EXHIBIT 1.1
5,000,000 Shares
TAKE-TWO INTERACTIVE SOFTWARE, INC.
COMMON STOCK
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
_____, 1999
ING BARING XXXXXX XXXX LLC
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
XXXXXX xXXXXX & cOMPANY, iNC.
As Representatives of the
several Underwriters
c/o ING Baring Xxxxxx Xxxx LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introduction. Take-Two Interactive Software, Inc., a
Delaware corporation (the "Company"), proposes to issue and sell to the several
Underwriters named in Schedule I hereto (the "Underwriters"), for which ING
Baring Xxxxxx Xxxx LLC, Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc. and Xxxxxx Xxxxxx &
Company, Inc. are acting as representatives (the "Representatives"), an
aggregate of 3,500,000 shares (the "Company Shares") of the Company's Common
Stock, par value $.01 per share (the "Common Stock"). The selling stockholders
named in Schedule II hereto (the "Selling Stockholders") propose to sell to the
Underwriters an aggregate of 1,500,000 shares of Common Stock (the "Stockholder
Shares"). The Company Shares to be sold by the Company and the Stockholder
Shares to be sold by the Selling Stockholders are collectively referred to
herein as the "Firm Shares." The Company also proposes to issue and sell to the
several Underwriters an aggregate of not more than 750,000 additional shares of
Common Stock (the "Additional Shares"), if requested by the Underwriters in
accordance with Section 9 hereof. The Firm Shares and the Additional Shares are
collectively referred to herein as the "Shares." The words "you" and "your"
refer to the Representatives of the Underwriters.
The Company and the Selling Stockholders hereby agree with the
several Underwriters as follows:
2. Representations and Warranties.
(a) The Company represents and warrants to, and
agrees with, each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-______)
under the Securities Act of 1933, as amended (the "Act"), with respect
to the Shares, including a form of prospectus subject to completion,
has been prepared by the Company in conformity with the requirements of
the Act and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder (the "Rules and Regulations").
Such registration statement has been filed with the Commission under
the Act, and one or more amendments to such registration statement may
also have been so filed. After the execution of this Agreement, the
Company shall file with the Commission either (A) if such registration
statement, as it may have been amended, has been declared by the
Commission to be effective under the Act, a prospectus in the form most
recently included in an amendment to such registration statement filed
with the Commission (or, if no such amendment shall have been filed, in
such registration statement), with such insertions and changes as are
required by Rule 430A under the Act or permitted by Rule 424(b) under
the Act as shall have been provided to and approved by the
Representatives prior to the filing thereof, or (B) if such
registration statement, as it may have been amended, has not been
declared by the Commission to be effective under the Act, an amendment
to such registration statement, including a form of prospectus, a copy
of which amendment has been furnished to and approved by the
Representatives prior to the filing thereof. As used in this Agreement,
the term "Registration Statement" means such registration statement, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto; the Registration Statement
shall be deemed to include any information omitted therefrom pursuant
to Rule 430A under the Act and included in the Prospectus (as
hereinafter defined) and shall also mean any registration statement
filed pursuant to Rule 462(b) under the Act; the term "Preliminary
Prospectus" means each prospectus subject to completion contained in
such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration
Statement or any amendment thereto or filed pursuant to Rule 424(a)
under the Act at the time it was or is declared effective); and the
term "Prospectus" means the prospectus first filed with the Commission
pursuant to Rule 424(b) under the Act or, if no prospectus is required
to be filed pursuant to said Rule 424(b), such term means the
prospectus included in the Registration Statement.
(ii) The Company has not received any order preventing or
suspending the use of any Preliminary Prospectus, and the Company has
not received any notice that the Commission has instituted, nor, to the
Company's knowledge, has the Commission threatened to institute, any
proceedings with respect to such an order. When each Preliminary
Prospectus was filed with the Commission it (A) contained all
2
statements required to be stated therein in accordance with, and
complied in all material respects with, the requirements of the Act and
the Rules and Regulations and (B) did not include any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. When the Registration
Statement or any amendment thereto was or is declared effective, it (A)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with, the requirements of the Act and the Rules and
Regulations and (B) did not or will not include any untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein not misleading. When the Prospectus and when any
amendment or supplement thereto is filed with the Commission pursuant
to Rule 424(b) (or, if the Prospectus or such amendment or supplement
is not required to be so filed, when the Registration Statement and
when any amendment thereto containing such amendment or supplement to
the Prospectus was or is declared effective) and at all times
subsequent thereto up to and including the Closing Date (as defined in
Section 3 hereof) and the Option Closing Date (as defined in Section 9
hereof), the Prospectus, as amended or supplemented at any such time,
(A) contained or will contain all statements required to be stated
therein in accordance with, and complied or will comply in all material
respects with, the requirements of, the Act and the Rules and
Regulations and (B) did not or will not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The foregoing provisions of this
paragraph (ii) shall not apply to (A) statements or omissions made in
any Preliminary Prospectus which have been corrected in a subsequent
Preliminary Prospectus or the Prospectus or (B) statements or omissions
made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement
thereto in reliance upon, and in conformity with, information furnished
in writing to the Company by or on behalf of the Underwriters through
the Representatives expressly for use therein.
(iii) Each of the Company and its subsidiaries (the
"Subsidiaries") (A) is duly incorporated and validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with corporate power and corporate authority to own or
lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus); and (B) is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which (x) the conduct of its business
requires such qualification (except for those jurisdictions in which
the failure so to qualify has not had and will not have a Material
Adverse Effect (as hereinafter defined)) and (y) it owns or leases
property. "Material Adverse Effect" means, when used in connection with
the Company or its Subsidiaries, any development, change or effect that
is materially adverse to the business, operations, properties, assets,
liabilities, net worth, results of operations, condition (financial or
other) or prospects of the Company and its Subsidiaries taken as a
whole.
3
(iv) The Company has the duly authorized and validly
outstanding capitalization set forth under the caption "Capitalization"
in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and will have the adjusted
capitalization set forth therein on the Closing Date and the Option
Closing Date (each as defined herein), based on the assumptions and
including the exceptions set forth therein and the footnotes thereto.
The capital stock of the Company conforms in all material respects to
the description thereof contained in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus). The outstanding shares of Common Stock have been duly
authorized and validly issued by the Company and are fully paid and
nonassessable. Except as created hereby or described in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), there are no outstanding options, warrants, rights or
other arrangements requiring the Company or any subsidiary at any time
to issue any capital stock. No holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any of the Shares, and neither the filing of
the registration statement nor the offering or sale of the Shares as
contemplated by this Agreement gives rise to any rights for or relating
to the registration of any securities of the Company. The Shares have
been duly authorized; on the Closing Date and the Option Closing Date
(if applicable), after payment therefor in accordance with the terms of
this Agreement, (A) the Firm Shares and the Additional Shares to be
sold by the Company hereunder will be validly issued, fully paid and
nonassessable and (B) good and marketable title to the Firm Shares and
the Additional Shares will pass to the Underwriters on the Closing Date
and the Option Closing Date (if applicable) free and clear of any lien,
encumbrance, security interest, claim or other restriction whatsoever.
All the outstanding shares of capital stock of each Subsidiary have
been duly authorized and validly issued, are fully paid and
nonassessable and are owned directly by the Company, free and clear of
any lien, encumbrance, charge, security interest, claim or other
restriction whatsoever. The Company has received, subject to notice of
issuance, approval to have the Shares quoted on the National Market
System of the National Association of Securities Dealers' Automated
Quotation System, and the Company knows of no reason or set of facts
which is likely to adversely affect such approval.
(v) The consolidated financial statements and the related
notes and schedules thereto included in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) fairly present, in all material
respects, the consolidated financial condition, results of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries
at the dates and for the periods specified therein. Such financial
statements and the related notes and schedules thereto have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise noted therein), and such financial statements as are audited
have been examined by PricewaterhouseCoopers LLP, who are independent
public accountants within the meaning of the Act and the Rules and
Regulations, as indicated in their reports filed therewith. The
selected financial information set forth under the caption "Selected
Financial Data" in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) have been prepared
on a basis consistent with the consolidated financial statements of the
Company and its Subsidiaries.
4
(vi) The Company and each of its Subsidiaries have filed all
necessary federal, state and local income, franchise and other material
tax returns and have paid all taxes shown as due thereunder, and the
Company has no knowledge of any tax deficiency which is reasonably
likely to be assessed against the Company which, if so assessed, would
have a Material Adverse Effect.
(vii) The Company and each of its Subsidiaries maintain
insurance of the types and in amounts which they reasonably believe to
be adequate for their business in such amounts and with such
deductibles as is customary for companies in the same or similar
business, all of which insurance is in full force and effect.
(viii) Except as disclosed in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus), there is no action, suit, proceeding or investigation
pending or, to the Company's best knowledge, threatened before or by
any court, regulatory body or administrative agency or any other
governmental agency or body, domestic or foreign, which (A) questions
the validity of the capital stock of the Company or this Agreement or
of any action taken or to be taken by the Company pursuant to or in
connection with this Agreement, (B) is required to be disclosed in the
Registration Statement which is not so disclosed (and such proceedings,
if any, as are summarized in the Registration Statement are accurately
summarized in all material respects), or (C) if decided adversely to
the Company, would have a Material Adverse Effect.
