Exhibit 1.1
17,000,000 Shares
Nu Skin Enterprises, Inc.
Class A Common Stock
Underwriting Agreement
July __, 2002
Table of Contents
Section 1. Representations and Warranties. ...................................................... 2
A. Representations and Warranties of the Company ........................................ 2
(a) Compliance with Registration Requirements ................................................... 2
(b) Incorporated Documents ...................................................................... 3
(c) Independent Accountants ..................................................................... 3
(d) Financial Statements ........................................................................ 3
(e) No Material Adverse Change .................................................................. 3
(f) Good Standing of the Company ................................................................ 4
(g) Good Standing of Subsidiaries ............................................................... 4
(h) Capitalization .............................................................................. 4
(i) Authorization of Agreement .................................................................. 4
(j) Authorization and Description of Securities ................................................. 4
(k) Absence of Defaults and Conflicts ........................................................... 4
(l) Absence of Labor Dispute .................................................................... 5
(m) Absence of Proceedings ...................................................................... 5
(n) Accuracy of Exhibits ........................................................................ 5
(o) Possession of Intellectual Property ......................................................... 5
(p) Absence of Further Requirements ............................................................. 6
(q) Possession of Licenses and Permits .......................................................... 6
(r) Title to Property ........................................................................... 6
(s) Environmental Laws .......................................................................... 6
(t) Registration Rights ......................................................................... 7
(u) Certain Transactions ........................................................................ 7
(v) Company's Accounting System ................................................................. 7
B. Representations and Warranties of the Selling Stockholders ........................... 7
(a) Accurate Disclosure ......................................................................... 7
(b) Authorization of Agreements ................................................................. 8
(c) Valid Title ................................................................................. 8
(d) Due Execution of Power of Attorney and Custody Agreement .................................... 8
(e) Absence of Manipulation ..................................................................... 9
(f) Absence of Further Requirements ............................................................. 9
(g) Certificates Suitable for Transfer .......................................................... 9
(h) No Association with NASD .................................................................... 9
C. Officer's Certificate ................................................................ 9
Section 2. Purchase, Sale and Delivery of the Common Shares. .................................... 9
(a) The Firm Common Shares ...................................................................... 9
(b) The First Closing Date ...................................................................... 9
(c) The Optional Common Shares; the Second Closing Date ......................................... 10
(d) Public Offering of the Common Shares ........................................................ 10
(e) Payment for the Common Shares ............................................................... 11
(f) Delivery of the Common Shares ............................................................... 11
(g) Delivery of Prospectus to the Underwriters .................................................. 11
Section 3. Additional Covenants. ................................................................ 11
A. Covenants of the Company ............................................................. 11
(a) Representatives' Review of Proposed Amendments and Supplements .............................. 12
(b) Securities Act Compliance ................................................................... 12
(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters ............... 12
(d) Copies of any Amendments and Supplements to the Prospectus .................................. 12
(e) Blue Sky Compliance ......................................................................... 12
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(f) Transfer Agent ................................................................................... 13
(g) Earnings Statement ............................................................................... 13
(h) Periodic Reporting Obligations ................................................................... 13
(i) Company to Provide Interim Financial Statements .................................................. 13
(j) Exchange Act Compliance .......................................................................... 13
(k) Agreement Not to Offer or Sell Additional Securities ............................................. 13
(l) Future Reports to the Representative ............................................................. 13
B. Covenants of the Selling Stockholders ..................................................... 14
(a) Delivery of Forms W-8 and W-9 .................................................................... 14
Section 4. Payment of Expenses ....................................................................... 14
Section 5. Conditions of the Obligations of the Underwriters ......................................... 15
(a) Accountants' Comfort Letter ...................................................................... 15
(b) Compliance with Registration Requirements; No Stop Order; No Objection
from NASD ............................................................................................ 15
(c) No Material Adverse Change ....................................................................... 16
(d) Opinion of Counsel for the Company ............................................................... 16
(e) Opinion of General Counsel of the Company ....................................................... 16
(f) Opinion of Counsel for the Underwriters .......................................................... 16
(g) Opinion of Japanese Counsel for the Company ...................................................... 16
(h) Officers' Certificate ............................................................................ 16
(i) Bring-down Comfort Letter ........................................................................ 17
(j) Opinion of Counsel for the Selling Stockholders .................................................. 17
(k) Selling Stockholders' Certificate ................................................................ 17
(l) Selling Stockholders' Documents .................................................................. 17
(m) Lock-Up Agreement from Certain Securityholders of the Company Other Than
Selling Stockholders ................................................................................. 17
(n) Lock-up Agreement from the Selling Stockholders .................................................. 17
(o) Additional Documents ............................................................................. 18
Section 6. Reimbursement of Underwriters' Expenses ................................................... 18
Section 7. This Section Intentionally Left Blank ..................................................... 18
Section 8. Indemnification. .......................................................................... 18
(a) Indemnification of the Underwriters .............................................................. 18
(b) Indemnification of the Company, its Directors and Officers and Selling Stockholders .............. 21
(c) Actions Against Parties: Notification ............................................................ 21
(d) Settlement without Consent if Failure to Reimburse ............................................... 22
(e) Other Agreements with Respect to Indemnification ................................................. 22
Section 9. Contribution .............................................................................. 22
Section 10. Default of One or More of the Several Underwriters ....................................... 23
Section 11. Termination of this Agreement ............................................................ 24
Section 12. Representations and Indemnities to Survive Delivery ...................................... 24
Section 13. Notices .................................................................................. 24
Section 14. Successors ............................................................................... 26
Section 15. Partial Unenforceability ................................................................. 26
Section 16. Governing Law Provisions ................................................................. 26
Section 17. Failure of One or More of the Selling Stockholders to Sell and
Deliver Common Shares ........................................................................ 26
Section 18. General Provisions ....................................................................... 27
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Underwriting Agreement
July __, 0000
XXXX XX XXXXXXX SECURITIES LLC
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
As Representatives of the several Underwriters
c/o BANC OF AMERICA SECURITIES LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Introductory. The stockholders of Nu Skin Enterprises, Inc., a
Delaware corporation (the "Company), named in Schedule B (collectively, the
"Selling Stockholders") severally propose to sell to the underwriters named
in Schedule A (the "Underwriters") an aggregate of 17,000,000 shares (the
"Firm Common Shares") of the Class A Common Stock, par value $.001 per share
(the "Common Stock"), of the Company. In addition, the Selling Stockholders
have severally granted to the Underwriters an option to purchase up to an
additional 2,550,000 shares (the "Optional Common Shares") of Common Stock,
as provided in Section 2, each Selling Stockholder selling up to the amount
set forth opposite such Selling Stockholder's name in Schedule B. The Firm
Common Shares and, if and to the extent such option is exercised, the
Optional Common Shares are collectively called the "Common Shares". Banc of
America Securities LLC ("BAS"), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") have agreed to act as representatives of the several
Underwriters (in such capacity, the "Representatives") in connection with
the offering and sale of the Common Shares.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (File No.
333-90716), which contains a form of prospectus to be used in connection
with the public offering and sale of the Common Shares. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the Securities Act of 1933 and the rules and regulations
promulgated thereunder (collectively, the "Securities Act"), including all
documents incorporated or deemed to be incorporated by reference therein or
any information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430A or Rule 434 under the Securities Act or the Securities
Exchange Act of 1934 and the rules and regulations promulgated thereunder
(collectively, the "Exchange Act"), is called the "Registration Statement".
Any registration statement filed by the Company pursuant to Rule 462(b)
under the Securities Act is called the "Rule 462(b) Registration Statement",
and from and after the date and time of filing of the Rule 462(b)
Registration Statement the term "Registration Statement" shall include the
Rule 462(b) Registration Statement. Such prospectus, in the form first used
by the Underwriters to confirm sales of the Common Shares, is called the
"Prospectus"; provided, however, if the Company has, with the consent of BAS
and Xxxxxxx Xxxxx (the
"Joint Book-Runners"), elected to rely upon Rule 434 under the Securities
Act, the term "Prospectus" shall mean the Company's prospectus subject to
completion (each, a "preliminary prospectus") dated July 8, 2002 (such
preliminary prospectus is called the "Rule 434 preliminary prospectus"),
together with the applicable term sheet (the "Term Sheet") prepared and
filed by the Company with the Commission under Rules 434 and 424(b) under
the Securities Act and all references in this Agreement to the date of the
Prospectus shall mean the date of the Term Sheet. All references in this
Agreement to the Registration Statement, the Rule 462(b) Registration
Statement, a preliminary prospectus, the Prospectus or the Term Sheet, or
any amendments or supplements to any of the foregoing, shall include any
copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements
and schedules and other information which is or is deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case
may be; and all references in this Agreement to amendments or supplements to
the Registration Statement or the Prospectus shall be deemed to mean and
include the filing of any document under the Exchange Act which is or is
deemed to be incorporated by reference in the Registration Statement or the
Prospectus, as the case may be.
The Company and each of the Selling Stockholders hereby
confirm their respective agreements with the Underwriters as follows:
Section 1. Representations and Warranties.
