EXHIBIT 1.1
Draft--February 7, 1997
[1,878,200 Shares]
CARIBINER INTERNATIONAL, INC.
(a Delaware corporation)
Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
------------------
[Date]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
ALEX. XXXXX & SONS INCORPORATED
XXXXXX XXXX LLC
XXXXXXXX XXXXXXXX & CO. INCORPORATED
as Representatives of the several
Underwriters named in Schedule A hereto
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
Caribiner International, Inc., a Delaware corporation (the
"Company") and the indirect beneficial owner of all of the outstanding capital
stock of Caribiner, Inc., a New York corporation ("Caribiner"), and the selling
stockholders listed on Schedule B hereto (collectively, the "Selling
Stockholders," and each, a "Selling Stockholder"), confirm their respective
agreements with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx"), Xxxx. Xxxxx & Sons Incorporated ("Alex. Xxxxx"), Xxxxxx Xxxx LLC
("Xxxxxx Xxxx"), and Xxxxxxxx Wertheim & Co. Incorporated ("Xxxxxxxx Xxxxxxxx")
and each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10), for whom Xxxxxxx Xxxxx, Xxxx. Xxxxx, Xxxxxx
Xxxx, and Xxxxxxxx Xxxxxxxx are acting as representatives (in such capacity,
Xxxxxxx Xxxxx, Xxxx. Xxxxx, Xxxxxx Xxxx and Xxxxxxxx Xxxxxxxx shall hereinafter
be referred to as the "Representatives"), with respect to (i) the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the number of shares of Common Stock, par value
$.01 per share, of the Company (the "Common Stock") set forth in Schedule B
hereto opposite the name of the Company, (ii) the sale by the Selling
Stockholders and the purchase by the Underwriters, acting severally and not
jointly, of the number of shares of Common Stock set forth in said Schedule B
hereto opposite the name of each Selling Stockholder, and (iii) the grant by the
Company and Xxxxxxx X. Xxxxxxx ("Ingleby") to the Underwriters, acting severally
and not jointly, of the options described in Section 2(b) hereof to purchase all
or any part of the Underwriters' pro rata portion of [81,730] and [200,000]
additional shares of Common Stock from the Company and Ingleby, respectively, to
cover over-allotments, if any. The aforesaid shares of Common Stock (the
"Initial Securities") to be purchased by the Underwriters and all or any part of
the [281,730] shares of Common Stock subject to the options described in Section
2(b) hereof (the "Option Securities") that may be purchased by the Underwriters
are collectively hereinafter called the "Securities."
Prior to the purchase and public offering of the Securities by the
several Underwriters, the Company, the Selling Stockholders and the
Representatives, acting on behalf of the several Underwriters, shall enter into
an agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written telecommunication among the Company, the Selling
Stockholders (or their attorney-in-fact) and the Representatives and shall
specify such applicable information as is indicated in Exhibit A hereto. The
offering of the Securities will be governed by this Agreement, as supplemented
by the Pricing Agreement. From and after the date of the execution and delivery
of the Pricing Agreement (the "Representation Date"), this Agreement shall be
deemed to incorporate the Pricing Agreement.
The Company has filed with the United States Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (No. 333-
18327), including the related preliminary prospectus for the registration of the
Securities under the Securities Act of 1933, as amended (the "1933 Act"), and
has filed such amendments thereto and such amended preliminary prospectuses as
may have been required to the date hereof, and will file such additional
amendments thereto and such amended prospectuses as may hereafter be required.
Such registration statement (as amended, if applicable) at the time it becomes
effective and the prospectus constituting a part thereof (including in each case
the information, if any, deemed to be part thereof pursuant to Rule 430A(b) or
Rule 434(d) of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations")), as from time to time amended or supplemented
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pursuant to the 1933 Act, are hereinafter referred to as the "Registration
Statement" and the "Prospectus", respectively, except that if any revised
prospectus shall be provided to the Underwriters by the Company for use in
connection with the offering of the Securities which differs from the Prospectus
on file at the Commission at the time the Registration Statement becomes
effective (whether or not such revised prospectus is required to be filed by the
Company pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to each such revised prospectus from and after the time
it is first provided to the Underwriters for such use. If the Company files a
registration statement to register a portion of the Securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462(b) Registration Statement"), then any reference to
the "Registration Statement" herein shall be deemed to include both the
registration statement referred to above (No. 333-18327) and the Rule 462(b)
Registration Statement, as each such registration statement may be amended
pursuant to the 1933 Act.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representatives deem advisable after the Registration Statement becomes
effective and the Pricing Agreement has been executed and delivered. The price
per share for the Securities to be purchased by the Underwriters pursuant to
this Agreement will be determined in the manner set forth in the Pricing
Agreement.
SECTION 1. Representations and Warranties. (a) Each of the Company
and Caribiner represents and warrants to each of the Underwriters as of the date
hereof and as of the Representation Date as follows:
(i) At the time the Registration Statement becomes effective and at
the Representation Date, the Registration Statement, including the
information deemed to be part of the Registration Statement at the time of
effectiveness pursuant to Rule 430A(b) or Rule 434, will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations 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, in the light of the circumstances under which
they were made, not misleading. The Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus that has been provided
to the Underwriters by the Company for use in connection with the offering
of the Securities
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that differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, in which case at the time such
prospectus is first provided to the Underwriters for such use) and at
Closing Time (as hereinafter defined) and at each Date of Delivery referred
to in Section 2 hereof, will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and
warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and
in conformity with information furnished to the Company in writing by any
Underwriter through the Representatives expressly for use in the
Registration Statement or the Prospectus (the "Underwriters' Information").
The Company and each of the Selling Stockholders acknowledge for all
purposes under this Agreement that the statements set forth in the first
and second sentences of the last paragraph of text on the cover page of the
Prospectus and the first paragraph of text (but only as it relates to the
Underwriters), the chart following the first paragraph of text, and the
second, third and fifth paragraphs of text appearing under the caption
"Underwriting" in the Prospectus constitute the entirety of the
Underwriters' Information and that the Underwriters shall not be deemed to
have provided any information (and therefore are not responsible for any
statement or omission) pertaining to any arrangement with any party other
than the Underwriters.
(ii) The accountants who certified the financial statements (and
supporting schedules, if any) included in the Registration Statement are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iii) The financial statements, including the notes thereto (and
supporting schedules, if any), included in the Registration Statement and
the Prospectus comply as to form with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations and present
fairly the financial position of the Company and its consolidated
subsidiaries, SCH International Limited ("SCH") and its consolidated
subsidiaries, and Total Audio Video Services ("TAVS") at the dates
indicated and the statements of operations, changes in stockholders' equity
and cash flows of the Company and its consolidated subsidiaries, profit and
loss account and cash flow
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statement of SCH and its consolidated subsidiaries, and statement of
operations and divisional equity and statement of cash flows of TAVS for
the periods specified (subject, in the case of unaudited financial
statements, to customary year-end adjustments); said financial statements,
in the case of the Company and its consolidated subsidiaries, and TAVS,
have been prepared in conformity with accounting principles generally
accepted in the United States ("GAAP") applied on a consistent basis
throughout the periods involved and, in the case of SCH and its
consolidated subsidiaries have been prepared in conformity with accounting
principles generally accepted in the United Kingdom applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus 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) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, (A) there has been no Material Adverse
Effect (as defined in clause (d) of this Section 1), whether or not arising
in the ordinary course of business, (B) there have not been any
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) except as disclosed in the Registration Statement and the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) The Company has been duly incorporated 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 Prospectus and to enter
into and perform its obligations under this Agreement and the Pricing
Agreement; the
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Company is duly qualified as a foreign corporation to transact business and
is in good standing in the State of New York, and the Company is duly
registered or qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such registration
or qualification or good standing is required, whether by reason of the
ownership or leasing of property, the conduct of business or otherwise,
except where the failure to so register or qualify or be in good standing
would not have a Material Adverse Effect.
(vi) Each of Caribiner, Ingleby Holding Corp. ("IHC"), Entertainment
Trademark Consultants, Inc. ("ETC"), Caribiner Holdings (UK) Limited
("CHUK"), SCH, Spectrum Communications Limited ("SCL") and Xxxx Xxxxxxx
Associates ("MWA," and together with Caribiner, IHC, CHUK, SCH and SCL,
the "Material Subsidiaries") has been duly organized and is validly
existing as a corporation or limited liability company, as the case may be,
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 may be described in the Prospectus, and is
duly registered or qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such registration or
qualification or good standing is required, whether by reason of the
ownership or leasing of property, the conduct of business or otherwise,
except where the failure to so register or qualify or be in good standing
would not have a Material Adverse Effect; and all of the issued and
outstanding capital stock or limited liability company interests, as the
case may be, of each of the Material Subsidiaries has been duly authorized
and validly issued, is fully paid and nonassessable and is owned directly
by the Company, except in the case of (i) Caribiner, which is owned by the
-
Company 83% through ETC and IHC and 17% directly, (ii) IHC, which is owned
--
by the Company 7% through ETC and 93% directly, (iii) SCH, which is owned
---
by the Company through CHUK, and (iv) MWA and SCL which are owned by the
--
Company through CHUK and its wholly-owned subsidiary SCH, free and clear of
any security interests, mortgages, pledges, liens, encumbrances, claims or
equities; none of the outstanding shares of capital stock or limited
liability company interests, as the case may be, of any of the Material
Subsidiaries was issued in violation of the preemptive or similar rights,
if any, of any stockholder of any such corporation or limited liability
company, as the case may be, arising by operation of law, under the charter
or by-laws or equivalent organizational documents of any such Material
Subsidiary or under any
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agreement to which the Company or such Material Subsidiary is a party. The
only subsidiaries of the Company are the subsidiaries listed on Schedule D
attached hereto. Except for the shares of capital stock or limited
liability company interests, as the case may be, of each of the
subsidiaries owned by the Company and such subsidiaries, neither the
Company nor any such subsidiary owns any shares of stock or any other
equity securities of any corporation or has any equity interest in any
firm, partnership, association or other entity, except as described in the
Prospectus. None of the subsidiaries of the Company other than the Material
Subsidiaries has assets or liabilities or conducts business, which singly
or in the aggregate are material to the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; and the Company conducts
substantially all of its business and derives substantially all of its
revenue through Caribiner, MWA, and SCL.
