19,500,000 SHARES OF COMMON STOCK
AVIS RENT A CAR, INC.
FORM OF U.S. UNDERWRITING AGREEMENT
-----------------------------------
________ __, 1997
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxx & Partners, X.X.
Xxxxx Securities Inc.
Xxxxxxx, Sachs & Co.
Xxxxxx Brothers Inc.
Xxxxxxxxxx Securities
Xxxxxxxxx, Xxxxxxxx & Company LLC
as Representatives of the
several U.S. Underwriters named
in Schedule I annexed hereto
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Ladies and Gentlemen:
Avis Rent A Car, Inc., a Delaware corporation (the
"Company"), hereby confirms its agreements with you as follows:
1. U.S. UNDERWRITERS. The term "U.S. Underwriters", as used
herein, refers collectively to you and the other underwriters named in
Schedule I hereto, for whom you are acting as representatives. Except as may
be expressly set forth below, any reference to you in this Agreement shall be
solely in your capacity as representatives of the U.S. Underwriters, and the
Company shall be entitled to act and rely upon any statement, request, notice,
consent, waiver or agreement purportedly on behalf of any U.S. Underwriter
made or given by Bear, Xxxxxxx & Co. Inc. ("Bear, Xxxxxxx").
2. DESCRIPTION OF STOCK.
(a) The Company proposes to sell to the U.S. Underwriters an
aggregate of 15,600,000 shares (the "Firm U.S. Shares") of Common Stock, par
value $.01 per share (the "Common Stock"), of the Company, upon the terms and
subject to the conditions set forth herein. The Company also proposes to grant
to the U.S. Underwriters the option to purchase from the Company, for the sole
purpose of covering over-allotments, if any, in connection with the sale of
the Firm U.S. Shares, an aggregate of
up to 2,340,000 additional shares (the "Additional U.S. Shares") of Common
Stock upon the terms and subject to the conditions set forth herein and for
the purposes set forth in Section 4(b) hereof. The Firm U.S. Shares and the
Additional U.S. Shares are hereinafter referred to collectively as the "U.S.
Shares."
(b) It is understood and agreed to by all the parties that
the Company is concurrently entering into an agreement (the "International
Underwriting Agreement") providing for the sale by the Company of an aggregate
of 3,900,000 shares (the "Firm International Shares") of Common Stock through
arrangements with certain underwriters outside the United States and Canada
(the "Managers"), for which Bear, Xxxxxxx International Limited, Bayerische
Vereinsbank AG, Chase Manhattan International Limited, Credit Lyonnais
Securities, Xxxxxxx Xxxxx International, Xxxxxx Brothers International
(Europe), Xxxxxxxxxx Securities and Xxxxxxxxx, Xxxxxxxx & Company LLC are
acting as representatives. The Company also proposes to grant to the Managers
the option to purchase, for the sole purpose of covering over-allotments in
connection with the sale of the Firm International Shares, up to an aggregate
of 585,000 additional shares (the "Additional International Shares") of Common
Stock. The Firm International Shares and the Additional International Shares
are collectively referred to herein as the "International Shares," the U.S.
Shares and the International Shares are collectively referred to herein as the
"Shares" and this Agreement and the International Underwriting Agreement are
collectively referred to herein as the "Underwriting Agreements." Two forms of
prospectus are to be used in connection with the offering and sale of the
Shares contemplated by the foregoing, one relating to the U.S. Shares and the
other relating to the International Shares. The latter form of prospectus will
be identical to the former except for certain substitute pages as included in
the registration statement and amendments thereto as mentioned below. Except
as the context otherwise may require, references hereinafter to any
prospectus, whether in preliminary or final form and whether as amended or
supplemented, shall include the U.S. and the international versions thereof.
(c) It is also understood and agreed to by all the parties
that the U.S. Underwriters have entered into an agreement with the Managers
(the "Agreement Between U.S. Underwriters and Managers") contemplating the
coordination of certain transactions between the U.S. Underwriters and the
Managers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may (i) purchase from the Managers a portion of
the International Shares to be sold to the Managers pursuant to the
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International Underwriting Agreement or (ii) sell to the Managers a portion of
the U.S. Shares to be sold to the U.S. Underwriters pursuant to this
Agreement. The Company also understands that any such purchases and sales
between the U.S. Underwriters and the Managers shall be governed by the
Agreement Between U.S. Underwriters and Managers and shall not be governed by
the terms of this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to, and agrees with, each U.S. Underwriter
that:
(a) The Company meets the requirements for the use of a
Registration Statement on Form S-1 under the Securities Act of 1933
(the "Act"), and has prepared and filed with the Securities and
Exchange Commission (the "Commission"), pursuant to the Act and the
rules and regulations promulgated by the Commission thereunder (the
"Regulations"), a registration statement on Form S-1 (File No.
333-28609) relating to the Shares and may have filed one or more
amendments thereto, including in each case preliminary prospectuses
relating to the offerings of the Shares. The Company next proposes to
file with the Commission a further amendment to the registration
statement, including therein a final prospectus, necessary to permit
the registration statement to become effective or, if no amendment is
required for that purpose, then promptly following the effectiveness
of the registration statement, the Company proposes to file with the
Commission, in accordance with Rules 430A and 424(b)(1) or Rule
424(b)(4) of the Regulations, final prospectuses with respect to the
offerings of the Shares, the final prospectus so filed in either case
to include all Rule 430A Information (as hereinafter defined) and to
conform, in content and form, to the last printer's proof thereof
furnished to and approved by you immediately prior to such filing. As
used in this Agreement, (i) "Effective Date" means the date that the
registration statement hereinabove referred to, or the most recent
post-effective amendment thereto, if any, is declared effective by
the Commission, (ii) "Registration Statement" means such registration
statement as last amended prior to the time the same was declared
effective by the Commission, including all exhibits and schedules
thereto and all Rule 430A Information deemed to be included therein
at the Effective Date pursuant to Rule 430A of the Regulations, (iii)
"Rule 430A Information" means information with respect to the Shares
and the public offerings thereof permitted, pursuant to the
provisions of paragraph (a) of Rule 430A of
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the Regulations, to be omitted from the form of prospectus included
in the Registration Statement at the time it is declared effective by
the Commission, (iv) "U.S. Prospectus" means the form of final
prospectus relating to the U.S. Shares first filed with the
Commission pursuant to Rule 424(b) of the Regulations or, if no
filing pursuant to Rule 424(b) is required, the form of final
prospectus included in the Registration Statement at the Effective
Date, (v) "International Prospectus" means the form of final
prospectus relating to the International Shares first filed with the
Commission pursuant to Rule 424(b) of the Regulations or, if no
filing pursuant to Rule 424(b) is required, the form of final
prospectus included in the Registration Statement at the Effective
Date (the U.S. Prospectus and the International Prospectus are
referred to collectively as the "Prospectuses") and (vi) "Preliminary
Prospectus" means any preliminary prospectus (as described in Rule
430 of the Regulations) with respect to the Shares that omits Rule
430A Information.