A. Representations and Warranties of the Company. The Company hereby
represents and warrants as of the date hereof, to each Underwriter as follows:
(a) Compliance with Registration Requirements. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective under
the Securities Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been issued
and no proceedings for such purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission.
The Company meets the requirements for use of Form S-3 under the
Securities Act and at the respective times the Registration Statement, any
Rule 462(b) Registration Statement and any post-effective amendment thereto,
at the time it became effective, at the First Closing Date (and, if any
Option Common Shares are purchased, at the Second Closing Date) and during
the Prospectus Delivery Period, as defined in Section 3(A)(a) below,
complied and will comply at these times in all material respects with the
Securities Act and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The Prospectus,
as amended or supplemented, as of its date, at the First Closing Date (and,
if any Option Common Shares are purchased, at the Second Closing Date) and
during the Prospectus Delivery Period, as defined in Section 3(A)(a) below,
did not and will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. If Rule 434 under the Securities Act is used, the Company will
comply with
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the requirements of Rule 434 under the Securities Act and the Prospectus
shall not be "materially different", as such term is used in Rule 434 under
the Securities Act, from the prospectus included in the Registration
Statement at the time it became effective. The representations and
warranties set forth in this subsection do not apply to statements in or
omissions from the Registration Statement, any Rule 462(b) Registration
Statement, or any post-effective amendment thereto, or the Prospectus, or
any amendments or supplements thereto, made in reliance upon and in
conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein.
Each preliminary prospectus and the Prospectus when filed complied in
all material respects with the Securities Act and, if filed by electronic
transmission pursuant to XXXXX (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to
the Underwriters for use in connection with the offer and sale of the Common
Shares.
(b) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectus,
at the time they were or hereafter are filed with the Commission, complied
and will comply in all material respects with the requirements of the
Exchange Act, and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the First Closing Date and the Second
Closing Date, as the case may be, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
(c) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included or incorporated by reference in
the Registration Statement are independent public accountants as required by
the Securities Act.
(d) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its subsidiaries (the "Subsidiaries") at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company
and its Subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting
principles in the United States ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement.
(e) No Material Adverse Change. Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, (i) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business (a "Material Adverse Change"), (ii) there have been no
transactions entered into by the Company or any of the Subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its Subsidiaries considered as one
3
enterprise, and (iii) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(f) Good Standing of the Company. The Company has been duly organized and
is validly existing as a corporation in good standing under the laws of the
State of Delaware and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Change.
(g) Good Standing of Subsidiaries. Each of the Subsidiaries has been duly
organized and is validly existing as a corporation in good standing (or has
such comparable corporate status as may be applicable in its jurisdiction of
incorporation) under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Prospectus and is duly qualified
as a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Change; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and owned by the Company directly, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity;
none of the outstanding shares of capital stock of any Subsidiary was issued
in violation of the preemptive or similar rights of any securityholder of
such Subsidiary.
(h) Capitalization. The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under the caption
"Capitalization".
(i) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(j) Authorization and Description of Securities. The shares of issued and
outstanding capital stock of the Company, including the Common Shares, have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock, including
the Common Shares, was issued in violation of the preemptive or other
similar rights of any securityholder of the Company; the Common Shares
conform to all statements relating thereto contained in the Prospectus and
such description conforms to the rights set forth in the instruments
defining the same; no holder of the Common Shares will be subject to
personal liability by reason of being such a holder.
(k) Absence of Defaults and Conflicts. Neither the Company nor any of its
Subsidiaries is in violation of its charter or by-laws or comparable
governing documents or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any Subsidiary is
subject (collectively, "Agreements and Instruments") except
4
for such defaults that would not result in a Material Adverse Change; and
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated in this Agreement and in the
Registration Statement and compliance by the Company with its obligations
under this Agreement have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any Subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults or liens,
charges or encumbrances that would not result in a Material Adverse
Change), nor will such action result in any violation of the provisions of
the charter or by-laws of the Company or comparable governing documents of
any Subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any Subsidiary.
(l) Absence of Labor Dispute. No labor dispute with the employees or
distributors of the Company or any of its affiliates exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its or any
Subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Change.
(m) Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any Subsidiary, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which would reasonably be expected by the Company to
result in a Material Adverse Change, or which would reasonably be expected
by the Company to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder or
thereunder; the aggregate of all pending legal or governmental proceedings
to which the Company or any Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, is not reasonably expected to result in a Material Adverse
Change.
(n) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement or the Prospectus or
to be filed as exhibits thereto which have not been so described and filed
as required.
(o) Possession of Intellectual Property. The Company and its Subsidiaries
own or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks, trade names
or other intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them, and neither the
Company nor any of its Subsidiaries has received any notice or is otherwise
aware of any
5
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling
or finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Change.
(p) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of,
any court or governmental authority or agency is necessary or required for
the performance by the Company of its obligations hereunder, in connection
with the sale of the Securities under this Agreement or the consummation of
the transactions contemplated in the Prospectus and this Agreement, except
such as have been already obtained or as may be required under the
Securities Act, the rules and regulations of the NASD and foreign or state
securities or blue sky laws obtained or as may be required.
(q) Possession of Licenses and Permits. The Company and its Subsidiaries
possess such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to conduct
the business now operated by them, except where the failure to possess such
Governmental Licenses would not, singly or in the aggregate, have a Material
Adverse Change; the Company and its Subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, have a Material
Adverse Change; all of the Governmental Licenses are valid and in full force
and effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Change; neither the Company nor any of its
Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Change.
(r) Title to Property. The Company and its Subsidiaries have good and
marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (i) are
described in the Prospectus or (ii) do not, singly or in the aggregate,
materially affect the value of such property and do not in any way that
could result in a Material Adverse Change interfere with the use made and
proposed to be made of such property by the Company or any of its
Subsidiaries; and all of the leases and subleases material to the business
of the Company and its Subsidiaries, considered as one enterprise, and under
which the Company or any of its Subsidiaries holds properties described in
the Prospectus, are in full force and effect, and neither the Company nor
any Subsidiary has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any
Subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such Subsidiary to the
continued possession of the leased or subleased premises under any such
lease or sublease.
(s) Environmental Laws. Except as described in the Registration Statement
and except as would not, singly or in the aggregate, result in a Material
Adverse Change, (i) neither the Company nor any of its Subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
6
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (ii)
the Company and its Subsidiaries have all permits, authorizations and
approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (iii) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation
or proceedings relating to any Environmental Law against the Company or any
of its Subsidiaries and (iv) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(t) Registration Rights. There are no persons with registration rights or
other similar rights that have not been waived to have any securities
registered pursuant to the Registration Statement or otherwise registered by
the Company under the Securities Act.
(u) Certain Transactions. There are no business relationships or
related-party transactions of the nature described in Item 404 of Regulation
S-K involving the Company and any other persons referred to in said Item 404
that are required to be disclosed in the Prospectus and that have not been
so disclosed.
(v) Company's Accounting System. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles as applied in the United States 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.
B. Representations and Warranties of the Selling Stockholders. Each
Selling Stockholder (or Back-Stopped Selling Stockholder (as defined in
Section 8(a)) as the case may be) severally represents and warrants to each
Underwriter as of the date hereof as of the First Closing Date and, if the
Selling Stockholder is selling Optional Common Shares, on the Second Closing
Date, and agrees with each Underwriter as follows:
(a) Accurate Disclosure. To the best knowledge of each Back-Stopped
Selling Stockholder, the representations and warranties of the Company
contained in Section 1(a) hereof are true and correct; such Back-Stopped
Selling Stockholder has reviewed and is familiar with the Registration
Statement and the Prospectus and neither the Prospectus nor any amendments
or supplements thereto includes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; each Selling Stockholder is not prompted to sell the Common
Shares to be sold by such Selling Stockholder hereunder
7
by any information concerning the Company or any Subsidiary of the Company
which is not set forth in the Prospectus.
(b) Authorization of Agreements. Each Selling Stockholder has the full
right, power and authority to enter into this Agreement and the Power of
Attorney and Custody Agreement referred to in Section 1(B)(d) below and to
sell, transfer and deliver the Common Shares to be sold by such Selling
Stockholder hereunder. The execution and delivery of this Agreement, the
Power of Attorney and Custody Agreement and the sale and delivery of the
Common Shares to be sold by such Selling Stockholder and the consummation
of the transactions contemplated herein and therein and compliance by such
Selling Stockholder with its obligations hereunder and thereunder, have
been duly authorized by such Selling Stockholder and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Common Shares to be sold by such Selling Stockholder or any property or
assets of such Selling Stockholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease or
other agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder may be bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Stockholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Stockholder or any of its properties.
(c) Valid Title. Such Selling Stockholder has and will on the First
Closing Date and, if any Optional Common Shares are purchased, on the
Second Closing Date, as the case may be, have valid title to, or a valid
"security entitlement" within the meaning of Section 8-501 of the New York
Uniform Commercial Code in respect of, the Common Shares to be sold by such
Selling Stockholder hereunder, free and clear of any security interest,
mortgage, pledge, lien, charge, claim, equity or encumbrance of any kind,
other than pursuant to this Agreement; and upon delivery of such Common
Shares and payment of the purchase price therefor as herein and therein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive valid title to the Common
Shares purchased by it from such Selling Stockholder, free and clear of any
security interest, mortgage, pledge, lien, charge, claim, equity or
encumbrance of any kind.
