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United Rentals, Inc.
(A Delaware Corporation)
5,200,000 Shares of Common Stock
U.S. PURCHASE AGREEMENT
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Dated: _______ , 1998
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Table of Contents
Page
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U.S. PURCHASE AGREEMENT.................................................... 1
SECTION 1. Representations and Warranties........................... 3
(a) Representations and Warranties by the Company............ 3
(i) Compliance with Registration Requirements....... 3
(ii) Independent Accountants ..................... 4
(iii) Financial Statements............................ 4
(iv) No Manipulation of Market Prices................ 5
(v) No Material Adverse Change in Business.......... 5
(vi) Good Standing of the Company.................... 5
(vii) Good Standing of Subsidiaries................... 6
(viii) Capitalization .............................. 6
(ix) Authorization of Agreement ..................... 6
(x) Authorization and Description of Securities..... 6
(xi) Absence of Defaults and Conflicts............... 7
(xii) Absence of Labor Dispute........................ 7
(xiii) Absence of Proceedings.......................... 8
(xiv) Accuracy of Representations and Warranties...... 8
(xv) Accuracy of Exhibits ..................... 8
(xvi) Possession of Intellectual Property............. 8
(xvii) Absence of Further Requirements................. 9
(xviii) Possession of Licenses and Permits.............. 9
(xix) Title to Property .............................. 9
(xx) Investment Company Act ..................... 10
(xxi) Environmental Laws.............................. 10
(b) Officer's Certificates................................... 11
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing.......... 11
(a) Initial Securities....................................... 12
(b) Option Securities ....................................... 12
(c) Payment.................................................. 12
(d) Denominations; Registration.............................. 13
SECTION 3. Covenants of the Company................................. 13
(a) Compliance with Securities Regulations and Commission
Requests................................................. 13
(b) Filing of Amendments..................................... 14
(c) Delivery of Registration Statements...................... 14
(d) Delivery of Prospectuses................................. 14
(e) Continued Compliance with Securities Laws................ 14
i
(f) Blue Sky Qualifications.................................. 15
(g) Rule 158................................................. 15
(h) Use of Proceeds ....................................... 15
(i) Listing.................................................. 15
(j) Restriction on Sale of Securities........................ 15
(k) Reporting Requirements................................... 17
SECTION 4. Payment of Expenses...................................... 17
(a) Expenses ................................................ 17
(b) Termination of Agreement................................. 17
SECTION 5. Conditions of U.S. Underwriters' Obligations............. 18
(a) Effectiveness of Registration Statement.................. 18
(b) Opinions of Counsel for Company.......................... 18
(c) Opinion of Counsel for U.S. Underwriters................. 18
(d) Officers' Certificate.................................... 19
(e) Accountant's Comfort Letters............................. 19
(f) Bring-down Comfort Letters............................... 19
(g) Approval of Listing...................................... 19
(h) No Objection............................................. 20
(i) Lock-up Agreements....................................... 20
(j) Purchase of Initial International Securities............. 20
(k) Conditions to Purchase of U.S. Option Securities......... 20
(l) Additional Documents..................................... 21
(m) Termination of Agreement................................. 21
SECTION 6. Indemnification.......................................... 21
(a) Indemnification of U.S. Underwriters..................... 21
(b) Indemnification of Company, Directors and Officers....... 22
(c) Actions against Parties; Notification.................... 23
(d) Settlement without Consent if Failure to Reimburse....... 24
SECTION 7. Contribution............................................. 24
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery................................................. 25
SECTION 9. Termination of Agreement................................. 26
(a) Termination; General..................................... 26
(b) Liabilities.............................................. 26
SECTION 10. Default by One or More of the U.S. Underwriters.......... 26
ii
SECTION 11. Notices................................................. 27
SECTION 12. Parties................................................. 27
SECTION 13. GOVERNING LAW AND TIME.................................. 28
SECTION 14. Effect of Headings...................................... 28
SCHEDULES
Schedule A .............................................. Sch A-1
Schedule B .............................................. Sch B-1
Schedule C .............................................. Sch C-1
EXHIBITS
Exhibit A-1 - Form of Opinion of Company's Counsel................... A-1
Exhibit A-2 - Form of Opinion of Company's Counsel................... A-2
Exhibit B - Form of Lock-up Letter................................... B-1
ANNEX
Annex A - Form of Accountants' Comfort Letter
Pursuant to Section 5(e)....................................... Annex A-1
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United Rentals, Inc.
(a Delaware corporation)
5,200,000 Shares of Common Stock
(Par Value $.01 Per Share)
U.S. PURCHASE AGREEMENT
------------------------
_______ , 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxx Xxxxxx Inc.
as U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
United Rentals, Inc., a Delaware corporation (the "Company"), confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), Deutsche Xxxxxx Xxxxxxxx Inc., Xxxxxxxxx Xxxxxx
& Xxxxxxxx Securities Corporation and Xxxxx Xxxxxx Inc. (collectively, the "U.S.
Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), with respect to the issue and sale
by the Company and the purchase by the U.S. Underwriters, acting severally and
not jointly, of the respective numbers of shares of Common Stock, par value $.01
per share, of the Company ("Common Stock") set forth in Schedule A hereto, and
with respect to the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 780,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 5,200,000 shares of Common Stock (the
"Initial U.S. Securities") to be purchased by the U.S. Underwriters and all or
any part of the 780,000 shares
of Common Stock subject to the option described in Section 2(b) hereof (the
"U.S. Option Securities") are hereinafter called, collectively, the "U.S.
Securities".