(ix) The Company and each of its Subsidiaries have all
requisite corporate, power and authority to enter into this Agreement
and to consummate the transactions provided for herein. This Agreement
has been duly authorized, executed and delivered by the Company and
each of its Subsidiaries and, assuming it is a binding agreement of
yours, constitutes a legal, valid and binding agreement of the Company
and each of its Subsidiaries , enforceable against the Company and each
of its Subsidiaries in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be
limited by federal or state securities laws and the public policy
underlying such laws), and none of the Company's nor each of the
Subsidiaries' execution or delivery of this Agreement, its performance
hereunder, its consummation of the transactions contemplated herein,
its application of the net proceeds of the offering in the manner set
forth under the caption "Use of Proceeds" or the conduct of its
5
business as described in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus), conflicts or
will conflict with, or results or will result in any breach or
violation of, any of the terms or provisions of, or constitutes or will
constitute a default under, or causes or will cause (or permits or will
permit) the maturation or acceleration of any liability or obligation
or the termination of any right under, or result in the creation or
imposition of any lien, charge or encumbrance upon, any property or
assets of the Company or any of its Subsidiaries pursuant to the terms
of (A) the certificate of incorporation or by-laws of the Company or
any of its Subsidiaries, (B) any indenture, mortgage, deed of trust,
voting trust agreement, stockholders' agreement, note agreement or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which any of them are or may be bound or
to which any of their respective property is or may be subject or (C)
any statute, judgment, decree, order, rule or regulation applicable to
the Company or any of its Subsidiaries of any government, arbitrator,
court, regulatory body or administrative agency or other governmental
agency or body, domestic or foreign, having jurisdiction over the
Company, any of its Subsidiaries or any of their respective activities
or properties, except, in the cases of clauses (B) and (C) above, for
breaches, violations, defaults or terminations which would not be
reasonably likely to have a Material Adverse Effect.
(x) All executed agreements or copies of executed agreements
filed as exhibits to the Registration Statement to which the Company or
any of its Subsidiaries is a party or by which any of them are or may
be bound or to which any of their assets, properties or businesses is
or may be subject have been duly and validly authorized, executed and
delivered by the Company or such Subsidiary, as the case may be, and,
assuming such agreements are the legal, valid, binding and enforceable
agreements of the other parties thereto, constitute the legal, valid
and binding agreements of the Company or such Subsidiary, as the case
may be, enforceable against each of them in accordance with their
respective terms (except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to enforcement of creditors' rights generally, and general
equitable principles relating to the availability of remedies, and
except as rights to indemnity or contribution may be limited by federal
or state securities laws and the public policy underlying such laws).
The descriptions in the Registration Statement of contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown with respect thereto by the Act and
the Rules and Regulations, and there are no contracts or other
documents which are required by the Act or the Rules and Regulations to
be described in the Registration Statement or filed as exhibits to the
Registration Statement which are not described or filed as required,
and the exhibits which have been filed are complete and correct copies
of the documents of which they purport to be copies.
(xi) Subsequent to the most recent respective dates as of
which information is given in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), and except
as expressly contemplated therein, neither the Company nor any of its
Subsidiaries has incurred, other than in the ordinary course of its
business, any material liabilities or obligations, direct or
contingent, purchased any of its outstanding capital stock, paid or
declared any dividends or other distributions on its capital stock or
6
entered into any material transactions not in the ordinary course of
business, and there has been no material change in capital stock or
debt or any material adverse change in the business, operations,
properties, assets, liabilities, net worth, results of operations,
condition (financial or other) or prospects of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its
Subsidiaries (or the manner in which it any of them conducts its
business) is in breach or violation of, or in default under, any term
or provision of (A) its certificate of incorporation or bylaws, (B) any
indenture, mortgage, deed of trust, voting trust agreement,
stockholders' agreement, note agreement or other agreement or
instrument to which it is a party or by which it is or may be bound or
to which any of its property is or may be subject, or any indebtedness,
the effect of which breach or default singly or in the aggregate may
have a Material Adverse Effect or (C) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of its
Subsidiaries or of any arbitrator, court, regulatory body,
administrative agency or any other governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
Subsidiaries or any of their respective activities or properties and
the effect of which breach or default singly or in the aggregate would
have a Material Adverse Effect.
(xii) No labor disturbance by the employees of the Company or
any of its Subsidiaries exists or is imminent which would have a
Material Adverse Effect.
(xiii) Except as set forth in the Prospectus, (i) the Company
and its Subsidiaries own or possess valid and enforceable licenses for
all inventions, patents, patent applications, trademarks (registered or
unregistered), trademark applications, tradenames, copyrights,
manufacturing processes, formulae, trade secrets, know-how, and other
intangible property and assets necessary to the conduct of their
business now conducted as described in the Prospectus (collectively,
"Intellectual Property") and the Company does not know of any facts
which would form a reasonable basis for a claim that the Company or any
of its Subsidiaries do not own or possess valid and enforceable
licenses for all Intellectual Property necessary to the conduct of
their business proposed to be conducted as described in the Prospectus;
(ii) the Company has no knowledge that it or any of its Subsidiaries
lack or will be unable to obtain any rights or licenses to use any of
the Intellectual Property; (iii) the Company does not know of any third
parties who have or will be able to establish rights to any of the
Intellectual Property; (iv) to the Company's knowledge, there is no
infringement by third parties of any of the Intellectual Property; (v)
there is no pending or, to the Company's knowledge, threatened action,
suit, proceeding or claim by others challenging the Company's or any
Subsidiary's rights of title or other interest in or to any
Intellectual Property, and the Company does not know of any facts which
would form a reasonable basis for any such claim; (vi) there is no
pending, or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the validity and scope of any
Intellectual Property, and the Company does not know of any facts which
would form a reasonable basis for any such claim; (vii) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company or any of its
Subsidiaries or any of their products or processes infringe or
otherwise violate any patent, trademark, copyright, trade secret or
other proprietary right of others, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; and
(viii) there is no pending or, to the Company's knowledge, threatened
7
action, suit, proceeding or claim by any current or former employee,
consultant or agent of the Company or any of its Subsidiaries seeking
either ownership rights to any invention or compensation from the
Company or any of its Subsidiaries for any invention made by such
employee, consultant or agent in the course of his/her employment with
the Company or any of its Subsidiaries, nor, to the Company's
knowledge, can any such action, suit, proceeding or claim, if
instituted, be sustained. The Prospectus fairly and accurately
describes in all material respects the Company's and its Subsidiaries'
rights with respect to the Intellectual Property.
(xiv) No consent, approval, authorization or order of or
filing with any court, regulatory body, administrative agency or any
other governmental agency or body, domestic or foreign, is required for
the performance of this Agreement or the consummation of the
transactions contemplated hereby, except such as have been or may be
required to be obtained under the Act or may be required under state
securities or Blue Sky laws in connection with the Underwriters'
purchase and distribution of the Shares.
(xv) Neither the Company nor any of its officers, directors or
affiliates (within the meaning of the Rules and Regulations) has taken,
directly or indirectly, any action designed to stabilize or manipulate
the price of any security of the Company, or which has constituted or
which might in the future 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 Shares or otherwise.
(xvi) Each of the Company and its Subsidiaries has good and
valid title to, or valid and enforceable leasehold interests in, all
properties and assets owned or leased by it, free and clear of all
liens, encumbrances, security interests, claims, restrictions,
equities, claims and defects, except (A) such as are described in the
Registration Statement and Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), or such as do not
materially adversely affect the value of any of such properties or
assets taken as a whole and do not materially interfere with the use
made and proposed to be made of any of such properties or assets, and
(B) liens for taxes not yet due and payable as to which appropriate
reserves have been established and reflected in the financial
statements included in the Registration Statement. The Company owns or
leases all such properties as are materially necessary to its
operations as now conducted, and as proposed to be conducted as set
forth in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary
Prospectus); and the properties and business of the Company and its
Subsidiaries conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus (or,
if the Prospectus is not in existence, the most recent Preliminary
Prospectus). All the material leases and subleases of the Company and
its Subsidiaries, and under which the Company or any Subsidiary holds
properties or assets as lessee or sublessee, constitute valid leasehold
interests of the Company or such Subsidiary free and clear of any lien,
encumbrance, security interest, restriction, equity, claim or defect,
are in full force and effect, and neither the Company nor any
8
Subsidiary is in default in respect of any of the material terms or
provisions of any such material leases or subleases, and neither the
Company nor any Subsidiary has notice of any claim which has been
asserted by anyone adverse to the Company's or any of its Subsidiary's
rights as lessee or sublessee under either the material lease or
sublease, or affecting or questioning the Company's or any Subsidiary's
right to the continued possession of the leased or subleased premises
under any such material lease or sublease, in each case which default
or claim would have a Material Adverse Effect.
(xvii) Neither the Company nor any Subsidiary has violated any
applicable environmental, safety, health or similar law applicable to
the business of the Company, nor any federal or state law relating to
discrimination in the hiring, promotion, or pay of employees, nor any
applicable federal or state wages and hours law, nor any provisions of
ERISA or the rules and regulations promulgated thereunder, the
consequences of which violation would have a Material Adverse Effect.