(b) The Registration Statement conforms and on the Effective
Date will conform, and the Prospectuses on the date thereof and on
the date first filed with the Commission pursuant to Rule 424(b) of
the Regulations (if required) will conform, in all material respects
with the applicable requirements of the Act and the Regulations. On
the Effective Date, the date the Prospectuses are first filed with
the Commission pursuant to Rule 424(b) of the Regulations (if
required), at all times subsequent thereto to and including the
Closing Date (as defined in Section 4(a)(ii) hereof) and, if later,
the Additional Closing Date (as defined in Section 4(b)(ii) hereof),
when any post-effective amendment to the Registration Statement
becomes effective or any supplement to the Prospectuses is filed with
the Commission, and during such longer period as the Prospectuses may
require to be delivered under the Act in connection with sales of
Shares by the U.S. Underwriters, the Managers or a dealer, the
Registration Statement and the Prospectuses (as amended or
supplemented if the Company shall have filed with the Commission an
amendment or supplement thereto) did not and will not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein (in the case of the Prospectuses, in light of
the circumstances under which they were made) not misleading. No
order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and when any Preliminary
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Prospectus was first filed with the Commission (whether filed as part
of the Registration Statement or an amendment thereof or pursuant to
Rule 424(a) of the Regulations) and when any amendment thereof or
supplement thereto was first filed with the Commission, such
Preliminary Prospectus and any amendments thereof and supplements
thereto conformed in all material respects with the applicable
requirements of the Act and the Regulations thereunder and did not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading. No representation and warranty,
however, is made in this subsection 3(b) by the Company with respect
to written information contained in or omitted from the Registration
Statement, the Prospectuses, any Preliminary Prospectus, or any
amendment or supplement in reliance upon and in conformity with
written information with respect to the U.S. Underwriters and the
Managers and the plan of distribution of the Shares furnished to the
Company on behalf of any U.S. Underwriter or Manager by Bear, Xxxxxxx
expressly for use in connection with the preparation thereof.
(c) Each contract, agreement, instrument, lease, license or
other item required to be described in the Registration Statement or
the Prospectuses or filed as an exhibit to the Registration Statement
has been so described or filed, as the case may be.
(d) Deloitte & Touche LLP, whose separate reports appear in
the Prospectuses, are independent public accountants with respect to
the Company and Ernst & Young LLP, whose separate reports appear in
the Prospectuses, are independent public accountants with respect to
The First Xxxx Line Corporation ("First Xxxx Line"), in each case as
required by and within the meaning of the Act and the Regulations.
The consolidated financial statements and schedules (including the
related notes) of the Company, its subsidiaries and their
predecessors (the "Company Financials") included in the Registration
Statement or any Preliminary Prospectus, or to be included in the
Prospectuses fairly present the consolidated financial position,
results of operations and cash flows of the Company, its subsidiaries
and their predecessors and the other information purported to be
shown therein at the respective dates and for the respective periods
to which they apply. The Company Financials have been prepared in
accordance with generally accepted accounting principles as
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in effect in the United States ("US GAAP") consistently applied
throughout the periods involved, and are, in all material respects,
in accordance with the books and records of the Company, its
subsidiaries and their predecessors, as the case may be. The
consolidated financial statements and schedules (including the
related notes) of First Xxxx Line and its subsidiaries (the "First
Xxxx Line Financials") included in the Registration Statement or any
Preliminary Prospectus, or to be included in the Prospectuses fairly
present the consolidated financial position, results of operations
and cash flows of First Xxxx Line and its subsidiaries and the other
information purported to be shown therein at the respective dates and
for the respective periods to which they apply. The First Xxxx Line
Financials have been prepared in accordance with US GAAP consistently
applied throughout the periods involved, and are, in all material
respects, in accordance with the books and records of First Xxxx Line
and its subsidiaries, as the case may be. The "pro forma" financial
information included in the Registration Statement or any Preliminary
Prospectus, or to be included in the Prospectuses, fairly present the
information purported to be shown therein at the respective dates
thereof and for the respective periods covered thereby and all
adjustments have been properly applied. The assumptions in such pro
forma financial information are reasonable. No other financial
statements are required by Form S-1 or otherwise to be included in
the Registration Statement or the Prospectuses other than those
included therein.
(e) Subsequent to the respective dates as of which
information is given in the Registration Statement, except as set
forth in the Registration Statement or as may be set forth in the
Prospectuses, there has not been any material adverse change in the
business, properties, operations, condition (financial or other) or
results of operations of the Company and the subsidiaries (as defined
below) taken as a whole, whether or not arising from transactions in
the ordinary course of business, and since the date of the latest
balance sheet of the Company included in the Registration Statement,
and except as described in the Registration Statement or as may be
described in the Prospectuses, (i) neither the Company nor any of its
subsidiaries (A) has incurred or undertaken any liabilities or
obligations, direct or contingent, that are, individually or in the
aggregate, material to the Company and its subsidiaries taken as a
whole, or (B) entered into any transaction not in the ordinary course
of business that is
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material to the Company and its subsidiaries taken as a whole; and
(ii) the Company has not declared or paid any dividend on or made any
distribution of or with respect to any shares of its capital stock or
redeemed, purchased or otherwise acquired or agreed to redeem,
purchase or otherwise acquire any shares of its or its subsidiaries'
capital stock. As used in this Agreement, the term "subsidiary" means
any corporation, partnership, joint venture, association, company,
business trust or other entity in which the Company or First Xxxx
Line, as the case may be, directly or indirectly (i) beneficially
owns or controls a majority of the outstanding voting securities
having by the terms thereof ordinary voting power to elect a majority
of the board of directors (or other body fulfilling a substantially
similar function) of such entity (irrespective of whether or not at
the time any class or classes of such voting securities shall have or
might have voting power by reason of the happening of any
contingency) or (ii) has the authority or ability to control the
policies of such entity (including, but without limitation thereto,
any partnership of which the Company or First Xxxx Line, as the case
may be, or a subsidiary is a general partner or owns or has the right
to obtain a majority of limited partnership interests and any joint
venture in which the Company or First Xxxx Line, as the case may be,
or a subsidiary has liability similar to the liability of a general
partner of a partnership or owns or has the right to obtain a
majority of the joint venture interests).
(f) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each
of the Underwriting Agreements and to issue, sell and deliver the
Shares in accordance with the terms and conditions thereof. Each of
the Underwriting Agreements has been duly and validly authorized,
executed and delivered by the Company and is a legal and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors' rights and remedies
generally, and subject, as to enforceability, to general principles
of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity), and except insofar as rights to
indemnification and contribution contained therein may be limited by
federal or state securities laws or related public policy.
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(g) The Company's execution and delivery of, and its
performance of its obligations under, each of the Underwriting
Agreements and the consummation of the transactions contemplated
thereby, will not (i) conflict with or result in a breach of any of
the terms and provisions of, or constitute a default under (or an
event that with notice or lapse of time, or both, would constitute a
default under) or require approval or consent under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to the terms of (A) any agreement, contract, indenture, mortgage,
lease, license, arrangement or understanding to which the Company or
any of its subsidiaries is a party, or to which any of its properties
is subject, that is material to the Company and the subsidiaries
taken as a whole (hereafter, collectively, "Material Contracts")
(except for those conflicts, breaches or defaults for which consent
or approval has been obtained by the Company prior to the date
hereof, and copies evidencing such consent or approval have been
provided to Bear, Xxxxxxx) or (B) any governmental franchise, license
or permit heretofore issued to the Company or any of its subsidiaries
that is material to the Company and its subsidiaries taken as a whole
(hereafter, collectively, "Material Permits"), (ii) violate or
conflict with any provision of the certificate of incorporation,
by-laws or similar governing instruments of the Company or any of its
subsidiaries listed on Schedule II hereto (the "Material
Subsidiaries") or (iii) violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body having jurisdiction
over the Company or any Material Subsidiary or any of its respective
properties or assets, except for those violations or conflicts, that,
individually or in the aggregate, would not have a material adverse
effect on the Company and its subsidiaries taken as a whole
(hereafter, a "Material Adverse Effect").