(d) Due Execution of Power of Attorney and Custody Agreement. Such
Selling Stockholder has duly executed and delivered, in the form heretofore
furnished to the Representatives, the Power of Attorney (the
"Power-of-Attorney") with the Company as attorney-in-fact (the
"Attorney-in-Fact") and the Custody Agreement (the "Custody Agreement")
with American Stock Transfer and Trust Company, as custodian (the
"Custodian"); the Custodian is authorized to deliver the Common Shares to
be sold by such Selling Stockholder hereunder and to accept payment
therefor; and each Attorney-in-Fact is authorized to execute and deliver
this Agreement on behalf of such Selling Stockholder, to sell, assign and
transfer to the Underwriters the Common Shares to be sold by such Selling
Stockholder hereunder and thereunder, to determine the purchase price to be
paid by the Underwriters to such Selling Stockholder, as provided in
Section 2(a) hereof, to authorize the delivery of the Common Shares to be
sold by such Selling Stockholder hereunder and thereunder, to accept
payment therefor, and otherwise to act on behalf of such Selling
Stockholder in connection with this Agreement.
8
(e) Absence of Manipulation. Such Selling Stockholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Common Shares.
(f) Absence of Further Requirements. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling Stockholder of
its obligations under this Agreement or under the Power of Attorney or the
Custody Agreement, or in connection with the sale and delivery of the
Common Shares or the consummation of the transactions contemplated by this
Agreement except such as may have previously been made or obtained or as
may be required under the Securities Act or state securities laws.
(g) Certificates Suitable for Transfer. Certificates for all of the
Common Shares to be sold by such Selling Stockholder pursuant to this
Agreement in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Common Shares to the Underwriters
pursuant to this Agreement.
(h) No Association with NASD. Neither such Selling Stockholder nor any
of his or her affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
sub-section (dd) of the By-Laws of the National Association of Securities
Dealers, Inc.), any member firm of the National Association of Securities
Dealers, Inc.
C. Officer's Certificate
Any certificate signed by any officer of the Company or any of
its Subsidiaries delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company
to each Underwriter as to the matters covered thereby; and any certificate
signed by or on behalf of the Selling Stockholders as such and delivered to
the Representatives or to counsel for the Underwriters pursuant to the
terms of this Agreement shall be deemed a representation and warranty by
such Selling Stockholder to each Underwriter as to the matters covered
thereby.
Section 2. Purchase, Sale and Delivery of the Common Shares.
(a) The Firm Common Shares. The Selling Stockholders agree to sell to
the several Underwriters the Firm Common Shares upon the terms set forth
herein, each Selling Stockholder selling the number of Firm Common Shares
set forth opposite such Selling Stockholder's name on Schedule B. On the
basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase from the Selling
Stockholders the respective number of Firm Common Shares set forth opposite
their names on Schedule A. The purchase price per Firm Common Share to be
paid by the several Underwriters to the Selling Stockholders shall be
$[___] per share.
(b) The First Closing Date. Delivery of certificates for the Firm
Common Shares to be purchased by the Underwriters and payment therefor
shall be made at the offices of Xxxxx
9
Polk & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (or such other
place as may be agreed to by the Company and the Representatives) at 10:00
a.m. New York time, on _______ __, 2002, or such other time and date not
later than 10:00 a.m. New York time, on ______ __, 2002 as the
Representatives shall designate by notice to the Company (the time and date
of such closing are called the "First Closing Date"). The Company and the
Selling Stockholders hereby acknowledge that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any
determination by the Company, the Selling Stockholders or the
Representatives to recirculate to the public copies of an amended or
supplemented Prospectus or a delay as contemplated by the provisions of
Section 10.
(c) The Optional Common Shares; the Second Closing Date. In addition,
on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set
forth, the Selling Stockholders specified in Schedule B as selling Optional
Common Shares hereby grant an option to the several Underwriters to
purchase, severally and not jointly, up to an aggregate of 2,550,000
Optional Common Shares, as set forth in Schedule B, from such Selling
Stockholders at the purchase price per share to be paid by the Underwriters
for the Firm Common Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the
sale and distribution of the Firm Common Shares. The option granted
hereunder may be exercised at any time (but not more than once) upon notice
by the Representatives to the Selling Stockholders (with a copy to the
Company), which notice may be given at any time within 30 days from the
date of this Agreement. Such notice shall set forth (i) the aggregate
number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii)
the time, date and place at which such certificates will be delivered
(which time and date may be simultaneous with, but not earlier than, the
First Closing Date; and in such case the term "First Closing Date" shall
refer to the time and date of delivery of certificates for the Firm Common
Shares and the Optional Common Shares). Such time and date of delivery, if
subsequent to the First Closing Date, is called the "Second Closing Date"
and shall be determined by the Representatives and shall not be earlier
than three nor later than five full business days after delivery of such
notice of exercise. If any Optional Common Shares are to be purchased, (a)
each Underwriter agrees, severally and not jointly, to purchase the number
of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name
of such Underwriter bears to the total number of Firm Common Shares and (b)
each Selling Stockholder agrees, severally and not jointly, to sell the
number of Optional Common Shares (subject to such adjustments to eliminate
fractional shares as the Representatives may determine) that bears the same
proportion to the total number of Optional Common Shares to be sold as the
number of Optional Common Shares set forth in Schedule B opposite the name
of such Selling Stockholder. The Representatives may cancel the option at
any time prior to its expiration by giving written notice of such
cancellation to the Selling Stockholders (with a copy to the Company).
(d) Public Offering of the Common Shares. The Representatives hereby
advise the Company and the Selling Stockholders that the Underwriters
intend to offer for sale to the public, as described in the Prospectus,
their respective portions of the Common Shares as soon after this Agreement
has been executed and the Registration Statement has been
10
declared effective as the Representatives, in their sole judgment, have
determined is advisable and practicable.
(e) Payment for the Common Shares. Payment for the Common Shares to be
sold by the Selling Stockholders shall be made at the First Closing Date
(and, if applicable, at the Second Closing Date) by wire transfer of
immediately available funds to the order of the Custodian.
It is understood that the Representatives have been authorized, for
their own accounts and the accounts of the several Underwriters, to accept
delivery of and receipt for, and make payment of the purchase price for,
the Firm Common Shares and any Optional Common Shares the Underwriters have
agreed to purchase. Each of the Joint Book-Runners, individually and not as
a Representative of the Underwriters, may (but shall not be obligated to)
make payment for any Common Shares to be purchased by any Underwriter whose
funds shall not have been received by the Representatives by the First
Closing Date or the Second Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.
Each Selling Stockholder hereby agrees that (i) it will pay all stock
transfer taxes, stamp duties and other similar taxes, if any, payable upon
the sale or delivery of the Common Shares to be sold by such Selling
Stockholder to the several Underwriters, or otherwise in connection with
the performance of such Selling Stockholder's obligations hereunder and
(ii) the Custodian is authorized to deduct for such payment any such
amounts from the proceeds to such Selling Stockholder hereunder and to hold
such amounts for the account of such Selling Stockholder with the Custodian
under the Custody Agreement.
(f) Delivery of the Common Shares. The Selling Stockholders shall
deliver, or cause to be delivered, to the Representatives for the accounts
of the several Underwriters certificates for the Firm Common Shares at the
First Closing Date, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor.
The Selling Stockholders shall also deliver, or cause to be delivered, to
the Representatives for the accounts of the several Underwriters,
certificates for the Optional Common Shares the Underwriters have agreed to
purchase from them at the First Closing Date or the Second Closing Date, as
the case may be, against the irrevocable release of a wire transfer of
immediately available funds for the amount of the purchase price therefor.
The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall
have requested at least two full business days prior to the First Closing
Date (or the Second Closing Date, as the case may be) and shall be made
available for inspection on the business day preceding the First Closing
Date (or the Second Closing Date, as the case may be) at a location in New
York City as the Representatives may designate. Time shall be of the
essence, and delivery at the time and place specified in this Agreement is
a further condition to the obligations of the Underwriters.
(g) Delivery of Prospectus to the Underwriters. Not later than 12:00
p.m. on the second business day following the date the Common Shares are
first released by the Underwriters for sale to the public, the Company
shall deliver or cause to be delivered, copies of the Prospectus in such
quantities and at such places as the Representatives shall request.
Section 3. Additional Covenants.
A. Covenants of the Company. The Company further covenants and agrees
with each Underwriter as follows:
11
(a) Representatives' Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of
the First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered
in connection with sales by an Underwriter or dealer (the "Prospectus
Delivery Period"), prior to amending or supplementing the Registration
Statement (including any registration statement filed under Rule 462(b)
under the Securities Act) or the Prospectus including any amendment or
supplement through incorporation by reference of any report filed under the
Exchange Act, the Company shall furnish to the Representatives for review a
copy of each such proposed amendment or supplement, and the Company shall
not file any such proposed amendment or supplement to which the
Representatives reasonably object.