(vii) Caribiner has the corporate power and authority to enter into
and perform its obligations under this Agreement.
(viii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any, pursuant to this
Agreement); the shares of issued and outstanding Common Stock, including
the Securities to be purchased by the Underwriters from the Selling
Stockholders, have been duly authorized and validly issued and are fully
paid and nonassessable; none of the outstanding shares of Common Stock was
issued in violation of the preemptive or other similar rights, if any, of
any securityholder of the Company arising by operation of law, under the
charter or by-laws of the Company, or under any agreement to which the
Company or any of its subsidiaries is a party. The Securities to be
purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement, and,
when issued and delivered by the Company pursuant to this Agreement,
against payment of the consideration set forth in the Pricing Agreement,
will be validly issued and fully paid and non-assessable; the Common Stock
of the Company conforms to all statements relating thereto contained in the
Prospectus; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the
Securities being sold by the Company hereunder is not subject to
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preemptive or other similar rights of any securityholder of the Company
arising by operation of law, under the charter and by-laws of the Company
or under any agreement to which the Company or any of its subsidiaries is a
party.
(ix) Neither the Company nor any of its subsidiaries is in violation
of its charter or by-laws, or in default (the term "default", as used in
this Agreement, includes an actual default and an event or circumstance
which with notice or lapse of time or both would constitute a default) in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, license, lease or other instrument or agreement 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 of its subsidiaries is subject, which default could reasonably be
expected to have a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and (in the case of the Company) the Pricing
Agreement, the issuance and delivery by the Company of the Securities and
the consummation of the transactions contemplated herein, therein and in
the Registration Statement, and compliance by the Company and Caribiner
with their obligations hereunder and thereunder (including the use of the
proceeds from the sale of the Securities by the Company as described in the
Prospectus under the caption "Use of Proceeds") have been duly authorized
by all necessary corporate action of the Company and Caribiner and do not
and will not 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 tax, lien, charge or other encumbrances (together,
"Encumbrances") upon the Securities or any revenues, property or assets of
the Company or any of its subsidiaries (including, without limitation,
Caribiner) pursuant to any treaty, law, rule, administrative regulation,
judgment or order of any governmental agency or body or any administrative
or court decree or any contract, indenture, mortgage, loan agreement, note,
license, lease or other instrument or agreement to which the Company or any
of its subsidiaries (including, without limitation, Caribiner) 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 of its subsidiaries (including, without
limitation, Caribiner) is subject, which conflict, breach, default or
Encumbrance could reasonably be expected to have a Material Adverse Effect,
nor will such action result in
8
any violation of the provisions of the instruments providing for the
organization or governance of the Company or any of its Material
Subsidiaries (including, without limitation, Caribiner) or any of their
respective assets or properties or any treaty, law, rule, administrative
regulation, judgment or order of any governmental agency or body or any
administrative or court decree, which violation could reasonably be
expected to have a Material Adverse Effect. 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 of
its subsidiaries.
(x) There is no action, suit, proceeding or rule-making before or by
any court or governmental agency or body in any jurisdiction, now pending,
or, to the knowledge of the Company and Caribiner, threatened, against or
affecting the Company or any of its subsidiaries (including, without
limitation, Caribiner), that is required to be disclosed in the
Registration Statement (other than as may be disclosed therein), or which,
alone or taken together with all such actions, suits, proceedings and rule-
makings, could reasonably be expected to have a Material Adverse Effect or
which could reasonably be expected to materially and adversely affect the
properties or assets thereof or which could reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated by this Agreement, (and in the case of Company) the Pricing
Agreement or the performance by the Company and Caribiner of their
respective obligations hereunder or thereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective properties
or assets is the subject that are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to have a Material Adverse
Effect. There are no contracts, licenses, loan agreements, leases or other
instruments or documents that are required to be described in or filed as
exhibits to the Registration Statement by the 1933 Act or by the 1933 Act
Regulations that have not been described in or filed as exhibits to the
Registration Statement as so required (including filings deemed made by
incorporation by reference).
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(xi) The Company and its subsidiaries own, possess, or are licensed
or otherwise have the full right to use, or can acquire on reasonable
terms, the material trademarks, service marks, trade names, patents, patent
rights, licenses, inventions, copyrights and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) presently employed by them
in connection with the business as now operated by them or reasonably
necessary in order to conduct such business; 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 of the foregoing, or of invalidity or inadequacy, which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or
finding, could reasonably be expected to have a Material Adverse Effect.
(xii) The Company and its subsidiaries possess such licenses,
certificates, authorities, permits, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate regulatory agencies or bodies of each and every applicable
jurisdiction as are necessary to conduct the business as now operated by
them except for such Governmental Licenses the lack of which could not be
reasonably expected to have a Material Adverse Effect; all such
Governmental Licenses are in full force and effect and the Company and its
subsidiaries are in all material respects complying therewith except where
the failure so to comply could not, singly or in the aggregate, be
reasonably expected to have 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
License, which singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could be reasonably expected to have a
Material Adverse Effect.
(xiii) The Company and its subsidiaries are in compliance with all
applicable laws, statutes, ordinances, rules or regulations of any
applicable jurisdiction, the enforcement of which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(xiv) The Company and its subsidiaries have good and marketable
title to all real property and good and valid title to all other property
and assets owned by them free and clear of all mortgages, pledges,
10
Encumbrances and defects, except such as do not, singly or in the
aggregate, materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all properties
(real and personal) and premises held under lease by the Company or its
subsidiaries are held under valid, subsisting and enforceable leases, in
each case free and clear of all Encumbrances and defects, except such
Encumbrances and defects as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to
be made of such properties by the Company or any of its subsidiaries.
(xv) The Company and its subsidiaries have filed all material
federal, state, local and foreign tax returns required to have been filed
by them or appropriate extensions for such filings have been obtained as
required by law, and have paid all taxes required to be paid by any of them
and all assessments, fines, penalties and other governmental charges or
levies made against them, except any such tax, assessment, fine or penalty
as is not yet due or is being contested in good faith and by appropriate
proceedings; and adequate charges, accruals and reserves have been provided
for in the financial statements referred to in Section 1(a)(iii) above in
respect of all material federal, state, local and foreign taxes for all
periods as to which the tax liability of the Company or any of its
subsidiaries has not been finally determined or remains open to examination
by applicable taxing authorities.
(xvi) No labor dispute with any group of employees of the Company or
any of its subsidiaries 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 the principal suppliers,
manufacturers or contractors of the Company or any of its subsidiaries
which could be reasonably expected to have a Material Adverse Effect.
(xvii) No filing with, or consent, approval, authorization, license,
order, registration, qualification or decree of, any governmental
authority, agency or body is necessary or required for the performance by
the Company and Caribiner of their respective obligations hereunder or the
consummation of the transactions contemplated by this Agreement and (in
the case of the Company) the Pricing Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations, and which have
been obtained or made or will have been obtained or
11
made prior to Closing Time and are or will be at Closing Time in full force
and effect or foreign or state securities or Blue Sky laws (as to which no
representation or warranty is made).
(xviii) Except as disclosed in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of,
and no commitments, plans or arrangements to issue, any shares of capital
stock of the Company or any shares of capital stock or limited liability
company interests, as the case may be, of any of its subsidiaries or any
security convertible into or exchangeable for capital stock of the Company
or capital stock or limited liability company interests, as the case may
be, of any of its subsidiaries.
(xix) The Company is not, and upon the issuance and sale by the
Company of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus under the caption
"Use of Proceeds" 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").
(xx) Except as may be described in the Registration Statement, (A)
neither the Company nor any of its subsidiaries is in violation of any
federal, state, local or foreign laws or regulations 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 manu facture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), except such violations as could not, singly or in
the aggregate, be reasonably expected to have a Material Adverse Effect,
and (B) to the best of the Company's knowledge, there are no events or
circumstances that could 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 any Hazardous Materials or the violation of any
Environmental Laws in any jurisdiction, which, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
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(xxi) The Common Stock is listed on the New York Stock Exchange, Inc.
(the "NYSE"). The Company has been advised that the Securities have been
approved for listing on the NYSE, upon official notice of issuance
thereof.
(xxii) The Company and its subsidiaries carry or are entitled to the
benefits of insurance in such amounts and covering such risks as it
reasonably believes are sufficient to cover potential losses or damages,
and all such insurance is in full force and effect.
(xxiii) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
and specific authorizations; (ii) transactions are recorded as necessary to
permit preparations of financial statements in conformity with GAAP and
to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(xxiv) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company
or any of its subsidiaries any brokerage or finder's fee or any other
similar fee, commission or payment as a result of the transactions
contemplated by this Agreement.
(xxv) Neither the Company nor any of its subsidiaries (i) has taken
or will take, directly or indirectly, any action designed to cause or to
result in, or that has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Securities or (ii)
has since the initial filing of the Registration Statement (A) sold, bid
for, purchased or paid anyone any compensation for soliciting purchases of,
the Securities, or (B) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.
(xxvi) Except as described in the Registration Statement and the
Prospectus, no person has registration or similar rights to have any
securities of the Company
13
registered by the Company under the 1933 Act pursuant to the filing of the
Registration Statement or otherwise.
(xxvii) The Company has not distributed and, prior to the later to
occur of (i) the Closing Time and (ii) completion of the distribution of
the Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the Registration
Statement, any preliminary prospectus, the Prospectus or other materials,
if any, permitted by the 1933 Act or by the 1933 Act Regulations and
approved by the Representatives.
(xxviii) The Company has obtained and delivered to the
Representatives the agreements of the persons and entities named in
Schedule C annexed hereto to the effect that each such person or entity, as
the case may be, will not, for a period of 90 days from the date of the
Prospectus and except as otherwise provided therein, without Xxxxxxx
Xxxxx'x prior written consent, directly or indirectly sell, offer or
contract to sell, grant any option for the sale of, or otherwise dispose
of, any shares of capital stock of the Company (including, without
limitation, Common Stock) or any security that represents or is convertible
or exchangeable into or exercisable for or that otherwise represents the
right (contingent or otherwise) to receive capital stock of the Company
(including, without limitation, Common Stock) owned by such person or
entity or with respect to which such person or entity has the power of
disposition, or cause the Company to file a registration statement under
the 1933 Act with respect to any of the foregoing.