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 1,300,000 shares of
Common Stock (the "Initial International Securities") through arrangements with
Xxxxxxx Xxxxx International, Xxxxxxxxx, Lufkin & Xxxxxxxx International, Xxxxxx
Xxxxxxxx & Co. Limited and Xxxxx Xxxxxx Inc. (the "International Managers") and
the grant by the Company to the International Managers, acting severally and not
jointly, of an option to purchase all or any part of the 195,000 additional
shares of Common Stock solely to cover over-allotments, if any (the
"International Option Securities" and, together with the U.S. Option Securities,
the "Option Securities"). The Initial International Securities and the
International Option Securities are hereinafter called the "International
Securities". It is understood that the Company is not obligated to sell and the
U.S. Underwriters are not obligated to purchase, any Initial U.S. Securities
unless all of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters". The Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities". The U.S. Securities and the International Securities are
hereinafter collectively called the "Securities".
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 Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (in
such capacity, the "Global Coordinator").
The Company understands that the U.S. Underwriters propose to make a public
offering of the U.S. Securities as soon as the U.S. Underwriters deem advisable
after this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_____) 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 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 U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International
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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, if any, 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 U.S. Prospectus and Form of International
Prospectus used before such registration statement became effective, and any
prospectus that omitted, if 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,
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 U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated February 17, 1998 and the
preliminary International Prospectus dated February 17, 1998, 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 U.S. Prospectus, the International 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 ("XXXXX").
SECTION 1. Representations and Warranties.
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(a) Representations and Warranties by the Company. The Company
represents and warrants to each U.S. Underwriter as of the date hereof (and
agrees that each such representation and warranty will be deemed to be made by
the Company 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 U.S. Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
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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
3
knowledge of the Company, 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 U.S. 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 (including any prospectus wrapper),
at the time the Prospectuses or any amendments or supplements thereto were
issued and at the Closing Time (and, if any U.S. 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 U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any U.S.
Underwriter expressly for use in the Registration Statement or the U.S.
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 XXXXX, except to the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
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financial statements and supporting schedules of the Company and its
subsidiaries included in the Registration Statement are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. Each of the historical financial
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statements included in the Registration Statement and Prospectus, together
with related schedules and Notes, present fairly (on a consolidated basis
where so indicated) the financial condition of the entity or entities to
which such financial statement purports to relate (the "Reported Entity")
at the date(s) indicated and the statement of operations (or income or
earnings as
4
indicated in the applicable financial statement) and cash flows and (in the
case of a Reported Entity for which a statement of stockholders' equity is
included) stockholders' equity (and partners' capital if so indicated in
the applicable financial statement) of the Reported Entity for the
period(s) specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved (except as otherwise
indicated in such financial statements). Any supporting schedules included
in the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected historical
financial data and the summary historical financial information included in
the Prospectuses present fairly the information shown therein and, in the
case of historical financial data or information of the Company, have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma financial
statements and the related notes thereto 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.
(iv) No Manipulation of Market Prices. The Company has not taken or
--------------------------------
caused to be taken and will not take or cause to be taken, either directly
or indirectly, any action designed to cause or result in, or which action
constitutes or which might reasonably be expected to constitute, the
stabilization or manipulation of the market price of the Common Stock,
including but not limited to those actions prohibited by Section 9(a) of
the 1934 Act, the 1934 Act Regulations and Regulation M promulgated by the
Commission.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
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 to the best knowledge of the Company 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
on any class of its capital stock.
(vi) 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
5
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.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
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Company has been duly organized and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation, has
corporate 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 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; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity (except for any
security interest or pledge contemplated by the Credit Agreement filed as
Exhibit 10(a) to the Registration Statement); 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. The
only subsidiaries of the Company (other than inactive subsidiaries) are the
subsidiaries listed on Exhibit 21 to the Registration Statement.
(viii) Capitalization. The authorized, issued and outstanding
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capital stock of the Company is as set forth in the Prospectuses under
"Description of Capital Stock--General" (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, warrants or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock of the
Company 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 was issued in violation of the preemptive or other similar rights
of any security holder of the Company. All sales of the Company's capital
stock prior to the date hereof were either (1) made pursuant to a
registration statement filed by the Company with the Commission under the
1933 Act or (2) at all relevant times exempt from the registration
requirements of the 1933 Act and in case (1) and (2) duly registered with
or the subject of an available exemption from the registration requirements
of the applicable state securities or blue sky laws.
(ix) Authorization of Agreement. This Agreement and the
--------------------------
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
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(x) Authorization and Description of Securities. The Securities
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to be purchased by the U.S. Underwriters and the International Managers
from the Company have been duly authorized for issuance and sale to the
U.S. Underwriters pursuant to this Agreement and the International Managers
pursuant to the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to this Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth herein and the International 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 security holder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws 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 its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary 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 International Purchase Agreement and
the consummation of the transactions contemplated in this Agreement, the
International 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 with its
obligations under this Agreement and the International Purchase Agreement
have been duly authorized by all necessary corporate 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 of the Company
or any subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality 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.
7
(xii) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiii) 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, 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 consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement or the performance by the Company 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 property 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.
(xiv) Accuracy of Representations and Warranties. To the
------------------------------------------
knowledge of the Company, the representations and warranties made by each
of the Acquired Companies (as defined in the Registration Statement and the
Prospectuses) and the selling stockholders in the respective agreements
pursuant to which the Company acquired the Acquired Companies did not as of
the respective dates thereof contain any inaccuracies that might, singly or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(xv) 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.
(xvi) Possession of Intellectual Property. The Company and its
-----------------------------------
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 other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
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 its subsidiaries therein, and which infringement or
conflict (if the subject of any
8
unfavorable decision, ruling or finding) or invalidity or inadequacy,
singly or in the aggregate, would result in a Material Adverse Effect.