(b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the
receipt of any comments of, or requests for additional or supplemental
information from, the Commission, (ii) of the time and date of any filing
of any post-effective amendment to the Registration Statement or any
amendment or supplement to any preliminary prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the
Registration Statement becomes effective and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or of any
order preventing or suspending the use of any preliminary prospectus or the
Prospectus, or of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon
which it is listed for trading or included or designated for quotation, or
of the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any time,
the Company will use its best efforts to obtain the lifting of such order
at the earliest possible moment. Additionally, the Company agrees that it
shall comply with the provisions of Rules 424(b), 430A and 434, as
applicable, under the Securities Act and will use its reasonable efforts to
confirm that any filings made by the Company under such Rule 424(b) were
received in a timely manner by the Commission.
(c) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if in the opinion of the Representatives or counsel for
the Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with law, the Company agrees to promptly prepare
(subject to Section 3(A)(a) hereof), file with the Commission and furnish
at its own expense to the Underwriters and to dealers, amendments or
supplements to the Prospectus so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any
amendments and supplements thereto (including any documents incorporated or
deemed incorporated by reference therein) as the Representatives may
reasonably request.
(e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or
12
obtain exemptions from the application of) the state securities or blue sky
laws or Canadian provincial Securities laws or other foreign laws of those
jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions
in effect so long as required for the distribution of the Common Shares.
The Company shall not be required to qualify as a foreign corporation or to
take any action that would subject it to general service of process in any
such jurisdiction where it is not presently qualified or where it would be
subject to taxation as a foreign corporation. The Company will advise the
Representatives promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Common Shares for
offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance of
any order suspending such qualification, registration or exemption, the
Company shall use its best efforts to obtain the withdrawal thereof at the
earliest possible moment.
(f) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.
(g) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month
period ending [___] that satisfies the provisions of Section 11(a) of the
Securities Act.
(h) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and
the New York Stock Exchange all reports and documents required to be filed
under the Exchange Act.
(i) Company to Provide Interim Financial Statements. Prior to the
Closing Date, the Company will furnish the Underwriters, as soon as they
have been prepared by or are available to the Company, a copy of any
unaudited interim financial statements of the Company for any period
subsequent to the period covered by the most recent financial statements
appearing in the Registration Statement and the Prospectus.
(j) Exchange Act Compliance. During the Prospectus Delivery Period, the
Company will file all documents required to be filed with the Commission
pursuant to Section 13, 14 or 15 of the Exchange Act in the manner and
within the time periods required by the Exchange Act.
(k) Agreement Not to Offer or Sell Additional Securities. During the
period commencing on the date hereof and ending at the close of trading on
the 90/th/ day following the date of the Prospectus the Company will not,
without the prior written consent of the Joint Book-Runners (which consent
may be withheld in their sole discretion), directly or indirectly, sell,
offer, contract or grant any option to sell (including without limitation
any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Securities Exchange
Act of 1934, as amended, or otherwise dispose of any shares of Common
Stock, options or warrants to acquire shares of Common Stock, or securities
exchangeable or exercisable for or convertible into shares of Common Stock
currently or hereafter owned either of record or beneficially (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by the
Company, or publicly announce an intention to do any of the foregoing.
(l) Future Reports to the Representatives. During the period of two
years hereafter the Company will furnish to BAS at 000 Xxxxx XxXxxxx
Xxxxxx, 0/xx/ Xxxxx, Xxxxxxx, XX 00000
13
Attention: Xxxxxx Xxxxx and Xxxxx Xxxx and to Xxxxxxx Xxxxx and Xxxxxx
Xxxxxxx at the addresses given for them in Section 13 hereof (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report
of the Company containing the balance sheet of the Company as of the close
of such fiscal year and statements of income, stockholders' equity and cash
flows for the year then ended and the opinion thereon of the Company's
independent public or certified public accountants; (ii) as soon as
practicable after the filing thereof, copies of each proxy statement,
Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other report filed by the Company with the Commission, the
NASD or any securities exchange; and (iii) as soon as available, copies of
any report or communication of the Company mailed generally to holders of
its capital stock.
B. Covenants of the Selling Stockholders. Each Selling Stockholder
further covenants and agrees with each Underwriter:
(a) Delivery of Forms W-8 and W-9. To deliver to the Representative
prior to the First Closing Date a properly completed and executed United
States Treasury Department Form W-8 (if the Selling Stockholder is a
non-United States person) or Form W-9 (if the Selling Stockholder is a
United States Person).
C. The Representatives, on behalf of the several Underwriters,
may, in their sole discretion, waive in writing the performance by the
Company or any Selling Stockholder of any one or more of the foregoing
covenants or extend the time for their performance.
Section 4. Payment of Expenses. The Selling Stockholders agree to pay
in such proportions as they may agree upon among themselves, and the
Company agrees to guarantee such payment and to pay any expenses not paid
by the Selling Shareholders, all costs, fees and expenses incurred in
connection with the performance of their obligations hereunder and in
connection with the transactions contemplated hereby, including without
limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees
and expenses of the registrar and transfer agent of the Common Stock, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees
and expenses of the Company's counsel, independent public or certified
public accountants and other advisors, (v) all costs and expenses incurred
in connection with the preparation, printing, filing, shipping and
distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each
preliminary prospectus and the Prospectus, and all amendments and
supplements thereto, and this Agreement, (vi) all filing fees, attorneys'
reasonable fees and expenses incurred by the Company or the Underwriters in
connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for
offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada, and, if requested by the
Representatives, preparing and printing a "Blue Sky Survey" or memorandum,
and any supplements thereto, advising the Underwriters of such
qualifications, registrations and exemptions, (vii) the filing fees
incident to, and the reasonable fees and expenses of counsel for the
Underwriters in connection with, the NASD's review and approval of the
Underwriters' participation in the offering and distribution of the Common
Shares, and (viii) all other fees, costs and expenses referred to in Item
13 of Part II of the Registration Statement. Except as provided in this
Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters
shall pay their own expenses, including the fees and disbursements of their
counsel.
14
The Selling Stockholders further agree with each Underwriter to pay
(directly or by reimbursement) all fees and expenses incident to the
performance of their obligations under this Agreement which are not
otherwise specifically provided for herein, including but not limited to
(i) fees and expenses of counsel and other advisors for such Selling
Stockholders, (ii) fees and expenses of the Custodian and (iii) expenses
and taxes incident to the sale and delivery of the Common Shares to be sold
by such Selling Stockholders to the Underwriters hereunder (which taxes, if
any, may be deducted by the Custodian under the provisions of Section 2 of
this Agreement).
This Section 4 shall not affect or modify any separate, valid
agreement relating to the allocation of payment of expenses between the
Company, on the one hand, and the Selling Stockholders, on the other hand.
Section 5. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Common
Shares as provided herein on the First Closing Date and, with respect to
the Optional Common Shares, the Second Closing Date, shall be subject to
the accuracy of the representations and warranties on the part of the
Company and the Selling Stockholders set forth in Sections 1(A) and 1(B)
hereof as of the date hereof and as of the First Closing Date as though
then made and, with respect to the Optional Common Shares, as of the Second
Closing Date as though then made, to the timely performance by the Company
and the Selling Stockholders of their respective covenants and other
obligations hereunder, and to each of the following additional conditions:
(a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from PricewaterhouseCoopers LLP,
independent public or certified public accountants for the Company, a
letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representatives, containing statements and
information of the type ordinarily included in accountant's "comfort
letters" to underwriters, delivered according to Statement of Auditing
Standards No. 72 (or any successor bulletin), with respect to the audited
and unaudited financial statements and certain financial information
contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional three conformed copies of
such accountants' letter).
(b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date:
(i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the
Securities Act) in the manner and within the time period required by
Rule 424(b) under the Securities Act; or the Company shall have filed a
post-effective amendment to the Registration Statement containing the
information required by such Rule 430A, and such post-effective
amendment shall have become effective; or, if the Company elected to
rely upon Rule 434 under the Securities Act and obtained the
Representative's consent thereto, the Company shall have filed a Term
Sheet with the Commission in the manner and within the time period
required by such Rule 424(b);
(ii) no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in
effect and no proceedings for such purpose shall have been instituted
or threatened by the Commission; and
15
(iii) the NASD shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.
(c) No Material Adverse Change. For the period from and after the date of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Common Shares, the Second Closing Date in the judgment of the
Representatives there shall not have occurred any Material Adverse Change.
(d) Opinion of Counsel for the Company. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received the
favorable opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Company, dated
as of such Closing Date, the form of which is attached as Exhibit A (and the
Representatives shall have received an additional three conformed copies of such
counsel's legal opinion).
(e) Opinion of General Counsel of the Company. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of D. Xxxxxxx Xxxxx, Assistant General Counsel of the Company,
dated as of such Closing Date, the form of which is attached as Exhibit B (and
the Representatives shall have received an additional three conformed copies of
such counsel's legal opinion for each of the several Underwriters).
(f) Opinion of Counsel for the Underwriters. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, dated
as of such Closing Date, with respect to the matters set forth in paragraphs 4,
5 and 10 (with respect to the caption "Underwriting"), and the next-to-last
paragraph of Exhibit A (and the Representatives shall have received an
additional three conformed copies of such counsel's legal opinion).