(xviii) Each of the Company and its Subsidiaries hold, and, at
the Closing Date and any later Option Closing Date, as the case may be,
will hold, all franchises, licenses, permits, approvals, certificates
and other authorizations from federal, state and foreign and other
governmental or regulatory authorities necessary to the ownership,
leasing, distribution and operation of their properties or required for
the present conduct of business, and such franchises, licenses,
permits, approvals, certificates and other governmental authorizations
are in full force and effect and the Company and its Subsidiaries are
in compliance therewith in all material respects except where the
failure so to obtain, maintain or comply with would not be reasonably
likely to have a Material Adverse Effect. All of the descriptions in
the Registration Statement and Prospectus of the legal and governmental
proceedings by or before any foreign, state or local government body
are true, complete and accurate in all material respects.
(xix) No Subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such Subsidiary's capital stock, from
repaying to the Company any loans or advances to such Subsidiary from
the Company or from transferring any of such Subsidiary's property or
assets to the Company or any other Subsidiary of the Company, except as
described in or contemplated by the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(xx) Neither the Company nor any of its Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws, (ii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any bond, debenture, note or other
evidence of indebtedness, which default would have a Material Adverse
Effect, (iii) in default in the performance or observance of any
contract, indenture, mortgage, loan agreement joint venture or other
agreement or instrument to which it is a party or by which its or any
of its properties are bound, which default would have a Material
Adverse Effect, or (iv) in violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court of
government agency or body to which the Company is subject, which
violation would have a Material Adverse Effect.
9
(xxi) The Company and its Subsidiaries are (i) in compliance
with all applicable United States, foreign, state and local
environmental laws, rules, regulations, treaties, statutes and codes
promulgated by any and all governmental authorities relating to the
protection of human health and safety, the environment or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct their
business as currently conducted, and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except,
in the case of each of clauses (i) through (iii), above, where such
noncompliance with Environmental Laws, failure to receive required
permit licenses or other approvals would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect. No
action, proceeding, revocation proceeding, writ, injunction or claim is
pending or, to the Company's knowledge, threatened against the Company
or its Subsidiaries relating to the Environmental Laws or to their
activities involving Hazardous Materials. "Hazardous Materials" means
for purposes of this Agreement any material or substance (i) that is
prohibited or regulated by any environmental law, rule, regulation,
order, treaty, statute or code promulgated by any governmental
authority, or any amendment or modification thereto, or (ii) that has
been designated or regulated by any governmental authority as
radioactive, toxic, hazardous or otherwise a danger to health,
reproduction or the environment. The Company and its Subsidiaries have
not engaged in the generation, use, manufacture, transportation or
storage of any Hazardous Materials on any of their properties or former
properties, except where such use, manufacture, transportation or
storage is in compliance in all material respects with Environmental
Laws. The Company and its Subsidiaries have not disposed of any, and to
the Company's knowledge, no parties other than the Company and its
Subsidiaries have disposed of, Hazardous Materials on any of their
properties or on properties formerly owned or leased by them during the
time of such ownership or lease, except in compliance in all material
respects with Environmental Laws. To the Company's knowledge, no
spills, discharges, releases, deposits, emplacements, leaks or disposal
of any Hazardous Materials have occurred on or under or have emanated
from any of the Company's or its Subsidiaries' properties or former
properties during the time of their ownership or lease thereof except
in compliance in all respects with Environmental Laws or that would not
be reasonably likely to have a Material Adverse Effect, and except as
disclosed in the Prospectus, the Company has no knowledge of any
spills, discharges, releases, deposits, emplacements, leaks or disposal
of any Hazardous Materials that have occurred on or under or have
emanated from any of the Company's or Subsidiaries' properties or
former properties prior to the Company's or Subsidiaries' ownership or
lease thereof.
(xxii) Except as disclosed in the Prospectus, there are no
business relationships or related party transactions required to be
disclosed therein by Item 404 of Regulation S-K of the Commission.
(xxiii) The Company and its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with
10
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxiv) The Company and its Subsidiaries are in compliance with
all provisions of Florida Statutes ss.517.075 and the regulations
thereunder, relating to issuers doing business with Cuba.
(xxv) The Company and its Subsidiaries have not at any time
during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any
contribution in violation of law, or (ii) made any payment to any
foreign, United States or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States.
(xxvi) The Company is not, and upon consummation of the
transactions contemplated hereby will not be, subject to registration
as an "investment company" under the Investment Company Act of 1940.
(b) Each Selling Stockholder, severally and not
jointly, represents and warrants to, and agrees with, the several
Underwriters that:
(i) When any Preliminary Prospectus was filed with the
Commission it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of the Act and the Rules and Regulations and (B) did
not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto
was or is declared effective, it (A) contained or will contain all
statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements
of the Act and the Rules and Regulations and (B) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
When the Prospectus and when any amendment or supplement thereto is
filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or such amendment or supplement is not required to be so
filed, when the Registration Statement and when any amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective) and at all times subsequent thereto up to and
including the Closing Date (as defined in Section 3 hereof) and the
Option Closing Date (as defined in Section 9 hereof), the Prospectus,
as amended or supplemented at any such time, (A) contained or will
contain all statements required to be stated therein in accordance
with, and complied or will comply in all material respects with the
11
requirements of, the Act and the Rules and Regulations and (B) did not
or will not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The foregoing provisions of this paragraph (i) shall
apply only to information furnished to the Company by or on behalf of
such Selling Shareholder.
(ii) Such Selling Stockholder is a duly incorporated and
validly existing corporation in good standing under the laws of its
jurisdiction of incorporation, as applicable. Such Selling Stockholder
has all requisite corporate power and authority (as applicable) to
enter into this Agreement and to consummate the transactions provided
for herein.
(iii) This Agreement has been duly authorized, executed and
delivered by such Selling Stockholder and, assuming it is your and the
Company's binding agreement of yours, constitutes a legal, valid and
binding agreement of such Selling Stockholder enforceable against such
Selling Stockholder in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application
relating to or affecting the enforcement of creditors' rights and the
application of equitable principles relating to the availability of
remedies and except as rights to indemnity or contribution may be
limited by federal or state securities laws and the public policy
underlying such laws), and none of such Selling Stockholder's execution
or delivery of this Agreement, its performance hereunder, its
consummation of the transactions contemplated herein or its application
of the net proceeds of the offering in the manner set forth under the
caption "Use of Proceeds" conflicts or will conflict with or results or
will result in any breach or violation of any of the terms or
provisions of, or constitutes or will constitute a default under,
causes or will cause (or permits or will permit) the maturation or
acceleration of any liability or obligation or the termination of any
right under, or result in the creation or imposition of any lien,
charge, or encumbrance upon, any property or assets of such Selling
Stockholder pursuant to the terms of, as applicable, (A) the
organizational documents of such Selling Stockholder (if a
corporation), (B) any indenture, mortgage, deed of trust, voting trust
agreement, stockholders' agreement, note agreement or other agreement
or instrument to which such Selling Stockholder is a party or by which
it is or may be bound or to which any of its respective property is or
may be subject or (C) any statute, judgment, decree, order, rule or
regulation applicable to such Selling Stockholder of any government,
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body, domestic or foreign, having jurisdiction
over such Selling Stockholder or any of its respective activities or
properties, except, in the cases of clauses (B) and (C) above, for
breaches, violations, defaults or terminations which would not be
reasonably likely to have a Material Adverse Effect.
(iv) Neither such Selling Stockholder, nor any person acting
on behalf of such Selling Stockholder, has taken, directly or
indirectly, any action designed to stabilize or manipulate the price of
any security of the Company, or which has constituted or which might in
the future 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 Shares or otherwise.
12
(v) Such Selling Stockholder is the lawful owner of the
Shares to be sold by it pursuant to this Agreement and has, and on the
Closing Date (and Option Closing Date, if applicable) will have, good
and clear title to such Shares, free of all restrictions on transfer,
liens, encumbrances, security interests and claims whatsoever.
(vi) Upon delivery of and payment for the Shares to be sold
by such Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests and
claims whatsoever.
3. Purchase, Sale and Delivery of the Shares. On the basis of the
representations, warranties, covenants and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company and the
Selling Stockholders agree to sell to each Underwriter, and each Underwriter,
severally and not jointly, agrees to purchase from the Company and the Selling
Shareholders, at a purchase price of $______________ per Share, the number of
Firm Shares set forth opposite the name of such Underwriter in Column (1) of
Schedule I hereto.
Delivery of certificates, and payment of the purchase price, for the
Firm Shares shall be made at the offices of ING Baring Xxxxxx Xxxx LLC at 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as shall be
agreed upon by the Company and the Representatives. Such delivery and payment
shall be made at 10:00 a.m., New York City time, on __________, 1999 or at such
other time and date not more than ten business days thereafter as shall be
agreed upon by the Representatives and the Company. The time and date of such
delivery and payment are herein called the "Closing Date." Delivery of the
certificates for the Firm Shares shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price for the Firm
Shares by wire transfer of immediately available funds to an account designated
to the Representatives in writing at least two business days preceding the
Closing Date. The certificates for the Shares to be so delivered will be in
definitive, fully registered form, will bear no restrictive legends and will be
in such denominations and registered in such names as the Representatives shall
request, not less than two full business days prior to the Closing Date. The
certificates for the Firm Shares will be made available to the Representatives
at such office or such other place as the Representatives may designate for
inspection, checking and packaging not later than 9:30 a.m., New York time on
the business day prior to the Closing Date.
4. Public Offering of the Shares. It is understood that the
Underwriters propose to make a public offering of the Shares at the price and
upon the other terms set forth in the Prospectus.