(xvii) 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 for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement and the International Purchase
Agreement or the consummation of the transactions contemplated by this
Agreement and the International Purchase Agreement, except (i) such as have
been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations, the 1934 Act and the rules and regulations of the
Commission under the 1934 Act (the "1934 Act Regulations") and foreign or
state securities or blue sky laws.
(xviii) Possession of Licenses and Permits. The Company and its
----------------------------------
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, except where the
failure to so possess such Government Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its 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, singly or in the aggregate, a
Material Adverse Effect; and neither the Company nor any of its
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.
(xix) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all real property described in the Prospectus
as owned by the Company and its subsidiaries and good title to all other
properties described in the Prospectus as owned by them, in each case, 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 or are not required to be described therein pursuant to
the 1933 Act or the 1933 Act Regulations or (b) do not, singly or in the
aggregate, materially interfere with the use made and proposed to be made
of such property by the Company or any of its 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 any subsidiary 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
9
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, which claim, if upheld, would result in a Material
Adverse Effect.
(xx) 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").
(xxi) Environmental Laws. Except as described in the
------------------
Registration Statement or except as would not, singly or in the aggregate,
result in a Material Adverse Effect or except as would not be required to
be described in the Registration Statement or the Prospectuses pursuant to
the 1933 Act or the 1933 Act Regulations: (A) neither the Company nor any
of its 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) neither the Company nor any of its subsidiaries
is lacking any permits, authorizations and approvals required under any
applicable Environmental Laws or are in violation of the requirements of
such Environmental Laws, (C) there are no pending or to the best knowledge
of the Company, 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 its subsidiaries and (D) to the knowledge of
the Company 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 its subsidiaries
relating to Hazardous Materials or any Environmental Laws.
(xxii) Statistical and Market Data. Nothing has come to the
---------------------------
attention of the Company that has caused the Company to believe that the
statistical and market-related data included in the Prospectus are not
based on or derived from sources that are reliable and accurate in all
material respects.
10
(xxiii) Taxes. The Company and each of its subsidiaries have
-----
filed all necessary federal, state, local and foreign income, payroll,
franchise and other tax returns (after giving effect to extensions) and
have paid all taxes shown as due thereon or with respect to the Company or
any of its properties (except where the failure to so file or pay would
not, singly or in the aggregate, have a Material Adverse Effect), and there
is no tax deficiency that has been, or to the knowledge of the Company is
likely to be, asserted against the Company, any of its subsidiaries or any
of their properties or assets that would result in a Material Adverse
Effect, except for taxes that are being contested in good faith by
appropriate proceedings and with respect to which the Company has
established adequate reserves in accordance with GAAP.
(xxiv) Insurance. Neither the Company nor any subsidiary has
---------
received notice from any insurer providing insurance coverage for the
Company and its subsidiaries or agent of such insurer that capital
improvements or other expenditures will have to be made in order to
continue present insurance coverage, except such as could not reasonably be
expected, singularly or in the aggregate, to have a Material Adverse
Effect.
(xxv) Maintenance of Sufficient Internal Controls. The Company
-------------------------------------------
and its subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(xxvi) Registration Rights. There are no persons with
-------------------
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
(xxvii) Fees. Other than pursuant to this Agreement, the
----
International Purchase Agreement or as described in the Registration
Statement and the Prospectuses, there are no contracts, agreements or
understandings between either the Company or its subsidiaries and any
person that give rise to a valid claim against the Company, any of its
subsidiaries or any of the Underwriters for a brokerage commission,
finder's fee or other like payment relating to the transactions
contemplated hereby.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Global Coordinator, the U.S.
Underwriters or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby.
11
SECTION 2. Sale and Delivery to U.S. Underwriters; 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 agrees to sell to each U.S. Underwriter, severally and not
jointly, and each U.S. Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price per share set forth in Schedule B, the
number of Initial U.S. Securities set forth in Schedule A opposite the name of
such U.S. Underwriter, plus any additional number of Initial U.S. Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(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 Company hereby grants an option to the U.S. Underwriters,
severally and not jointly, to purchase up to an additional 780,000 shares of
Common Stock at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial U.S. Securities but not payable on the U.S. Option
Securities. 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 U.S. Securities upon notice by the Global
Coordinator to the Company setting forth the number of U.S. Option Securities as
to which the several U.S. Underwriters are then exercising the option and the
time and date of payment and delivery for such U.S. Option Securities. Any such
time and date of delivery for the U.S. Option Securities (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be earlier than
three or later than seven full business days after the exercise of said option
or at such earlier time as may be agreed upon by the Global Coordinator and the
Company, 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 U.S. Option Securities,
each of the U.S. Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of U.S. Option Securities then being
purchased which the number of Initial U.S. Securities set forth in Schedule A
opposite the name of such U.S. Underwriter bears to the total number of Initial
U.S. 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
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, 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), 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").
12
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. 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.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the U.S. Underwriters of certificates for the U.S. Securities to be purchased by
them. It is understood that each U.S. Underwriter is authorized, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial U.S. Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Xxxxxxx Xxxxx, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial U.S. Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter 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 U.S. Underwriter from
its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Underwriters 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
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Underwriters 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. The Company covenants with each
------------------------
U.S. Underwriter 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
the Registration Statement or 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
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
13
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 its 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 U.S. Underwriters shall
object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the U.S. Underwriters and counsel for the U.S.
Underwriters, 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 U.S.
Underwriters, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
U.S. Underwriter, without charge, as many copies of each preliminary
prospectus as such U.S. Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
U.S. Prospectus (as amended or supplemented) as such U.S. Underwriter may
reasonably request. The U.S. Prospectus and any amendments or supplements
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, 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 International
14
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 U.S.
Underwriters 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), 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 U.S. Underwriters such
number of copies of such amendment or supplement as the U.S. Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the U.S. Underwriters, 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
a period of not less than one year from the later of the effective date of
the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general 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 a
period of not less than one year from the effective date of the
Registration Statement and any Rule 462(b) Registration Statement.