(g) Opinion of Japanese Counsel for the Company. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Tokyo Aoyama Aoki Law Office - Xxxxx & XxXxxxxx,
Japanese counsel for the Company, dated as of such Closing Date, the form of
which is attached as Exhibit D (and the Representatives shall have received an
additional three conformed copies of such counsel's legal opinion).
(h) Officers' Certificate. On each of the First Closing Date and the Second
Closing Date the Representatives shall have received a written certificate
executed by the Chairman of the Board, Chief Executive Officer or President of
the Company and the Chief Financial Officer or Chief Accounting Officer of the
Company, dated as of such Closing Date, to the effect set forth in subsection
(b)(ii) of this Section 5, and further to the effect that:
(i) for the period from and after the date of this Agreement and
prior to such Closing Date, there has not occurred any Material Adverse
Change;
(ii) the representations and warranties of the Company set forth in
Section 1(A) of this Agreement are true and correct with the same force and
effect as though expressly made on and as of such Closing Date; and
(iii) the Company has complied with all the agreements hereunder and
satisfied all the conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date.
16
(i) Bring-down Comfort Letter. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received from
PricewaterhouseCoopers LLP, independent public or certified public accountants
for the Company, a letter dated such date, in form and substance satisfactory to
the Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional three conformed copies of such accountants' letter).
(j) Opinion of Counsel for the Selling Stockholders. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Xxxxxxxxx Xxxxxxx & XxXxxxxxxx, counsel for the Selling
Stockholders, dated as of such Closing Date, the form of which is attached as
Exhibit C (and the Representatives shall have received an additional three
conformed copies of such counsel's legal opinion).
(k) Selling Stockholders' Certificate. On each of the First Closing Date
and the Second Closing Date the Representatives shall receive a written
certificate executed by the Attorney-in-Fact of each Selling Stockholder, dated
as of such Closing Date, to the effect that:
(i) the representations and warranties of such Selling Stockholder
set forth in Section 1(B) of this Agreement are true and correct with the
same force and effect as though expressly made by such Selling Stockholder
on and as of such Closing Date; and
(ii) such Selling Stockholder has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.
(l) Selling Stockholders' Documents. On the date hereof, the Company and
the Selling Stockholders shall have furnished for review by the Representatives
copies of the Powers of Attorney and the Custody Agreement executed by each of
the Selling Stockholders and such further information, certificates and
documents as the Representatives may reasonably request.
(m) Lock-Up Agreement from Certain Securityholders of the Company Other
Than Selling Stockholders. On or prior to the date hereof, the Company shall
have furnished to the Representatives an agreement in the form of Exhibit E
hereto from each officer of the Company required to file reports pursuant to
Section 16 of the Exchange Act and each director of the Company, and each such
agreement shall be in full force and effect on each of the First Closing Date
and the Second Closing Date.
(n) Lock-up Agreement from the Selling Stockholders. On or prior to the
date hereof, the Company shall have furnished to the Representatives an
agreement in the form of Exhibit F hereto from each of the Selling Stockholders,
other than the Corporation of the President of the Church of Xxxxx Xxxxxx of
Latter Day Saints, and each such agreement shall be in full force and effect on
each of the First Closing Date and the Second Closing Date.
(o) Additional Documents. On or before each of the First Closing Date and
the Second Closing Date, the Representatives and counsel for the Underwriters
shall have received such information, documents and opinions as they may
reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Common Shares as contemplated
17
herein, or in order to evidence the accuracy of any of the representations and
warranties, or the satisfaction of any of the conditions or agreements, herein
contained.
If any condition specified in this Section 5 is not satisfied when and as
required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company and the Selling Stockholders at any
time on or prior to the First Closing Date and, with respect to the Optional
Common Shares, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 6, Section 8 and Section 9 shall at all times be
effective and shall survive such termination.
Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 11 (iv) or (v)
or Section 17, or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company or the Selling Stockholders to perform any
agreement herein or to comply with any provision hereof, the Company agrees to
reimburse the Representatives and the other Underwriters (or such Underwriters
as have terminated this Agreement with respect to themselves), severally, upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by the Representatives and the Underwriters in connection with the proposed
purchase and the offering and sale of the Common Shares, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to the sharing or allocation
of such expenses.
Section 7. This Section Intentionally Left Blank. [This Section
Intentionally Left Blank.]
Section 8. Indemnification.
(a) Indemnification of the Underwriters. Each of the Company and each of
the Selling Stockholders, jointly (except as provided in clause (2) below) and
severally, agrees to indemnify and hold harmless each Underwriter, its officers
and employees, and each person, if any, who controls any Underwriter within the
meaning of the Securities Act and the Exchange Act:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment
thereto), including any information deemed to be a part thereof
pursuant to Rule 430A or Rule 434 under the Securities Act, if
applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading;
18
(2) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged
untrue statement or omission; provided that any such settlement
is effected with the written consent of (A) the Company, to the
extent indemnification pursuant to this Section 8(a)(2) is
sought from the Company, and (B) each Selling Stockholder, to
the extent indemnification pursuant to this Section 8(a)(2) is
sought from such Selling Stockholder; and
(3) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Joint Book-Runners), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is
not paid under clauses (1) or (2) above;
provided, however, that (x) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto), including any
information deemed to be a part thereof pursuant to Rule 430A or Rule 434
under the Securities Act, if applicable, or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto); (y) the aggregate
liability of each Selling Stockholder under this Section 8 shall be limited
to an amount equal to the net proceeds (after deducting the aggregate
Underwriters' discount, but before deducting expenses) received by such
Selling Stockholder from the sale of his or her Common Stock pursuant to
this Agreement and (z) each Selling Stockholder other than the Back-Stopped
Selling Stockholders, as defined below, (such other Selling Stockholders
being referred to herein as the "Limited Selling Stockholders") will be
liable in any case only to the extent that any such loss, liability, claim,
damage or expense arises out of or is based upon statements in or omissions
from the Registration Statement (or any amendment thereto) based upon
information furnished to the Company by such Limited Selling Stockholder
expressly for use therein; and provided, further, that the Company and the
Selling Stockholders shall not be liable to any Underwriter under this
subsection (a) with respect to any preliminary prospectus to the extent
that any loss, claim, damage or liability of such Underwriter results from
the fact that such Underwriter sold Common Stock to a person to whom there
was not given or sent, at or prior to the written confirmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Securities
Act if the Company has previously furnished copies thereof to such
Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained
in the preliminary prospectus which was corrected in the Prospectus (as
amended or supplemented).
In making a claim for indemnification under this Section 8 (other than
pursuant to clause (a)(3) of this Section 8) or contribution under Section
9 hereof by the Company or the Selling Stockholders, the indemnified
parties may proceed against either (1)
19
the Company and the Selling Stockholders jointly, (2) the Selling Stockholders
only or (3) the Company only, but may not proceed solely against Xxxxx X. Xxxxx,
Xxxxxx X. Xxxx, Xxxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx (the "Back-Stopped
Selling Stockholders"), except as set forth below. In the event that the
indemnified parties are entitled to seek indemnity or contribution hereunder
against any loss, liability, claim, damage and expense to which this paragraph
applies then, as a precondition to any indemnified party obtaining
indemnification or contribution from any Back-Stopped Selling Stockholder, the
indemnified parties shall first obtain a final judgment from a trial court that
such indemnified parties are entitled to indemnity or contribution under this
Agreement from the Company and the Selling Stockholders with respect to such
loss, liability, claim, damage or expense (the "Final Judgment") and shall seek
to satisfy such Final Judgment in full from the Company by making a written
demand upon the Company for such satisfaction. Only in the event such Final
Judgment shall remain unsatisfied in whole or in part 45 days following the date
of receipt by the Company of such demand shall any indemnified party have the
right to take action to satisfy such Final Judgment by making demand directly on
the Back-Stopped Selling Stockholders (but only if and to the extent the Company
has not already satisfied such Final Judgment, whether by settlement, release or
otherwise). The indemnified parties may exercise this right to first seek to
obtain payment from the Company and thereafter obtain payment from the
Back-Stopped Selling Stockholders without regard to the pursuit by any party of
its rights to the appeal of such Final Judgment. The indemnified parties shall,
however, be relieved of their obligation to first obtain a Final Judgment
against the Company, to seek to obtain payment from the Company with respect to
such Final Judgment or, having sought such payment, to wait such 45 days after
failure by the Company to immediately satisfy any such Final Judgment if (A) the
Company files a petition for relief under the United States Bankruptcy Code (the
"Bankruptcy Code") or the Japanese equivalent thereof, (B) an order for relief
is entered against the Company in an involuntary case under the Bankruptcy Code
or its Japanese equivalent, (C) the Company makes an assignment for the benefit
of their respective creditors, (D) any court orders or approves the appointment
of a receiver or custodian for the Company or a substantial portion of its
assets, or (E) the loss, liability, claim, damage or expense arises out of or is
based upon statements in or omissions from the Registration Statement (or any
amendment thereto) based upon information furnished to the Company by a
Back-Stopped Selling Stockholder for use therein. The foregoing provisions of
this paragraph are not intended to require any indemnified party to obtain a
Final Judgment against the Company or the Selling Stockholders before obtaining
reimbursement of expenses pursuant to clause (a)(3) of this Section 8. However,
the indemnified parties shall first seek to obtain such reimbursement in full
from the Company by making written demand upon the Company for such
reimbursement. Only in the event such expenses shall remain unreimbursed in
whole or in part 45 days following the date of receipt by the Company of such
demand shall any indemnified party have the right to receive reimbursement of
such expenses from the Back-Stopped Selling Stockholders by making written
demand directly on the Back-Stopped Selling Stockholders (but only if and to the
extent the Company has not already satisfied the demand for reimbursement,
whether by settlement, release or otherwise). The indemnified parties shall,
however, be relieved of their obligation to first seek to obtain such
reimbursement in full from the Company or, having made written demand therefor,
to wait such 45 days after failure by the Company to immediately reimburse such
expenses if (I) the Company files a petition for relief under the Bankruptcy
Code or its Japanese equivalent, (II) an order for relief is entered against the
Company in an involuntary case under the Bankruptcy Code or its Japanese
equivalent, (III) the Company makes an assignment for the benefit of its
creditors, (IV) any court orders or approves the appointment of a receiver or
custodian for the Company or a substantial portion of its assets, or (V) the
loss, liability, claim, damage or expense arises out of or is based upon
20
statements in or omissions from the Registration Statement (or any amendment
thereto) based upon information furnished to the Company by a Back-Stopped
Selling Stockholder for use therein. Notwithstanding anything to the contrary
contained herein, the provisions of this paragraph shall not apply to any claim
for indemnity pursuant to clause (a)(2) of this Section 8 if the indemnified
parties are entitled to seek indemnity under such clause (a)(2) from any Selling
Stockholder with respect to a settlement that has not been effected with the
written consent of the Company.