(xxix) This Agreement has been, and on the Representation Date the
Pricing Agreement will have been, duly authorized, executed and delivered
by the Company; and this Agreement has been duly authorized, executed and
delivered by Caribiner.
(b) Each Selling Stockholder, severally and not jointly, represents
and warrants to, and agrees with, each Underwriter as of the date hereof and as
of the Representation Date as follows:
(i) All authorizations, approvals and consents necessary for the
execution and delivery by such Selling Stockholder of this Agreement and
the Pricing Agreement, and the sale and delivery of the shares of Common
Stock to be sold by such Selling
14
Stockholder hereunder and thereunder (other than the issuance of the order
of the Commission declaring the Registration Statement effective and such
authorizations, approvals or consents as may be necessary under state
securities or Blue Sky laws or the securities laws of other applicable
jurisdictions), have been obtained and are in full force and effect; and
such Selling Stockholder has the full right, power and authority to enter
into this Agreement and the Pricing Agreement, a Power of Attorney and
Custody Agreement and to sell, transfer and deliver the shares of Common
Stock to be sold by such Selling Stockholder hereunder and thereunder.
(ii) The execution and delivery of this Agreement and the Pricing
Agreement, the sale and delivery of the shares of Common Stock to be sold
by such Selling Stockholder and the consummation by such Selling
Stockholder of the transactions contemplated herein and thereby have been
duly authorized by all necessary action, corporate or otherwise, of such
Selling Stockholder and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of any
Encumbrances upon the shares of Common Stock to be sold by such Selling
Stockholder pursuant to, any contract, indenture, mortgage, loan agreement,
note, license, lease or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder may be bound,
or to which any of the property or assets of such Selling Stockholder is
subject, nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument or constituent
documents of such Selling Stockholder, if any, or any treaty, law,
administrative regulation, judgement or order of any governmental agency or
body or any administrative or court decree applicable to such Selling
Stockholder.
(iii) Such Selling Stockholder has and will have at the Closing Time
referred to in Section 2 hereof good and marketable title to the shares of
Common Stock to be sold by such Selling Stockholder hereunder, free and
clear of any security interest, mortgage, pledge, Encumbrances, claim or
equity other than pursuant to this Agreement; such Selling Stockholder has
full right, power and authority to sell, transfer and deliver the shares of
Common Stock to be sold by such Selling Stockholder under this Agreement;
and upon delivery of such shares of Common Stock and payment of the
purchase price therefor as herein contemplated, each of the Underwriters
will receive good and marketable title to the shares of Common Stock
purchased by it from such Selling Stockholder, free
15
and clear of any security interest, mortgage, pledge, Encumbrances, claim
or equity.
(iv) Certificates in negotiable form for all shares of Common Stock
to be sold by such Selling Stockholder hereunder have been placed in
custody with the Custodian by or for the benefit of such Selling
Stockholder for the purpose of effecting delivery by such Selling
Stockholder hereunder.
(v) Such Selling Stockholder has not taken, and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities.
(vi) No filing with, or consent, approval, authorization, order,
registration, qualification or decree of, any governmental authority or
body is necessary or required under the law of any applicable jurisdiction
for the performance by such Selling Stockholder of its obligations
hereunder or in connection with the issuance and sale of the Securities
hereunder, or the consummation of the transactions contemplated by this
Agreement and the Pricing Agreement, except such as may have previously
been made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or foreign or state securities or Blue Sky laws (as to
which no representation or warranty is made).
(vii) Such Selling Stockholder and its obligations under this
Agreement are subject to civil and commercial law and to suit and neither
it nor any of its properties, assets or revenues has any right of immunity,
from any legal action, suit or proceeding, from the giving of any relief in
any such legal action, suit or proceeding, from setoff or counterclaim,
from the jurisdiction of any court, from service of process, attachment
upon or prior to judgment, or attachment in aid of execution of judgment,
or from execution of a judgment, or other legal process or proceeding for
the giving of any relief or for the enforcement of a judgment, in any
jurisdiction, with respect to its obligations, liabilities or any other
matter under or arising out of or in connection with this Agreement, the
Pricing Agreement and the Power of Attorney and Custody Agreement, and to
the extent that such Selling Stockholder or any of its properties, assets
or revenues may have or may hereafter become entitled to any such right of
immunity in any jurisdiction in which
16
proceedings may at any time be commenced, such Selling Stockholder has
effectively waived such right and consented to such relief and enforcement
pursuant to Section 14 of this Agreement.
(viii) No stamp duty or similar tax or duty is payable by or on
behalf of the Underwriters in connection with the sale and delivery by such
Selling Stockholder of the Securities to be sold by such Selling
Stockholder to the Underwriters as contemplated by this Agreement and the
Pricing Agreement.
(ix) The information furnished by or on behalf of such Selling
Stockholder to the Company in writing expressly for use in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), which consists solely
of the information with respect to such Selling Stockholder set forth in
the table and the footnotes under the caption "Principal and Selling
Stockholders," in the Prospectus and, in the case of Ingleby, also consists
of the information with respect to Ingleby under the captions "Management"
and "Certain Relationships and Related Transactions -- Advances to Xxxxxxx
X. Xxxxxxx" in the Prospectus, does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein in the light of the circumstances under which they
were made, not misleading; and such Selling Stockholder is not prompted to
sell the Securities to be sold by such Selling Stockholder hereunder by any
information concerning the Company or any subsidiary of the Company which
is not set forth in the Prospectus.
(x) During a period of 90 days from the date of the Prospectus, such
Selling Stockholder will not, without the prior written consent of Xxxxxxx
Xxxxx, directly or indirectly, sell, offer or contract to sell, grant any
option for the sale of, or otherwise dispose of, any capital stock of the
Company (including, without limitation, Common Stock) or any security
convertible or exchangeable into, or exercisable for, capital stock of the
Company (including, without limitation, Common Stock) owned by such Selling
Stockholder or with respect to which such Selling Stockholder has the power
of disposition, other than to the Underwriters pursuant to this Agreement,
and will not cause the Company to file a registration statement under the
1933 Act with respect to any of the foregoing.
17
(c) Any certificate signed by any officer of the Company and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by the
Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of any Selling Stockholder as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Stockholder to each Underwriter as to the matters covered thereby.
(d) As used in this Agreement, the term "Material Adverse Effect"
means any material adverse effect on (i) the Company's ability to perform its
obligations under this Agreement and the Pricing Agreement or (ii) the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
SECTION 2. Sale and Delivery to the Underwriters; Closing. (a) On
the basis of the representations and warranties herein contained and subject to
the terms and conditions herein set forth, (1) the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter, severally and
not jointly, agrees to purchase from the Company, at the price per share set
forth in the Pricing Agreement, that portion of the number of Initial Securities
set forth in Schedule B opposite the name of the Company which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
(plus any additional number of Initial Securities which such Underwriter may
become obligated to purchase pursuant to the provisions of Section 10 hereof)
bears to the total number of Initial Securities; and (2) each Selling
Stockholder agrees, severally and not jointly, to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly,
agrees to purchase from each Selling Stockholder, at the price per share set
forth in the Pricing Agreement, that portion of the number of Initial Securities
set forth in Schedule B opposite the name of each Selling Stockholder which the
number of Initial Securities set forth in Schedule A opposite the name of such
Underwriter (plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof) bears to the total number of Initial Securities subject, in
each case, to such adjustments as the Underwriters in their sole discretion
shall make to eliminate any sales or purchases of fractional securities.
18
(i) If the Company and the Selling Stockholders have elected not to
rely upon Rule 430A under the 1933 Act Regulations, the initial public
offering price per share and the purchase price per share to be paid by the
several Underwriters for the Securities have each been determined and set
forth in the Pricing Agreement, dated the date hereof, and an amendment to
the Registration Statement and the Prospectus containing such information
will be filed before the Registration Statement becomes effective.
(ii) If the Company and the Selling Stockholders have elected to rely
upon Rule 430A under the 1933 Act Regulations, the initial public offering
price and the purchase price per share to be paid by the several
Underwriters for the Securities shall be determined by agreement among the
Company, the Selling Stockholders and the Representatives and, when so
determined, shall be set forth in the Pricing Agreement. In the event that
such prices have not been agreed upon and the Pricing Agreement has not
been executed and delivered by all parties thereto by the close of business
on the fourteenth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party to any
other party, unless otherwise agreed to by the Company, the Selling
Stockholders and the Representatives, except that Sections 6 and 7 hereof
shall remain in effect. For purposes of this Agreement, the term "business
day" means a day on which the NYSE is open for business and the trading of
securities thereon is permitted.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and Ingleby hereby grant options to the Underwriters, severally and not
jointly, to purchase up to an additional [81,730] and [200,000] shares,
respectively, of Common Stock at the price per share set forth in the Pricing
Agreement, less 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. The options hereby granted will expire 30 days after the
later of (i) the date the Registration Statement becomes effective, if the
Company and such Selling Stockholders have elected not to rely on Rule 430A
under the 1933 Act Regulations, or (ii) the Representation Date, if the
Company and such Selling Stockholders have elected to rely upon Rule 430A under
the 1933 Act Regulations, 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
19
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
exercising the options and the time and date of payment for and delivery of such
Option Securities. Such time and date of delivery for the Option Securities
(the "Date of Delivery") shall be determined by the Representatives, but shall
not be, unless otherwise agreed upon by the Representatives and the Company,
later than seven full business days after the exercise of said options, and in
no event prior to Closing Time, as hereinafter defined. If the options are
exercised as to all or any portion of the Option Securities, the Company and
Ingleby will sell an aggregate number of Option Securities to each Underwriter,
severally and not jointly, and each Underwriter, severally and not jointly, will
purchase an aggregate number of Option Securities from the Company and Ingleby,
that portion of the total number of Option Securities as to which options are
exercised that the number of Initial Securities set forth in Schedule A opposite
the name of such Underwriter (plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof) bears to the total number of Initial
Securities, subject, in each case, to such adjustments as the Underwriters in
their discretion shall make to eliminate any sales or purchases of fractional
Securities.
