EXHIBIT 1
8,000,000 AMERICAN DEPOSITARY SHARES
EACH REPRESENTING ONE ORDINARY SHARE
INDEPENDENT ENERGY HOLDINGS plc
UNDERWRITING AGREEMENT
July __, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX RICE & COMPANY L.L.C.
SOUTHCOAST CAPITAL L.L.C.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Independent Energy Holdings plc, an English public limited company (the
"COMPANY"), proposes to sell 8,000,000 American Depositary Shares representing
8,000,000 ordinary shares, nominal value 1 p per share ("ORDINARY SHARES") of
the Company to the several underwriters named in Schedule I hereto (the
"UNDERWRITERS"). The 8,000,000 American Depositary Shares to be sold by the
Company are hereinafter called the "FIRM ADSs" and the 8,000,000 Ordinary Shares
underlying the Firm ADSs are referred to herein as "FIRM SHARES". The Company
also proposes to sell to the several Underwriters not more than an additional
1,200,000 American Depositary Shares (the "ADDITIONAL ADSs") representing an
additional 1,200,000 Ordinary Shares (the "ADDITIONAL SHARES") if requested by
the Underwriters as provided in Section 2 hereof. The Firm ADSs and the
Additional ADSs are hereinafter referred to collectively as the "ADSs". The
Firm Shares and the Additional Shares are hereinafter referred to as the
"SHARES".
The ADSs will be evidenced by American Depositary Receipts (the "ADRs")
issuable in accordance with a Deposit Agreement dated as of April 17, 1998 (the
"DEPOSIT AGREEMENT") among the Company, the Bank of New York, as Depositary (the
"DEPOSITARY") and all holders from time to time of the ADRs. The ADSs will be
issued by the Depositary to the Underwriters upon deposit of the Firm Shares
underlying such ADSs with the Depositary. Unless the context otherwise
requires, references herein to the ADSs shall include the ADRs evidencing the
ADSs.
Section 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form F-1, including a
prospectus, relating to the ADSs. The registration statement, as amended at the
time it became effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Act, is hereinafter referred to as the "REGISTRATION STATEMENT"; and
the prospectus in the form first used to confirm sales of ADSs is hereinafter
referred to as the "PROSPECTUS". If the Company has filed or is required
pursuant to the terms hereof to file a registration statement pursuant to Rule
462(b) under the Act registering additional ADSs (a "RULE 462(b) REGISTRATION
STATEMENT"), then, unless otherwise specified, any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The Company has also prepared and filed with the
Commission in accordance with the provisions of the Act a registration statement
on Form F-6, as amended (the "ADS REGISTRATION STATEMENT") relating to the ADSs.
Unless the context otherwise requires, any reference herein to the "REGISTRATION
STATEMENT" shall include the ADS Registration Statement.
Section 2. Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to sell, and each
Underwriter agrees, severally and not jointly, to purchase from the Company at a
price per ADS of $______ (the "PURCHASE PRICE") the number of Firm ADSs set
forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
the Additional ADSs and the Underwriters shall have the right to purchase,
severally and not jointly, up to 1,200,000 Additional ADSs from the Company at
the Purchase Price. Additional ADSs may be purchased solely for the purpose of
covering over-allotments made in connection with the offering of the Firm ADSs.
The Underwriters may exercise their right to purchase Additional ADSs in whole
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or in part from time to time by giving written notice thereof to the Company
within 30 days after the date of this Agreement. You shall give any such notice
on behalf of the Underwriters and such notice shall specify the aggregate number
of Additional ADSs to be purchased pursuant to such exercise and the date for
payment and delivery thereof, which date shall be a business day (i) no earlier
than two business days after such notice has been given (and, in any event, no
earlier than the Closing Date (as hereinafter defined)) and (ii) no later than
ten business days after such notice has been given. If any Additional ADSs are
to be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Company the number of Additional ADSs (subject to such adjustments to
eliminate fractional shares as you may determine) which bears the same
proportion to the total number of Additional ADSs to be purchased from the
Company as the number of Firm ADSs set forth opposite the name of such
Underwriter in Schedule I bears to the total number of Firm ADSs.
The Company hereby agrees not to (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 Ordinary Shares, ADSs or ADRs or any
securities convertible into or exercisable or exchangeable for Ordinary Shares,
ADSs or ADRs or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Ordinary Share, ADS or ADR (regardless of whether any of the transactions
described in clause (i) or (ii) is to be settled by the delivery of Ordinary
Shares, ADSs or ADRs, or such other securities, in cash or otherwise), except to
the Underwriters pursuant to this Agreement, for a period of 180 days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. Notwithstanding the foregoing, during such
period the Company may issue Ordinary Shares upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof and may
grant stock options to purchase Ordinary Shares to employees and consultants of
the Company and its subsidiaries; provided, however, that such options do not
vest within 180 days after the date of the Prospectus. The Company also agrees
not to file any registration statement with respect to any shares of Ordinary
Shares, ADSs or ADRs or any securities convertible into or exercisable or
exchangeable for Ordinary Shares, ADSs or ADRs for a period of 180 days after
the date of the Prospectus without the prior written consent of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation; provided, however, that the Company
may file and cause to become effective under the Act one or more registration
statements on Form [ ] relating to the offer, sale and delivery of Ordinary
Shares pursuant to stock options or other employee benefit plans. The Company
shall, prior to or concurrently with the execution of this Agreement, deliver an
agreement executed by each of the directors and officers of the Company to the
effect that such person will not, during the period commencing on the date such
person signs such
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agreement and ending 180 days after the date of the Prospectus, without the
prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation,
(A) engage in any of the transactions described in the first sentence of this
paragraph or (B) make any demand for, or exercise any right with respect to, the
registration of any Ordinary Shares, ADSs or ADRs or any securities convertible
into or exercisable or exchangeable for Ordinary Shares, ADSs or ADRs.
