the Company and its subsidiaries in the preparation of
the Registration Statement and the Prospectuses, and our participation with
representatives of the Company, its independent public accountants and the
Underwriters at meetings in which the contents of the Registration Statement and
the Prospectuses and related matters were discussed and the examination by us of
such corporate records, statutes, documents and questions of law as we deemed
necessary, but without independent verification by us of the accuracy,
completeness and fairness of the statements contained in the Registration
Statement and the Prospectuses, and without commenting as to the financial
statements and the notes thereto and the schedules and other financial data
included therein, nothing has come to our attention that would lead us to
believe that the Registration Statement, at the time it became effective under
the Securities Act, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectuses, or any amendment or
supplement thereto (except for the financial statements and the notes thereto
and the schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), as of its date and as of the
Closing Time, contained or contains any untrue statement of material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
A-2-1
Exhibit B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
1. No filing with, or consent, approval, authorization, license, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign [CARAT], other than the issuance
of the order of the Commission declaring the Registration Statement
effective and such authorizations, approvals or consents as may be
necessary under state securities laws [CARAT] (as to which we need to
express no opinion), is necessary or required to be obtained by the Selling
Shareholders for the performance by each Selling Shareholder of its
obligations under the U.S. Purchase Agreement and the International
Purchase Agreement or in the Custody Agreement and Power of Attorney, or in
connection with the offer, sale or delivery of the Securities.
2. Each Custody Agreement and Power of Attorney has been duly executed and
delivered by the respective Selling Shareholder named therein and
constitutes the legal, valid and binding agreement of such Selling
Shareholder, enforceable in accordance with its terms, subject to the
qualification that the enforceability of such Selling Shareholders'
obligations under the Custody Agreement and Power of Attorney may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights
generally, and by general equitable principles (whether applied by a court
of law or equity).
3. The U.S. Purchase Agreement and the International Purchase Agreement have
been duly authorized, executed and delivered by or on behalf of each
Selling Shareholder.
4. American Stock Transfer & Trust Company has been duly authorized by the
Selling Shareholders to deliver the Securities on behalf of the Selling
Shareholders in accordance with the terms of the U.S. Purchase Agreement
and the International Purchase Agreement and the Custody Agreement and
Power of Attorney.
5. The execution, delivery and performance of the U.S. Purchase Agreement, the
International Purchase Agreement and the Custody Agreement and Power of
Attorney and the sale and delivery of the Securities and the consummation
of the transactions contemplated in the U.S. Purchase Agreement and the
International
B-1
Purchase Agreement and in the Registration Statement and compliance by the
Selling Shareholders with their obligations under the U.S. Purchase
Agreement and the International Purchase Agreement have been duly
authorized by all necessary action on the part of such Selling Shareholders
and, to the best of our knowledge, (i) do not and will not, whether with or
without the giving of notice or passage of time or both, result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Shareholder nor (ii) will such action
result in any violation of the provisions of the charter or by-laws of the
Selling Shareholders, if applicable, or any law, administrative regulation,
judgment or order of any governmental agency or body or any administrative
or court decree having jurisdiction over such Selling Shareholder or any of
its properties.
6. [CARAT] Each Selling Shareholder is the sole registered owner of the
Securities to be sold by such Selling Shareholder pursuant to the U.S.
Purchase Agreement and the International Purchase Agreement [CARAT] and has
full right, power and authority to sell, transfer and deliver such
Securities pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement. Upon delivery of such Securities, such Selling
Shareholder will transfer to the Underwriters who have purchased such
Securities pursuant to the U.S. Purchase Agreement and the International
Purchase Agreement (without notice of any adverse claim of such Selling
Shareholder and who are otherwise bona fide purchasers for purposes of the
Uniform Commercial Code) good and valid title to such Securities, free and
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind.
B-2
Exhibit C
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER
SHAREHOLDERS PURSUANT TO SECTION 5(k)
September [ ], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
as Lead Managers of the several
International Managers to be named in the
within-mentioned International Purchase Agreement
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Proposed Public Offering by ▇▇▇▇▇▇ Communications, Inc.