13
5. Covenants of the Company and the Selling Stockholders.
(a) The Company covenants and agrees with each of the
Underwriters that:
(i) The Company will use its best efforts to cause
the Registration Statement, if not effective at the time of execution
of this Agreement, and any amendments thereto to become effective as
promptly as practicable. If required, the Company will file the
Prospectus and each amendment or supplement thereto with the Commission
in the manner and within the time period required by Rule 424(b) under
the Act. During any time when a prospectus relating to the Shares is
required to be delivered under the Act, the Company (A) will comply
with all requirements imposed upon it by the Act and the Rules and
Regulations to the extent necessary to permit the continuance of sales
of or dealings in the Shares in accordance with the provisions hereof
and of the Prospectus, as then amended or supplemented, and (B) will
not file with the Commission the prospectus or the amendment referred
to in the third sentence of Section 2(a)(i) hereof, any amendment or
supplement to such prospectus or any amendment to the Registration
Statement of which the Representatives shall not previously have been
advised and furnished with a copy a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall
not have given their consent.
(ii) As soon as the Company is advised or obtains
knowledge thereof, the Company will advise the Representatives (A) when
the Registration Statement, as amended, has become effective; if the
provisions of Rule 430A promulgated under the Act will be relied upon,
when the Prospectus has been filed in accordance with said Rule 430A
and when any post-effective amendment to the Registration Statement
becomes effective; (B) of any request made by the Commission for
amending the Registration Statement, for supplementing any Preliminary
Prospectus or the Prospectus or for additional information, or (C) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto or the institution or threat of any investigation or proceeding
for that purpose, and will use its best efforts to prevent the issuance
of any such order and, if issued, to obtain the lifting thereof as soon
as possible.
(iii) The Company will (A) use its best efforts to
arrange for the qualification of the Shares for offer and sale under
the state securities or blue sky laws of such jurisdictions as the
Representatives may designate, and the continuation of such
qualifications in effect for as long as may be necessary to complete
the distribution of the Shares, and (B) make such applications, file
such documents and furnish such information as may be required for the
purposes set forth in clause (A); provided, however, that the Company
shall not be required to qualify as a foreign corporation or file a
general or unlimited consent to service of process in any such
jurisdiction.
14
(iv) The Company consents to the use of the
Prospectus (and each amendment or supplement thereto) by the
Underwriters and all dealers to whom the Shares may be sold, in
connection with the offering or sale of the Shares and for such period
of time thereafter as the Prospectus is required by law to be delivered
in connection therewith. If, at any time when a prospectus relating to
the Shares is required to be delivered under the Act, any event occurs
as a result of which the Prospectus, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state
a material fact necessary to make the statements therein not
misleading, or if it becomes necessary at any time to amend or
supplement the Prospectus to comply with the Act or the Rules and
Regulations, the Company promptly will so notify the Representatives
and, subject to Section 5(a)(i) hereof, will prepare and file with the
Commission an amendment to the Registration Statement or an amendment
or supplement to the Prospectus which will correct such statement or
omission or effect such compliance, each such amendment or supplement
to be reasonably satisfactory to the Representatives and counsel to the
Underwriters.
(v) As soon as practicable, but in any event not
later than 45 days after the end of the 12-month period beginning on
the day after the end of the fiscal quarter of the Company during which
the effective date of the Registration Statement occurs (90 days in the
event that the end of such fiscal quarter is the end of the Company's
fiscal year), the Company will make generally available to its security
holders, in the manner specified in Rule 158(b) of the Rules and
Regulations, and to the Representatives, an earnings statement which
will be in the detail required by, and will otherwise comply with, the
provisions of Section 11(a) of the Act and Rule 158(a) of the Rules and
Regulations, which statement need not be audited unless required by the
Act or the Rules and Regulations, covering a period of at least 12
consecutive months after the effective date of the Registration
Statement.
(vi) During a period of five years after the date
hereof, the Company will furnish to its stockholders, as soon as
practicable, annual reports (including financial statements audited by
independent public accountants) and unaudited quarterly reports of
earnings, and will deliver to the Representatives:
(A) concurrently with furnishing any quarterly reports to its
stockholders, statements of income of the Company for each quarter in
the form furnished to the Company's stockholders;
(B) concurrently with furnishing annual reports to its
stockholders, a balance sheet of the Company as at the end of the
preceding fiscal year, together with statements of operations,
stockholders' equity, and cash flows of the Company for such fiscal
year, accompanied by a copy of the report thereon of independent public
accountants;
(C) as soon as they are available, copies of all information
(financial or other) mailed to stockholders;
(D) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the
National Association of Securities Dealers, Inc. ("NASD") or any
securities exchange;
15
(E) every press release and every material news item or
article of interest to the financial community in respect of the
Company or its affairs which was released or prepared by the Company;
and
(F) any additional information of a public nature concerning
the Company or its business in the possession of the Company which the
Representatives may reasonably request.
During such five-year period, for so long as the Company has
active subsidiaries, the foregoing financial statements will be on a
consolidated basis to the extent that the accounts of the Company and
its subsidiaries are consolidated, and will be accompanied by similar
financial statements for any significant subsidiary which is not so
consolidated.
(vii) The Company will maintain a Transfer Agent and,
if necessary under the jurisdiction of incorporation of the Company, a
Registrar (which may be the same entity as the Transfer Agent) for its
Common Stock.
(viii) The Company will furnish, without charge, to
the Representatives or on the Representatives' order, at such place as
the Representatives may designate, copies of the each Preliminary
Prospectus, the Registration Statement and any pre-effective or
post-effective amendments thereto (two of which copies will be signed
and will include all financial statements and exhibits) and the
Prospectus, and all amendments and supplements thereto, in each case as
soon as available and in such quantities as the Representatives may
reasonably request.
(ix) The Company will not, directly or indirectly,
without the prior written consent of the Representatives, issue, offer,
sell, grant any option to purchase or otherwise dispose (or announce
any issuance, offer, sale, grant of any option to purchase or other
disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common
Stock for the period ending 180 days after the date hereof, except
pursuant to this Agreement and except for issuances pursuant to the
exercise of stock options outstanding on or granted subsequent to the
date hereof pursuant to a stock option or other employee benefit plan
in existence on the date hereof.
(x) The Company will use its best efforts to cause
the Shares to be included for quotation on the Nasdaq National Market
prior to the Closing Date.
(xi) The Company will apply the net proceeds of the
offering received by it in the manner set forth under the caption "Use
of Proceeds" in the Prospectus.
(xii) The Company will timely file all such reports,
forms or other documents as may be required from time to time, under
the Act, the Rules and Regulations, the Exchange Act, and the rules and
regulations thereunder, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements
under the Act, the Rules and Regulations, the Exchange Act and the
rules and regulations thereunder.
16
(b) Each Selling Stockholder covenants and agrees
with each of the Underwriters that during the period ending 180 days after the
date hereof, such Selling Stockholder will not without your prior written
consent, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, directly or indirectly, any shares of Common Stock (or any
securities convertible into or exercisable or exchangeable for Common Stock)
other than such Selling Stockholder's sale of Shares hereunder.
6. Expenses.
(a) Regardless of whether the transactions contemplated in
this Agreement are consummated, and regardless of whether for any
reason this Agreement is terminated subject to the last sentence of
this Section 6(a), the Company and the Selling Stockholders will pay,
and hereby agree to indemnify each Underwriter against, all fees and
expenses incident to the performance of the obligations of the Company
and the Selling Stockholders under this Agreement, including, but not
limited to, (i) fees and expenses of accountants and counsel for the
Company, (ii) all costs and expenses incurred in connection with the
preparation, duplication, printing, filing, delivery and shipping of
copies of the Registration Statement and any pre-effective or
post-effective amendments thereto, any Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto (including postage
costs related to the delivery by the Underwriters of any Preliminary
Prospectus or Prospectus, or any amendment or supplement thereto), this
Agreement, and all other documents in connection with the transactions
contemplated herein, including the cost of all copies thereof, (iii)
fees and expenses relating to qualification of the Shares under state
securities or blue sky laws, including the cost of preparing and
mailing the preliminary and final blue sky memoranda and filing fees
and disbursements and reasonable fees of counsel and other related
expenses, if any, in connection therewith, (iv) filing fees of the
Commission and the NASD relating to the Shares, (v) any fees and
expenses in connection with the quotation of the Shares on the Nasdaq
National Market and reasonable fees of counsel to the Underwriters in
connection with NASD filings, (vi) costs and expenses incident to the
preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including transfer agent's and
registrar's fees and any applicable transfer taxes incurred in
connection with the delivery to the Underwriters of the Shares to be
sold by the Company and the Selling Stockholders pursuant to this
Agreement, (vii) costs and expenses incident to any meetings with
prospective investors in the Shares (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters) and (viii) costs and expenses of advertising relating to
the offering of the Shares (other than as shall have been specifically
approved by the Representatives to be paid for by the Underwriters).
Except as set forth above and in Section 6(b) below, the Underwriters
shall pay all of their own expenses (including the fees and
disbursements of their counsel and their travel expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby.