(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 it 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.
15
(j) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectuses, the Company will not, without the
prior written consent of the Global Coordinator on behalf of the
Underwriters, (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 for the sale of or
otherwise dispose of or transfer any share of Common Stock or any
securities convertible into or exchangeable or exercisable for Common
Stock, whether now owned or hereafter acquired or with respect to which the
power of disposition is acquired, or file any registration statement under
the 1933 Act with respect to any of the foregoing (other than as
contemplated in (E), (F) and (G) below), (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, or (iii) waive any
Stockholder Lock-up Agreement (as such term is defined in the Registration
Statement and the Prospectuses). Clauses (i) and (ii) of the foregoing
sentence shall not limit the Company's ability (A) to sell the Securities
hereunder or under the International Purchase Agreement, (B) to issue
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof and referred to in
the Prospectuses, (C) to grant stock options under the 1997 Stock Option
Plan (as such term is defined in the Registration Statement and the
Prospectuses), (D) to issue shares of Common Stock as consideration for
future acquisitions, provided, however, that the Company may not issue in
excess of 750,000 shares for acquisitions unless the recipients of such
excess shares enter into agreements containing the limitations set forth in
the first sentence of this paragraph with respect to such additional
shares, (E) to file a shelf registration statement pursuant to Rule 415
under the 1933 Act relating to (a) shares of Common Stock outstanding as of
the date of the Prospectuses and (b) shares of Common Stock underlying
warrants or convertible notes outstanding as of the date of the
Prospectuses, provided, however, that no sales of Common Stock may be made
pursuant to such registration statement during the period of 180 days from
the date of the Prospectuses, (F) to file a registration statement under
the 1933 Act with respect to shares of Common Stock or other securities to
be issued after the date hereof as consideration for an acquisition or with
respect to the potential resale of shares issued after the date hereof as
consideration for an acquisition, provided, however, that no sales may be
made pursuant to such registration statement except to the extent permitted
by clause (D) hereof, or (G) file a registration statement under the 1933
Act registering the shares of Common Stock that may be issued pursuant to
options granted or to be granted under the 1997 Stock Option Plan. In
addition to the foregoing, the Company will (i) require any individual who
becomes an officer or director of the Company and purchases shares of
Common Stock of the Company subsequent to the date of the Prospectuses to
enter into a Lock-up Agreement in the form contained in Exhibit B hereto
and (ii) in the event any registration rights are granted by the Company in
regard to shares of Common Stock issuable upon the conversion of any
outstanding securities of the Company (as contemplated in (B) above, and
including, but not limited to, a $300,000 principal amount note issued as
consideration
16
for the acquisition of one of the Initial Acquired Companies), also require
the holders of shares of Common Stock that are the subject of such
registration rights to enter into a Lock-up Agreement in the form of
Exhibit B hereto.
(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.
(l) Compliance with Rule 463. The Company will file with the
Commission such information as may be required pursuant to Rule 463 of the
1933 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay
-------------------
all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, the International Purchase
Agreement, the Intersyndicate Agreement and Agreement Among Managers 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 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 National Association of Securities Dealers,
Inc. (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.
(b) Termination of Agreement. If this Agreement is terminated by the U.S.
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the U.S. Underwriters for all of their
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the U.S. Underwriters,
17
provided however, that any reimbursement by the Company pursuant to this Section
4(b) shall be limited to an aggregate of $500,000.
SECTION 5. Conditions of U.S. Underwriters' Obligations. The
--------------------------------------------
obligations of the several U.S. Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Company of its 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 U.S.
Underwriters. If the Company has elected to rely on Rule 430A,
Prospectuses 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 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) Opinions of Counsel for Company. At Closing Time, the U.S.
Underwriters shall have received the favorable opinions, dated as of
Closing Time, of Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP and Weil, Gotshal
& Xxxxxx LLP, counsel for the Company, in form and substance reasonably
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letters for each of the other U.S. Underwriters
to the effect set forth in Exhibits A-1 and A-2, respectively, hereto and
to such further effect as counsel to the U.S. Underwriters may reasonably
request. In giving such opinions, 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 of the State of Delaware, upon the opinions of counsel reasonably
satisfactory to counsel to the U.S. Underwriters. Such counsel may also
state that, insofar as such opinions involve 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) Opinion of Counsel for U.S. Underwriters. At Closing Time,
the U.S. Underwriters shall have received the favorable opinion, dated as
of Closing Time, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for
the U.S. Underwriters, together with signed or reproduced copies of such
letter for each of the other U.S. Underwriters in form and substance
reasonably satisfactory to the U.S. Underwriters. In
18
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 of the
State of Delaware, upon the opinions of counsel satisfactory to the U.S.
Underwriters. 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.
(d) 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 U.S. Underwriters shall have received a certificate of the Chief
Executive Officer of the Company and of the Chief Financial Officer of the
Company, dated as of Closing Time, 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 has
complied in all material respects 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 proceedings for that purpose
have been instituted or are pending or, to the best knowledge of the
Company, are contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the execution
of this Agreement, the U.S. Underwriters shall have received from Ernst &
Young LLP, Xxxxxxx, Xxxx & Co. PA, KPMG Peat Marwick LLP, Xxxxx Xxxxxxxx,
LLP, KPMG Peat Marwick (Canada) and Xxxxxxxxx, Xxxxxxx & Xxxx, P.C.
letters dated such date, in form and substance satisfactory to the U.S.
Underwriters, together with signed or reproduced copies of such letters for
each of the other U.S. Underwriters, to the effect set forth in Annex A
hereto, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to
the financial statements audited by such accountants and certain financial
information contained in the Registration Statement and the Prospectuses.