Section 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the ADSs as soon after the execution and delivery of this Agreement
as in your judgment is advisable and (ii) initially to offer the ADSs upon the
terms set forth in the Prospectus.
Section 4. Delivery and Payment. Payment for the ADSs shall be made in
U.S. dollars to the Company by wire transfer in same day funds on the Closing
Date or the applicable Option Closing Date, as the case may be, against deposit
of the Ordinary Shares underlying such ADSs with the London office of The Bank
of New York, as custodian for the Depositary (the "CUSTODIAN"), instruction by
the Custodian to the Depositary to issue such ADSs and delivery of ADRs
evidencing all such ADSs. The ADRs shall be in definitive form and shall be in
such names and in such denominations as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation shall request not later than two business days prior to the Closing
Date or the applicable Option Closing Date (as defined below), with any stamp
duty, stamp duty reserve or other transfer or similar taxes payable in
connection with (i) the deposit by the Company of the Shares with the Depositary
or the Custodian against the issuance of ADRs evidencing ADSs and (ii) the sale
and delivery by the Company of the Shares underlying the ADSs to or for the
account of the Underwriters. The certificates for the ADRs will be made
available for inspection and packaging not later than 8:00 A.M., New York City
time, on the business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The time and date of delivery of the ADSs
shall be 8:00 A.M., New York City time, on July __, 1998 or such other time on
the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation and the Company shall agree in writing. The time and date of
delivery and payment for the ADSs are hereinafter referred to as the "CLOSING
DATE." The time and date of delivery and payment for any Additional ADSs to be
purchased by the Underwriters shall be 8:00 A.M., New York City time, on the
date specified in the applicable exercise notice given to you pursuant to
Section 2 hereof or such other time on the same or such other date as Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities Corporation and the Company shall agree in writing.
The time and date of delivery and payment for any Additional ADSs are
hereinafter referred to as an "OPTION CLOSING DATE".
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The documents to be delivered on the Closing Date or any Option Closing
Date on behalf of the parties hereto pursuant to Section 8 of this Agreement
shall be delivered at the offices of Xxxxx Xxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Section 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) of any request by the Commission for amendments
to the Registration Statement or the ADS Registration Statement or
amendments or supplements to the Prospectus or for additional information,
(ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the ADS Registration
Statement or of the suspension of qualification of the ADSs for offering or
sale in any jurisdiction, or the initiation of any proceeding for such
purposes, (iii) when any amendment to the Registration Statement or the ADS
Registration Statement becomes effective, (iv) if the Company is required
to file a Rule 462(b) Registration Statement after the effectiveness of
this Agreement, when the Rule 462(b) Registration Statement has become
effective and (v) of the happening of any event during the period referred
to in Section 5(d) below which makes any statement of a material fact made
in the Registration Statement, the ADS Registration Statement or the
Prospectus untrue or which requires any additions to or changes in the
Registration Statement, the ADS Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you four signed copies of the Registration
Statement and the ADS Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits, and to
furnish to you and each Underwriter designated by you such number of
conformed copies of the Registration Statement and the ADS Registration
Statement as so filed and of each amendment to it, without exhibits, as you
may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be satisfactory to you, and to file the Prospectus in such form with
the Commission within the applicable period specified in Rule 424(b) under
the Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and the ADS Registration
Statement and not to make any amendment or supplement to
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the Prospectus of which you shall not previously have been advised or to
which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your
reasonable request, any amendment to the Registration Statement and the ADS
Registration Statement or amendment or supplement to the Prospectus which
may be necessary or advisable in connection with the distribution of the
ADSs by you, and to use its best efforts to cause any such amendment to the
Registration Statement and the ADS Registration Statement to become
promptly effective.
(d) Promptly after the execution of this Agreement and from time to
time thereafter for such period as in the opinion of counsel for the
Underwriters a prospectus is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish in New York City to
each Underwriter and any dealer as many copies of the Prospectus (and of
any amendment or supplement to the Prospectus) as such Underwriter or
dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare and file with the Commission an appropriate
amendment or supplement to the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not in the light of the
circumstances when it is so delivered, be misleading, or so that the
Prospectus will comply with applicable law, and to furnish to each
Underwriter and to any dealer as many copies thereof as such Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the ADSs, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the ADSs for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such registration or
qualification in effect so long as required for distribution of the ADSs
and to file such consents to service of process or other documents as may
be necessary in order to effect such registration or qualification;
provided, however, that the Company shall not be required in connection
therewith to qualify as a foreign corporation in any jurisdiction in which
it is not now so qualified or to take any action that would subject it to
general
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consent to service of process or taxation other than as to matters and
transactions relating to the Prospectus, the Registration Statement, the
ADS Registration Statement, any preliminary prospectus or the offering or
sale of the ADSs, in any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its stockholders as
soon as practicable an earnings statement covering the twelve-month period
beginning after the effective date of the Registration Statement that shall
satisfy the provisions of Section 11(a) of the Act, and to advise you in
writing when such statement has been so made available.