17
(b) If the purchase of the Shares as herein contemplated is
not consummated for any reason other than the Underwriters' default
under this Agreement or other than by reason of Section 11(a), the
Company and the Selling Stockholders shall reimburse the several
Underwriters for their reasonable out-of-pocket expenses (including
reasonable counsel fees and disbursements) in connection with any
investigation made by them, and any preparation made by them in respect
of marketing of the Shares or in contemplation of the performance by
them of their obligations hereunder.
7. Conditions of the Underwriters' Obligations. The obligation
of each Underwriter to purchase and pay for the Shares set forth opposite the
name of such Underwriter in Schedule I is subject to the continuing accuracy of
the representations and warranties of the Company and the Selling Stockholders
herein as of the date hereof and as of the Closing Date as if they had been made
on and as of the Closing Date; the accuracy on and as of the Closing Date of the
statements of officers of the Company made pursuant to the provisions hereof;
the performance by the Company and the Selling Stockholders on and as of the
Closing Date of all of its covenants and agreements hereunder which are to be
performed on or prior to the Closing Date; and the following additional
conditions:
(a) If the Company has elected to rely on Rule 430A under the
Act, the Registration Statement shall have been declared effective, and
the Prospectus (containing the information omitted pursuant to Rule
430A) shall have been filed with the Commission not later than the
Commission's close of business on the second business day following the
date hereof or such later time and date to which the Representatives
shall have consented; if the Company does not elect to rely on Rule
430A, the Registration Statement shall have been declared effective not
later than 11:00 A.M., New York time, on the first business day
following the date hereof or such later time and date to which the
Representatives shall have consented; if required, in the case of any
changes in or amendments or supplements to the Prospectus in addition
to those contemplated above, the Company shall have filed such
Prospectus as amended or supplemented with the Commission in the manner
and within the time period required by Rule 424(b) under the Act; no
stop order suspending the effectiveness of the Registration Statement
or any amendment thereto shall have been issued, and no proceedings for
that purpose shall have been instituted or, to the knowledge of the
Company or the Representatives, shall be contemplated or threatened by
the Commission; and the Company shall have complied with any request of
the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise).
(b) The Registration Statement, or any amendment thereto,
shall not contain an untrue statement of material fact, or omit to
state a material fact which is required to be stated therein or is
necessary to make the statements therein not misleading, and the
Prospectus, or any supplement thereto, shall not contain an untrue
statement of material fact, or omit to state a material fact which is
required to be stated therein or is necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
18
(c) On or prior to the Closing Date, the Representatives shall
have received from counsel to the Underwriters, such opinion or
opinions with respect to the issuance and sale of the Firm Shares, the
Registration Statement and the Prospectus and such other related
matters as the Representatives reasonably may request and such counsel
shall have received such documents and other information as they
request to enable them to pass upon such matters.
(d) On the Closing Date, the Underwriters shall have received
the opinion, dated the Closing Date, of Xxxxxx Xxxxxxxxxx LLP, counsel
to the Company and the Selling Stockholders, in the form attached
hereto as Appendix A, addressed to the Underwriters.
(e) On or prior to the Closing Date, counsel to the
Underwriters shall have been furnished such documents, certificates and
opinions as they may reasonably require in order to evidence the
accuracy, completeness or satisfaction of any of the representations or
warranties of the Company and the Selling Stockholders, or conditions
herein contained.
(f) On the Closing Date, the Representatives shall have
received, a letter from the PricewaterhouseCoopers LLP addressed to the
Company and the Underwriters, dated the Closing Date, confirming that
it is an independent certified public accountant with respect to the
Company within the meaning of the Act and the Rules and Regulations
thereunder and based upon the procedures described in its letter
delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not
more than three days prior to the Closing Date, (i) confirming that the
statements and conclusions set forth in the Original Letter are
accurate as of the Closing Date; and (ii) setting forth any revisions
and additions to the statements and conclusions set forth in the
Original Letter that are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change, or any
development involving a prospective change, in or affecting the
business or properties of the Company which, in your reasonable
judgment, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. In
addition, you shall have received from the Accountants a letter
addressed to the Company and made available to you for the use of the
Underwriters stating that its review of the Company's system of
internal accounting controls, to the extent it deemed necessary in
establishing the scope of its latest examination of the Company's
financial statements, did not disclose any weaknesses in internal
controls that it considered to be material weaknesses. All such letters
shall be in a form reasonably satisfactory to the Representatives and
their counsel.
(g) On the Closing Date, the Representatives shall have
received a certificate, dated the Closing Date, of the principal
executive officer and the principal financial or accounting officer of
the Company to the effect that each of such persons has carefully
examined the Registration Statement and the Prospectus and any
amendments or supplements thereto and this Agreement, and that:
19
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the
Closing Date, and the Company has complied with all agreements and
covenants and satisfied all conditions contained in this Agreement on
its part to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best knowledge
of each of such persons are contemplated or threatened under the Act
and any and all filings required by Rule 424 and Rule 430A have been
timely made;
(iii) The Registration Statement and Prospectus and, if
any, each amendment and each supplement thereto, contain all statements
and information required to be included therein, and neither the
Registration Statement nor any amendment thereto includes any untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and neither the Prospectus nor any supplement
thereto includes any untrue statement of a material fact or omits or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
up to and including the Closing Date, other than as contemplated by the
Prospectus, neither the Company nor any of the Subsidiaries has
incurred, other than in the ordinary course of its business, any
material liabilities or obligations, direct or contingent; neither the
Company nor any of the Subsidiaries has purchased any of its
outstanding capital stock or paid or declared any dividends or other
distributions on its capital stock; neither the Company nor any of the
Subsidiaries has entered into any transactions not in the ordinary
course of business; and there has not been any change in the capital
stock or consolidated long-term debt or any increase in the
consolidated short-term borrowings (other than any increase in
short-term borrowings in the ordinary course of business) of the
Company or any material adverse change to the business, properties,
assets, net worth, condition (financial or other), or results of
operations of the Company and its Subsidiaries taken as a whole;
neither the Company nor any of the Subsidiaries has sustained any
material loss or damage to its property or assets, whether or not
insured; there is no litigation which is pending or threatened against
the Company or any of its Subsidiaries which if adversely decided would
have a Material Adverse Effect.
References to the Registration Statement and the Prospectus in
this paragraph (g) are to such documents as amended and supplemented at
the date of the certificate.
20
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus up to and
including the Closing Date there has not been (i) any material change
or decrease specified in the letter or letters referred to in paragraph
(f) of this Section 7 or (ii) any material adverse change, or any
development involving a prospective material adverse change, in the
business or properties of the Company or its Subsidiaries which change
or decrease in the case of clause (i) or change or development in the
case of clause (ii) makes it impractical or inadvisable in the
Representatives' judgment to proceed with the public offering or the
delivery of the Shares as contemplated by the Prospectus.
(i) No order suspending the sale of the Shares in any
jurisdiction designated by you pursuant to Section 5(a)(iii)(A) hereof
has been issued on or prior to the Closing Date and no proceedings for
that purpose have been instituted or, to your knowledge or that of the
Company, have been or are contemplated.
(j) The Representatives shall have received from each person
identified on Appendix B attached hereto an agreement to the effect
that such person will not, for the period ending one hundred and eighty
(180) days after the date hereof, directly or indirectly offer, sell,
solicit an offer to buy, make any short sale, pledge, grant any option
to purchase, contract to sell, or otherwise dispose of or transfer
(collectively, a "Disposition") any shares of Common Stock (including,
without limitation, shares of Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and Exchange Commission) or any
securities convertible into or exercisable or exchangeable for, or any
rights to purchase or acquire, shares of Common Stock now owned or
hereafter acquired directly by the undersigned or with respect to which
the undersigned has or hereafter acquires the power of Disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or
donees thereof agree in writing to be bound by this restriction or (ii)
as a distribution to partners or stockholders of the undersigned,
provided that the distributees thereof agree in writing to be bound by
the terms of this restriction.
(k) The Company and the Selling Stockholders shall have
furnished the Underwriters with such further opinions, letters,
certificates or documents as you or counsel for the Representatives may
reasonably request. All opinions, certificates, letters and documents
to be furnished by the Company will comply with the provisions hereof
(to the extent a form of such document is not attached hereto) only if
they are reasonably satisfactory in all material respects to the
Representatives and to counsel for the Representatives. The Company
shall furnish the Representatives with conformed copies of such
opinions, certificates, letters and documents in such quantities as you
reasonably request. The certificates delivered under this Section 7
shall constitute representations, warranties and agreements of the
Company, as to all matters set forth therein as fully and effectively
as if such matters had been set forth in Section 2 of this Agreement.
(l) The Shares shall have been duly authorized for quotation
on the Nasdaq National Market.
21
8. Indemnification.
(a) The Company and each Selling Shareholder jointly and
severally agree to indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, against any
and all losses, claims, damages or liabilities, joint or several (and
actions in respect thereof), to which such Underwriter or such
controlling person may become subject, under the Act or other federal
or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement
or the Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission therein of 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, and will
reimburse, as incurred, such Underwriter or such controlling persons
for any legal or other expenses reasonably incurred by such Underwriter
or such controlling persons in connection with investigating, defending
or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action; provided, however, that the Company
and the Selling Stockholders will not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any of such documents
in reliance upon and in conformity with information furnished in
writing to the Company on behalf of such Underwriter through the
Representatives expressly for use therein, and provided, further, that
such indemnity with respect to any Preliminary Prospectus shall not
inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage, liability or action purchased Shares which
are the subject thereof to the extent that any such loss, claim,
damage, liability or action (i) results from the fact that such
Underwriter failed to send or give a copy of the Prospectus (excluding
documents incorporated by reference) to such person at or prior to the
confirmation of the sale of such Shares to such person in any case
where such delivery is required by the Act and (ii) arises out of or is
based upon an untrue statement or omission of a material fact contained
in such Preliminary Prospectus that was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Company with
Section 5(viii) hereof.