(f) Bring-down Comfort Letters. At Closing Time, the U.S.
Underwriters shall have received from Ernst & Young LLP, Xxxxxxx, Xxxx &
Co. PA, KPMG Peat Marwick LLP, Xxxxx Xxxxxxxx, LLP, KPMG Peat Marwick
(Canada) and Xxxxxxxxx, Xxxxxxx & Xxxx, P.C. letters, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letters
furnished pursuant to subsection (e) of this Section 5, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
19
(g) 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.
(h) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the U.S.
Underwriters shall have received an agreement substantially in the form of
Exhibit B hereto signed by each of the persons listed on Schedule C hereto.
(j) Purchase of Initial International Securities. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities under
this Agreement, the International Managers shall have purchased the Initial
International Securities under the International Purchase Agreement.
(k) Conditions to Purchase of U.S. Option Securities. In the
event that the U.S. Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the U.S. Option Securities,
the representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company or any subsidiary
of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the U.S. Underwriters shall
have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the Chief Executive Officer of the Company and of the
Chief Financial Officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinions of
-------------------------------
Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP and Weil, Gotshal & Xxxxxx
LLP, counsel for the Company, in form and substance reasonably
satisfactory to counsel for the U.S. Underwriters, dated such Date of
Delivery, relating to the U.S. Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b) hereof.
(iii) Opinion of Counsel for U.S. Underwriters. The favorable
----------------------------------------
opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP, counsel for the
U.S. Underwriters, dated such Date of Delivery, relating to the U.S.
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(c)
hereof.
20
(iv) Bring-down Comfort Letters. Letters from Ernst & Young LLP,
--------------------------
Xxxxxxx, Xxxx & Co. PA, KPMG Peat Marwick LLP, Xxxxx Xxxxxxxx LLP,
KPMG Peat Marwick (Canada) and Xxxxxxxxx, Xxxxxxx & Xxxx, P.C., in
form and substance satisfactory to the U.S. Underwriters and dated
such Date of Delivery, substantially in the same form and substance as
the letters furnished to the U.S. Underwriters pursuant to Section
5(f) hereof, except that the "specified date" in the letters furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(l) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the U.S. Underwriters shall have been furnished with
such documents and opinions as they may reasonably 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 in connection
with the issuance and sale of the Securities as herein contemplated shall
be reasonably satisfactory in form and substance to the U.S. Underwriters
and counsel for the U.S. Underwriters.
(m) 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 U.S.
Option Securities on a Date of Delivery which is after the Closing Time,
the obligations of the several U.S. Underwriters to purchase the relevant
Option Securities, may be terminated by the U.S. Underwriters 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.
SECTION 6. Indemnification.
---------------
(a) Indemnification of U.S. Underwriters. The Company agrees to indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. Underwriter 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
included in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission
21
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(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Xxxxxxx Xxxxx), 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 this indemnity agreement shall not apply to any loss,
-------- -------
liability, claim, damage or expense 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
U.S. Underwriter 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 U.S. Prospectus
(or any amendment or supplement thereto); provided, further, that the Company
-------- -------
will not be liable to any Underwriter or any person controlling such Underwriter
with respect to any such untrue statement or omission made in any Preliminary
Prospectus that is corrected in the Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage or liability
purchased Securities from such Underwriter but was not sent or given a copy of
the Prospectus (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with Sections 5(d) or 5(e) of this
Agreement.
(b) Indemnification of Company, Directors and Officers. Each U.S.
Underwriter 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 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),
22
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary U.S. prospectus or the U.S. Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
furnished to the Company by such U.S. Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus (or any amendment or supplement thereto).
(c) 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) above,
counsel to the indemnified parties shall (subject to the following sentence) be
selected by Xxxxxxx Xxxxx, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof with counsel satisfactory to such indemnified party;
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
and provided, further, that if the defendants in any such action include both
-------- -------
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. 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; after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable to
such indemnified party under this Section 6 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the U.S. Underwriters in the case of paragraph (a) of this Section
6, representing the indemnified parties under such paragraph (a) who are parties
to such action or actions) or (ii) the indemnifying party
23
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. The indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party.
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
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.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested 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) 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.
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 on the one hand and the U.S. Underwriters 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 on the one hand and of the
U.S. Underwriters 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.
The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
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 U.S.
Securities pursuant to this Agreement (before deducting expenses)
24
received by the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.
The relative fault of the Company on the one hand and the U.S. Underwriters
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 or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission or any violation of the nature referred to in Section
6(a)(ii) hereof.
The Company and the U.S. Underwriters 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 U.S. Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. 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, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any 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 0000 Xxx) 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 a U.S.
Underwriter 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 U.S.
Underwriter, 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 U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
25
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 any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any U.S.
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the U.S. Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The U.S. Underwriters 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 which information is given in the U.S. 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 U.S.
Underwriters, 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 National Association of Securities Dealers,
Inc. 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 U.S. Underwriters. If one or
-----------------------------------------------
more of the U.S. Underwriters 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 U.S. Underwriters shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. Underwriters, 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 U.S.
Underwriters shall not have completed such arrangements within such 24-hour
period, then:
26
(a) if the number of Defaulted Securities does not exceed 10% of
the number of U.S. Securities to be purchased on such date, each of the
non-defaulting U.S. Underwriters 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 U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of U.S. 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 U.S. Underwriters 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 U.S. Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter 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 U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Underwriters 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 "U.S. Underwriter" includes
any person substituted for a U.S. Underwriter under this Section 10.
SECTION 11. 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 U.S.