(c) Payment of the purchase price for, and delivery of certificates
for, the Initial Securities to be purchased by the Underwriters shall be made at
the offices of Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or at such other place as shall be agreed upon by the Company and the
Representatives, at 9:00 A.M. on the third or fourth business day (as permitted
under Rule 15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act")
(unless postponed in accordance with the provisions of Section 10 hereof)
following the date the Registration Statement becomes effective (or, if the
Company and the Selling Stockholders have elected to rely upon Rule 430A under
the 1933 Act Regulations, the third or fourth business day (as permitted under
Rule 15c6-1 under the 0000 Xxx) after execution of the Pricing Agreement), or
such other time not later than ten business days after such date as shall be
agreed upon by the Company, the Selling Stockholders and the Representatives
(such time and date of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are purchased
by the Underwriters, payment of the purchase price, and delivery of
certificates, for such Option Securities shall be made at the above-mentioned
offices of Debevoise & Xxxxxxxx, or at such other place as shall be agreed upon
by the Company and the Representatives, on the Date of Delivery as specified in
the
20
notice from the Representatives to the Company. Payment for the Initial
Securities shall be made to the Company and the Selling Stockholders by wire
transfer of immediately available funds to bank accounts designated by the
Company and the Selling Stockholders, respectively, in each case against
delivery to the Representatives for the respective accounts of the Underwriters
of certificates for such Initial Securities to be purchased by them hereunder.
Payment for the Option Securities, if any, shall be made to the Company and
Ingleby by wire transfer of immediately available funds to bank accounts
designated by the Company and Ingleby against delivery to the Representatives
for the accounts of the Underwriters of certificates for such Option Securities
to be purchased by them hereunder. Certificates for the Initial Securities and
the Option Securities, if any, shall be in such denominations and registered in
such names as the Representatives may request in writing delivered to the
Company and such Selling Stockholder at least two business days before Closing
Time or the relevant Date of Delivery, as the case may be.
(d) It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, give a receipt for, and
make payment of the purchase price for, the Initial Securities and the Option
Securities which it has agreed to purchase. Xxxxxxx Xxxxx, Xxxx. Xxxxx, Xxxxxx
Xxxx, and Xxxxxxxx Xxxxxxxx, individually and not as Representatives, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose payment has not been received by Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder. The certificates for the Initial
Securities and the Option Securities, if any, will be made available in The City
of New York, New York for examination and packaging by the Representatives not
later than 10:00 A.M. on the last business day prior to Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants. The Company covenants with each Underwriter as
follows:
(a) The Company will use its best efforts to cause the Registration
Statement to become effective (as and when requested by the
Representatives) and, if the Company and the Selling Stockholders elect to
rely upon Rule 430A, and subject to Section 3(b), will comply with the
requirements of Rule 430A, and will notify the Representatives immediately,
and confirm the notice in writing, (i) of the effectiveness of the
Registration
21
Statement or any post-effective amendment thereto or of the filing of any
supplement to the Prospectus or of any amended Prospectus, (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 Prospectus or for additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any order preventing or suspending the use
of any preliminary prospectus, or the initiation of any proceedings for
that purpose and (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or the initiation or threatening of
any proceedings for any such purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order or any order
preventing or suspending the use of any preliminary prospectus or the
Prospectus or suspending such qualification and, in the event of the
issuance of a stop order or any order preventing or suspending the use of
any preliminary prospectus or the Prospectus or suspending such
qualification, to obtain the lifting thereof at the earliest possible
moment.
(b) The Company will give the Representatives notice of its intention
to file or prepare any amendment to the Registration Statement (including
any post-effective amendment) or any amendment or supplement to the
Prospectus (including any revised prospectus that the Company proposes for
use by the Underwriters in connection with the offering of the Securities
which differ from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective, whether or not such revised
prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations), will furnish the Representatives with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Representatives or
counsel for the Underwriters shall reasonably object.
(c) The Company has furnished or will deliver to each of the
Representatives and counsel for the Underwriters without charge manually
executed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and copies of all consents and certificates of
experts) and will
22
also deliver to each of the Representatives as many conformed copies of the
Registration Statement originally filed and of each amendment thereto
(without exhibits) as the Representatives may reasonably request. If
applicable, the copies of the Registration Statement and each amendment
thereto furnished to the 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) The Company will deliver to each Underwriter, without charge, from
time to time until the effective date of the Registration Statement (or, if
the Company and the Selling Stockholders have elected to rely upon Rule
430A, until such time that the Pricing Agreement is executed and
delivered), as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company
will furnish to each Underwriter without charge, by 12:00 p.m. on the day
following the Representation Date and from time to time during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act or the 1934 Act or the respective applicable
rules and regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Company, to amend
the Registration Statement or to amend or supplement the Prospectus in
order to ensure that the Prospectus does not include an untrue statement 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 time to amend or
supplement the Prospectus in order to comply with the 1933 Act and the 1933
Act Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b) hereof, such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus, as the case may be, comply with
such requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.
23
(f) The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as the
Representatives may designate; 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 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
otherwise not 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.
(g) The Company generally will make available to its security holders
as soon as practicable, but not later than 60 days after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering a twelve-month
period beginning not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in said Rule 158)
of the Registration Statement.
(h) If, at the time that the Registration Statement becomes effective,
any information shall have been omitted therefrom in reliance upon Rule
430A or Rule 434 of the 1933 Act Regulations, then immediately following
the execution of the Pricing Agreement, the Company will prepare, and file
with the Commission in accordance with such Rule 430A or Rule 434 and Rule
424(b) of the 1933 Act Regulations, copies of the amended Prospectus, or,
if required by such Rule 430A or Rule 434, a post-effective amendment to
the Registration Statement (including the amended Prospectus), containing
all information so omitted and will use its best efforts to cause any such
post-effective amendment to be declared effective as promptly as
practicable.
(i) The Company will use every reasonable effort to maintain the
listing of the Common Stock on the NYSE and to effect the listing of the
Securities on the NYSE.
(j) During the period of 90 days from the date hereof, the Company
will not, without Xxxxxxx Xxxxx'x prior written consent, directly or
indirectly sell, offer or contract to sell, grant any option (other than
options
24
pursuant to the Company's 1996 Stock Option Plan) for the sale of, or
otherwise dispose of, any Common Stock or any security that represents or
is convertible or exchangeable into or exercisable for or that otherwise
represents the right (contingent or otherwise) to receive capital stock of
the Company (including, without limitation, Common Stock, except for Common
Stock issued pursuant to this Agreement or pursuant to the Company's "Non-
Employee Directors' Stock Plan" (as described in the Prospectus under the
caption "Management - Director Compensation"), or file any registration
statement under the 1933 Act with respect to any of the foregoing (other
than a registration statement (i) on Form S-8 for the shares of Common
Stock reserved for issuance under the Company's 1996 Stock Option Plan, and
(ii) on Form S-3 for up to the [77,256] shares of Common Stock issued in
connection with the acquisition by the Company of Lighthouse, Rome and
Xxxxxxxx (each as defined in the Registration Statement)).
(k) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(l) 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 Sections 13, 14 or 15
of the 1934 Act within the time periods required by the 1934 Act and the
rules and regulations of the Commission under the 1934 Act.
SECTION 4. Payment of Expenses. The Company will pay, or will cause
Caribiner to pay, all expenses incident to the performance of the respective
obligations of the Company and Caribiner under, and the consummation of the
transactions contemplated by, this Agreement, including (i) the printing and
filing of the Registration Statement (including financial statements and
exhibits) as originally filed with the Commission and of each amendment thereto,
(ii) the copying and distribution to the Underwriters of this Agreement, the
Pricing Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale and delivery of
the Securities, (iii) the preparation, issuance and delivery of the certificates
for the Securities to the Underwriters, including any stamp duties, capital
duties and stock or other transfer taxes, if any, payable upon the sale of the
Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters, (iv) the fees and
disbursements of the Company's and Caribiner's
25
counsel, accountants and other advisors, (v) the qualification of the Securities
under state or foreign securities or Blue Sky 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 the
Registration Statement as originally filed and of each amendment thereto, of the
preliminary prospectuses, and of the Prospectus and any amendments or
supplements thereto, (vii) the printing and delivery to the Underwriters of
copies of the Blue Sky Survey, (viii) the filing fees incident to, and the fees
and disbursements of counsel to the Underwriters in connection with, the review
by the NASD of the terms of the sale of the Securities, (ix) the fees and
expenses incurred in connection with listing the Securities on the NYSE, and (x)
the fees and expenses of any registrar or transfer agent. The Company and
Caribiner will indemnify and hold harmless the Underwriters against any expenses
incurred by or on behalf of the Selling Stockholders.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5, Section 9(a)(i) or Section 11 hereof, the
Company shall, and the Company shall cause Caribiner to, reimburse the
Underwriters for all of their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of the Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company, Caribiner and the Selling
Stockholders herein contained, to the performance by the Company, Caribiner and
the Selling Stockholders of their respective obligations hereunder in all
material respects, and to the following further conditions:
(a) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof (and in the case of the Rule 462(b)
Registration Statement, if applicable, not later than 10:00 p.m. on the
date hereof), or with the consent of the Representatives, at a later time
and date, not later, however, than 5:30 P.M. on the first business day
following the date hereof, or at such later time and date as may be
approved by a majority in interest of the Underwriters; and at Closing Time
no stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings
26
therefor initiated or, to the knowledge of the Company, 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 Underwriters. If the Company and the Selling Stockholders
have elected to rely upon Rule 430A or Rule 434 of the 1933 Act
Regulations, the price of the Securities and any price-related information
previously omitted from the effective Registration Statement pursuant to
such Rule 430A or Rule 434 shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) of the 1933 Act Regulations within the
prescribed time period, and prior to Closing Time, the Company shall have
provided evidence satisfactory to the Representatives of such timely
filing, or a post-effective amendment providing such information shall have
been filed as promptly as practicable and declared effective in accordance
with the requirements of Rule 430A under the 1933 Act Regulations.
(b) At Closing Time, the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Xxxxxxx Xxxx
& Xxxxx, LLP, special counsel for the Company, Caribiner and the Selling
Stockholders, in form and substance reasonably satisfactory to counsel for
the Underwriters, to the effect that:
(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 the corporate power and authority to
own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus and
to enter into and perform its obligations under this Agreement
and the Pricing Agreement.
(iii) The Company is duly qualified as a foreign
corporation to transact business and is in good standing as a
foreign corporation 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 have a
Material Adverse Effect.