The indemnity agreement in this paragraph (a) shall be in
addition to any liability which the Company and the Selling
Stockholders may otherwise have.
(b) Each of the Underwriters agrees severally, but not
jointly, to indemnify and hold harmless the Company, each Selling
Stockholder, each of the directors of the Company, each of the officers
of the Company who has signed the Registration Statement, each person,
if any, who controls the Company within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities (and actions in respect thereof) to
which the Company or any such Selling Stockholder, director, officer,
or controlling person may become subject, under the Act or other
federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
22
actions arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement or the Prospectus or any Preliminary Prospectus, or any
amendment or supplement thereto or in any Blue Sky Application, or
arise out of or are based upon the (i) any untrue statement or alleged
untrue statement of any material fact contained therein, or (ii) the
omission or alleged omission therein of 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,
in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information furnished
in writing by that Underwriter through the Representatives to the
Company expressly for use therein; and will reimburse, as incurred, all
legal or other expenses reasonably incurred by the Company or any such
Selling Stockholder, director, officer, controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action. The Company and the Selling Stockholders
acknowledge that the statements with respect to the public offering of
the Shares set forth in paragraphs one (1) and three (3) under the
heading "Underwriting" and the stabilization legend in the Prospectus
have been furnished by the Underwriters to the Company expressly for
use therein and constitute the only information furnished in writing by
or on behalf of the Underwriters for inclusion in the Registration
Statement, the Prospectus and any Preliminary Prospectus. The indemnity
agreement contained in this subsection (b) shall be in addition to any
liability which the Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against one or
more indemnifying parties under this Section 8, notify such
indemnifying party or parties of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) of this Section 8 or to the extent that the
indemnifying party was not adversely affected by such omission. In case
any such action is brought against an indemnified party and it notifies
an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties against which a claim is to be made will
be entitled to participate therein and, to the extent that it or they
may wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided however, that if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party has reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties
shall have the right to select separate counsel to assume such legal
defenses and otherwise to participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election
so to assume the defense of such action and approval by the indemnified
23
party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
(other than the reasonable costs of investigation) subsequently
incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party has employed such counsel in
connection with the assumption of such different or additional legal
defenses in accordance with the proviso to the immediately preceding
sentence, (ii) the indemnifying party has not employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement
of the action, or (iii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the
expense of the indemnifying party; provided, however, that the Company
and the Selling Stockholders shall only be liable for the reasonable
fees and expenses of one (1) such additional counsel in any single
jurisdiction plus appropriate local counsel in other jurisdictions.
(d) If the indemnification provided for in this Section 8 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) above in respect of any losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) (i) in
such proportion as is appropriate to reflect the relative benefits
received by each of the contributing parties, on the one hand, and the
party to be indemnified, on the other hand, from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of each of the contributing parties, on the
one hand, and the party to be indemnified, on the other hand in
connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. In any case where the Company and the Selling
Stockholders are the contributing party and the Underwriters are the
indemnified party, the relative benefits received by the Company and
the Selling Stockholders on the one hand, and the Underwriters, on the
other, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Shares (before deducting expenses)
bear to the total underwriting discounts received by the Underwriters
hereunder, in each case as set forth in the table on the cover page of
the Prospectus. Relative fault 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 and the Selling
Stockholders or by the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this paragraph (d), the Underwriters shall not be
required to contribute any amount in excess of the underwriting
24
discount applicable to the Shares purchased by the Underwriters
hereunder. The Underwriters' obligations to contribute pursuant to this
paragraph (d) are several in proportion to their respective
underwriting obligations, and not joint. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this paragraph (d),
(i) each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter and (ii) each
director of the Company, each officer of the Company who has signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act shall have the same rights to contribution as the
Company, subject in each case to this paragraph (d). Any party entitled
to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect to
which a claim for contribution may be made against another party or
parties under this paragraph (d), notify such party or parties from
whom contribution may be sought, but the omission so to notify such
party or parties shall not relieve the party or parties from whom
contribution may be sought from any other obligation (x) it or they may
have hereunder or otherwise than under this paragraph (d) or (y) to the
extent that such party or parties were not adversely affected by such
omission. The contribution agreement set forth above shall be in
addition to any liabilities which any indemnifying party may otherwise
have.
9. Right to Increase Offering. At anytime during a period of
30 days from the date of the Prospectus, the Underwriters, by no less than two
business days' prior notice to the Company may designate a closing (which may be
concurrent with, and part of, the closing on the Closing Date with respect to
the Firm Shares or may be a second closing held on a date subsequent to the
Closing Date, in either case such date shall be referred to herein as the
"Option Closing Date") at which the Underwriters may purchase all or less than
all of the Additional Shares in accordance with the provisions of this Section 9
at the purchase price per share to be paid for the Firm Shares. In no event
shall the Option Closing Date be later than 10 business days after written
notice of election to purchase Additional Shares is given.
The Company and the Selling Stockholders agree to sell to the
several Underwriters on the Option Closing Date the number of Additional Shares
specified in such notice and the Underwriters agree severally and not jointly,
to purchase such Additional Shares on the Option Closing Date. Such Additional
Shares shall be purchased for the account of each Underwriter in the same
proportion as the number of Firm Shares set forth opposite the name of such
Underwriter in Column (3) of Schedule I bears to the total number of Firm Shares
(subject to adjustment by you to eliminate fractions) and may be purchased by
the Underwriters only for the purpose of covering over-allotments made in
connection with the sale of the Firm Shares.
No Additional Shares shall be sold or delivered unless the
Firm Shares previously have been, or simultaneously are, sold and delivered. The
right to purchase the Additional Shares or any portion thereof may be
surrendered and terminated at any time upon notice by you to the Company.
25
Except to the extent modified by this Section 9, all
provisions of this Agreement relating to the transactions contemplated to occur
on the Closing Date for the sale of the Firm Shares shall apply, mutatis
mutandis, to the Option Closing Date for the sale of the Additional Shares.
10. Representations, etc. to Survive Delivery. The respective
representations, warranties, agreements, covenants, indemnities and statements
of, and on behalf of, the Company and its officers, the Selling Stockholders and
the Underwriters, respectively, set forth in or made pursuant to this Agreement
will remain in full force and effect, regardless of any investigation made by or
on behalf of the Underwriters, and will survive delivery of and payment for the
Shares. Any successors to the Underwriters shall be entitled to the indemnity,
contribution and reimbursement agreements contained in this Agreement.
11. Effective Date and Termination.
(a) This Agreement shall become effective at 11:00 A.M., New
York time on the first business day following the date hereof, or at such
earlier time after the Registration Statement becomes effective as the
Representatives, in their sole discretion, shall release the Shares for the sale
to the public unless prior to such time the Representatives shall have received
written notice from the Company and the Selling Stockholders that they elect
that this Agreement shall not become effective, or the Representatives shall
have given written notice to the Company that the Representatives on behalf of
the Underwriters elect that this Agreement shall not become effective; provided,
however, that the provisions of this Section and of Section 6 and Section 8
hereof shall at all times be effective. For purposes of this Section 11(a), the
Shares to be purchased hereunder shall be deemed to have been so released upon
the earlier of notification by the Representatives to securities dealers
releasing such Shares for offering or the release by the Representatives for
publication of the first newspaper advertisement which is subsequently published
relating to the Shares.
(b) This Agreement (except for the provisions of Sections 6
and 8 hereof) may be terminated by the Representatives by notice to the Company
that the Company or the Selling Stockholders have failed to comply in any
respect with any of the provisions of this Agreement required on their part to
be performed at or prior to the Closing Date or the Option Closing Date, or if
any of the representations or warranties of the Company and the Selling
Stockholders are not accurate in any respect or if the covenants, agreements or
conditions of, or applicable to the Company or the Selling Stockholders herein
contained have not been complied with in any respect or satisfied within the
time specified on the Closing Date or the Option Closing Date, respectively, or
if prior to the Closing Date or the Option Closing Date:
(i) the Company or any of its Subsidiaries shall have
sustained a loss by strike, fire, flood, accident or other calamity of such a
character as to interfere materially with the conduct of the business and
operations of the Company and its Subsidiaries taken as a whole regardless of
whether or not such loss was insured;
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities generally
on the New York Stock Exchange or the National Association of Securities Dealers
Automated Quotations National Market System shall have been suspended or a
material limitation on such trading shall have been imposed or minimum or
maximum prices shall have been established on any such exchange or market
system;
26
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been an outbreak or escalation of
hostilities between the United States and any foreign power or an outbreak or
escalation of any other insurrection or armed conflict involving the United
States; or
(v) there shall have been a material adverse change in (A)
general economic, political or financial conditions or (B) the present or
prospective business or condition (financial or other) of the Company and its
Subsidiaries taken as a whole that, in each case, in the Representatives'
judgment makes it impracticable or inadvisable to make or consummate the public
offering, sale or delivery of the Shares on the terms and in the manner
contemplated in the Prospectus and the Registration Statement.