(h) Prior to the Closing Date or the Option Closing Date, as the
case may be, to make Ordinary Shares available to the Depositary in
accordance with the provisions of the Deposit Agreement, and otherwise to
comply with the Deposit Agreement so that ADRs evidencing ADSs will be
executed (and, if applicable, countersigned) and issued by the Depositary
against receipt of such Ordinary Shares and delivered to the Underwriters
at such Closing Date.
(i) During the period of three years after the date of this
Agreement, to furnish to you as soon as available copies of all reports or
other communications furnished to the record holders of Ordinary Shares or
furnished to or filed with the Commission or any national securities
exchange or trading system on which any class of securities of the Company
is listed (including the Alternative Investment Market of the London Stock
Exchange) and such other publicly available information concerning the
Company and its subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Shares and the ADSs under the Act and all
other fees and expenses in connection with the preparation, printing,
filing and distribution of the Registration Statement (including financial
statements and exhibits), the ADS Registration Statement, any preliminary
prospectus, the Prospectus and all amendments and supplements to any of the
foregoing, including the mailing and delivering of copies thereof to the
Underwriters and dealers in the quantities specified herein, (ii) all costs
and expenses related to the transfer and delivery of the ADSs to the
Underwriters, (iii) all costs of printing or producing this Agreement, the
Deposit Agreement and any other agreements or
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documents in connection with the offering, purchase, sale or delivery of
the ADSs, (iv) all expenses, if any, in connection with the registration or
qualification of the Shares and ADSs for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing
or producing any Preliminary and Supplemental Blue Sky Memoranda in
connection therewith (including the filing fees and fees and disbursements
of counsel for the Underwriters in connection with such registration or
qualification and memoranda relating thereto), (v) the filing fees and
disbursements of counsel for the Underwriters in connection with the review
and clearance of the offering of the ADSs by the National Association of
Securities Dealers, Inc., (vi) all fees and expenses in connection with the
preparation and filing of the registration statement on Form 8-A relating
to the Ordinary Shares and all costs and expenses incident to the listing
of the ADSs on the Nasdaq National Market, (vii) the cost of printing ADR
certificates representing the ADSs, (viii) the costs and charges if any of
depositing Ordinary Shares under the Deposit Agreement against issuance of
ADRs evidencing the ADSs, (ix) the fees and expenses (including fees and
disbursements of counsel), if any, of the Depositary and any custodian
appointed under the Deposit Agreement, (x) the cost and charges of any
transfer agent or registrar, (xi) all stamp duty or stamp duty reserve tax
arising as a result of the deposit of the Shares with the Depositary, (xii)
the costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the offering
of the ADSs, and (xiii) all other costs and expenses incident to the
performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section 5(j). Except as expressly otherwise
provided in this Section 5 or in Section 8 of this Agreement, the
Underwriters shall pay all of their own costs, expenses, fees and taxes
incurred in connection with the offer, sale and delivery of the ADSs,
including the costs and expenses of the Underwriters relating to investor
presentations on the "road show" described in the preceding sentence, the
fees and expenses of their counsel and any advertising expenses incurred by
them; provided, however, that the cost of any aircraft chartered in
connection with the "road show" shall be paid one-half by the Company and
one-half by the Underwriters.
(k) To use its best efforts to list for quotation, subject to
notice of issuance, the ADSs on the Nasdaq National Market and to maintain
the listing of the ADSs on the Nasdaq National Market for a period of three
years after the date of this Agreement.
(l) To use its best efforts to do and perform all things required
or necessary to be done and performed under this Agreement by the Company
prior to the Closing Date or any Option Closing Date, as the
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case may be, and to satisfy all conditions precedent to the delivery of the
ADSs.
(m) To designate CT Corporation Systems, New York, New York, a
Delaware corporation, as the Company's authorized agent for service of
process, upon which process may be served in any action, suit or proceeding
which may be instituted in any state or federal court in the State of New
York by the Underwriters or person controlling the Underwriters asserting a
claim for indemnification or contribution under or pursuant to Section 7
hereof, and the Company will accept the jurisdiction of such court in such
action, and waive, to the fullest extent permitted by applicable law, any
defense based upon lack of personal jurisdiction or venue. A copy of any
such process shall be sent or given to the Company at the address for
notices specified in Section 10 hereof.
Section 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) Each of the Registration Statement and the ADS Registration
Statement has become effective and no stop order suspending the
effectiveness of the Registration Statement or the ADS Registration
Statement is in effect, and no proceedings for such purpose are pending
before or, to the knowledge of the Company, threatened by the Commission.