(h) No consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with any
court or any public, governmental or regulatory agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
its respective properties or assets is required for the Company's
execution and delivery of, and its performance of its obligations
under, each of the Underwriting Agreements, and the consummation of
the transactions contemplated thereby, except the registration of the
Shares under the Act and the Securities Exchange Act
8
of 1934, as amended (the "Exchange Act"), the authorization of the
Shares for listing on the New York Stock Exchange (the "NYSE") and
such filings and registrations as may be required under state
securities or "Blue Sky" laws and the securities laws of foreign
jurisdictions in connection with the purchase and distribution of the
Shares by the U.S. Underwriters and the Managers.
(i) All of the currently outstanding shares of capital stock
of the Company, and all of the outstanding shares of capital stock
(or similar interests) of each of its subsidiaries, have been duly
and validly authorized and issued, are fully paid and nonassessable
and were not issued in violation of or subject to any preemptive
rights. The shares of Common Stock of the Company to be outstanding
on the Closing Date, including the Shares, have been duly authorized
and, when issued (and, in the case of the Shares, delivered and sold
in accordance with the terms of the Underwriting Agreements) will be
validly issued, fully paid and nonassessable, and will not have been
issued in violation of or be subject to any preemptive rights. Upon
delivery of and payment for the Shares in accordance with the
Underwriting Agreements, the U.S. Underwriters and the Managers will
receive valid title to those of the Shares to be purchased by them
from the Company, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders' agreements and voting
trusts. The Company has, as of the date hereof, and will have, as of
the Closing Date and the Additional Closing Date, if any, an
authorized and outstanding capitalization as set forth in the
Registration Statement and as shall be set forth in the Prospectuses,
both on an historical basis and as adjusted to give effect to the
offering of the Shares. The Company's capital stock conforms to the
description thereof set forth in the Registration Statement and as
shall be set forth in the Prospectuses. The Company owns directly or
indirectly such percentage of the outstanding capital stock (or
similar interests) of each of its subsidiaries as is set forth
opposite the name of such subsidiary in Schedule III hereto, free and
clear of all claims, liens, security interests, pledges, charges,
encumbrances, stockholders agreements and voting trusts, except as
otherwise described in said Schedule III.
(j) There is no commitment, plan or arrangement to issue,
and no outstanding option, warrant or other right calling for the
issuance of, any shares of capital stock (or similar interests) of
the Company or of any of its
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subsidiaries or any security or other instrument that by its terms is
convertible into, exchangeable for or evidencing the right to
purchase capital stock (or similar interests) of the Company or such
subsidiary, except as described in the Registration Statement and as
shall be described in the Prospectuses.
(k) The Company has no subsidiaries other than those listed
in Schedule III hereto. Each of the Company and its subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdictions of incorporation. Each
of the Company and the Material Subsidiaries is duly qualified and in
good standing as a foreign corporation in each jurisdiction in which
the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such
qualification necessary, except for those failures to be so qualified
or in good standing that will not in the aggregate have a Material
Adverse Effect. Each of the Company and the Material Subsidiaries has
all requisite corporate power and authority, and all necessary
consents, approvals, authorizations, orders, registrations, filings,
qualifications, licenses and permits of and from all public,
regulatory or governmental agencies and bodies, to own, lease and
operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and as shall
be described in the Prospectuses (except for those the absence of
which, individually or in the aggregate, would not have a Material
Adverse Effect), and no such consent, approval, authorization, order,
registration, qualification, license or permit contains a materially
burdensome restriction that is not adequately disclosed in the
Registration Statement and the Prospectuses. Neither the Company nor
any Material Subsidiary has received any notice of proceedings
relating to revocation or modification of any such consents,
approvals, authorizations, orders, registrations, filings,
qualifications, licenses or permits (except for those the revocation
or modification of which would not have a Material Adverse Effect).
(l) Neither the Company nor any of its subsidiaries, nor to
the knowledge of the Company, any other party, is in violation or
breach of, or in default under (nor has an event occurred that with
notice, lapse of time or both, would constitute a default under), any
Material Contract, and each Material Contract is in full force and
effect, and is the legal, valid and binding obligation of the Company
or
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such subsidiary, as the case may be, and (subject to applicable
bankruptcy, insolvency, and other laws affecting the enforceability
of creditors' rights generally) is enforceable as to the Company or
such subsidiary, as the case may be, in accordance with its terms.
Neither the Company nor any Material Subsidiary is in violation of
its certificate of incorporation, by-laws or similar governing
instrument.
(m) There is no litigation, arbitration, claim, governmental
or other proceeding or investigation pending or, to the best
knowledge of the Company, threatened with respect to the Company or
any of its subsidiaries, or any of its respective operations,
businesses, properties or assets, except as described in the
Registration Statement and as shall be described in the Prospectuses,
that, individually or in the aggregate, would have a Material Adverse
Effect. Neither the Company nor any Material Subsidiary is, or, to
the best knowledge of the Company, with the giving of notice or lapse
of time or both would be, in violation of or in non-compliance with
the requirements of any Material Permit or the provisions of any law,
rule, regulation, order, judgment or decree, including, without
limitation, all applicable federal, state and local laws and
regulations relating to (i) zoning, land use, protection of the
environment, human health and safety or hazardous or toxic
substances, wastes, pollutants or contaminants and (ii) employee or
occupational safety, discrimination in hiring, promotion or pay of
employees, employee hours and wages or employee benefits, except for
such violations or failures of compliance that, individually or in
the aggregate, would not have a Material Adverse Effect.
(n) Except as described in the Registration Statement and as
shall be described in the Prospectuses, the Company and each of its
subsidiaries have (i) good and marketable title to all real and
personal properties owned by them, free and clear of all liens,
security interests, pledges, charges, encumbrances and mortgages, and
(ii) valid, subsisting and enforceable leases for all real and
personal properties leased by them, in each case, subject to such
exceptions as, individually or in the aggregate, do not have and are
not reasonably likely to have a Material Adverse Effect. No real
property owned, leased, licensed or used by the Company or by a
Material Subsidiary lies in an area that is, or to the best knowledge
of the Company will be, subject to zoning, use or building code
restrictions that would prohibit, and no state of facts relating to
the actions or
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inaction of another person or entity or his, her or its ownership,
leasing, licensing or use of any real or personal property exists
that would prevent, the continued effective ownership, leasing,
licensing or use of such real property in the business of the Company
or such Material Subsidiary as presently conducted or as the
Prospectuses indicate are contemplated to be conducted, subject to
such exceptions as, individually or in the aggregate, do not have and
are not reasonably likely to have a Material Adverse Effect.