Underwriters shall be directed to Xxxxxxx Xxxxx at Xxxxx Xxxxx, Xxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, attention of Xxxxxx X. Xxxxxxxx; and
notices to the Company shall be directed to it at Four Xxxxxxxxx Xxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000, attention of Xxxxxxx X. Xxxxxx, with copies to
Xxxxx X. Xxxxxx, 000 Xxxxx Xxxxxx, 00/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
Xxxxxx Xxxxxxxxxx, Xxxxxxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP, 00 Xxxx 00/xx/
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 12. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the U.S. Underwriters and the Company 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 U.S.
Underwriters and the Company 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 U.S. Underwriters
27
and the Company 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 U.S. Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 13. 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 14. 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.
28
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the U.S. Underwriters and the Company in accordance with its terms.
Very truly yours,
UNITED RENTALS, INC.
By
_______________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
DEUTSCHE XXXXXX XXXXXXXX INC.
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXXXX XXXXXX INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By ___________________________________
Authorized Signatory
29
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
------------------- ----------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.................................
Deutsche Xxxxxx Xxxxxxxx Inc...............................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation........
Xxxxx Xxxxxx Inc...........................................
Total...................................................... 5,200,000
==========
Sch A-1
SCHEDULE B
United Rentals, Inc.
5,200,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The 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 Securities to be paid by the
several Underwriters shall be $______ , being an amount equal to the public
offering price set forth above less $_____ per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
SCHEDULE C
List of persons and entities
subject to lock-up
[TO BE INSERTED]
Sch C-1
Exhibit A-1
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
As to various questions of fact material to our opinion, we have relied
upon the certificates of officers and upon certificates of public officials.
With regard to the due incorporation of corporations (other than the Company)
and the good standing of corporations (other than the Company), we have (subject
to the next sentence) relied entirely upon certificates of public officials.
With regard to the tax good standing of certain corporations (other than the
Company), we have relied solely upon a certificate of an officer of such
corporation to the effect that the corporation has filed the most recent annual
report required by the law of such jurisdiction and that all franchise taxes
required to be paid under such law have been paid. We have also examined such
corporate documents and records and other certificates, and have made such
investigations of law, as we have deemed necessary in order to render the
opinion hereinafter set forth. We have assumed the authenticity of all
documents submitted to us as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents submitted to us as copies. We have also assumed that all documents
examined by us have been duly and validly authorized, executed and delivered by
each of the parties thereto other than the Company.
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation 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.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Description of Capital
Stock--General" (except for subsequent issuances, if any, pursuant to the
Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities, warrants or options referred to in the Prospectus);
the shares of issued and outstanding capital stock of the Company have been
A-1-1
duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of the Company was
issued in violation of any preemptive or other similar rights of any
security holder of the Company arising by statute or the Company's
certificate of incorporation or by-laws or, to the best of our knowledge,
any other preemptive or other similar rights of any security holder of the
Company.
(v) The Securities have been duly authorized for issuance and sale to
the Underwriters pursuant to the Purchase Agreement and, when issued and
delivered by the Company pursuant to the Purchase Agreement against payment
of the consideration set forth in the Purchase Agreement, will be validly
issued and fully paid and non-assessable and no holder of the Securities is
or will be subject to personal liability by reason of being such a holder.
(vi) The issuance of the Securities is not subject to preemptive or
other similar rights of any security holder of the Company arising by
statute or the Company's certificate of incorporation or by-laws or, to the
best of our knowledge, any other preemptive or other similar rights of any
security holder of the Company.
(vii) Each subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
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; except as otherwise disclosed in the Registration Statement and
other than as contemplated by the Credit Agreement of the Company filed as
Exhibit 10(a) to the Registration Statement, 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, to the best of our
knowledge, is owned by the Company, directly or through subsidiaries, 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 security holder of such subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration
A-1-2
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or threatened by the
Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, and each amendment or supplement to the
Registration Statement and Prospectus, as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no
opinion) complied as to form in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations.
(xi) If Rule 434 has been relied upon, the Prospectus was not
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
(xii) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the New York Stock Exchange.
(xiii) To the best of our knowledge, there is not pending or
threatened 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
thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xiv) The information in the Prospectus under "Dividend Policy" and
"Description of Capital Stock", "Certain Charter and By-Law Provisions",
and in the Registration Statement under Item 14 and Item 15, insofar as
they purport to constitute a summary of the terms of the Common Stock, the
provisions of the Company's certificate of incorporation or By-laws or
specific provisions of the Delaware General Corporation Law referred to
therein, are accurate summaries in all material respects of such terms or
provisions, as the case may be.
(xv) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws.
(xvi) To the best of our knowledge, neither the Company nor any
subsidiary is in default in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement,
A-1-3
note, lease or other agreement or instrument that is described or referred
to in the Registration Statement or the Prospectus or filed or incorporated
by reference as an exhibit to the Registration Statement which violations
or defaults are required to be described in the prospectus and are not so
described or would, individually or in the aggregate, have a Material
Adverse Effect or effect the validity of the Securities.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and
the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations,
which have been obtained, or as may be required under the securities or
blue sky laws of the various states, as to which we need express no
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering,
issuance or sale of the Securities.
(xviii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of a portion of the net
proceeds from the sale of the Securities to repay outstanding indebtedness
as described in the Prospectus under the caption "Use Of Proceeds") and
compliance by the Company with its obligations under the Purchase Agreement
(A) after reasonable investigation do not and will not, whether with or
without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(x) of the Purchase Agreement) 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 any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to us, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults, Repayment Events
or liens, charges or encumbrances that would not have a Material Adverse
Effect), (B) result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary, or (C) to the best of our
knowledge, result in any violation of the provisions of any applicable law,
statute, rule or regulation of the United States of America or included in
the Delaware General Corporate Law (except we express no opinion as to
"blue sky" laws), 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.