(c) Termination of this Agreement under this Section 11 or
Section 12 after the Firm Shares have been purchased by the Underwriters
hereunder shall be applicable only to the Additional Shares. Termination of this
Agreement shall be without liability of any party to any other party other than
as provided in Sections 6 and 8 hereof.
12. Substitution of Underwriters. If one or more of the
Underwriters shall fail or refuse (otherwise than for a reason sufficient to
justify the termination of this Agreement under the provisions of Section 7 or
11 hereof) to purchase and pay for (a) in the case of the Closing Date, the
number of Firm Shares agreed to be purchased by such Underwriter or Underwriters
upon tender to you of such Firm Shares in accordance with the terms hereof or
(b) in the case of the Option Closing Date, the number of Additional Shares
agreed to be purchased by such Underwriter or Underwriters upon tender to you of
such Additional Shares in accordance with the terms hereof, and the number of
such Shares shall not exceed 10% of the Firm Shares or Additional Shares
required to be purchased on the Closing Date or the Option Closing Date, as the
case may be, then, each of the non-defaulting Underwriters shall purchase and
pay for (in addition to the number of such Shares which it has severally agreed
to purchase hereunder) that proportion of the number of Shares which the
defaulting Underwriter or Underwriters shall have so failed or refused to
purchase on such Closing Date or Option Closing Date, as the case may be, which
the number of Shares agreed to be purchased by such non-defaulting Underwriter
bears to the aggregate number of Shares so agreed to be purchased by all such
non-defaulting Underwriters on such Closing Date or Option Closing Date, as the
case may be. In such case, you shall have the right to postpone the Closing Date
or the Option Closing Date, as the case may be, to a date not exceeding seven
full business days after the date originally fixed as such Closing Date or the
Option Closing Date, as the case may be, pursuant to the terms hereof in order
that any necessary changes in the Registration Statement, the Prospectus or any
other documents or arrangements may be made.
If one or more of the Underwriters shall fail or refuse
(otherwise than for a reason sufficient to justify the termination of this
Agreement under the provisions of Section 7 or 11 hereof) to purchase and pay
for (a) in the case of the Closing Date, the number of Firm Shares agreed to be
purchased by such Underwriter or Underwriters upon tender to you of such Firm
Shares in accordance with the terms hereof or (b) in the case of the Option
Closing Date, the number of Additional Shares agreed to be purchased by such
27
Underwriter or Underwriters upon tender to you of such Additional Shares in
accordance with the terms hereof, and the number of such Shares shall exceed 10%
of the Firm Shares or Additional Shares required to be purchased by all the
Underwriters on the Closing Date or the Option Closing Date, as the case may be,
then (unless within 48 hours after such default arrangements to your
satisfaction shall have been made for the purchase of the defaulted Shares by an
Underwriter or Underwriters) and subject to the provisions of Section 11(b)
hereof, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or on the part of the Company and the Selling
Stockholders except as otherwise provided in Sections 6 and 8 hereof. As used in
this Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this paragraph. Nothing in this Section 12, and no action
taken hereunder, shall relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
13. Notices. All communications hereunder shall be in writing
and if sent to the Representatives shall be mailed or delivered or telegraphed
and confirmed by letter or telecopied and confirmed by letter to c/o ING Baring
Xxxxxx Xxxx LLC at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxx Xxxxx or, if sent to the Company,
shall be mailed or delivered or telegraphed and confirmed to the Company at 000
Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, with a copy to Xxxxxx Xxxxxxxxxx
LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxxx.
14. Successors. This Agreement shall inure to the benefit of
and be binding upon the Company, the Selling Stockholders and each Underwriter
and their respective successors and legal representatives, and nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person, except
that the representations, warranties, indemnities and contribution agreements of
the Company and the Selling Stockholders contained in this Agreement shall also
be for the benefit of any person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and except that the Underwriters' indemnity and contribution agreements shall
also be for the benefit of the directors of the Company, the officers of the
Company who have signed the Registration Statement, any person or persons, if
any, who control the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of Shares from the Underwriters
will be deemed a successor because of such purchase.
15. Applicable Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the choice of law or conflict of law principles
thereof. Each party hereto consents to the jurisdiction of each court in which
any action is commenced seeking indemnity or contribution pursuant to Section 8
above and agrees to accept, either directly or through an agent, service of
process of each such court.
28
16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument.
If the foregoing correctly sets forth our understanding,
please indicate the Underwriters' acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
The Company:
TAKE-TWO INTERACTIVE SOFTWARE, INC.
By:_____________________________________
Name:
Title:
The Subsidiaries:
GEARHEAD ENTERTAINMENT, INC.
By:_____________________________________
Name:
Title:
MISSION STUDIOS, INC.
By:______________________________________
Name:
Title:
29
ALTERNATIVE REALITY TECHNOLOGIES, INC.
By:______________________________________
Name:
Title:
TAKE-TWO INTERACTIVE SOFTWARE EUROPE LIMITED
By:______________________________________
Name:
Title:
GOLDWEB SERVICES
By:______________________________________
Name:
Title:
TAKE-TWO INTERACTIVE FRANCE F.A.
By:______________________________________
Name:
Title:
TAKE-TWO INTERACTIVE GMBH
By:______________________________________
Name:
Title:
30
INVENTORY MANAGEMENT SYSTEMS, INC.
By:______________________________________
Name:
Title:
XXXX OF ALL GAMES, INC.
By:______________________________________
Name:
Title:
DIRECTSOFT AUSTRALIA PTY. LIMITED
By:______________________________________
Name:
Title:
TALONSOFT, INC.
By:______________________________________
Name:
Title:
L.D.A. DISTRIBUTION LIMITED
By:______________________________________
Name:
Title:
31
JOYTECH EUROPE LIMITED
By:______________________________________
Name:
Title:
FALCON VENTURES CORPORATION (d/b/a XXXXXXX.XXX)
By:______________________________________
Name:
Title:
The Selling Stockholders:
By:_______________________________________
Name: Xxxxx X. Xxxxx
Title:
By:_______________________________________
Name: BMG Entertainment
Title:
By:_______________________________________
Name: Xxxxxx Xxxxxxxxx
Title:
By:_______________________________________
Name: Xxxxx Xxxxxxxxx
Title:
By:_______________________________________
Name: Xxxxxx X. Xxxxx, Xx.
Title:
By:_______________________________________
Name: Xxxx X. Xxxxx
Title:
By:_______________________________________
Name: Xxxx X. Xxxxxx
Title:
By:_______________________________________
Name: Xxxxx Xxxxxx
Title:
32
By:_______________________________________
Name: Xxxxxx Xxxx
Title:
By:_______________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title:
By:_______________________________________
Name: Xxxxxxx X. Ras
Title:
By:_______________________________________
Name: Xxxxx Xxxxxx
Title:
Accepted as of the date first above
written:
ING BARING XXXXXX XXXX LLC Xxxxxx Xxxxxx
Xxxxxxxx & Co., Inc. XXXXXX XXXXXX &
COMPANY, INC.
By: ING Baring Xxxxxx Xxxx LLC Acting on
its own behalf and as one of the
Representatives of the several
Underwriters referred to in the foregoing
Agreement
By:_______________________________________
Name:
Title:
33
Schedule I
Underwriters
(1) (2)
Number of Firm Number of
Shares to be Additional
Purchased from Shares
the Company to be Purchased
----------- ---------------
Name and Address
----------------
ING Baring Xxxxxx Xxxx LLC........... _____________ _____________
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.... _____________ _____________
Xxxxxx Xxxxxx & Company, Inc......... _____________ _____________
Total................................ _____________ _____________
============= =============
34
Appendix A
1. Opinion of Counsel to the Company
(a) Each of the Company and its Subsidiaries (A) is a duly
incorporated and validly existing corporation in good standing under the laws of
its jurisdiction of incorporation, with corporate power and corporate authority
to own or lease its properties and to conduct its business as described in the
Prospectus; and (B) is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction (x) in which the conduct of its
business requires such qualification and (y) in which it owns or leases
property.