(o) The Company, directly or through one or more of its
subsidiaries, owns or has the right under license to use all patents,
patent rights, licenses, inventions, copyrights, trademarks, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
service marks and trade names (collectively, "Intellectual Property")
necessary to conduct its business as now conducted and proposed to be
conducted as disclosed in the Registration Statement and as shall be
disclosed in the Prospectuses. Neither the Company nor any of its
subsidiaries has received notice of infringement of or conflict with
the asserted rights of others with respect to any Intellectual
Property. To the best knowledge of the Company, there is no
infringement by others of any Intellectual Property of the Company or
any of its subsidiaries that has had or may in the future have a
Material Adverse Effect.
(p) To the Company's best knowledge, neither the Company or
any of its subsidiaries, nor any director, officer or employee of the
Company or any such subsidiary has, directly or indirectly, used any
corporate funds for unlawful contributions, gifts, entertainment, or
other unlawful expenses relating to political activity; made any
unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment, kickback, or other unlawful payment.
(q) Except as set forth in the Registration Statement, no
person or entity has the right, by contract or otherwise, to require
registration under the Act of shares of capital stock or other
securities of the Company or any of its subsidiaries solely because
of the filing or effectiveness
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of the Registration Statement and the consummation of the
transactions contemplated by the Underwriting Agreements.
(r) Neither the Company nor any of its officers, directors
or affiliates (as defined in the Regulations) has taken or will take,
directly or indirectly, prior to the termination of the offerings of
the Shares contemplated by the Underwriting Agreements, any action
designed to stabilize or manipulate the price of the Common Stock, or
that might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock.
(s) Neither the Company nor any of its subsidiaries is, or
intends to conduct its business in such a manner that it would
become, and after giving effect to the offering and sale of the
Shares and the application of the proceeds thereof as described in
the Prospectuses, neither the Company nor any subsidiary will be, an
"investment company" or a company "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act").
(t) Except as may be set forth in the Prospectuses, the
Company has not incurred any liability for a fee, commission or other
compensation on account of the employment of a broker or finder in
connection with the transactions contemplated by the Underwriting
Agreements.
(u) The Company and each of its subsidiaries maintain
systems of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with US GAAP and to maintain
accountability for assets; (iii) the access to the respective assets
of the Company and each such subsidiary, as the case may be, 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.
(v) Other than as disclosed in the Registration Statement
and as shall be disclosed in the Prospectuses, no labor dispute with
the employees of the Company or any of its subsidiaries exists or, to
the best knowledge of the
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Company, is imminent that, individually or in the aggregate, is or is
reasonably likely to have a Material Adverse Effect, and the Company
is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or contractors that
reasonably can be expected to have a Material Adverse Effect.
(w) (i) All United States Federal income tax returns of the
Company and each of its subsidiaries required by law to be filed have
been filed and all taxes shown by such returns or otherwise assessed
that are due and payable have been paid, except assessments against
which appeals have been or will be promptly taken and (ii) the
Company and its subsidiaries have filed all other tax returns that
are required to have been filed by them pursuant to the applicable
laws of all other jurisdictions, except, as to each of the foregoing
clauses (i) and (ii), insofar as the failure to file such returns,
individually or in the aggregate, would not have a Material Adverse
Effect, and the Company and its subsidiaries have paid all taxes due
pursuant to said returns or pursuant to any assessment received by
the Company or any such subsidiary, except for such taxes, if any, as
are being contested in good faith and as to which adequate reserves
have been provided in accordance with US GAAP. The charges, accruals
and reserves on the consolidated books of the Company in respect of
any tax liability for any years not finally determined are adequate
to meet any assessments or re-assessments for additional tax for any
years not finally determined, except to the extent of any inadequacy
that would not have a Material Adverse Effect.
(x) Each of the Company and its subsidiaries is insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which the Company and its subsidiaries are engaged.
Neither the Company nor any of its subsidiaries has any reason to
believe that it will not be able to renew its existing insurance
coverage from similar insurers as may be necessary to continue its
business.
(y) Except as disclosed in the Registration Statement and as
shall be disclosed in the Prospectuses, there are no business
relationships or related party transactions of the nature described
in Item 404 of Regulation S-K of the Commission involving the Company
or any other persons
14
referred to in such Item 404, except for such transactions that would
be considered immaterial under such Item 404.
4. PURCHASE, SALE AND DELIVERY OF THE U.S. SHARES.
(a)(i) On the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each of
the U.S. Underwriters an aggregate of 15,600,000 shares of Common Stock, and
each U.S. Underwriter agrees, severally and not jointly, to purchase from the
Company, the number of Firm U.S. Shares set forth opposite the name of such
U.S. Underwriter in Schedule I hereto, all at a purchase price per share of
$_________ (the "Purchase Price"). Subject to Section 12, the number of Firm
U.S. Shares to be purchased from the Company by each U.S. Underwriter (as
adjusted by Bear, Xxxxxxx to eliminate fractions) shall be determined by
multiplying the aggregate number of Firm U.S. Shares to be sold by the
Company, as set forth above by a fraction (A) the numerator of which is the
total number of Firm U.S. Shares set forth opposite the name of such U.S.
Underwriter in Schedule I hereto and (B) the denominator of which is the total
number of Firm U.S. Shares.
(ii) Delivery of the Firm U.S. Shares and payment of the
Purchase Price therefor shall be made at the offices of Bear, Xxxxxxx & Co.
Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location in
the New York City metropolitan area as Bear, Xxxxxxx shall determine and
advise the Company upon at least two full business days' (as defined in
Section 18 hereof) notice in writing. Such delivery and payment shall be made
at 10:00 A.M., New York City time, on the third full business day following
the determination of the Purchase Price, or at such other time as may be
agreed upon by Bear, Xxxxxxx and the Company. The time and date of such
delivery and payment are herein called the "Closing Date." Delivery of the
Firm U.S. Shares shall be made to or upon the order of Bear, Xxxxxxx, for the
respective accounts of the U.S. Underwriters, against payment to the Company
of the aggregate Purchase Price therefor by wire transfer of same day funds to
the account of the Company designated in writing to Bear, Xxxxxxx at least two
business days prior to the Closing Date.
(iii) Certificates for the Firm U.S. Shares shall be
registered in such name or names and in such authorized denominations as Bear,
Xxxxxxx may request in writing at least two full business days prior to the
Closing Date, provided that, if so specified by Bear, Xxxxxxx, the Firm U.S.
Shares may be
15
represented by a global certificate registered in the name of Cede & Co., as
nominee of the Depositary Trust Company ("Cede"). Bear, Xxxxxxx shall be
permitted to examine and package such certificates for delivery at least one
full business day prior to the Closing Date, unless the Firm U.S. Shares are
to be represented by a global certificate.
(b)(i) The Company hereby grants to the U.S. Underwriters an
option (the "U.S. Option") to purchase from the Company the Additional U.S.
Shares at the Purchase Price, for the sole purpose of covering
over-allotments, if any, in the offering of the Firm U.S. Shares by the U.S.
Underwriters. The U.S. Option shall be exercisable by the U.S. Underwriters on
one occasion only, at any time before the expiration of 30 days from the date
of the U.S. Prospectus, for the purchase of all or part of the Additional U.S.