(b) Indemnification of the Company, its Directors and Officers and Selling
Stockholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Stockholder against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), any information deemed to be a part thereof pursuant to Rule
430A or Rule 434 under the Securities Act, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representative expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions Against Parties: Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 8(a) above,
counsel for the indemnified parties shall be selected by the Joint Book-Runners,
and, in the case of parties indemnified pursuant to Section 8(b) above, counsel
for the indemnified parties shall be selected by the Company; provided, however,
that in each such case, such counsel shall be reasonably satisfactory to the
indemnifying party. An indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that counsel for the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel for the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 8 or Section 9 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
21
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 8(a)(2) or Section 8(a)(3) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement between the Company and the Selling
Stockholders with respect to indemnification.
Section 9. Contribution. If the indemnification provided for in Section 8
is for any reason held to be unavailable to or otherwise insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses
referred to therein (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders, on the
one hand, and the Underwriters, on the other hand, from the offering of the
Common Shares pursuant to this Agreement 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 the Company and the Selling Stockholders,
on the one hand, and the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling Stockholders, on
the one hand, and the Underwriters, on the other hand, in connection with the
offering of the Common Shares pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the Common Shares pursuant to this Agreement (before deducting expenses)
received by the Selling Stockholders, and the total underwriting discount
received by the Underwriters, in each case as set forth on the front cover page
of the Prospectus (or, if Rule 434 under the Securities Act is used, the
corresponding location on the Term Sheet) bear to the aggregate initial public
offering price of the Common Shares as set forth on such cover. The relative
fault of the Company and the Selling Stockholders, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders, on the one
hand, or the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 8(c) with
respect to notice of commencement of any action shall apply if a claim for
contribution is to be made under this Section 9; provided, however,
22
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.
The Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 9.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several, and not joint, in proportion to their
respective underwriting commitments as set forth opposite their names in
Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company or any Selling Stockholder who signed the Registration Statement,
and each person, if any, who controls the Company with the meaning of the
Securities Act and the Exchange Act shall have the same rights to contribution
as the Company or such Selling Stockholder, as the case may be.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to contribution.
Section 10. Default of One or More of the Several Underwriters. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the several Underwriters shall fail or refuse to purchase Common Shares
that it or they have agreed to purchase hereunder on such date, and the
aggregate number of Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Common Shares to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the number
of Firm Common Shares set forth opposite their respective names on Schedule A
bears to the aggregate number of Firm Common Shares set forth opposite the names
of all such non-defaulting Underwriters, or in such other proportions as may be
specified by the Representatives with the consent of the non-defaulting
Underwriters, to purchase the Common Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Underwriters shall fail or refuse to purchase Common Shares and the
aggregate number of Common Shares with respect to which such default occurs
exceeds 10% of the aggregate number of Common Shares to be purchased on such
date, and arrangements satisfactory to the Representatives and the Company for
the purchase of such Common Shares are not made within 48 hours after such
default, this Agreement shall terminate without liability of any party to any
other party except that the provisions of Section 4, Section 6, Section 8 and
Section 9 shall at all times be effective and shall survive such termination. In
any such case either the Representatives or the Company shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
but in no event for longer than seven days in order that the required changes,
if any,
23
to the Registration Statement and the Prospectus or any other documents or
arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
Section 11. Termination of this Agreement. Prior to the First Closing
Date this Agreement may be terminated by the Representatives by notice
given to the Company and the Selling Stockholders if at any time (i)
trading or quotation in any of the Company's securities shall have been
suspended or limited by the Commission or by the New York Stock Exchange,
or trading in securities generally on either the Nasdaq Stock Market or the
New York Stock Exchange shall have been suspended or materially limited, or
minimum or maximum prices shall have been generally established on any of
such stock exchanges by the Commission or the NASD; (ii) a general banking
moratorium shall have been declared by any of federal, New York or
California authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial
markets, or any substantial change or development involving a prospective
substantial change in United States' or international political, financial
or economic conditions, as in the judgment of the Representatives is
material and adverse and makes it impracticable or inadvisable to market
the Common Shares in the manner and on the terms described in the
Prospectus or to enforce contracts for the sale of securities; (iv) in the
judgment of the Representatives there shall have occurred any Material
Adverse Change; or (v) the Company shall have sustained a loss by strike,
fire, flood, earthquake, accident or other calamity of such character as in
the judgment of the Representatives may interfere materially with the
conduct of the business and operations of the Company regardless of whether
or not such loss shall have been insured. Any termination pursuant to this
Section 11 shall be without liability on the part of (a) the Company or the
Selling Stockholders to any Underwriter, except that the Company and the
Selling Stockholders shall be obligated to reimburse the expenses of the
Representative and the Underwriters pursuant to Sections 4 and 6 hereof,
(b) any Underwriter to the Company or the Selling Stockholders, or (c) of
any party hereto to any other party except that the provisions of Section 8
and Section 9 shall at all times be effective and shall survive such
termination.
Section 12. Representations and Indemnities to Survive Delivery. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers, of the Selling Stockholders and
of the several Underwriters 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 any Underwriter or the Company or any of its or their
partners, officers or directors or any controlling person, or the Selling
Stockholders, as the case may be, and will survive delivery of and payment
for the Common Shares sold hereunder and any termination of this Agreement.
Section 13. Notices. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the
parties hereto as follows:
If to the Representatives:
24
1. Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Child/Xxxxxxx X. XxXxxx, Xx.
with a copy to:
1. Banc of America Securities LLC
0 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Legal Department
2. Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
0000X Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxxx
3. Xxxxxx Xxxxxxx & Co. Incorporated
Equity Syndicate
0000 Xxxxxxxx
0/xx/ Xxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxxxx, Managing Director
4. Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
If to the Company:
Nu Skin Enterprises, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
0000 Xxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
25
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
If to the Selling Stockholders:
American Stock Transfer and Trust Company
0000 00/xx/ Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxxxxx Xxxxxxx & XxXxxxxxxx
Gateway Tower East Suite 900
00 Xxxx Xxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx XxXxxxxxxx
Any party hereto may change the address for receipt of communications by
giving written notice to the others.
Section 14. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto, including any substitute Underwriters
pursuant to Section 10 hereof, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8 and
Section 9, and in each case their respective successors, and personal
representatives, and no other person will have any right or obligation
hereunder. The term "successors" shall not include any purchaser of the
Common Shares as such from any of the Underwriters merely by reason of such
purchase.
Section 15. Partial Unenforceability. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of
this Agreement is for any reason determined to be invalid or unenforceable,
there shall be deemed to be made such minor changes (and only such minor
changes) as are necessary to make it valid and enforceable.
Section 16. Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 17. Failure of One or More of the Selling Stockholders to Sell
and Deliver Common Shares. If one or more of the Selling Stockholders shall
fail to sell and deliver to the Underwriters the Common Shares to be sold
and delivered by such Selling Stockholders at the First Closing Date
pursuant to this Agreement, then the Underwriters may at their option, by
written notice from the Representative to the Company and the Selling
Stockholders, either (i) terminate this Agreement without any liability on
the part of any
26
Underwriter or, except as provided in Sections 4, 6, 8 and 9 hereof, the
Company or the Selling Stockholders, or (ii) purchase the shares which the
Company and other Selling Stockholders have agreed to sell and deliver in
accordance with the terms hereof. If one or more of the Selling
Stockholders shall fail to sell and deliver to the Underwriters the Common
Shares to be sold and delivered by such Selling Stockholders pursuant to
this Agreement at the First Closing Date or the Second Closing Date, then
the Underwriters shall have the right, by written notice from the
Representative to the Company and the Selling Stockholders, to postpone the
First Closing Date or the Second Closing Date, as the case may be, but in
no event for longer than seven days in order that the required changes, if
any, to the Registration Statement and the Prospectus or any other
documents or arrangements may be effected.