(b) (i) Each of the Registration Statement and the ADS Registration
Statement, when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) each of the Registration
Statement, the ADS Registration Statement and the Prospectus comply as to
form and, as amended or supplemented, if applicable, will comply as to form
in all material respects with the Act and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations
and warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement, the ADS Registration Statement or
the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein.
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(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did 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, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(d) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a limited company under the laws of
England and Wales, with the corporate power and authority to carry on its
business and to own, lease and operate its properties as described in the
Prospectus and each is duly qualified as a foreign corporation authorized
to do business and is in good standing in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole.
(e) The authorized share capital of the Company conforms as to
legal matters in all material respects to the description thereof set forth
in the Registration Statement and the Prospectus, and all of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, and are fully-paid and not subject to calls
for further funds and are not subject to any pre-emptive or similar rights;
and, except as described in the Prospectus, there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital stock of
the Company or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or option.
(f) The Shares have been duly authorized, and, when delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, will be duly issued and fully paid and not subject to calls for
further funds and will conform in all material respects to the descriptions
thereof in the Prospectus, and the issuance and transfer of such Shares is
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not subject to any preemptive or similar right that has not been duly and
validly waived.
(g) Upon the deposit of the Shares underlying the ADSs with the
Custodian pursuant to the Deposit Agreement against issuance of the ADRs
evidencing the ADSs, all right, title and interest in such Shares, subject
to the Deposit Agreement, will be transferred to the Depositary free and
clear of all liens, encumbrances or claims other than those arising under
applicable securities laws and the Deposit Agreement.
(h) Upon the sale and delivery of the Shares underlying the ADSs to
the Underwriters and payment therefor against deposit thereof with the
Custodian and delivery of ADRs evidencing all such ADSs as contemplated by
this Agreement and the Deposit Agreement, good and valid title to the ADSs
representing such Shares, free and clear of all liens, encumbrances or
claims, will be transferred to the Underwriters; the ADSs to be delivered
hereunder are freely transferable to or for the account of the several
Underwriters; upon delivery by the Depositary of the ADRs evidencing the
ADSs against deposit of the Shares in accordance with the Deposit
Agreement, the ADSs will be duly and validly issued; the ADSs and the ADRs
conform as to legal matters in all material respects to the description
thereof set forth in the Registration Statement and the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in violation
of its respective Memorandum or Articles of Association or in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
or their respective property is bound.
(j) The execution, delivery and performance of this Agreement and
the Deposit Agreement by the Company, the compliance by the Company with
all the provisions hereof and of the Deposit Agreement and the consummation
of the transactions contemplated hereby and thereby will not (i) require
any consent, approval, authorization or other order of, or qualification
with, any court or governmental body or agency (except orders of the
Commission declaring the Registration Statement and the ADS Registration
Statement effective under the Act and such as may be required under the
securities or Blue Sky laws of the various states), (ii) conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the Memorandum or Articles of Association of the
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Company or any of its subsidiaries or any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to the
Company and its subsidiaries, taken as a whole, to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order
or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their respective
property or (iv) result in the suspension, termination or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries
or any other impairment of the rights of the holder of any such
Authorization.
(k) The information underlying the estimates of the net proved
reserves of natural gas of the Company as of March 31, 1998 and the present
value of the future net cash flows therefrom, which was supplied by the
Company to Xxxxxxx, Xxxxx & Associates, independent petroleum consultants,
for purposes of preparing the reserve reports and estimates of the Company
described in the Prospectus, was supplied in accordance with customary
industry practices; Xxxxxxx, Xxxxx & Associates were, as of the date of the
reserve report, and are, as of the date hereof, independent petroleum
consultants with respect to the Company; other than as set forth or
contemplated in the Prospectus, the Company is not aware of any facts or
circumstances that would result in a material adverse change in the
reserves or the present value of future net cash flows therefrom as
described in the Prospectus and as reflected in the reserve report.
(l) There are no legal or governmental proceedings pending or, to
the knowledge of the Company, threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective
property is or could be subject that are required to be described in the
Registration Statement, the ADS Registration Statement or the Prospectus
and are not so described; nor are there any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement, the ADS Registration Statement or the Prospectus or
to be filed as exhibits to the Registration Statement that are not so
described or filed as required.
(m) Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), the protection of human health and
safety, or the U.S. Foreign Corrupt Practices Act, as amended (the "FCPA")
or the rules and regulations promulgated thereunder, except for
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such violations which, singly or in the aggregate, would not have a
material adverse effect on the business, prospects, financial condition or
results of operation of the Company and its subsidiaries, taken as a whole.
(n) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings with and
notices to, all governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, as are necessary to own,
lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to
make any such filing or notice would not, singly or in the aggregate, have
a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and its subsidiaries, taken as a
whole. Each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with all the
terms and conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect thereto;
and no event has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension or
termination of any such Authorization or results or, after notice or lapse
of time or both, would result in any other impairment of the rights of the
holder of any such Authorization; and such Authorizations contain no
restrictions that are burdensome to the Company or any of its subsidiaries;
except where such failure to be valid and in full force and effect or to be
in compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(o) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
(p) This Agreement has been duly authorized, executed and delivered
by the Company.