Shares, such exercise to be made by notice, given by Bear, Xxxxxxx to the
Company in the manner specified in Section 14 hereof, which notice shall set
forth the aggregate number of Additional U.S. Shares with respect to which the
U.S. Option is being exercised, the denominations and the name or names in
which certificates evidencing the Additional U.S. Shares so purchased are to
be registered, and the date and time of delivery of such Additional U.S.
Shares, which date may be at or subsequent to the Closing Date and shall not
be less than two nor more than ten days after such notice. Subject to Section
12, the aggregate number of Additional U.S. Shares so purchased from the
Company by each U.S. Underwriter (as adjusted by Bear, Xxxxxxx to eliminate
fractions) shall be determined by multiplying the total number of such
Additional U.S. Shares to be sold by the Company by a fraction (A) the
numerator of which is the number of Firm U.S. Shares set forth opposite the
name of such U.S. Underwriter in Schedule I hereto and (B) the denominator of
which is the total number of Firm U.S. Shares.
(ii) Delivery of the Additional U.S. Shares so purchased and
payment of the Purchase Price therefor shall be made at the offices of Bear,
Xxxxxxx & Co. Inc. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
location in the New York City metropolitan area as Bear, Xxxxxxx shall
determine and advise the Company upon at least two full business days' notice
in writing. Such delivery and payment shall be made at 10:00 A.M., New York
City time, on the date designated in such notice or at such other time and
date as may be agreed upon by Bear, Xxxxxxx and the Company. The time and date
of such delivery and payment are herein called the "Additional Closing Date."
Delivery of the Additional U.S. Shares shall be made to or upon the order of
Bear, Xxxxxxx, for the respective accounts of the U.S. Underwriters, against
payment to the Company of the
16
aggregate Purchase Price therefor by wire transfer of same day funds to the
account of the Company designated in writing to Bear, Xxxxxxx at least two
business days prior to the Additional Closing Date.
(iii) Certificates for the Additional U.S. Shares purchased
by the U.S. Underwriters, when so delivered, shall be registered in such name
or names and in such authorized denominations as Bear, Xxxxxxx shall have
requested in the notice of exercise of the U.S. Option, provided that, if so
specified therein, such Additional U.S. Shares may be represented by a global
certificate registered in the name of Cede. Bear, Xxxxxxx shall be permitted
to examine and package such certificates for delivery at least one full
business day prior to the Additional Closing Date, unless the Additional U.S.
Shares are to be represented by a global certificate.
(c) The U.S. Underwriters shall not be obligated to purchase
any Firm U.S. Shares from the Company except upon tender to the U.S.
Underwriters by the Company of all of the Firm U.S. Shares and the U.S.
Underwriters shall not be obligated to purchase any Additional U.S. Shares
from the Company except upon tender to the U.S. Underwriters by the Company of
all of the Additional U.S. Shares specified in the notice of exercise of the
U.S. Option. The Company shall not be obligated to sell or deliver any Firm
U.S. Shares or Additional U.S. Shares, as the case may be, except upon tender
of payment by the U.S. Underwriters for all the Firm U.S. Shares or the
Additional U.S. Shares, as the case may be, agreed to be purchased by the U.S.
Underwriters hereunder.
5. OFFERING. The Company has been advised by you that the
U.S. Underwriters propose to make a public offering of their respective
portions of the U.S. Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the U.S. Shares are to be offered to the public
initially at a price of $_____ per share and to certain dealers selected by
you at a price that represents a concession not in excess of $____ per share,
and that any U.S. Underwriter may allow, and such dealers may reallow, a
further concession, not in excess of $____ a share, to any U.S. Underwriter or
to certain other dealers, and that after the initial offering of the U.S.
Shares, the public offering price and such concessions may be changed by you.
6. COVENANTS OF THE COMPANY. The Company covenants
and agrees with each U.S. Underwriter that:
17
(a) The Company shall use its best efforts to cause the
Registration Statement to become effective as promptly as possible
and to maintain it in effect. If the Registration Statement has
become or becomes effective pursuant to Rule 430A of the Regulations,
or filing of the Prospectuses with the Commission is otherwise
required under Rule 424(b) of the Regulations, the Company shall file
the Prospectuses, properly completed, with the Commission pursuant to
Rule 424(b) of the Regulations within the time period therein
prescribed and shall provide evidence satisfactory to you of such
timely filing. The Company shall promptly advise you (and, if
requested, confirm such advice in writing), (i) when the Registration
Statement or any post-effective amendment thereto has become
effective, (ii) of the initiation or threatening of any proceedings
for, or receipt by the Company of any notice with respect to, the
suspension of the qualification of the Shares for sale in any
jurisdiction or the issuance by the Commission of any order
suspending the effectiveness of the Registration Statement and (iii)
of receipt by the Company or any representative of or attorney for
the Company of any other communications from the Commission relating
to the Company, the Registration Statement, any Preliminary
Prospectus, the Prospectuses or the transactions contemplated by the
Underwriting Agreements. The Company shall make every reasonable
effort to prevent the issuance of an order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto and, if any such order is issued, to obtain its
lifting as soon as possible. The Company shall not file any amendment
to the Registration Statement or any amendment of or supplement to
the Prospectuses before or after the Effective Date to which you
shall reasonably object after being timely furnished in advance a
copy thereof unless the Company shall conclude, upon the advice of
counsel, that any such amendment must be filed at a time prior to
obtaining such consent.
(b) Within the time during which the Prospectuses are
required to be delivered under the Act, the Company shall comply with
all requirements imposed upon it by the Act, as now or hereafter
amended, and by the Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Shares as contemplated by the provisions hereof and by the
Prospectuses. If, during such period, any event shall occur as a
result of which the Prospectuses as then amended or supplemented
include any untrue statement of a material fact or omit to state any
material fact required to be stated
18
therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not
misleading, or if it shall be necessary at any time to amend the
Registration Statement or supplement the Prospectuses to comply with
the Act and the Regulations, the Company shall notify you promptly
and prepare and file with the Commission an appropriate
post-effective amendment to the Registration Statement or supplement
to each Prospectus (in form and substance reasonably satisfactory to
you) that will correct such statement or omission and shall use its
best efforts to have any such post-effective amendment to the
Registration Statement declared effective as soon as possible.
(c) The Company shall promptly deliver to you two
manually-signed copies of the Registration Statement, including
exhibits and all amendments thereto, and to those persons (including
your counsel) whom you identify to the Company, such number of
conformed copies of the Registration Statement, with exhibits, each
Preliminary Prospectus, the Prospectuses and all amendments of and
supplements to such documents, if any, as you may reasonably request.
(d) The Company shall cooperate with the U.S. Underwriters,
the Managers and Weil, Gotshal & Xxxxxx LLP ("Underwriters' Counsel")
in connection with their efforts to qualify or register the Shares
for sale under the state securities (or "Blue Sky") or foreign laws
of such jurisdictions as you shall request, shall execute such
applications and documents and furnish such information as reasonably
may be required for such purpose and shall comply with such laws so
as to continue such registrations and qualifications in effect for so
long as may be required to complete the distribution of the Shares;
provided, however, that in connection therewith the Company shall not
be required to (i) qualify as a foreign corporation in any
jurisdiction in which it is not so qualified as of the date hereof,
(ii) file a consent to service of process in any jurisdiction in any
action other than one arising out of the offering or sale of the
Shares in such jurisdiction or (iii) become subject to taxation in
any jurisdiction in which it is not now so subject.