27
(iv) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under the caption
"Capitalization" (except for subsequent issuances, if any,
pursuant to this Agreement); the shares of issued and outstanding
capital stock of the Company (including, without limitation, the
Common Stock), including the Securities to be purchased by the
Underwriters from the Selling Stockholders, have been duly
authorized and validly issued and are fully paid and
non-assessable; no holder of Common Stock is or will be subject
to personal liability by reason of being such a holder; and none
of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights, if
any, of any stockholder or warrantholder of the Company arising
by operation of law, under the charter or by-laws of the Company
or any of its subsidiaries or, to the best of such counsel's
knowledge, under any agreement to which the Company or any of its
subsidiaries is a party.
(v) The Securities to be purchased by the Underwriters from
the Company have been duly authorized for issuance and sale to
the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company pursuant to this Agreement against
payment of the consideration set forth in the Pricing 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 and sale of the Securities by the Company
and the sale of the Securities by the Selling Stockholders are
not subject to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company
or, to the best of such counsel's knowledge, any agreement to
which the Company is a party.
(vii) Each of Caribiner, IHC and ETC (collectively, the "US
Material Subsidiaries") has been duly incorporated and is
validly existing as a corporation or limited liability company,
as
28
the case may be, 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 Registration Statement and, in
the case of Caribiner, to enter into and perform its obligations
under this Agreement, 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 have a Material Adverse Effect; all of the
issued and outstanding capital stock or limited liability company
interests, as the case may be, of each such US Material
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, Encumbrances, claim or equity; and no holder of
any capital stock of any subsidiary is or will be subject to
personal liability by reason of being such a holder and none of
such shares was issued in violation of the preemptive rights of
any stockholder or warrantholder of such US Material Subsidiary
arising by operation of law, under the charter or by-laws of such
US Material Subsidiary or, to the best of such counsel's
knowledge, under any agreement to which the Company or any US
Material Subsidiary is a party.
(viii) Except as disclosed in or specifically contemplated
by the Prospectus, to the best of such counsel's knowledge, there
are no outstanding options, warrants or other rights calling for
the issuance by the Company or any US Material Subsidiary of, and
no commitments, obligations, plans or arrangements to which the
Company or any US Material Subsidiary is a party to issue, any
shares of capital stock of the Company or capital stock or
limited liability company interests, as the case may be, of any
US Material
29
Subsidiary or any security convertible into or exchangeable for
capital stock of the Company or capital stock or limited
liability company interests, as the case may be, of any US
Material Subsidiary.
(ix) To the best of such counsel's knowledge, except as
disclosed in or specifically contemplated by the Prospectus,
there are no persons with registration or other similar rights to
have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933
Act; and, to the best knowledge of such counsel, neither the
filing of the Registration Statement nor the offering of the
Securities as contemplated by this Agreement gives rise to any
rights relating to the registration of any securities of the
Company.
(x) Each of this Agreement and (in the case of the Company)
the Pricing Agreement has been duly authorized, executed and
delivered by the Company and Caribiner.
(xi) The Registration Statement is effective under the 1933
Act; any required filing of the Prospectus pursuant to Rule
424(b) under the 1933 Act has been made in the manner and within
the time period required by Rule 424(b), and, to the best of such
counsel's knowledge and information, no stop order suspending the
effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by
the Commission.
(xii) At the time the Registration Statement became
effective and at the Representation Date, the Registration
Statement and the Prospectus (other than the financial statements
and supporting schedules, if any, and other financial information
included therein, as to which no opinion need be rendered)
complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations; and,
to the best of such counsel's knowledge, all material contracts,
licenses, loan agreements, leases or other agreements or
instruments which are required to be described in or filed
30
as exhibits to the Registration Statement by the 1933 Act or by
the 1933 Act Regulations have been described in or filed as
exhibits to the Registration Statement as so required.
(xiii) The Common Stock conforms, in all material respects,
as to matters of law to the description thereof in the
Registration Statement and the Prospectus and the form of
certificate used to evidence the Common Stock complies with all
applicable statutory requirements, with any applicable
requirements of the certificate of incorporation and by-laws of
the Company and with the requirements of the NYSE.
(xiv) No filing with, or consent, approval, authorization,
order, registration, qualification or decree of, any court or
governmental authority or body in the United States, or any state
or territory thereof, is necessary or required to be obtained by
the Company or Caribiner or (to the best of such counsel's
knowledge, without independent inquiry) any of the Selling
Stockholders for the performance by the Company, Caribiner and
each of the Selling Stockholders of its respective obligations
hereunder, or in connection with the offer or sale of the
Securities hereunder or the consummation of the transactions
contemplated by this Agreement and (in the case of the Company
and each of the Selling Stockholders) the Pricing Agreement,
except such as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
(xv) The execution, delivery and performance of this
Agreement and (in the case of the Company) the Pricing Agreement,
the issuance and delivery of the Securities and the consummation
of the transactions contemplated herein, therein and in the
Registration Statement have been duly authorized by the Company
and Caribiner and will not conflict with or constitute a breach
of, or default under, or result in the creation or imposition of
any Encumbrances upon the Securities or any revenues, property or
assets of the Company or any of the US Material Subsidiaries
pursuant to any
31
applicable treaty, law, rule, administrative regulation,
judgement or order of any governmental agency or body or any
administrative or court decree or to the best of such counsel's
knowledge (in the case of the Selling Stockholders, without
independent inquiry) any contract, indenture, mortgage, loan
agreement, note, license, lease or other instrument or agreement
to which the Company or any of the US Material Subsidiaries or
any of the Selling Stockholders is a party or by which any of
them may be bound, or to which any of the property or assets of
the Company or any of the US Material Subsidiaries or any of the
Selling Stockholders is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Company or any applicable treaty, law, rule, administrative
regulation, judgment or order of any governmental agency or body
or any administrative or court decree known to such counsel to be
applicable to the Company, in each case (except in the case of
the Securities) where the conflict, breach, default, imposition,
Encumbrances or violation, consid ered alone or taken together
with all such other conflicts, breaches, defaults, imposi tions,
Encumbrances or violations, could be reasonably expected to have
a Material Adverse Effect.
(xvi) To the best of such counsel's knowledge, there is not
pending or threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any of its subsidiaries is
a party, or to which the property of the Company or any of its
subsidiaries is subject, before or brought by any court or
governmental agency or body, which, singly or in the aggregate,
could reasonably be expected to result in any Material Adverse
Effect or adversely affect the consummation of the transactions
contemplated by this Agreement and the Pricing Agreement or the
performance by the Company of its obligations hereunder or
thereunder.
(xvii) The information in the Registration Statement and
Prospectus under the captions "Description of Capital Stock,"
"Management" (except "Management-Executive
32
Officers, Directors and Key Management Personnel" and "--
Executive Compensation)", "Certain Relationships and Transactions
with Related Persons" (except that with respect to "Certain
Relationships and Related Transactions with Related Persons--
Advances to Xxxxxxx X. Xxxxxxx" such opinion may be to the best
of such counsel's knowledge) and "Shares Eligible for Future
Sale" and, in the Registration Statement under item 14, to the
extent that it constitutes matters of law, summaries of legal
matters, legal documents or legal proceedings, or legal
conclusions, has been reviewed by them and is correct in all
material respects; to the best of such counsel's knowledge, there
are no statutes or regulations, and no legal or governmental
actions, suits or proceedings pending or threatened against the
Company or any of its subsidiaries that are required to be
described in the Prospectus that are not described as required.
(xviii) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
(xix) Each of the Selling Stockholders has duly executed
and delivered this Agreement and the Pricing Agreement; each of
this Agreement and the Pricing Agreement is a legally valid and
binding obligation of each of the Selling Stockholders,
enforceable in accordance with its terms, subject to the effect
of (a) applicable bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law), and except that rights to indemnity thereunder may be
limited by applicable law and public policy.
33
(xx) The shares of Common Stock to be sold by each Selling
Stockholder under this Agreement (i) are owned of record as set
-
forth on Schedule B to this Agreement and (ii) to such counsel's
--
knowledge, are beneficially owned as set forth on Schedule B to
this Agreement, (with respect to clause (ii) of this paragraph
(xxi)) free and clear of all Encumbrances, equities or adverse
claims within the meaning of the Uniform Commercial Code, other
than the interests of the Underwriters hereunder.
(xxi) Immediately prior to the Closing Time, the Selling
Stockholders were the registered owners of the shares of Common
Stock to be sold by such Selling Stockholders. Upon transfer of
the shares of Common Stock to be sold by the Selling Stockholders
pursuant to the Purchase Agreement to Xxxxxxx Xxxxx, as
representative of the Underwriters, and, assuming the
Underwriters have purchased such shares of Common Stock for
value, in good faith and without notice of any adverse claim,
then the Underwriters will have acquired such shares of Common
Stock free and clear of any adverse claim (within the meaning of
Section 8-302 of the New York Uniform Commercial Code). The
owner of such shares of Common Stock, if other than such Selling
Stockholder, is precluded from asserting against Xxxxxxx Xxxxx,
as representative of the Underwriters, the ineffectiveness of any
unauthorized endorsement.
(2) In giving their opinion required by subsection (b)(1) of this
Xxxxxxx 0, Xxxxxxx Xxxx & Xxxxx, XXX shall additionally state that no
facts have come to its attention which cause it to believe that the
Registration Statement (including the information deemed to be a part
of the Registration Statement at such time of effectiveness pursuant
to Rule 430A(b) or Rule 434) (other than the financial statements and
other financial information contained therein, as to which it may
express no belief) at the time it 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
contained therein not misleading, or that the Prospectus (other than
the financial
34
statements and other financial information contained therein, as to
which it may express no belief), at the Representation Date and
Closing Time, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
(3) In giving their opinion required by subsection (b)(1)(iv) of
this Xxxxxxx 0, Xxxxxxx Xxxx & Xxxxx, XXX may rely upon the opinion,
in form and substance reasonably satisfactory to the Underwriters, of
Xxxxxxxx, Xxxxxx & Finger, P.A., in which case the opinion shall state
that they believe the Underwriters and such counsel are entitled to so
rely.