13
(q) The Deposit Agreement has been duly authorized, and, when
executed and delivered by the Company, will constitute a valid and legally
binding agreement of the Company, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(r) Xxxxxxx Xxxx Xxxxxxx, chartered accountants, are independent
public accountants with respect to the Company and its subsidiaries as
required by the Act.
(s) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company and its subsidiaries on the basis stated
therein at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared
in accordance with generally accepted accounting principles in the United
Kingdom consistently applied and reconciled to the generally accepted
accounting principles in the United States; the supporting schedules, if
any, included in the Registration Statement present fairly in accordance
with generally accepted accounting principles the information required to
be stated therein; and the other financial and statistical information and
data set forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared.
(t) The Company is not and, after giving effect to the offering and
sale of the ADSs and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(u) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares and ADSs registered pursuant to the Registration
Statement.
(v) Since the respective dates as of which information is given in
the Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any
14
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or the results of
operations, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any
of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries has incurred any material liability or obligation, direct or
contingent.
(w) The Company has filed a registration statement pursuant to
Section 12(g) of the Exchange Act to register the ADSs and has filed an
application to list the ADSs on the Nasdaq National Market.
(x) The form of certificate for the Shares conforms to the
requirements of U.K. law and the Memorandum and Articles of Association of
the Company and the ADSs and the ADRs conform to the requirements of the
Deposit Agreement and the Nasdaq National Market.
(y) Other than as set forth or contemplated in the Prospectus, no
ad valorem stamp duty, stamp duty reserve tax or issue, documentary,
certification or other similar tax imposed by any government department or
other taxing authority of or in the United Kingdom is payable in connection
with (A) the deposit with the Depositary or the Custodian of Shares against
the issuance of the ADRs evidencing ADSs in accordance with the Deposit
Agreement, (B) the issue, sale and transfer of the Shares and ADSs to or
for the respective accounts of the Underwriters, in either case in
accordance with the terms of this Agreement or (C) the sale and delivery by
the Underwriters of the Shares and ADSs to the initial purchasers thereof,
in either case in accordance with the terms of this Agreement and in the
manner contemplated in the Prospectus.
(z) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
(aa) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with UK GAAP and
to maintain asset accountability, (iii) access to assets is permitted only
in accordance with management's general or specific authorization and (iv)
the recorded accountability for assets is compared with the existing
15
assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(bb) Neither the Company nor any of its subsidiaries nor any person
acting on its or their behalf has taken, directly or indirectly, any action
which caused or resulted, or was designed or might reasonably be expected
to cause or result in, the stabilization or manipulation of the price of
the Ordinary Shares to facilitate the sale or resale of the Shares or ADSs.
(cc) The Company has no reason to believe that the final phase of
deregulation of the U.K. electricity industry will not take place in
September 1998.
Section 7. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Underwriter, its directors, its officers and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), from and against any and all losses, claims, damages, liabilities and
judgments (including, without limitation, any legal or other expenses incurred
in connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter who failed to deliver a Prospectus (as then
amended or supplemented, provided by the Company to the several Underwriters in
the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages
and liabilities and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured
16
in such Prospectus and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to such Underwriter but only with
reference to information relating to such Underwriter furnished in writing to
the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the
reasonable fees and expenses of such counsel, except as provided below, shall be
at the expense of such Underwriter). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the reasonable fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such counsel shall
have been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party. In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, in the case of parties
indemnified pursuant to Section 7(a), and by the Company, in the case of
17
parties indemnified pursuant to Section 7(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
reimburse the indemnified party in accordance with such request for
reimbursement (other than the payment of amounts being disputed in good faith)
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action 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 the indemnified party.
(d) To the extent the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the ADSs or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the ADSs, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company on the one hand and the Underwriters on the other hand
shall be determined by reference to, among other
18
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the ADSs underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of ADSs purchased by each of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
Section 8. Conditions of Underwriters' Obligations'. The several
obligations of the Underwriters to purchase the ADSs under this Agreement are
subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the
same force and effect as if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not
later than 5:00 P.M., New York City time, on the date of this Agreement or
at such later date and time as you may approve; and no stop order
19
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or
shall be pending before or contemplated by the Commission.