Section 18. General Provisions. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written
or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may
be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement may not be amended or modified
unless in writing by all of the parties hereto, and no condition herein
(express or implied) may be waived unless waived in writing by each party
whom the condition is meant to benefit. The Table of Contents and the
Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated
business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without
limitation, the indemnification provisions of Section 8 and the
contribution provisions of Section 9, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the
provisions of Sections 8 and 9 hereto fairly allocate the risks in light of
the ability of the parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has been made in the
Registration Statement, any preliminary prospectus and the Prospectus (and
any amendments and supplements thereto), as required by the Securities Act
and the Exchange Act.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholders
and the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation, or statement as to the results thereof, made by
or on behalf of any Underwriter, the officers or employees of any
Underwriter, any person controlling any Underwriter, the Company, the
officers or employees of the Company, or any person controlling the
Company, any Selling Stockholder or any person controlling such Selling
Stockholder, (ii) acceptance of the Shares and payment for them hereunder
and (iii) termination of this Agreement.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Selling Stockholders, the Underwriters, the Underwriters' officers and
employees, any controlling persons referred to herein, the Company's
directors and the Company's officers who sign the Registration Statement
and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
27
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company and the Custodian the enclosed copies
hereof, whereupon this instrument, along with all counterparts hereof, shall
become a binding agreement in accordance with its terms.
Very truly yours,
NU SKIN ENTERPRISES, INC.
By:________________________
Name:
Title:
SELLING STOCKHOLDERS
By:________________________
Name:
Attorney-in-fact
The foregoing Underwriting Agreement is hereby confirmed and accepted by
the Representatives as of the date first above written.
BANC OF AMERICA SECURITIES LLC
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: BANC OF AMERICA SECURITIES LLC
By: _________________________
Name:
Title:
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: _________________________
Name:
Title:
28
SCHEDULE A
Number of
Firm Common
Shares
Underwriters to be Purchased
Banc of America Securities LLC ........................ [___]
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ................................. [___]
Xxxxxx Xxxxxxx & Co. Incorporated ..................... [___]
[Junior Co-Managers] .................................. [___]
Total ........................................ 17,000,000
SCHEDULE B
Number of Maximum Number of
Firm Common Optional Common
Selling Stockholder Shares to be Sold Shares to be Sold
BMR NS-Holdings, LLC ........................................ 2,848,699 518,265
The B and X Xxxxx Trust ..................................... 44,000 -
The S and K Xxxx Trust ...................................... 50,000 -
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxx Xxxxx ................................................. 2,660,576 469,486
0000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxxx X. Xxxxxxxxx ......................................... 2,328,006 415,967
The Xxxxxx X. Xxxxxxxxx Foundation .......................... 15,000 -
The Xxxxxx X. Xxxxxxxxx Fixed Charitable Trust .............. 250,000 -
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxx X. Xxxxxxxxx .......................................... 1,768,543 311,637
The Xxxxx X. Xxxxxxxxx Foundation ........................... 61,600 -
The Xxxxx X. Xxxxxxxxx Fixed Charitable Trust ............... 112,500 -
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
RCB NS-Holdings, LLC ........................................ 1,713,581 311,637
The Xxxxxx Foundation ....................................... 52,500 -
The Xxxxxx Fixed Charitable Trust ........................... 73,800 -
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
SJL NS-Holdings, LLC ........................................ 633,862 261,504
The Xxxxxx and Xxxxxx Xxxx Fixed Charitable Trust ........... 51,280 -
Number of Maximum
Selling Stockholder Firm Number of
Common Optional
Shares Common Shares
to be Sold to be Sold
C & K Trust ................................................ 102,762 -
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
BBR NS-Holdings, LLC ....................................... 1,409,131 261,504
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxx Xxxxx ................................................. 528,697 -
Xxxxxxx Xxxxx .............................................. 413,684 -
X.X. Xxx 000
Xxxxx Xxxxxxx, XX
Xxxx X. Xxxxx .............................................. 495,180 -
All R's Trust--Xxxx Xxxxx .................................. 6,459 -
K and M Xxxxx Trust ........................................ 88,082 -
0000 X. Xxxxxxxx Xxxxx
Xxxx, XX 00000
K & M Rhino, LLC ........................................... 250,000 -
S & K Rhino, LLC ........................................... 50,000 -
00 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Corporation of the President of the Church of
Xxxxx Xxxxxx of Latter Day Saints .......................... 992,058 -
Donation-In-Kind Room 1514
00 Xxxx Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Total: ............................................ 17,000,000 2,550,000
============ ===========
EXHIBIT A
Opinion of counsel for the Company to be delivered pursuant to
Section 5(d) of the Underwriting Agreement.
1. The Company has been duly incorporated and is validly existing and in
good standing as a corporation under the laws of the State of Delaware and has
full corporate power and authority to conduct its business as described in the
Registration Statement and Prospectus.
2. All outstanding shares of the Company's Class A common stock, including
the Shares, have been duly authorized, and validly issued, and are fully paid
and nonassessable; and the Class A common stock, including the Shares, conforms
in all material respects to the description of such Class A common stock
contained in the Prospectus.
3. The statements made in the Prospectus under the caption "Description of
Capital Stock," insofar as they purport to constitute summaries of the terms of
the Company's Class A common stock (including the Shares), constitute accurate
summaries of the terms of such Class A common stock in all material respects.
4. The statements made in the Prospectus under the caption "Certain United
States Tax Consequences to Non-U.S. Holders," insofar as they purport to
constitute summaries of matters of United States federal tax law and regulations
or legal conclusions with respect thereto, constitute accurate summaries of the
matters described therein in all material respects.
5. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
6. The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of the Underwriting Agreement will not
breach or result in a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument filed or incorporated by
reference as an exhibit to the Registration Statement, nor will such action
violate the Certificate of Incorporation or By-laws of the Company or, to our
knowledge, any federal statute or the Delaware General Corporation Law or any
rule or regulation that has been issued pursuant to any federal statute or the
Delaware General Corporation Law or any order known to us issued pursuant to any
federal statute or the Delaware General Corporation Law by any court or
governmental agency or body or court having jurisdiction over the Company or any
of its subsidiaries or any of their properties.
7. No consent, approval, authorization, order, registration or
qualification of or with any federal governmental agency or body or any Delaware
governmental agency or body acting pursuant to the Delaware General Corporation
Law or, to our knowledge, any federal court or any Delaware court acting
pursuant to the Delaware General Corporation Law is required for the issue and
sale of the Shares and the compliance by the Company with all of the provisions
of the Underwriting Agreement, except for the registration under the Act of the
Shares, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws and
from the NASD in connection with the purchase and distribution of the Shares by
the Underwriters.
8. The Registration Statement has become effective under the Act and the
Prospectus was filed on ________, 2002 pursuant to Rule 424(b)___ of the rules
and regulations of the Commission under the Act and, to our knowledge, no stop
order suspending the
A-1
effectiveness of the Registration Statement has been issued or proceeding for
that purpose has been instituted or threatened by the Commission.
9. There are no preemptive rights or rights of first refusal under federal
law or the Delaware General Corporation Law or pursuant to the Company's charter
or by-laws to subscribe for or purchase shares of the Company's Class A common
stock.
10. The statements made in the Prospectus under the caption "Description of
Capital Stock" and in the Registration Statement under Item 15, insofar as they
purport to constitute summaries of the terms of federal statutes, the Delaware
General Corporation Law, rules and regulations thereunder, legal proceedings or
the Company's charter and by-laws, constitute accurate summaries of the matters
summarized in all material respects.
11. To our knowledge, there are no pending or threatened legal or
governmental proceedings required to be described in the Prospectus which are
not described as required.
12. The Company is not an "investment company" within the meaning of and
subject to regulation under the Investment Company Act of 1940, as amended.
Such counsel shall also state that based upon their examination of the
Registration Statement and the Prospectus, their investigations made in
connection with the preparation of the Registration Statement and the Prospectus
and their participation in conferences with certain officers and employees of
the Company, with representatives of PricewaterhouseCoopers LLP and with counsel
to the underwriters, (i) such counsel is of the opinion that the Registration
Statement, as of its effective date, and the Prospectus, as of [ ], 2002,
complied as to form in all material respects with the requirements of the Act
and the applicable rules and regulations of the Commission thereunder, except
that such counsel express no opinion with respect to the financials statements
or other financial data contained in the Registration Statement or the
Prospectus, and (ii) such counsel has no reason to believe that the Registration
Statement, as of its effective date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading or
that the Prospectus as of its date or as of the date hereof contained or
contains any untrue statement of a material fact or omitted or omits 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, except
that in each case counsel expresses no belief with respect to the financial
statements or other financial data contained in the Registration Statement or
the Prospectus.