(4) The favorable opinion, dated the Closing Time, of Xxxxxxxx,
Xxxxxx & Finger, P.A., special Delaware counsel for the Company, in
form and substance reasonably satisfactory to counsel for the
Underwriters. In giving their opinion, such counsel may state that,
insofar as such opinion involves factual matters, they have relied, to
the extent they deem proper, upon certificates of officers or
directors (past or present) of the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters; provided that
--------
copies of such certificates have been delivered to the Underwriters.
(5) The favorable opinion, dated as of Closing Time, of Debevoise
& Xxxxxxxx, counsel for the Underwriters, with respect to the matters
set forth in paragraphs (i), (v), (x), (xi), (xiii) (solely as to
whether the Common Stock conforms as to matters of law in all material
respects with the description thereof set forth in the Prospectus) and
the first clause only of paragraph (xii) of subsection (b)(1) of this
Section 5. Debevoise & Xxxxxxxx shall also make a statement to the
same effect as is required by subsection (b)(2) of this Section 5.
(6) The favorable opinion, dated the Closing Time, of Xxxxx
Caller Solicitors, special United Kingdom counsel for the Company, in
form and substance reasonably satisfactory to counsel for the
Underwriters, addressing the matters set forth in paragraphs (vii),
(viii) and (xv) of Subsection (b)(1) of this Section 5, with respect
to CHUK, SCH, SCL and MWA.
(c) 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
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
35
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Representatives shall have received (i) a certificate
of the Chief Executive Officer of the Company and of the chief financial or
chief accounting 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) 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 with all agreements contained herein
and satisfied all conditions on its part contained herein 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 initiated or, to the best of such
officer's knowledge, threatened by the Commission. As used in this Section
5(c), the term "Prospectus" means the Prospectus in the form used by the
Underwriters to confirm sales of the Securities.
(d) At Closing Time, the Representatives shall have received a
certificate of each of the Selling Stockholders, dated as of Closing Time,
to the effect that (i) the representations and warranties of the Selling
Stockholders contained in Section 1(b) are true and correct with the same
force and effect as though expressly made at and as of Closing Time and
(ii) each of the Selling Stockholders 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.
(e) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter (the
"First Accounting Letter"), dated such date, in form and substance
satisfactory to the Representatives, substantially in the form of Exhibit B
hereto.
(f) At Closing Time, the Representatives shall have received from
Ernst & Young LLP a letter, dated as of Closing Time, to the effect that
they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be the day prior to Closing Time and, if the Company has elected to
rely on Rule 430A of the 1933 Act Regulations, to the further effect that
they have carried out procedures as specified in paragraph 9 of Exhibit
B hereto, with respect to certain amounts, percentages and financial
information specified
36
by the U.S. Representative(s) and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts, percentages
and financial information to be in agreement with the records specified in
such paragraph [7].
(g) At Closing Time the Representatives shall have received from the
Company the agreements of the persons and entities named in Schedule C
annexed hereto to the effect set forth in Section 1(a)(xxviii) above.
(h) In the event the Underwriters exercise the options granted in
Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company and the
Selling Stockholders contained herein and the statements in any
certificates furnished by the Company and the Selling Stockholders
hereunder shall be true and correct as of the Date of Delivery, and the
Representatives shall have received:
(i) a certificate, dated the Date of Delivery, of the Chief
Executive Officer of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(c) remains true and
correct as of the Date of Delivery;
(ii) a certificate, dated the Date of Delivery, of each of the
Selling Stockholders confirming that the certificate delivered at
Closing Time pursuant to Section 5(d) remains true and correct as of
the Date of Delivery;
(iii) the favorable opinion of Xxxxxxx Xxxx & Xxxxx, LLP, special
counsel for the Company, Caribiner and the Selling Stockholders, in
form and substance reasonably satisfactory to counsel for the
Underwriters, dated the Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinions required by Section 5(b)(1) (including
the additional statement required by Section 5(b)(2)) and 5(b)(3),
respectively;
(iv) the favorable opinion of Xxxxxxxx, Xxxxxx & Finger, P.A.,
special Delaware counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated
37
the Date of Delivery and otherwise to the same effect as the opinions
required by Section 5(b)(4).
(v) the favorable opinion of Debevoise & Xxxxxxxx, counsel for
the Underwriters, dated the Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b)(5); and
(vi) the favorable opinion of Xxxxx Caller Solicitors, special
United Kingdom counsel to the Company, dated the Date of Delivery, and
otherwise to the same effect as the opinion required by Section
5(b)(6).
(vii) a letter from Ernst & Young LLP in form and substance
reasonably satisfactory to the Underwriters and dated the Date of
Delivery, substantially the same in scope and substance as the letter
furnished to the Underwriters pursuant to Section 5(f) except that any
"specified date" in the letter furnished pursuant to this Section
5(h)(vii) shall not be more than five (5) days prior to the Date of
Delivery.
(i) At Closing Time and at the Date of Delivery, if any, counsel for
the 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 sale of the Securities as contemplated herein, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the agreements or conditions, herein contained; and
all proceedings taken by the Company and the Selling Stockholders in
connection with the issuance and sale of the Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(j) The Securities shall have been approved for listing upon notice of
issuance on the NYSE.
(k) At or prior to Closing Time, the Representatives shall have
received from each Selling Stockholder a properly completed and executed
United States Treasury Department Form W-9 (or other applicable form
statement specified by Treasury Department regulations in lieu thereof).
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company and the Selling Stockholders at
any time at or prior to Closing Time or the applicable 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
38
in Section 4 hereof, and provided further that Sections 6 and 7 hereof shall
survive such termination.
SECTION 6. Indemnification. (a) Each of the Company and Caribiner
agrees, jointly and severally, to indemnify and hold harmless each Underwriter,
its directors, officers and employees, and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act to the extent and in the manner set forth in clauses (i), (ii) and
(iii) below. In addition, Ingleby agrees to indemnify and hold harmless each
Underwriter, its directors, officers and employees, and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the extent and in the manner set forth in clauses
(i), (ii) and (iii) below; provided, however, that Ingleby shall not be
responsible for the payment of an amount, pursuant to this Section 6, which
exceeds the net proceeds received by Ingleby from the sale of the Securities
sold by Ingleby pursuant to this Agreement.
(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
information deemed to be part of the Registration Statement pursuant
to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that subject to Section 6(e) below any
39
such settlement is effected with the written consent of the Company
(not to be unreasonably withheld); and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(d) hereof, the reasonable fees and
disbursements of counsel chosen by the Representatives), 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 the indemnity agreement in this Section 6(a) shall not
-------- -------
apply to any loss, liability, claim, damage or expense (i) to the extent that
-
such loss, liability, claim, damage or expense arises out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with Underwriters' Information and (ii) with respect to
--
any preliminary prospectus to the extent that any such loss, liability, claim,
damage or expense of such Underwriter results solely from the fact that such
Underwriter sold Securities to a person as to whom the Company shall establish
that there was not sent by commercially reasonable means, at or prior to the
written confirmation of such sale, a copy of the Prospectus in any case where
such delivery is required by the 1933 Act, if the Company has previously
furnished copies thereof in sufficient quantity to such Underwriter and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the preliminary prospectus
that was corrected in the Prospectus.
In making a claim for indemnification under this Section 6 (other than
pursuant to clause (a)(iii) of this Section 6), or contribution under Section 7,
by the Company, Caribiner or Ingleby, the indemnified parties may proceed
against either (i) the Company, Caribiner and Ingleby or (ii) the Company and
Caribiner only, but may not proceed solely against Ingleby. In the event that
the indemnified parties are entitled to seek indemnity or contribution hereunder
against any loss, liability, claim, damage and expense incurred with respect to
a final judgment from a trial court, then, as a precondition to any indemnified
party obtaining indemnification or contribution from Ingleby, the indemnified
parties shall first obtain a final judgment from a trial court that such
indemnified parties are entitled to indemnity or
40
contribution under this Agreement with respect to such loss, liability, claim,
damage or expense (the "Final Judgment") from the Company, Caribiner and Ingleby
and shall seek to satisfy such Final Judgment in full from the Company and
Caribiner by making a written demand upon the Company and Caribiner for such
satisfaction. Only in the event such Final Judgment shall remain unsatisfied in
whole or in part 45 days following the date of receipt by the Company and
Caribiner of such demand shall any indemnified party have the right to take
action to satisfy such Final Judgment by making demand directly on Ingleby (but
only if and to the extent the Company and Caribiner have not already satisfied
such Final Judgment, whether by settlement, release or otherwise). The
indemnified parties may exercise this right to first seek to obtain payment from
the Company and Caribiner and thereafter obtain payment from Ingleby without
regard to the pursuit by any party of its rights to the appeal of such Final
Judgment. The indemnified parties shall, however, be relieved of their
obligation to first obtain a Final Judgment, seek to obtain payment from the
Company and Caribiner with respect to such Final Judgment or, having sought such
payment, to wait such 45 days after failure by the Company and Caribiner to
immediately satisfy any such Final Judgment if (i) the Company or Caribiner
files a petition for relief under the United States Bankruptcy Code (the
"Bankruptcy Code"), (ii) an order for relief is entered against the Company or
Caribiner in an involuntary case under the Bankruptcy Code, (iii) the Company or
Caribiner makes an assignment for the benefit of its creditors, or (iv) any
court orders or approves the appointment of a receiver or custodian for the
Company or Caribiner or a substantial portion of either of their assets. The
foregoing provisions of this paragraph are not intended to require any
indemnified party to obtain a Final Judgment against the Company, Caribiner or
Ingleby before obtaining reimbursement of expenses pursuant to clause (a)(iii)
of this Section 6. However, the indemnified parties shall first seek to obtain
such reimbursement in full from the Company and Caribiner by making a written
demand upon the Company and Caribiner for such reimbursement. Only in the event
such expenses shall remain unreimbursed in whole or in part 45 days following
the date of receipt by the Company and Caribiner of such demand shall any
indemnified party have the right to receive reimbursement of such expenses from
Ingleby by making written demand directly on Ingleby (but only if and to the
extent the Company and Caribiner have not already satisfied the demand for
reimbursement, whether by settlement, release or otherwise). The indemnified
parties shall, however, be relieved of their obligation to first seek to obtain
such reimbursement in full from the Company and Caribiner or, having made
written demand therefor, to wait such 45 days after failure by the Company and
Caribiner to immediately
41
reimburse such expenses if (i) the Company or Caribiner files a petition for
relief under the Bankruptcy Code, (ii) an order for relief is entered against
the Company or Caribiner in an involuntary case under the Bankruptcy Code, (iii)
the Company or Caribiner makes an assignment for the benefit of its creditors,
or (iv) any court orders or approves the appointment of a receiver or custodian
for the Company or Caribiner or a substantial portion of either of their
assets.]