(c) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by Xx. Xxxx Xxxxxx and Xx. Xxxx Xxxxxx, in their
capacities as the Executive Chairman and Managing Director of the Company,
confirming the matters set forth in Sections 6(t), 6(v), 8(a) and 8(b) and
that the Company has complied with all of the agreements and satisfied all
of the conditions herein contained and required to be complied with or
satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement), (i) there shall not have occurred any change or any development
involving a prospective change in the condition, financial or otherwise, or
the earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change
or any development involving a prospective change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 8(d)(i), 8(d)(ii) or 8(d)(iii), in your
judgment, is material and adverse and, in your judgment, makes it
impracticable to market the ADSs on the terms and in the manner
contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, of Masons, English counsel for the Company, to the effect that:
(i) each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a public limited company, in
the case of the Company, and a limited company, in the case of its
subsidiaries, under the laws of England and Wales and has the power
under its Memorandum and Articles of Association to carry on its
business and to own, lease and operate its properties as described in
the Prospectus;
(ii) all the issued shares of the Company have been duly
authorized and validly issued and are fully paid and not subject to
calls for further funds, or subject to any preemptive or similar
rights under the Company's Memorandum or Articles of
20
Association or English Statute, and no partner of Masons has any
actual knowledge of any agreement or contract entered into by the
Company which may subject the issued shares to any such preemptive or
similar rights;
(iii) the Shares have been duly authorized, and, when
delivered to and paid for by the Underwriters, in accordance with the
terms of this Agreement, will be duly issued and fully paid and not
subject to calls for further funds and will conform to the description
thereof in the Prospectus; and the issuance and transfer of such
Shares is not subject to any preemptive or similar right that has not
been duly and validly waived;
(iv) upon the registration in the register of members of the
Company of the Shares underlying the ADSs in the name of the Custodian
pursuant to the Deposit Agreement, all right, title and interest in
such Shares, subject to the Deposit Agreement, will be transferred to
the Depositary free and clear of all liens, encumbrances or claims;
(v) all of the issued shares of each of the Company's
subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, free and
clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature other than security in favor of Barclays Bank
plc and Barclays Commercial Services Ltd. granted by the Company over
its assets;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Deposit Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable in accordance with its
terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally, (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability and (iii) claims may
be barred by relevant limitations relating to effluxion of time or may
be subject to defenses of set off or counterclaim;
(viii) the authorized share capital of the Company conforms
as to legal matters to the description thereof contained in the
Prospectus;
21
(ix) the statements (A) in the Prospectus under the captions
"Description of Share Capital" and "Taxation" in the Prospectus and
identified in the attached extracted sections from the Prospectus and
(B) Item 14 of Part II of the Registration Statement, in each case
insofar as such statements are of English law or the Memorandum and
Articles of Association of the Company, are accurate;
(x) no partner of Masons has actual knowledge of the Company
or any of its subsidiaries being in violation of its respective
Memorandum or Articles of Association, provided such opinion does not
relate to Article 107 of the Articles of Association of the Company
and, Masons has received a certificate from the Company, attached
hereto as Exhibit __, stating that neither the Company nor any of its
subsidiaries is in default in the performance of any agreement that is
filed as an exhibit to the Registration Statement;
(xi) the execution, delivery and performance of this
Agreement and the Deposit Agreement by the Company, the compliance by
the Company with all the provisions hereof and of the Deposit
Agreement and the consummation of the transactions contemplated hereby
and thereby will not (A) require any consent, approval, authorization
or other order of, or qualification with, any U.K. court or
governmental body or agency, (B) conflict with or constitute a breach
of any of the terms or provisions of, or a default under, the
Memorandum or Articles of Association of the Company or any of its
subsidiaries or any agreement that is filed as an exhibit to the
Registration Statement, or (C) violate or conflict with any applicable
law affecting the Company, any of its subsidiaries or their respective
property;
(xii) Masons is not instructed to act in any legal or
governmental proceedings pending or threatened to which the Company or
any of its subsidiaries is or could be a party or to which any of
their respective property is or could be subject which, if determined
adversely to the Company or any such subsidiary could individually or
in the aggregate be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(xiii) in order to ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement and the
Deposit
22
Agreement in England, it is not necessary that any document be filed,
recorded or enrolled with any public authority, governmental agency or
governmental department of England;
(xiv) the Company has the power to submit and has taken all
necessary corporate action to submit, to the non-exclusive
jurisdiction of any United States Federal or state court in the County
of New York, State of New York and to appoint CT Corporation System as
the authorized agent of the Company, in each case with respect to
legal proceedings in the United States; and there is no provision of
English law which would render service of process invalid with respect
to legal proceedings in the United States;
(xv) the Company can xxx and be sued under its own name in
England and Wales;
(xvi) under the laws of England and under current practice
of courts in England, (A) the Underwriters would be permitted to
commence proceedings against the Company in English courts based on
actions under this Agreement, (B) the Depositary would be permitted to
commence proceedings against the Company in English courts based on
actions under the Deposit Agreement, (C) the owners of ADSs issued
under the Deposit Agreement would be permitted to commence proceedings
against the Company in English courts based on actions under the
Deposit Agreement and (D) such courts in England would accept
jurisdiction over any such action or proceedings, subject to any
application being made by the Company to stay proceedings on the
grounds of forum non-conveniens;
(xvii) under the laws of England, the choice of the law of
the State of New York as the law expressed to govern this Agreement
and the Deposit Agreement is valid and binding on the Company and the
courts of England will give effect to each such choice of law upon
proof of the relevant provisions of such foreign laws, subject,
however, to the qualification that foreign laws will not be applied to
the extent contrary to English public policy; any judgment obtained in
a New York court arising out of or based upon this Agreement that is
for a definite sum of money, is given on the merits and is recognized
as final and conclusive would be enforceable against the Company in
the courts of England, provided that: (A) the judgment was not
obtained by fraud, (B) recognition or enforcement of the judgment is
not contrary to
23
English public policy or in breach of the rules of natural justice,
and is not contrary to the provisions of the Protection of Trading
Interests Act 1980, (C) the judgment does not cover matters which
relate to issues raised in proceedings in England or which have
previously been determined by an English court, and (D) the judgment
does not determine the proprietary or possessory rights in immovable
property situated outside the State of New York.