-------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of ▇▇▇▇▇▇
Communications, Inc., a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ International ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ International,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited, ▇▇▇▇▇▇▇▇▇▇ Securities and Bear,
▇▇▇▇▇▇▇ International Limited propose to enter into an International Purchase
Agreement (the "International Purchase Agreement") with the Company and the
other parties named therein providing for the public offering of shares (the
"Securities") of the Company's common stock, par value $.001 per share (the
"Common Stock"). In recognition of the benefit that such an offering will confer
upon the undersigned as a stockholder [and an officer and/or director]* of the
Company, and
____________________
* Delete or revise bracketed language as appropriate.
C-1
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the International Purchase Agreement that, during a period of 90 days
from the date of the International Purchase Agreement, the undersigned will not,
without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
[Notwithstanding the foregoing, the undersigned may, at any time after 30
days from the date of the Closing Time (as defined in the International Purchase
Agreement), pledge as security for borrowed money [up to 50% of]* the shares
of Common Stock then owned by the undersigned to any commercial banking
institution that is a member of the Federal Reserve System or any institutional
lender that makes loans secured by margin securities in the ordinary course of
business having combined capital and surplus in excess of $500,000,000 (a
"Pledgee") as long as such Pledgee shall have agreed in writing to be bound by
the obligations and restrictions applicable to the Common Stock under Section
1(c) of the
____________________
* Include in the case of lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
C-2
International Purchase Agreement and the Lead Managers shall have received an
agreement substantially in the form of Exhibit D to the International Purchase
Agreement signed by such Pledgee.]*
Very truly yours,
Signature:_____________________________
Print Name:____________________________
____________________
* Include in the case of lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and USN College Marketing, L.P. or its partners.
C-3
Exhibit D
FORM OF LOCK-UP FROM PLEDGEE PURSUANT TO SECTION 1(c)
[month and day], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
▇▇▇▇▇▇▇ SACHS INTERNATIONAL
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INTERNATIONAL LIMITED
▇▇▇▇▇▇▇▇▇▇ SECURITIES
BEAR, ▇▇▇▇▇▇▇ INTERNATIONAL LIMITED
as Lead Managers of the several
International Managers named in the
within-mentioned International Purchase Agreement
c/o Merrill ▇▇▇▇▇ International
Ropemaker Place
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Re: Public Offering by ▇▇▇▇▇▇ Communications, Inc.
----------------------------------------------
Dear Sirs:
The undersigned, a pledgee of shares (the "Pledged Shares") of Common
Stock, par value $.001 per share, of ▇▇▇▇▇▇ Communications, Inc., a Delaware
corporation (the "Company"), understands that ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ International, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
International Limited, ▇▇▇▇▇▇▇▇▇▇ Securities and Bear, ▇▇▇▇▇▇▇ International
Limited have entered into an International Purchase Agreement, dated September [
], 1997 (the "International Purchase Agreement"), with the Company and the other
parties named therein providing for the public offering of shares of the
Company's Common Stock. For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter named in the International Purchase Agreement that, during a period
of 90 days from the date of the International Purchase Agreement, the
undersigned will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
-
option or contract to purchase, purchase any option or contract to sell, grant
any
D-1
option, right or warrant for the sale of, or otherwise dispose of or
transfer any Pledged Shares or any securities convertible into or exchangeable
or exercisable for any Pledged Shares, whether now owned or hereafter acquired
by the undersigned or with respect to which the undersigned has or hereafter
acquires the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or (ii)
--
enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership
of any Pledged Shares, whether any such swap or transaction is to be settled by
delivery of any Pledged Shares or other securities, in cash or otherwise.
Very truly yours,
[name of Pledgee]
By:________________________
Name:
Title:
D-2
________________ COMPARISON OF FOOTNOTES _______________
-FOOTNOTE*-
Delete or revise bracketed language as appropriate.
-FOOTNOTE*-
Include in the case of [CARAT] lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-FOOTNOTE*-
Include in the case of [CARAT] lock-up agreement of C.E., LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and USN College Marketing, L.P. or its partners
________________ COMPARISON OF HEADERS _______________
-HEADER 1-
Draft-- September [CARAT] 13, 1997
________________ COMPARISON OF FOOTERS _______________
-FOOTER 1-
[CARAT] 20438782,02
iv