(b) The authorized, issued and outstanding capital stock of
the Company is as set forth under the caption "Capitalization" in the
Prospectus; the issued and outstanding shares of the Company's capital stock
have been duly authorized and validly issued by the Company, are fully paid and
nonassessable and have been issued in compliance with all federal and state
securities laws and to the knowledge of such counsel, have not been issued in
violation of any preemptive right, co-sale right, registration right, right of
first refusal or other similar right known to such counsel;
(c) The Company has duly authorized the issuance and sale of
the Shares to be sold by it hereunder; such Shares, when issued by the Company
and paid for in accordance with the terms hereof, will be validly issued, fully
paid and nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus and will be sold free and clear
of any pledge, lien, security interests, encumbrance, claim, or equitable
interest, and, to the knowledge of such counsel, not in violation of or subject
to any preemptive right, co-sale right, right of first refusal or other similar
right, which rights have not previously been waived, in connection with the
purchase or sale of any of the Shares;
(d) To the best knowledge of such counsel, there are no
contracts or documents which are required by the Act to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required by the Act
and the Rules and Regulations;
(e) The statements set forth under the headings "Risk Factors
--_____________," "Business -- Legal Matters," "Management -- Employee Stock and
Other Benefit Plans," "Description of Capital Stock," and "Certain Transactions"
and statements in response to Items 14 and 15 of Form S-1 under the Act of the
Registration Statement in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to therein,
provide an accurate summary in all material respects of such legal matters,
documents and proceedings;
(f) The Company and each Selling Stockholder, as applicable,
has all requisite corporate legal right, power, and authority to enter into this
Agreement and to consummate the transactions provided for herein; this Agreement
has been duly authorized, executed and delivered by the Company and each Selling
Stockholder, as applicable;
(g) None of the Company's execution or delivery of this
Agreement, its performance hereof, its consummation of the transactions
contemplated herein conflicts or will conflict with or results or will result in
any breach or violation of any of the terms or provisions of, or constitute a
default under, the terms of the certificate of incorporation or by-laws of the
Company; the terms of any indenture, mortgage, deed of trust, voting trust
agreement, stockholder's agreement, note agreement or other agreement or
instrument filed as an exhibit to the Registration Statement to which the
Company is a party or by which it is or may be bound or to which any of its
properties may be subject; or, to the best knowledge of such counsel, any
Massachusetts, New York or United States statute, rule or regulation or the
Delaware General Corporate Law, of any state or Federal regulatory body or
administrative agency or other governmental agency or body, of any state or
Federal government, arbitrator, court, regulatory body or administrative agency
or other governmental agency or body, having such jurisdiction;
(h) None of the Selling Stockholder's execution or delivery of
this Agreement, its performance hereof, its consummation of the transactions
contemplated herein conflicts or will conflict with or results or will result in
any breach or violation of any of the terms or provisions of, or constitute a
default under, the terms of the certificate of incorporation or by-laws of such
Selling Stockholder, as applicable; the terms of any indenture, mortgage, deed
of trust, voting trust agreement, stockholder's agreement, note agreement or
other agreement or instrument filed as an exhibit to the Registration Statement
to which such Selling Stockholder, as applicable, is a party or by which it is
or may be bound or to which any of its properties may be subject; or, to the
best knowledge of such counsel, any New York or United States statute, rule or
regulation or the Delaware General Corporate Law, of any state or Federal
regulatory body or administrative agency or other governmental agency or body,
of any state or Federal government, arbitrator, court, regulatory body or
administrative agency or other governmental agency or body, having such
jurisdiction;
(i) No consent, approval, authorization or order of any state
or Federal court regulatory body or administrative agency or other New York or
Federal governmental agency or body, has been or is required for the Company's
or the Selling Stockholders'performance of this Agreement or the consummation of
the transactions contemplated hereby, except such as have been obtained under
the Act or may be required under state securities or blue sky laws (as to which
no opinion shall be expressed) in connection with the purchase and distribution
by the Underwriters of the Shares or may be required by the National Association
of Securities Dealers, Inc. (as to which no opinion shall be expressed);
(j) Upon delivery of the Shares and payment therefor in
accordance with the terms of the Agreement, the several Underwriters will
acquire all of the rights of the Selling Stockholders to such Shares and will
acquire such Shares free and clear of any "adverse claim"(as such term is used
in Section 8-302 of the Uniform Commercial Code as in effect in the State of New
York), assuming the several Underwriters acquire such Shares in good faith and
without notice of any "adverse claim."
2
(k) All holders of securities of the Company who, to such
counsel's knowledge, have rights to cause the Company to register shares of
Common Stock or other securities because of the filing of the Registration
Statement by the Company have waived such rights, such rights have expired by
reason of lapse of time following notification of the Company's intent to file
the Registration Statement or such rights have been satisfied in accordance with
their respective terms;
(l) No transfer taxes are required to be paid in connection
with the sale or delivery to the Underwriters of the Shares;
In rendering any such opinion, such counsel may rely, as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials and, as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the Delaware General Corporation Law or the United States.
References to the Registration Statement and the Prospectus in
such opinion shall include any amendment or supplement thereto at the date of
such opinion.
In addition, such counsel shall provide a separate letter to
the Representatives of the several Underwriters in the form attached hereto as
Appendix B.
3
Schedule II
Selling Stockholders
BMG Entertainment
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
Xxxxxx X. Xxxxx, Xx.
Xxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
4
Appendix B
[Insert Date]
ING Baring Xxxxxx Xxxx LLC
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
Xxxxxx Xxxxxx & Company, Inc.
As representatives of the several
Underwriters named in Schedule I hereto
c/o ING Baring Xxxxxx Xxxx LLC
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel for Take-Two Interactive Software,
Inc., a Delaware corporation (the "Company"), in connection with the preparation
and filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), of its
Registration Statement on Form S-1 (Registration No. 333-_______), as amended,
relating to the offering of an aggregate of (i) 3,500,000 shares (the "Company
Shares") of the Company's common stock, par value $.01 per share (the "Common
Stock"), by the Company and (ii) 1,500,000 shares (the "Stockholder Shares") of
Common Stock by the selling stockholders listed in Schedule II (the "Selling
Stockholders") to the several underwriters (the "Underwriters") listed in
Schedule I to the Underwriting Agreement, dated March __, 1999 (the
"Agreement"), between the Company, the Selling Stockholders and you, as
representatives of the several Underwriters (the "Representatives"). The Company
Shares to be sold by the Company and the Stockholder Shares to be sold by the
Selling Stockholders are collectively referred to herein as the "Firm Shares."
The Company also proposed to issue and sell to the several Underwriters an
aggregate of not more than 750,000 additional shares of Common Stock (the
"Additional Shares"), if requested by the Underwriters in accordance with
Section 9 of the Underwriting Agreement. The Firm Shares and the Additional
Shares are collectively referred to herein as the "Shares." The Registration
Statement, as amended when it became effective (including the information deemed
to be a part thereof as of such time pursuant to Rule 430A under the Securities
Act), is herein called the "Registration Statement," and the related prospectus
dated __________, 1999, as filed on __________, 1999 with the Commission
pursuant to Rule 424(b) under the Securities Act, is herein called the
"Prospectus."
We have examined such corporate records, certificates and
other documents as we have considered necessary or appropriate for the purposes
of this letter.
Whenever a statement herein is indicated to be based upon "our
knowledge" or "the best of our knowledge" or contains a similar qualification,
it should be understood that during the course of our representation of the
Company and the Selling Stockholders we have not undertaken any independent
investigation to determine the existence or absence of facts in connection with
the preparation of this letter. The phrase "our knowledge," and similar language
used in certain of the statements below, are limited to the knowledge of the
lawyers within our firm who have given attention to the Company's affairs.
5
Capitalized terms used but not defined herein shall have the
respective meanings attributed to them in the Agreement.
We have participated in the preparation of the Registration
Statement and Prospectus and have participated in discussions with your
representatives, those of counsel for the Underwriters, and those of the Company
and its accountants. On the basis of the information that we gained in the
course of the performance of the services referred to above, considered in the
light of our understanding of the applicable law and the experience we have
gained through our practice under the Securities Act, we confirm to you that
nothing that came to our attention in the course of such review has caused us to
believe that the Registration Statement or any further amendment thereto made by
the Company prior to the Closing Date contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or that, as
of its date, the Prospectus or any further amendment or supplement thereto made
by the Company prior to the Closing Date contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of the Closing
Date, either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Closing Date
contains an untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to the Closing Date
(other than financial, statistical or accounting data and related schedules
therein, as to which we make no statement) comply as to form in all material
respects to the requirements of the Securities Act and the applicable Rules and
Regulations promulgated under the Securities Act.
To the best of our knowledge, there is not pending or
threatened against the Company any action, suit, proceeding or investigation
before or by any court, regulatory body or administrative agency, or any other
governmental agency or body, domestic or foreign, of a character required to be
disclosed in the Registration Statement or the Prospectus which is not so
disclosed therein.
The Registration Statement has become effective under the
Securities Act. The foregoing statement is based solely upon verbal advice of
__________ the Securities and Exchange Commission staff on __________, 1999 that
the Commission had declared the Registration Statement effective as of _____
p.m. on __________, 1999. To the best of our knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued by the
Commission nor has any proceeding been instituted or contemplated for that
purpose under the Securities Act. Based solely upon a written confirmation from
the Commission's XXXXX Filing Desk dated __________, 1999, the Prospectus has
been filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations promulgated under the Securities Act within the time period required
thereby.
6
Notwithstanding the foregoing, the limitations inherent in the
independent verification of factual matters and the character of determinations
involved in the registration process are such, however, that we do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus except for those made
under the captions "Risk Factors--____________," "Business--Legal Matters,"
"Management--Employee Stock and Other Benefit Plans," "Description of Capital
Stock," "Shares Eligible for Future Sale" and "Certain Transactions" in the
Prospectus and statements in response to Items 14 and 15 of Form S-1 under the
Act of the Registration Statement, insofar as such statements constitute a
summary in all material respects of documents referred to therein or matters of
law. Also, we do not express any belief or otherwise make any statement as to
the financial statements, other financial, statistical or accounting data and
related schedules contained in the Registration Statement or the Prospectus.
This letter is furnished by us as counsel for the Company and
the Selling Stockholders to you as Representatives of the several Underwriters
and is solely for the benefit of the several Underwriters and may not be relied
upon by any other person without our express written consent. The statements in
this letter are made as of the date hereof and we disclaim any obligation to
advise you of any changes in facts or circumstances which might affect any
matters or statements set forth herein.
Very truly yours,
XXXXXX XXXXXXXXXX LLP
7