(xviii) except as may be described in the Prospectus under
the heading "Taxation", under the laws of England, cash dividends and
other distributions declared and payable in English sterling may be
converted into any other convertible currency in England and may be
transferred from England, and all such dividends made to holders of
the ADSs who are non-residents of England and not ordinarily resident
in the UK may be made without the necessity of obtaining any consents,
approvals, authorizations, orders or clearances from or registering
with any English governmental agency or body or any stock exchange
authority;
(xix) other than as set forth or contemplated in the
Prospectus, no ad valorem stamp duty, stamp duty reserve tax or issue,
documentary, certification or other similar tax imposed by any
government department or other taxing authority of or in the United
Kingdom is payable in connection with (A) the deposit with the
Depositary or the Custodian of Shares against the issuance of the ADRs
evidencing ADSs in accordance with the Deposit Agreement, (B) the
issue of the ADSs by the Depositary to the Underwriters in accordance
with the terms of this Agreement or (C) the sale by the Underwriters
of the ADSs to the initial purchasers thereof in either case in
accordance with the terms of this Agreement and in the manner
contemplated in the Prospectus;
(xx) the Extraordinary General Meeting of the Company
convened for and held on July 2, 1998 (the "EGM") was duly convened
and held in accordance with all applicable laws, including but not
limited to the provisions of the Memorandum and Articles of
Association of the Company and the Notice convening the EGM and the
accompanying letter to shareholders contained all necessary
information to ensure that the resolutions to be proposed at the EGM
could be proposed, considered and passed at the EGM in accordance with
all applicable laws and the Company's Memorandum and Articles of
Association and such resolutions were in fact so proposed, considered
and passed by the requisite majority of holders of shares in
accordance with the provisions of
24
the Companies Act 1985 (as amended), the Company's Memorandum of
Association and all other applicable laws;
In giving such opinion, such counsel will state that it has not
investigated the laws of any jurisdiction other than England and the
European Union as it applies in the U.K. as they stand and have been
interpreted in published case law of the courts in England and of the
European Union as of the date of such opinion, and that it does not
express or imply an opinion on the laws of any other jurisdiction.
(f) The Underwriters shall have received on the Closing Date an
opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., U.S. counsel for the
Company, dated the Closing Date, substantially in the form attached hereto
as Exhibit __.
(g) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
in such form as is reasonably satisfactory to you.
(h) Xxxxx, Xxxxxx & Xxxxxx, LLP, counsel for the Depositary,
shall have furnished to you their written opinion, dated such Closing
Date, in form and substance satisfactory to you, substantially to the
effect that:
(i) The Deposit Agreement has been duly authorized, executed
and delivered by the Depositary and, assuming due authorization,
execution and delivery by the Company and further assuming that the
Deposit Agreement is a valid and binding agreement of the Company,
constitutes a valid and legally binding obligation of the Depositary;
(ii) Upon the issuance by the Depositary of ADRs evidencing
ADSs against the deposit of the Shares in accordance with the
provisions of the Deposit Agreement (assuming such Ordinary Shares
were, at the time of such deposit, (a) duly authorized and validly
issued, fully paid and non-assessable and (b) registered in compliance
with the Act), such ADRs will be duly and validly issued and will
entitle the holders thereof to the rights specified therein and in the
Deposit Agreement; and
25
(iii) The ADS Registration Statement has been filed on Form
F-6 and has been declared effective under the Act and, to the best of
such counsel's knowledge, no stop order suspending the effectiveness
of the ADS Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and the ADS Registration
Statement, and each amendment as of their respective effective dates,
complied as to form and in all material respects with the requirements
of the Act and the rules and regulations thereunder.
(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from Xxxxxxx Xxxx
Xxxxxxx, chartered public accountants, containing the information and
statements 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 Prospectus.
(j) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and
effect on the Closing Date.
(k) The ADSs shall have been duly listed for quotation, subject to
notice of issuance, on the Nasdaq National Market.
(l) The Depositary shall have furnished or caused to be furnished
to you on the Closing Date evidence satisfactory to you evidencing the
deposit with it of the Ordinary Shares being so deposited against issuance
of ADRs evidencing the ADSs to be delivered by the Company at the Closing
Date, and the execution, countersignature (if applicable), issuance and
delivery of ADRs evidencing such ADSs pursuant to the Deposit Agreement.
(m) The Company shall not have failed on or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by the Company on or prior to the
Closing Date.
(n) Any preemptive or other such rights granted to the Company's
shareholders shall be duly and validly waived by such shareholders in
accordance with all applicable law in order to complete the offering, sale
and delivery of the ADSs contemplated hereby.
26
The several obligations of the Underwriters to purchase any Additional ADSs
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of such Additional
ADSs and other matters related to the issuance of such Additional ADSs.
Section 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
ADSs on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of
Trade, the Nasdaq National Market, The London Stock Exchange or the Alternative
Investment Market of the London Stock Exchange or limitation on prices for
securities or other instruments on any such exchange or trading system, (iii)
the suspension of trading of any securities of the Company on any exchange,
over-the-counter market or trading system, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal, New York State or English authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your opinion has a material
adverse effect on the financial markets in the United States or the United
Kingdom.