(b) Each Selling Stockholder agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter, its directors, officers and
employees, and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against (i)
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but, in the
case of each Selling Stockholder, only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of such Selling Stockholder expressly for use therein; provided, however, that
-------- -------
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense (i) to the extent that such loss, liability, claim, damage or expense
-
arises out of any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with Underwriters' Information
and (ii) with respect to any preliminary prospectus to the extent that any such
--
loss, liability, claim, damage or expense of such Underwriter results solely
from the fact that such Underwriter sold Securities to a person as to whom the
Company shall establish that there was not sent by commercially reasonable
means, at or prior to the written confirmation of such sale, a copy of the
Prospectus in any case where such delivery is required by the 1933 Act, if the
Company has previously furnished copies thereof in sufficient quantity to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the
preliminary prospectus that was corrected in the Prospectus; and provided
--------
further, that no Selling Stockholder shall be required to indemnify any
-------
Underwriter for any amount in excess of the net proceeds received by such
Selling Stockholder from the Underwriters in connection with the sale of such
Selling Stockholder's Common Stock as contemplated by this Agreement.
(c) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its
42
directors, each of its officers who signed the Registration Statement, each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act and each of the Selling Stockholders
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) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with Underwriters' Information.
(d) 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 so to 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. An indemnifying party
may participate at its own expense in the defense of any such action. In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, which consent
shall not be unreasonably withheld (provided, that for purposes of this
paragraph only, reasonableness shall be evaluated in light of the factors
identified in clauses (i) and (ii) below), 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.
43
(e) 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.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party specifying the basis for its claim that the unpaid balance is
unreasonable, in each case prior to the date of such settlement.
(f) The provisions of this Section shall not affect any agreement between
the Company, Caribiner and Ingleby and the other Selling Stockholders with
respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, Caribiner
and Ingleby and each of the other Selling Stockholders on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement (if such indemnified party is an Underwriter) or by the
indemnifying parties on the one hand and such indemnified party on the other
from the offering of the Securities (if such indemnified party is not an
Underwriter) 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, Caribiner, Ingleby and each of the other Selling Stockholders
44
on the one hand and of the Underwriters on the other hand (if such indemnified
party is an Underwriter) or of the indemnifying parties on the one hand and such
indemnified party on the other (if such indemnified party is not an Underwriter)
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,
Caribiner and Ingleby and each of the other Selling Stockholders on the one hand
and the Underwriters on the other hand in connection with the offering of the
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
Securities pursuant to this Agreement (before deducting expenses) received by
the Company, Caribiner and Ingleby and each of the other Selling Stockholders
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus or as calculated by reference to
Schedule B to this Agreement and the cover of the Prospectus, as the case may
be, bear to the aggregate initial public offering price of the Securities as set
forth on such cover. The relative fault of the Company, Caribiner, and Ingleby
and each of the other Selling Stockholders on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, Caribiner, or Ingleby or any of the other Selling
Stockholders or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, Caribiner, Ingleby and each of the other Selling
Stockholders and the 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 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, (i) no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and
45
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and
(ii) no Selling Stockholder shall be required to contribute any amount in excess
of the amount of the net proceeds received by it from the Underwriters in
connection with the sale of such Selling Stockholder's Common Stock as
contemplated by this Agreement. 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 an 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 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
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.
The provisions of this Section 7 shall not affect any agreement among the
Company, Caribiner and Ingleby and each of the other Selling Stockholders with
respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates (i) of
officers of the Company or (ii) of any of the Selling Stockholders (or their
Attorney-In-Fact) submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or any of
the Selling Stockholders and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement. (a) The Representatives may
terminate this Agreement, by notice to the Company and each of the Selling
Stockholders, 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 Registration Statement and the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings,
46
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 any outbreak of hostilities or
escalation of any existing hostilities 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 Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) if trading in the Common Stock has been suspended or
limited by the Commission or the NYSE, or if trading generally on the American
Stock Exchange or the NYSE or in the over-the-counter market has been suspended
or limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority, or
(iv) if a banking moratorium has been declared by any of the Federal or New York
authorities. As used in this Section 9(a), the term "Prospectus" means the
Prospectus in the form first used by the Underwriters to confirm sales of the
Securities.
(b) If this Agreement is terminated pursuant to this Section 9, 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 6 and 7 hereof
shall survive such termination.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it is or they are obligated to purchase under this
Agreement and the Pricing Agreement (the "Defaulted Securities"), the
Representatives shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting 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 Representatives shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
Securities to be purchased by the Underwriters on such date, each of the
non-defaulting Underwriters, severally and not jointly, shall be obligated
to purchase the full amount thereof in the proportions that their
respective underwriting
47
obligations hereunder bear to the underwriting obligations of all non-
defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the Securities
to be purchased by the Underwriters on such date, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
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, the Representatives, the Company or any of the Selling
Stockholders shall have the right to postpone Closing Time or the Date of
Delivery for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or the Prospectus or in any other
documents or agreements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Selling Stockholders or the Company. If the
Company or any of the Selling Stockholders shall fail at Closing Time or on a
Date of Delivery to sell and deliver the number of Securities which the Company
or any of the Selling Stockholders is obligated to sell hereunder, then the
Underwriters may, at their option, by notice from the Representatives to each of
the Selling Stockholders and the Company, either (a) terminate this Agreement
without any liability on the fault of any non-defaulting party or (b) elect to
purchase the Securities which the non-defaulting parties have agreed to sell
hereunder.
In the event of a default by any of the Selling Stockholders or the
Company as referred to in this Section 11, the Representatives or the non-
defaulting sellers shall have the right to postpone Closing Time or the Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
No action taken pursuant to this Section 11 shall relieve any of the
Selling Stockholders or the Company so defaulting from liability, if any, in
respect of such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
48
Underwriters shall be directed to the Representatives c/o Merrill Xxxxx & Co.,
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, North Tower, World Financial
Center, New York, N.Y. 10281-1201, attention Syndicate Operations, with a copy
to Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention
of Xxxxxxx X. Xxxxx; notices to the Company shall be directed to it at Caribiner
International, Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000
attention of Xxxxxx X. Xxxxxx, with a copy to Xxxxxxx Xxxx & Xxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention of Xxxxxx Xxxxxx; and notices to any
of the Selling Stockholders shall be directed to them c/o Caribiner
International, Inc., 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000.
SECTION 13. Parties. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriters, the Company,
the Selling Stockholders and their respective successors, heirs and legal
representatives. Nothing expressed or mentioned in this Agreement or the
Pricing Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Stockholders and their respective successors, heirs and legal representatives
and the controlling persons and officers and directors referred to in Sections 6
and 7 hereof and their respective successors, heirs and legal representatives,
any legal or equitable right, remedy or claim under or in respect of this
Agreement or the Pricing Agreement or any provision herein or therein contained.
This Agreement and the Pricing Agreement and all conditions and provisions
hereof and thereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Stockholders and their respective
successors, heirs and legal representatives, and said controlling persons and
officers and directors and their respective successors, heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 14. Waiver of Immunities. To the extent that any of the Selling
Stockholders or any of their properties, assets or revenues may have or may
hereafter become entitled to, or have attributed to any of the Selling
Stockholders, any right of immunity, on the grounds of sovereignty or otherwise,
from any legal action, suit or proceeding, from the giving of any relief in any
such legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, from attachment upon or
prior to judgment, from attachment in aid of execution of judgment, or from
execution of judgment, or other legal process or proceeding for the giving of
any relief
49
or for the enforcement of any judgment, in any jurisdiction in which proceedings
may at any time be commenced, with respect to the obligations and liabilities of
the Selling Stockholders, or any other matter under or arising out of or in
connection with this Agreement, each of the Selling Stockholders hereby
irrevocably and unconditionally waives, and agrees not to plead or claim, any
such immunity and consents to such relief and enforcement.
SECTION 15. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 16. Counterparts. This Agreement may be executed in one or
more counterparts and, when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, Caribiner, Xxxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxx X. Xxxxx a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Company, Caribiner and each of the Selling Stockholders in
accordance with its terms.
Very truly yours,
CARIBINER INTERNATIONAL, INC.
By:
---------------------------------
Name:
Title:
CARIBINER, INC.
By:
---------------------------------
Name:
Title:
-------------------------------------
Xxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
50
______________________________
Xxxxxxx X. Xxxxxxx
51
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
ALEX. XXXXX & SONS INCORPORATED
XXXXXX XXXX LLC
XXXXXXXX XXXXXXXX & CO. INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ____________________________________________
Name:
Title:
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
52
SCHEDULE A
Number of Initial
Securities
Name of Underwriter to Be Purchased
------------------- -----------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated........................
Alex. Xxxxx & Sons Incorporated................
Xxxxxx Xxxx LLC................................
Xxxxxxxx Xxxxxxxx & Co. Incorporated...........
-----------
Total....................................... [1,878,200]
===========
SCHEDULE B
Number of Maximum
Initial Number of
Securities Option
to Securities
Be Sold to Be Sold
----------- ----------
Caribiner International, Inc. [1,750,000] [81,730]
SELLING STOCKHOLDERS
Record Owner Beneficial Owner
------------------- -------------------
Xxxx X. Xxxxx Xxxx X. Xxxxx [14,200] [0]
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx [14,000] [0]
Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxx [100,000] [200,000]
----------- ---------
Total [1,878,200] [281,730]
=========== =========
SCHEDULE C
Stockholders, Directors and Officers of
the Company Who Have
Agreed to Lock-Up
Pursuant to Section 1(a)(xxviii)
of the Purchase Agreement
------------------------------
Warburg, Xxxxxx Investors, L.P.
Xxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
Xxxxx X. Xxxx
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxx
EXHIBIT A
[1,878,200] Shares
CARIBINER INTERNATIONAL, INC.