(e) The Company shall make generally available (within the
meaning of Section 11(a) of the Act) to its security holders and to
you, in such numbers as you reasonably may request for distribution
to the U.S. Underwriters, as soon as practicable but in no event
later than 45 days after the
19
end of its fiscal quarter in which the first anniversary date of the
Effective Date occurs, an earnings statement, covering a period of at
least twelve consecutive full calendar months commencing after the
effective date of the Registration Statement, that satisfies the
provisions of Section 11(a) of the Act and Rule 158 of the
Regulations.
(f) During a period of 180 days from the date of this
Agreement, the Company shall not, without the prior written consent
of Bear, Xxxxxxx, (i) issue, sell, offer or agree to sell, or
otherwise dispose of, directly or indirectly, any shares of its
capital stock (or any securities convertible into, exercisable for or
exchangeable for shares of its capital stock) other than the
Company's issuance and sale of Shares in accordance with the
Underwriting Agreements and the issuance of up to 4,621,000 shares of
Common Stock (or options exercisable for up to such number of shares)
reserved for issuance pursuant to the Company's Stock Option Plan, or
(ii) acquire, or agree or commit to acquire or publicly announce its
intention to acquire, directly or through a subsidiary, assets or
securities of any other person, firm or corporation in a transaction
or series of related transactions that would be material to the
Company and its subsidiaries, taken as a whole. In addition, the
Company has obtained and delivered to you a written undertaking from
HFS Incorporated that, during the period of 180 days from the date of
this Agreement, without the prior written consent of Bear, Xxxxxxx,
such entity will not sell, offer or agree to sell, or otherwise
dispose of, directly or indirectly, any shares of capital stock (or
any securities convertible into, exercisable for or exchangeable for
shares of capital stock) of the Company or any of its subsidiaries.
(g) During the three years following the Effective Date, the
Company shall furnish to Bear, Xxxxxxx, in such quantity as Bear,
Xxxxxxx may reasonably request for distribution to the U.S.
Underwriters, copies of (i) all reports of the Company to its
stockholders, (ii) all reports, financial statements, and proxy or
information statements filed by the Company with the Commission or
any national securities exchange and (iii) such other information
concerning the Company and its affairs as Bear, Xxxxxxx may
reasonably request from time to time.
(h) The Company shall apply the proceeds from the sale of
the Shares to be sold by it under the Underwriting Agreements in the
manner set forth under "Use of Proceeds" in the Prospectuses. The
Company shall take such steps as
20
shall be necessary to ensure that neither the Company nor any
subsidiary shall become an "investment company" or a company
"controlled" by an "investment company" within the meaning of such
terms under the Investment Company Act.
(i) The Company shall use its best efforts promptly to cause
the Shares to be listed on the NYSE and shall take all actions
necessary to comply with the rules and regulations of the NYSE in
order to maintain the listing of the Shares on the NYSE.
(j) The Company shall comply with all registration, filing
and reporting requirements of the Exchange Act and the rules and
regulations thereunder, which may from time to time be applicable to
the Company.
(k) The Company shall comply with all provisions of all
undertakings contained in Part II of the Registration Statement.
(l) Prior to the Closing Date and, if the U.S. Option is
exercised, until the Additional Closing Date, the Company shall issue
no press release or other communication or hold any press conference
with respect to the offerings of the Shares, or the financial
condition, results of operations, operations, business properties,
assets, liabilities, or prospects of the Company, without your prior
consent.
7. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated by the Underwriting Agreements are consummated or this Agreement
is terminated, and subject to Section 13(d) hereof, the Company agrees to pay
all costs and expenses incident to the performance of its obligations under
the Underwriting Agreements, including those in connection with (i) preparing,
printing, duplicating, filing and distributing the Registration Statement
(including all amendments thereof and exhibits thereto), any Preliminary
Prospectus, the Prospectuses and any supplements thereto, the Underwriting
Agreements and all related agreements, and all other documents relating to the
public offering of the Shares, (ii) the issuance, transfer and delivery of the
Shares to the U.S. Underwriters and the Managers, including any transfer or
other taxes payable thereon, (iii) the registration and qualification if any,
of the Shares under the securities laws of foreign jurisdictions, or where
applicable the obtaining of exemptions therefrom, including the reasonable
fees and disbursements of Underwriters' Counsel and local counsel in
connection therewith, (iv) the listing of the Shares on the NYSE, (v) the
review of the terms of the public offering of the Shares
21
by the National Association of Securities Dealers, Inc. (the "NASD") and the
reasonable fees and disbursements of Underwriters' Counsel in connection
therewith, (vi) the printing of certificates representing the Shares and (vii)
the cost and charges of any transfer agent and registrar for the Shares.
8. CONDITIONS OF THE U.S. UNDERWRITERS' OBLIGATIONS. The
obligations of the several U.S. Underwriters to purchase and pay for the U.S.
Shares, as provided herein, shall be subject to (i) the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof, as of the Closing Date and, with respect to the Additional U.S.
Shares, the accuracy of the representations and warranties of the Company as
of the Additional Closing Date, (ii) the absence from any certificates,
opinions, written statements or letters furnished pursuant to this Section 8
to you or to Underwriters' Counsel of any qualification or limitation not
previously approved in writing by you, (iii) the performance by the Company of
its obligations hereunder and (iv) the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 5:00 P.M., New York City time, on the date of this
Agreement or at such later time and date as shall have been consented
to in writing by Bear, Xxxxxxx. All post-effective amendments to the
Registration Statement shall have become effective. If the Company
shall have relied upon Rule 430A of the Regulations, the Prospectuses
shall have been filed with the Commission in a timely fashion in
accordance with Section 6(a) hereof. All filings required by Rule 424
of the Regulations shall have been made and no such filings shall
have been made without your consent. No stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereof shall have been issued by the Commission or any
state securities commission and no proceedings therefor shall have
been initiated or threatened by the Commission or any state
securities commission.
(b) At the Closing Date (and, with respect to the Additional
U.S. Shares, the Additional Closing Date), you shall have received
the written opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel for the Company, dated the date of its delivery, addressed to
the U.S. Underwriters and the Managers, and in form and scope
satisfactory to Underwriters' Counsel, to the effect that:
22
(i) Each of the Company and the domestic
subsidiaries listed in Schedule II hereto (the "Material
Domestic Subsidiaries") (x) has been duly organized and is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and (y) has all
requisite corporate power and authority, and all necessary
consents, approvals, authorizations, orders, registrations,
filings, qualifications, licenses and permits of and from
all public, regulatory or governmental agencies and bodies,
to own, lease and license its respective properties and
conduct its business as now being conducted and as described
in the Registration Statement and the Prospectuses, except
for those the absence of which, individually or in the
aggregate, would not have a Material Adverse Effect.