If on the Closing Date or on an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase the Firm
ADSs or Additional ADSs, as the case may be, which it has or they have agreed to
purchase hereunder on such date and the aggregate number of Firm ADSs or
Additional ADSs, as the case may be, which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the total number of Firm ADSs or Additional ADSs, as the case may be, to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall
27
be obligated severally, in the proportion which the number of Firm ADSs set
forth opposite its name in Schedule I bears to the total number of Firm ADSs
which all the non-defaulting Underwriters have agreed to purchase, or in such
other proportion as you may specify, to purchase the Firm ADSs or Additional
ADSs, as the case may be, which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no event
shall the number of Firm ADSs or Additional ADSs, as the case may be, which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Firm ADSs or Additional ADSs, as the case may be, without the written consent of
such Underwriter. If on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Firm ADSs and the aggregate number of Firm ADSs with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm ADSs to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Firm ADSs are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. If, on an Option Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional ADSs and the aggregate number of
Additional ADSs with respect to which such default occurs is more than one-tenth
of the aggregate number of Additional ADSs to be purchased on such date, the
non-defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase such Additional ADSs or (ii) purchase not less
than the number of Additional ADSs that such non-defaulting Underwriters would
have been obligated to purchase on such date in the absence of such default. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of any such Underwriter under this
Agreement.
Section 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Independent Energy Holdings plc, Dominion Court, 00 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
Xxxxxxxx X00 0XX and (ii) if to any Underwriter or to you, to you c/x Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
28
force and effect, and will survive delivery of and payment for the ADSs,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the ADSs and payment for them hereunder and (iii) termination of
this Agreement.
If for any reason the ADSs are not delivered by or on behalf of the Company
as provided herein (other than as a result of any termination of this Agreement
pursuant to Section 9), the Company agrees to reimburse the several Underwriters
for all out-of-pocket expenses (including the reasonable fees and disbursements
of counsel) incurred by them. Notwithstanding any termination of this Agreement,
the Company shall be liable for all expenses which it has agreed to pay pursuant
to Section 5(j) hereof. The Company also agrees to reimburse the several
Underwriters, their directors and officers and any persons controlling any of
the Underwriters for any and all reasonable fees and expenses (including,
without limitation, the reasonable fees disbursements of counsel) incurred by
them in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made solely
for the benefit of and shall be binding upon the Company, the Underwriters, the
Underwriters' directors and officers, any controlling persons referred to
herein, the Company's directors and the Company's officers who sign the
Registration Statement and their respective successors and assigns, all as and
to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
Each party to this Agreement hereby irrevocably agrees that any legal suit,
action or proceeding brought by any Underwriter or by any person controlling any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as amended, arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in any state or federal court in the County of New York, the State of
New York, United States of America, and irrevocably waives, to the fullest
extent permitted by law, any objection which such party may now or hereafter
have to the laying of the venue in such courts of any such suit, action or
proceeding, and irrevocably submits to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding. Each party waives any
immunity to jurisdiction to which such party may otherwise be entitled or become
entitled (including immunity to pre-judgment attachment and execution) in any
legal suit, action or proceeding against such party arising out of this
Agreement or the transactions
29
contemplated hereby which is instituted in any state or federal court in the
County of New York, the State of New York, United States of America, or in any
foreign court. To the extent permitted by law, each party hereby waives any
objection to the enforcement by any competent foreign court of any judgment
validly obtained in any such proceeding. Each party hereby designates and
appoints CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, XX 00000 as the
authorized agent of such party (the "Authorized Agent") to accept and
acknowledge on behalf of such party service of any and all process which may be
served in any such suit, action or proceeding in any such court. Such
appointments shall be irrevocable subject to the appointment of a successor
agent in the United States on terms substantially similar to those contained in
this Section 11 as reasonably satisfactory to DLJ. Each party agrees that
service of process upon the Authorized Agent of such party at such address (or
such other address in the United States as the parties may designate by written
notice to the Representatives) and written notice of such service to such party
shall be deemed in every respect effective service of process upon such party.
Each party represents and warrants that the Authorized Agent of such party has
agreed to act as said agent for service of process and agrees to take all action
that may be necessary to continue such appointment (or the appointment of a
successor agent in the United States). Notwithstanding the foregoing, any action
arising out of or based on this Agreement or the transactions contemplated
hereby may be instituted by any Underwriter or by any person controlling any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act in any competent foreign court.
This Agreement shall be governed and construed in accordance with the laws
of the State of New York.
This Agreement may be signed in various counterparts which together shall
constitute one and the same instrument.
30
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
INDEPENDENT ENERGY HOLDINGS plc
By:
---------------------------------
Title:
---------------------------
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX RICE & COMPANY L.L.C.
SOUTHCOAST CAPITAL L.L.C.
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:
----------------------------------------------------
Title:
31
SCHEDULE I
UNDERWRITERS NUMBER OF FIRM ADs
TO BE PURCHASED
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Xxxxxxx Rice & Company L.L.C.
Southcoast Capital L.L.C.
Total