In rendering 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 which are furnished to the Representatives. In
addition, such counsel may state their opinion is limited to matters governed by
the laws of the State of New York, the corporate law of the State of Delaware
and the federal law of the United States.
A-2
EXHIBIT B
Opinion of the Assistant General Counsel of the Company to be
delivered pursuant to Section 5(e) of the Underwriting Agreement.
1. The Company is duly qualified as a foreign corporation to do business
and is in good standing in each state in the United States where it owns or
leases real property or maintains an office or other facility.
2. Each U.S. significant subsidiary has been duly incorporated in its
respective state of incorporation and is validly existing and in good standing
as a corporation under the laws of such state and has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus.
3. Each U.S. significant subsidiary is duly qualified as a foreign
corporation to do business, and is in good standing, in each state in the United
States where it owns or leases real property or maintains an office or other
facility.
4. All of the issued and outstanding capital stock of each U.S.
significant subsidiary has been duly authorized and validly issued, and is fully
paid and non-assessable. To my knowledge, the Company has not pledged any of the
outstanding capital stock of the U.S. significant subsidiaries.
5. The statements in the Prospectus under the caption "Business-
Legal Proceedings" have been reviewed by me and fairly present and summarize, in
all material respects, the matters referred to therein.
6. To my knowledge, there are no contracts or documents of a character
required to be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement or incorporated by reference
therein which are not described and filed or incorporated by reference as
required.
7. To my knowledge, except for such rights as have been duly waived, there
are no persons with registration or other similar rights to have any equity or
debt securities registered for sale under the Registration Statement or included
in the offering contemplated by the Underwriting Agreement other than the
Selling Stockholders.
8. To my knowledge, neither the Company nor any U.S. significant
subsidiary of the Company has granted any pre-emptive rights, rights of first
refusal or other similar right to purchase shares of Common Stock that would
apply to or otherwise impact the sale of the shares pursuant to the Underwriting
Agreement.
B-1
EXHIBIT C
The opinion of such counsel pursuant to Section 5(j) shall be rendered
to the Representatives at the request of the Company and shall so state
therein. References to the Prospectus in this Exhibit C include any
1supplements thereto at the Closing Date.
(i) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of, and is a valid and binding
agreement of, such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or
by general equitable principles.
(ii) The execution and delivery by such Selling Stockholder of,
and the performance by such Selling Stockholder of its obligations
under, the Underwriting Agreement and its Custody Agreement and its
Power of Attorney will not contravene or conflict with, result in a
breach of, or constitute a default under, the charter or by-laws,
partnership agreement, trust agreement or other organizational
documents, as the case may be, of such Selling Stockholder, or, to the
best of such counsel's knowledge, violate or contravene any provision
of applicable law or regulation, or violate, result in a breach of or
constitute a default under the terms of any other agreement or
instrument to which such Selling Stockholder is a party or by which it
is bound, or any judgment, order or decree applicable to such Selling
Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over such Selling
Stockholder.
(iii) Such Selling Stockholder has good and valid title to all
of the Common Shares which may be sold by such Selling Stockholder
under the Underwriting Agreement and has the legal right and power,
and all authorizations and approvals required under its charter and
by-laws, partnership agreement, trust agreement or other
organizational documents, as the case may be, to enter into the
Underwriting Agreement and its Custody Agreement and its Power of
Attorney, to sell, transfer and deliver all of the Common Shares which
may sold by such Selling Stockholder under the Underwriting Agreement
and to comply with its other obligations under the Underwriting
Agreement, its Custody Agreement and its Power of Attorney.
(iv) Each of the Custody Agreement and Power of Attorney of
such Selling Stockholder has been duly authorized, executed and
delivered by such Selling Stockholder and is a valid and binding
agreement of such Selling Stockholder, enforceable in accordance with
its terms, except as rights to indemnification thereunder may be
limited by applicable law and except as the enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights generally or
by general equitable principles.
(iv) Assuming that the Underwriters purchase the Common Shares
which are sold by such Selling Stockholder pursuant to the
Underwriting Agreement for value, in good faith and without notice of
any adverse claim, the delivery of such Common Shares
C-1
pursuant to the Underwriting Agreement will pass good and
valid title to such Common Shares, free and clear of any
security interest, mortgage, pledge, lieu encumbrance or
other claim.
(vi) To the best of such counsel's knowledge, no
consent, approval, authorization or other order of, or
registration or filing with, any court or governmental
authority or agency, is required for the consummation by
such Selling Stockholder of the transactions contemplated in
the Underwriting Agreement, except as required under the
Securities Act, applicable state securities or blue sky
laws, and from the NASD.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the laws of the State of
Utah, the General Corporation Law of the State of Delaware or the federal law of
the United States, to the extent they deem proper and specified in such opinion,
upon the opinion (which shall be dated the First Closing Date or the Second
Closing Date, as the case may be, shall be satisfactory in form and substance to
the Underwriters, shall expressly state that the Underwriters may rely on such
opinion as if it were addressed to them and shall be furnished to the
Representatives) of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters; provided,
however, that such counsel shall further state that they believe that they and
the Underwriters are justified in relying upon such opinion of other counsel,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of the Selling Stockholders and public officials.
C-2
EXHIBIT D
The opinion of such counsel pursuant to Section 5(g) shall be rendered to
the Representatives at the request of the Company and shall so state therein.
References to the Prospectus in this Exhibit D include any supplements thereto
at the Closing Date.
1. The Subsidiary has been duly incorporated and is validly existing
as a corporation under the laws of Japan, and has the corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus; and
2. All of the issued and outstanding shares of capital stock of the
Subsidiary have been duly authorized and validly issued, and, to the best of our
current, actual knowledge, are fully paid and non-assessable, owned directly or
indirectly by the Company.
D-1
EXHIBIT E
July __, 0000
Xxxx xx Xxxxxxx Securities LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
and
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center
Xxx Xxxx, XX 00000
RE: Nu Skin Enterprises, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of Class
A Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, (and will cause any spouse or immediate family member of
the spouse or the undersigned living in the undersigned's household not to),
without the prior written consent of Banc of America Securities LLC and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (which consent may be withheld in
their sole discretion), directly or indirectly, sell, offer, contract or grant
any option to sell (including without limitation any short sale), pledge,
transfer, establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under the Securities Exchange Act of
1934, as amended) by the undersigned (or such spouse or family member), or
publicly announce an intention to do any of the foregoing, for a period
commencing on the date hereof and continuing through the close of trading on the
date 90 days after the date of the Prospectus. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.
E-1
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
_________________________________
Printed Name of Holder
By: _____________________________
Signature
_________________________________
Printed Name of Person Signing
(and indicate capacity of person
signing if signing as custodian,
trustee, or on behalf of an entity)
E-2
EXHIBIT F
July __, 2002
Nu Skin Enterprises, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000
Banc of America Securities LLC
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the Several Underwriters
c/o Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
and
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center
Xxx Xxxx, XX 00000
RE: Nu Skin Enterprises, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of Class
A Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives (the "Representatives") of the underwriters. The undersigned
recognizes that the Offering will be of benefit to the undersigned and will
benefit the Company. The undersigned acknowledges that the Company, the
Representatives and the other underwriters are relying on the representations
and agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into underwriting arrangements with the Company with
respect to the Offering.
In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, (and will cause any spouse or immediate family member of
the spouse or the undersigned living in the undersigned's household not to),
without the prior written consent of the Banc of America Securities LLC and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (which consent may be
withheld in their sole discretion) and without the approval of the majority of
the independent directors (who are not related to or affiliated with the
undersigned) of the Company's board of directors, directly or indirectly, sell,
offer, contract or grant any option to sell (including without limitation any
short sale), pledge, transfer, establish an open "put equivalent position"
within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934,
as amended, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) by the undersigned (or such
spouse or family member), or publicly announce an intention to do any of the
foregoing, for a period commencing on the date hereof and continuing through the
close of trading on the second anniversary of the date of the Prospectus. The
foregoing sentence shall not apply, however, to: (a) the transfer by the
undersigned, following the first anniversary of the date of the Prospectus, of
the number of shares of Common Stock set forth opposite the undersigned's name
in Schedule A hereto, as a charitable contribution to a charitable organization;
(b) distributions to the undersigned of shares of Common Stock by fixed
F-1
charitable remainder trusts established by the undersigned and which require
such distributions, provided that such shares of Common Stock are subject to the
provisions of this letter; (c) transfers of shares of Common Stock between the
undersigned and the undersigned's immediate family members or their related
persons or estate planning entities, provided that the transferee agrees in
writing that such shares of Common Stock are subject to the provisions of this
letter; (d) sales of shares of Common Stock of which the undersigned is the
beneficial owner but with respect to which the undersigned or the undersigned's
immediate family members living in his or her household has no direct or
indirect "pecuniary interest" (as defined in Rule 16a-1(a)(2) under the
Securities Exchange Act of 1934); and (e) transfers of shares of Common Stock by
lenders exercising their rights pursuant to the Line of Credit Agreement dated
January 23, 1998, as amended, between Xxxxx X. Xxxxx and Bank One Utah upon an
event of default thereunder or in connection with a refinancing thereof.
With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.
This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.
______________________________________
Printed Name of Holder
By: __________________________________
Signature
______________________________________
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
F-2