(ii) The authorized capital stock of the Company is
as set forth in the Prospectuses under the caption
"Capitalization". All of the outstanding shares of such
capital stock have been duly and validly authorized and
issued, are fully paid and nonassessable and were not issued
in violation of or subject to any preemptive rights. The
shares of Common Stock to be outstanding on the Closing
Date, including the Shares, have been duly authorized and
when issued (and, in the case of the Shares, delivered and
sold in accordance with the terms of the Underwriting
Agreements) will be validly issued, fully paid and
nonassessable. Upon delivery of and payment for the Shares
to be sold by the Company to each U.S. Underwriter and
Manager in accordance with the Underwriting Agreements, each
U.S. Underwriter and each Manager (assuming that it acquires
such Shares without notice of any adverse claim, as such
term is used in Section 8-302 of the Uniform Commercial Code
in effect in the State of New York) will acquire good and
marketable title to the Shares so sold and delivered to it,
free and clear of all liens, pledges, charges, claims,
security interests, restrictions on transfer, agreements or
other defects of title whatsoever (other than those
resulting from any action taken by such U.S. Underwriter or
such Manager). The capital stock of the Company conforms in
all material respects to the description thereof contained
in the Registration Statement and the Prospectuses.
23
(iii) The Company has all requisite corporate
right, power and authority to execute, deliver and perform
its obligations under each of the Underwriting Agreements
and to issue, sell and deliver the Shares in accordance with
the terms and conditions thereof. Each of the Underwriting
Agreements has been duly and validly authorized, executed
and delivered by the Company.
(iv) To the best of such counsel's knowledge, no
consent, approval, authorization, order, registration,
filing, qualification, license or permit of or with any
court or any public, governmental, or regulatory agency or
body having jurisdiction over the Company or any Material
Domestic Subsidiary or any of its respective properties or
assets is required for the Company's execution and delivery
of, and its performance of its obligations under, each of
the Underwriting Agreements, and the consummation of the
transactions contemplated thereby, including, without
limitation, of the issuance, sale and delivery of the
Shares, except for (A) such as may be required under state
securities or Blue Sky laws and the securities laws of
foreign jurisdictions in connection with the purchase and
distribution of the Shares by the U.S. Underwriters and the
Managers (as to which such counsel need express no opinion)
and (B) such as have been made or obtained under the Act,
the Exchange Act or the rules of the NYSE.
(v) The Registration Statement and the Prospectuses
(except for the financial statements and the notes thereto,
the financial statement schedules and the other financial
and accounting data included therein, as to which no opinion
need be expressed) comply as to form in all material
respects with the requirements of the Act and the
Regulations.
(vi) The Registration Statement has become
effective under the Act, and such counsel is not aware of
any stop order suspending the effectiveness of the
Registration Statement and to such counsel's knowledge no
proceedings therefor have been initiated or threatened by
the Commission, and there are no other filings on the part
of the Company required by the Act or the Regulations,
including those required by Rule 424(b) of the Regulations,
that to such counsel's knowledge have not been made.
24
(vii) The Company is not an "investment company" or
a company "controlled" by an "investment company" as defined
in the Investment Company Act.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives
of the Company, representatives of the independent certified public
accountants of the Company, representatives of the U.S. Underwriters
and the Managers and Underwriters' Counsel at which the contents of
the Registration Statement, the Prospectuses and any amendments
thereof or supplements thereto and related matters were discussed
and, although such counsel has not undertaken to investigate or
verify independently and are not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectuses or any amendments thereof or supplements thereto (except
as to matters referred to in the last sentence of clause (ii) above),
no facts have come to such counsel's attention which lead such
counsel to believe that the Registration Statement, on the effective
date thereof (or any post-effective amendment thereof as of the date
of such amendment), contained an untrue statement of a material fact
or omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or that
the Prospectuses, on the date thereof or the date of such opinion,
contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no view with respect to the financial statements
and related notes, the financial statement schedules and the other
financial and accounting data included therein).
In rendering such opinion, such counsel (i) may limit its
opinions to the corporate laws of the State of Delaware, the laws of
the State of New York and the federal laws of the United States of
America, and (ii) may rely (A) as to matters involving the
application of laws other than the laws of the State of New York and
the corporate laws of the State of Delaware and the federal laws of
the United States of America, to the extent such counsel deems proper
and to the extent specified in such opinion letter, if at all, upon a
written opinion or opinions (in form and scope reasonably
satisfactory to Underwriters' Counsel) of other counsel
25
reasonably acceptable to Underwriters' Counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such
counsel may deem proper, on certificates of responsible officers of
the Company and certificates or other written statements of officers
of departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company
and the subsidiaries. The opinion of such counsel shall specifically
state that the opinion of any such other counsel is in form and scope
satisfactory to such counsel and, in such counsel's opinion, such
counsel and you are justified in relying thereon. A copy of the
opinion of any such other counsel shall be delivered to Underwriters'
counsel.
(c) At the Closing Date (and, with respect to the Additional
U.S. Shares, the Additional Closing Date), you shall have received
the written opinion of the General Counsel of the Company, dated the
date of its delivery, addressed to the U.S. Underwriters and the
Managers, and in form and scope satisfactory to Underwriters'
Counsel, to the effect that:
(i) Each of the Company and the Material Domestic
Subsidiaries is duly qualified and in good standing as a
foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes
such qualification necessary, except for those failures to
be so qualified or in good standing that will not in the
aggregate have a Material Adverse Effect. All of the issued
and outstanding capital stock (or similar interests) of each
Material Domestic Subsidiary has been duly and validly
authorized and issued, is fully paid and nonassessable and
was not issued in violation of or subject to any preemptive
rights and is owned by the Company or one of its
subsidiaries, free and clear of all claims, liens, security
interests, pledges, charges, encumbrances, stockholders
agreements and voting trusts, except as otherwise described
in Schedule II to this Agreement.
(ii) The shares of Common Stock to be outstanding
on the Closing Date, including the Shares, will not have
been issued in violation of or be subject to any preemptive
rights. To such counsel's knowledge, there is no outstanding
option, warrant or other right calling for the issuance of
any share of capital stock
26
(or similar interests) of the Company or of any of its
subsidiaries or any security or other instrument that by its
terms is convertible into, exercisable for or exchangeable
for capital stock (or similar interests) of the Company or
any subsidiary, except as described in the Registration
Statement and the Prospectuses.
(iii) The Company's execution and delivery of, and
its performance of its obligations under, each of the
Underwriting Agreements and the consummation of the
transactions contemplated thereby, do not and, when such
performance is required pursuant to the terms thereof, will
not (A) conflict with or result in a breach of any of the
terms and provisions of, or constitute a default under (or
an event that with notice or lapse of time, or both, would
constitute a default under) or require approval or consent
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to the terms of
any Material Contract or any Material Permit, except for
those conflicts, breaches or defaults for which consent or
approval has been obtained by the Company prior to the date
hereof, (B) violate or conflict with any provision of the
certificate of incorporation, by-laws or similar governing
instruments of the Company or any Material Domestic
Subsidiary, or (C) to such counsel's knowledge, violate or
conflict with any judgment, decree, order, statute, rule or
regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the
Company or any Material Domestic Subsidiary or any of its
respective properties or assets, except, with respect to
clauses (A) and (C) of this subparagraph (iii), for those
violations or conflicts that, individually or in the
aggregate, would not have a Material Adverse Effect.