(a Delaware corporation)
Common Stock
(Par Value $.01 Per Share)
PRICING AGREEMENT
-----------------
[Date]
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
ALEX. XXXXX & SONS INCORPORATED
XXXXXX XXXX LLC
XXXXXXXX XXXXXXXX & CO. INCORPORATED
as Representatives of the several Underwriters
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, XX 00000-0000
Ladies and Gentlemen:
Reference is made to the Purchase Agreement, dated ___________________
(the "Purchase Agreement"), relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Alex. Xxxxx & Sons Incorporated, Xxxxxx Xxxx LLC, and Xxxxxxxx
Xxxxxxxx & Co. Incorporated are acting as representatives (the
"Representatives"), of the above shares of Common Stock (the "Initial
Securities"), of Caribiner International, Inc. (the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company and each
Selling Stockholder agrees with each Underwriter as follows:
1. The initial public offering price per share for the Initial
Securities, determined as provided in said Section 2, shall be $______.
A-1
2. The purchase price per share for Initial Securities to be paid by
the several Underwriters shall be $_____, being an amount equal to the initial
public offering price set forth above less $____ per share.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to each of the Company, Xxxxxxx X. Xxxxxxx,
Xxxx X. Xxxxx and Xxxxxx X. Xxxxxx a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Company and the Selling Stockholders in accordance with
its terms.
Capitalized terms used herein and not otherwise defined shall have the
meaning ascribed to such term in the Purchase Agreement.
Very truly yours,
CARIBINER INTERNATIONAL, INC.
By: ____________________________
Name:
Title:
_________________________________
Xxxx X. Xxxxx
_________________________________
Xxxxxx X. Xxxxxx
_________________________________
Xxxxxxx X. Xxxxxxx
A-2
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
ALEX. XXXXX & SONS INCORPORATED
XXXXXX XXXX LLC
XXXXXXXX XXXXXXXX & CO. INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: _________________________________________
Name:
Title:
For themselves and as Representatives of the other Underwriters
named in Schedule A to the Purchase Agreement.
A-3
EXHIBIT B
---------
[FORM OF COMFORT LETTER]
We have audited the consolidated balance sheets of the Company as of September
30, 1996 and 1995, the consolidated statements of income, shareholder's equity,
and cash flows for each of the three years in the period ended September 30,
1996, the balance sheets of TAVS as of December 31, 1995 and September 27, 1996,
and the statements of operations and divisional equity and cash flows for the
year ended December 31, 1995 and the nine-month period ended September 27, 1996
and the balance sheet of SCH as of March 31, 1996, and the consolidated profit
and loss account and cash flow statement for the nine-month period ended March
31, 1996, all included in the Registration Statement (No. 333-18327) on Form S-1
filed by the Company under the Securities Act of 1933 (the "Act"); our reports
with respect thereto are also included in such Registration Statement as amended
as of [date], herein referred to as the "Registration Statement".
In connection with the Registration Statement:
1. We are independent auditors with respect to the Company within the meaning
of the Act and the applicable published rules and regulations thereunder.
2. In our opinion, the consolidated financial statements of the Company and
SCH and the financial statements of TAVS, audited by us and included in the
Registration Statement, comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations thereunder.
3. We have not audited, in accordance with generally accepted auditing
standards, any consolidated financial statements of the Company as of any
date or for any period subsequent to September 30, 1996. The purpose (and
therefore the scope) of our audit for the year ended September 30, 1996 was
to enable us to express our opinion on the consolidated financial
statements at September 30, 1996, and for the year then ended, but not on
the consolidated financial statements for any interim period within that
year. Therefore, we are unable to and do not express an opinion on the
unaudited consolidated balance sheets as of December 31, 1995 and 1996, and
the unaudited consolidated statements of income, stockholders' equity, and
cash flows for the three-month periods ended December 31, 1995 and 1996,
included in the Registration Statement, or the financial position, results
of operations, or cash flows as of any date or for any period subsequent to
September 30, 1996.
4. For purposes of this letter, we have read the minutes of meetings of the
Board of Directors and Audit Committee of the Company as set forth in the
minute books through [a date not more than five days prior to the date of
this agreement] officials of the Company having advised us that the minutes
of all such meetings through that date were set forth therein. There were
no formal minutes available for any meetings held after [date] and through
the date of this letter. With respect to meetings held after [date], we
have obtained from the Company a summary of topics discussed at the
meetings. We also have carried out other procedures to [a date not more
than five days prior to the date of this agreement] as follows (our work
did not extend to the period from [a date not more than five days prior to
the date of this agreement] to [the date of this agreement], inclusive):
With respect to the three-month periods ended December 31, 1996 and 1995,
we have:
(1) Performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information,
on the unaudited consolidated balance sheet as of December 31, 1996,
and the unaudited consolidated statements of income, stockholders'
equity and cash flows for the three-month periods ended December 31,
1995 and 1996 included in the Registration Statement.
(2) Inquired of certain officials of the Company who have responsibility
for financial and accounting matters whether the unaudited
consolidated financial statements referred to in 4.(1) above comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related rules and regulations.
The foregoing procedures do not constitute an audit conducted in accordance
with generally accepted auditing standards. Also, they would not
necessarily reveal matters of significance with respect to the comments in
the following paragraph. Accordingly, we make no representations as to the
sufficiency of the foregoing procedures for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures,
however, that caused us to believe that:
2
(1) Any material modifications should be made to the unaudited
consolidated financial statements described in 4.(1) above, included
in the Registration Statement, for them to be in conformity with
generally accepted accounting principles.
(2) The unaudited consolidated financial statements described in 4.(1)
above do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published rules and regulations.
6. Company officials have advised us that no consolidated financial statements
as of any date or for any period subsequent to December 31, 1996 are
available; accordingly, the procedures carried out by us with respect to
changes in financial statement items after December 31, 1996, have, of
necessity, been even more limited than those with respect to the periods
referred to in 4.(1) above. We have inquired of certain officials of the
Company who have responsibility for financial and accounting matters as to
whether (i) at [a date not more than 2 days prior to the date of this
agreement] there was nay change in the capital stock, increase in
consolidated long-term debt of the Company, or any decrease in working
capital or stockholders' equity as compared with the amounts shown on the
December 31, 1996 unaudited consolidated balance sheet included in the
Registration Statement or (ii) during the period from January 1, 1997 to [a
date not more than 2 days prior to the date of this agreement], there were
any decreases, as compared with the corresponding period in the preceding
year, in consolidated revenues, operating income, net income or net income
available to common stockholders of the Company. On the basis of these
inquiries, nothing came to our attention that caused us to believe that
there was any such change, increase, or decrease, except in all instances
for changes, increases or decreases which the Registration Statement
discloses have occurred or may occur.
7. At your request, we have:
(1) Read the unaudited pro forma consolidated balance sheet as of December
31, 1996, and the unaudited pro forma condensed consolidated
statements of income for the year ended September 30, 1996, and the
three-month period ended December 31, 1996, included in the
Registration Statement.
3
(2) Inquired of certain officials of the Company and of SCH and TAVS who
have responsibility for financial and accounting matters about:
(i) The basis for their determination of the pro forma adjustments,
and
(ii) Whether the unaudited pro forma condensed consolidated financial
statements referred to in 7(1) comply as to form in all material
respects with the applicable accounting requirements of rule
11-02 of Regulation S-X.
(3) Proved the arithmetic accuracy of the application of the pro forma
adjustments to the historical amounts in the unaudited pro forma condensed
consolidated financial statements.
The foregoing procedures are substantially less in scope than an
examination, the objective of which is the expression of an opinion on
management's assumptions, the pro forma adjustments, and the application of
those adjustments to historical financial information. Accordingly, we do
not express such an opinion. The foregoing procedures would not
necessarily reveal matters of significance with respect to the comments in
the following paragraph. Accordingly, we make no representation about the
sufficiency of such procedures for your purposes.
8. Nothing came to our attention as a result of the procedures specified in
paragraph 7, however, that caused us to believe that the unaudited pro
forma condensed consolidated financial statements referred to in 7(1)
included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of rule 11-02
of Regulation S-X and that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements.
Had we performed additional procedures or had we made an examination of the
pro forma condensed consolidated financial statements, other matters might
have come to our attention that would have been reported to you.
9. At your request, we have also 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
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such items to be in agreement with, the accounting and financial records of
the Company.
We compared the executive compensation information and the information
included under the heading "Executive Compensation" and "Selected Financial
Data" with the requirements of Item 402 and Item 301, respectively, of
Regulation S-K. We also inquired of certain officials of the Company who
have responsibility for financial and accounting matters whether this
information conforms in all material respects with the disclosure
requirements of Item 402 and Item 301 of Regulation S-K. Nothing came to
our attention as a result of the foregoing procedures that caused us to
believe that this information does not conform in all material respects
with the disclosure requirements of Item 402 and Item 301, respectively, of
Regulation S-K. Also, we make no legal representations as to questions of
legal interpretation regarding the completeness or appropriateness of the
Company's determination of what constitutes executive compensation for
purposes of the SEC disclosure requirements on executive compensation.
10. Our audits of the consolidated financial statements of the Company for the
periods referred to in the introductory paragraph of this letter comprised
audit tests and procedures deemed necessary for the purpose of expressing
an opinion on such financial statements taken as a whole. For none of the
periods referred to therein, or any other periods, did we perform audit
tests for the purpose of expressing an opinion on individual balances of
accounts, amounts, percentages, or summaries of selected transactions such
as those enumerated in the Registration Statement attached hereto and
referred to in 9 above and, accordingly, we do not express an opinion
thereon.
11. It should be understood that we make no representations as to questions of
legal interpretation or as to the sufficiency for your purposes of the
procedures referred to in 9 above; also, such procedures would not
necessarily reveal any material misstatement of the information identified
in 9 above. Further, we have addressed ourselves solely to the foregoing
data as set forth in the Registration Statement, and make no
representations as to the adequacy of disclosure or as to whether any
material facts have been omitted.
12. This letter is solely for the information of the addressees and to assist
the underwriters in conducting and documenting their investigation of the
affairs of
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the Company in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted, or
otherwise referred to within or without the underwriting group for any
other purpose, including, but not limited to, the registration, purchase,
or sale of securities, nor is it to be filed with or referred to in whole
or in part in the Registration Statement or any other document, except that
a reference may be made to it in the underwriting agreement or any list of
closing documents pertaining to the offering of the securities covered by
the Registration Statement.
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