(xix) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
A-1-4
(xx) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
(xxi) We have reviewed the Prospectus and the Registration Statement
and participated in discussions with your representatives and those of the
Company, its accountants and its other counsel. Although we have not
undertaken, except as otherwise indicated in this opinion, to investigate
or verify independently, and do not assume responsibility for, the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, on the basis of the information that we gained in
the course of the performance of such services and our representation of
the Company, we confirm to you that nothing that came to our attention in
the course of such review or representation has caused us to belief that
(i) the Registration Statement or any amendment thereto, including the Rule
430A Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we need make no statement), at
the time such Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and
schedules and other financial data included therein or omitted therefrom,
as to which we need make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was issued
or at the Closing Time, included or includes an untrue statement of a
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 or (ii) that there are any
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto or that any descriptions of or references to any of the
foregoing are not correct in all material respects.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
X-0-0
Xxxxxxx X-0
FORM OF OPINION OF COMPANY'S
COUNSEL TO BE DELIVERED PURSUANT
TO SECTION 5(b)
(i) The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as described in the Prospectuses and to enter into and
perform its obligations under the Purchase Agreements.
(ii) The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses under the caption entitled "Description of
Capital Stock-General" (except for subsequent issuances pursuant to the Purchase
Agreements or pursuant to reservations, agreements, rights, or stock option or
employee benefit plans referred to in the Prospectuses, or pursuant to the
exercise of convertible securities, warrants, rights or options referred to in
the Prospectuses, or pursuant to an adjustment to the amount of the Stock
Consideration (as defined in the Prospectuses)). 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 nonassessable; and none of the outstanding
shares of capital stock of the Company were issued in violation of preemptive
rights pursuant to law or in the Company's certificate of incorporation or by-
laws.
(iii) The Securities have been duly authorized and, when issued
and delivered as contemplated by the Purchase Agreements against payment of the
consideration therefor set forth in the Purchase Agreements, will be validly
issued, fully paid and nonassessable and free of preemptive rights pursuant to
law or in the Company's certificate of incorporation or by laws, and no holder
of the Securities is or will be subject to personal liability solely by reason
of being such a holder.
(iv) The execution, delivery and performance of the Purchase Agreements by
the Company have been duly authorized by all necessary corporate action on the
part of the Company. The Purchase Agreements have been duly and validly executed
and delivered by the Company.
(v) We have been informed that the Registration Statement was declared
effective under the 1933 Act as of ____ a.m./p.m. on __________ , 1998, and to
our knowledge, as of ____ a.m./p.m. on the date hereof, no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and, to our knowledge, no proceedings for that purpose have been instituted
or are pending or threatened by the Commission. The Prospectuses have been
filed with the Commission pursuant to Rule 424(b) under the 1933 Act.
(vi) The Registration Statement and the Prospectuses (except for the
financial statements and the notes thereto and the other financial, statistical
and accounting data included in the Registration Statement or the Prospectuses,
as to which we express no opinion) comply as to
A-2-2
form in all material respects with the requirements of the 1933 Act and the
rules and regulations thereunder.
(vii) The statements contained in the Prospectuses under the
captions "Dividend Policy," "Description of Capital Stock," "Certain Charter and
By-Law Provisions" and "Certain United States Federal Tax Considerations," and
in Part II of the Registration Statement under Item 14 and Item 15, insofar as
they purport to describe the provisions of the documents referred to therein or
matters of federal or Delaware corporate law, constitute a fair summary thereof
in material respects; and all descriptions in the Registration Statement of
contracts or agreements to which the Company or any of its subsidiaries is a
party are accurate in all material respects.
(viii) No consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with the execution and delivery
by the Company of the Purchase Agreements or the consummation by the Company of
the transactions contemplated thereby, except for filings and other actions
required under or pursuant to (i) the 1933 Act and the rules and regulations
promulgated thereunder, which have been made or obtained, and (ii) the 1934 Act
and the rules and regulations promulgated thereunder, any other federal or state
securities or "blue sky" laws, and the rules of the New York Stock Exchange, as
to which we express no opinion.
(ix) The Company is not an "investment company" or an entity
"controlled" by an investment company", as such terms are defined in the 1940
Act.
(x) To our knowledge, there are no persons with registrations
rights or other similar rights to have any securities registered pursuant to the
Registration Statement.
(xi) We have participated in conferences with directors, officers
and other representatives of the Company, representatives of the independent
public accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectuses and related matters
were discussed, and, although we have not independently verified and are not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectuses (except to the extent specified in the foregoing opinions), no
facts have come to our attention which lead us to believe that the Registration
Statement, on the effective date thereof, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements contained therein not misleading or that the
Prospectuses, on the date thereof or on the date hereof, contained or contain an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that we express no view with respect to the
financial statements and related notes, the financial statement schedules and
the other financial, statistical and accounting data included in the
Registration Statement or Prospectuses).
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
A-2-3
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS AND OTHER STOCKHOLDERS
PURSUANT TO SECTION 5(i)
Exhibit B
_______ , 1998
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
Deutsche Xxxxxx Xxxxxxxx Inc.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxxxx Xxxxxx Inc.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Proposed Public Offering by United Rentals, Inc.
------------------------------------------------
Ladies and Gentlemen:
The undersigned, a stockholder and an officer and/or director of United
Rentals, Inc., a Delaware corporation (the "Company"), understands that Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx"), Deutsche Xxxxxx Xxxxxxxx Inc., Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation and Xxxxx Xxxxxx Inc. propose to enter into a Purchase Agreement
(the "Purchase Agreement") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $.01 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 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 Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of Xxxxxxx Xxxxx on behalf of the Underwriters named
in the Purchase Agreement, 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
B-1
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 transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Nothing contained herein limits the ability of the undersigned (i) to
transfer shares of Common Stock in a private placement pursuant to an exemption
from the registration requirements of the 1933 Act or (ii) to pledge shares of
Common Stock as security of indebtedness, provided, however, in either case the
transferee or pledgee agrees to be bound by the limitations contained herein.
Very truly yours,
Signature: _____________________________
Print Name:
B-2
Annex A
FORM OF ACCOUNTANTS' COMFORT LETTER
PURSUANT TO SECTION 5(e)
(i) We are independent public accountants with respect to the
Company/1/ within the meaning of the 1933 Act and the applicable
published 1933 Act Regulations.
(ii) In our opinion, the financial statements audited by us and the
related financial statement schedules included in the Registration
Statement and the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder.
(iii)/2/ On the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a
reading of the unaudited interim financial statements of the Company for
the _____ month periods ended _____________, 1996 and ______________, 1997,
(collectively, the "Quarterly Financials"), a reading of the latest
available unaudited interim financial statements of the Company, a reading
of the minutes of all meetings of the stockholders and directors of the
Company and the _________________ and __________________ Committees of the
Board of Directors of the Company since _____, 1997/3/, inquiries of
certain officials of the Company responsible for financial and accounting
matters, a review of interim financial information in accordance with
standards established by the American Institute of Certified Public
Accountants in Statement on Auditing Standards No. 71, Interim Financial
Information ("SAS 71"), with respect to the Quarterly Financials and such
other inquiries and procedures as may be specified in such letter, nothing
came to our attention that caused us to believe that:
(A) the Quarterly Financials included in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations or any material modifications should be
made to the unaudited financial statements
--------------------
/1/ As used in this Annex A, the "Company" refers to United Rentals, Inc.
or any of its subsidiaries, the respective financial statements of which
have been prepared by the accounting firm rendering the comfort letter.
/2/ Paragraph (iii) should be included for those comfort letters addressing
financial statements that include unaudited interim information.
/3/ Insert date that is one day after the end of the last audit period.
Annex A-1
included in the Registration Statement and the Prospectus for them to
be in conformity with generally accepted accounting principles;
(B) at _______, 199__/4/ and at a specified date not more than
five days/5/ prior to the date of this Agreement, there was any change
in the shareholder's equity of the Company or any decrease in the
assets of the Company or any increase in the liabilities of the
Company in each case as compared with amounts shown in the latest
balance sheet of the Company included in the Registration Statement,
except in each case for changes, decreases or increases that the
Registration Statement discloses have occurred or may occur; or
(C) for the period from _________, 19___ to _________, 19___
and/6/ for the period from _________, 19___ to a specified date not
more than five days prior to the date of this Agreement, there was any
decrease in the cash and cash equivalents, net rental equipment, total
assets, debt or stockholders' equity in each case as compared with the
comparable period in the preceding year, except in each case for any
decreases that the Registration Statement discloses have occurred or
may occur.
(iv) Based upon the procedures set forth in clause (ii) above and
a reading of the Selected Financial Data included in the Registration
Statement and a reading of the financial statements from which such
data were derived, nothing came to our attention that caused us to
believe that the Selected Financial Data included in the Registration
Statement do not comply as to form in all material respects with the
disclosure requirements of Item 301 of Regulation S-K of the 1933 Act,
that the amounts included in the Selected Financial Data are not in
agreement with the corresponding amounts in the audited financial
statements for the respective periods or that the
/4/ Insert the date of most recent balance sheet of the Company, if those
statements are more recent than the unaudited interim financial
statements included in the Registration Statement.
/5/ The specified date should be five calendar days prior to the date of
the Underwriting Agreement.
/6/ Insert dates to describe the period from the date of the most recent
financial statements in the Registration Statement to the date of the
most recent unaudited interim financial statements of the Company, if
those dates are different. Regardless of whether this language is
inserted or not, the period including five days prior to the date of
the Underwriting Agreement should run from the date of the last
financial statement included in the Registration Statement, not from
the later one that is not included in the Registration Statement.
Annex A-2
financial statements not included in the Registration Statement from which
certain of such data were derived are not in conformity with generally
accepted accounting principles.
(v) We have compared the information in the Registration Statement
under selected captions with the disclosure requirements of Regulation S-K
of the 1933 Act and on the basis of limited procedures specified herein
nothing came to our attention that caused us to believe that this
information does not comply as to form in all material respects with the
disclosure requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K.
(vi) Based upon the procedures set forth in clause (iii) above, a
reading of the unaudited financial statements of the Company for the most
recent period that have not been included in the Registration Statement and
a review of such financial statements in accordance with SAS 71, nothing
came to our attention that caused us to believe that the unaudited amounts
for the most recent period do not agree with the amounts set forth in the
unaudited financial statements for those periods or that such unaudited
amounts were not determined on a basis substantially consistent with that
of the corresponding amounts in the audited financial statements.
(vii) We are unable to and do not express any opinion on the Pro
Forma Consolidated Financial Statements (the "Pro Forma Statement")
included in the Registration Statement or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma Statement;
however, for purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) performed an audit of the financial statements to which the
pro forma adjustments were applied;
(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis
for their determination of the pro forma adjustments and whether the
Pro Forma Statement complies as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of Regulation S-
X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma
Statement; and on the basis of such procedures and such other
inquiries and procedures as specified herein, nothing came to our
attention that caused us to believe that (i) the Pro Forma Statement
included in the Registration Statement does not comply as to form in
all material respects with the applicable requirements of Rule 11-02
of Regulation S-X
Annex A-3
or (ii) the pro forma adjustments have not been properly applied to
the historical amounts in the compilation of those statements.
(viii) In addition to the procedures referred to in clause (iii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement, which are specified
herein, and have compared certain of such items with, and have found such
items to be in agreement with, the accounting and financial records of the
Company.
Annex A-4