(iv) Insofar as statements in the Prospectuses
purport to summarize the nature and status of litigation or
the provisions of laws, rules, regulations, orders,
judgments or decrees, or the terms of any Material Contracts
or Material Permits, such statements are correct in all
material respects and are fair summaries of the matters
referred to therein.
(v) To the best of such counsel's knowledge, except
as set forth in the Registration Statement and
27
the Prospectuses, no person or entity has the right, by
contract or otherwise, to require registration under the Act
of shares of capital stock or other securities of the
Company or any of its subsidiaries solely because of the
filing or effectiveness of the Registration Statement and
the consummation of the transactions contemplated by the
Underwriting Agreements.
(vi) The Shares have been duly authorized for
listing on the NYSE, subject only to official notice of
issuance.
(vii) To the best of such counsel's knowledge,
there is no litigation, arbitration or governmental or other
action, suit, proceeding or investigation before any court
or before or by any public, regulatory or governmental
agency or body pending or threatened against, or involving
the properties or business of, the Company or any of its
subsidiaries, that, if resolved against the Company or such
subsidiary, individually or, to the extent involving related
claims or issues, in the aggregate, is of a character
required to be disclosed in the Registration Statement and
the Prospectuses that has not been properly disclosed
therein; and to the best such counsel's knowledge, there is
no contract or document concerning the Company or any of its
subsidiaries of a character required to be described in the
Registration Statement and the Prospectuses or to be filed
as an exhibit to the Registration Statement, that is not so
described or filed.
In addition, such counsel shall state that they have
participated in conferences with officers and other representatives
of the Company, representatives of the independent certified public
accountants of the Company, representatives of the U.S. Underwriters
and the Managers and Underwriters' Counsel at which the contents of
the Registration Statement, the Prospectuses and any amendments
thereof or supplements thereto and related matters were discussed
and, although such counsel has not undertaken to investigate or
verify independently and are not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectuses or any amendments thereof or supplements thereto (except
as to matters referred to in clause (iv) above), no facts have
28
come to such counsel's attention which lead such counsel to believe
that the Registration Statement, on the effective date thereof (or
any post-effective amendment thereof as of the date of such
amendment), contained an untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectuses, on the date thereof or the date of such opinion,
contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under
which they were made, not misleading (it being understood that such
counsel need express no view with respect to the financial statements
and related notes, the financial statement schedules and the other
financial and accounting data included therein).
In rendering such opinion, such counsel (i) may limit its
opinions to the corporate laws of the State of Delaware, the laws of
the State of New York and the federal laws of the United States of
America, and (ii) may rely (A) as to matters involving the
application of laws other than the laws of the State of New York and
the corporate laws of the State of Delaware and the federal laws of
the United States of America, to the extent such counsel deems proper
and to the extent specified in such opinion letter, if at all, upon a
written opinion or opinions (in form and scope reasonably
satisfactory to Underwriters' Counsel) of other counsel reasonably
acceptable to Underwriters' Counsel, familiar with the applicable
laws; and (B) as to matters of fact, to the extent such counsel may
deem proper, on certificates of responsible officers of the Company
and certificates or other written statements of officers of
departments of various jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company
and the subsidiaries. The opinion of such counsel shall specifically
state that the opinion of any such other counsel is in form and scope
satisfactory to such counsel and, in such counsel's opinion, such
counsel and you are justified in relying thereon. A copy of the
opinion of any such other counsel shall be delivered to Underwriters'
counsel.
(d) At the Closing Date (and, with respect to the Additional
U.S. Shares, the Additional Closing Date), you shall have received a
certificate of the Company executed by each of the Chief Executive
Officer and the Chief Financial Officer of the Company, dated the
date of its delivery, to
29
the effect that the conditions set forth in subsection (a) of this
Section 8 have been satisfied, that as of the date of such
certificate the representations and warranties of the Company set
forth in Section 3 hereof are true and correct as of such Closing
Date and the obligations of the Company to be performed hereunder on
or prior thereto have been duly performed.
(e) At the time this Agreement is executed and at the
Closing Date (and, with respect to the Additional U.S. Shares, the
Additional Closing Date), you shall have received a letter, from
Deloitte & Touche LLP, dated the date of its delivery, addressed to
the U.S. Underwriters and the Managers and in form and substance
reasonably satisfactory to you, to the effect that: (i) they are
independent accountants with respect to the Company within the
meaning of the Act and the Regulations; (ii) in their opinion, the
Company Financials audited by such firm and included in the
Registration Statement and the Prospectuses comply as to form in all
material respects with the applicable accounting requirements of the
Act and the applicable published rules and regulations thereunder;
(iii) on the basis of procedures (but not an audit made in accordance
with generally accepted auditing standards) consisting of a reading
of the latest available unaudited interim consolidated financial
statements of the Company and its subsidiaries, a reading of the
minutes of meetings and consents of the stockholders and boards of
directors of the Company and the subsidiaries and the committees of
such boards subsequent to December 31, 1996, inquiries of certain
officials of the Company and its subsidiaries who have responsibility
for financial and accounting matters of such companies with respect
to transactions and events subsequent to December 31, 1996, and other
specified procedures and inquiries to a date not more than five days
prior to the date of such letter, nothing has come to their attention
that would cause them to believe that: (A) the unaudited historical
consolidated financial statements of the Company, its subsidiaries
and their predecessors included in the Registration Statement and the
Prospectuses do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or that any material modification
should be made to such unaudited consolidated financial statements
for them to be in conformity with US GAAP; (B) with respect to the
period subsequent to December 31, 1996 there were, as of the date of
the most recent available monthly consolidated financial data of the
Company and the
30
subsidiaries, if any, and as of a specified date not more than five
days prior to the date of such letter, any changes in the capital
stock or increases in long-term indebtedness of the Company or any
decrease in stockholders' equity of the Company, in each case as
compared with the amounts shown in the most recent balance sheet
included in the Registration Statement and the Prospectuses, except
for changes or decreases that the Registration Statement and the
Prospectuses disclose have occurred or may occur; (C) the unaudited
pro forma consolidated financial statements included in the
Prospectuses do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the applicable
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of such financial statements; or (D) that during
the period from December 31, 1996 to the date of the most recent
available monthly consolidated financial data of the Company and its
subsidiaries, if any, and to a specified date not more than five days
prior to the date of such letter, there was any decrease, as compared
with the corresponding period in the prior fiscal year, in total
revenues, or total or per share net income, except for decreases that
the Prospectuses disclose have occurred or may occur; and (iv)
stating that they have compared specific dollar amounts, numbers of
shares, percentages of revenues and earnings and other financial
information pertaining to the Company and its subsidiaries set forth
in the Prospectuses, which have been specified by you prior to the
date of this Agreement, to the extent that such dollar amounts,
numbers, percentages and information may be derived from the general
accounting and financial records that are subject to the internal
control structure policies and procedures of the Company's and its
subsidiaries' accounting systems or that have been derived directly
from such accounting records by analysis or computation, and
excluding any questions requiring an interpretation by legal counsel,
with the results obtained from the application of specified readings,
inquiries, and other appropriate procedures specified by you (which
procedures do not constitute an examination in accordance with
generally accepted auditing standards) set forth in such letter, and
found them to be in agreement.
(f) At the time this Agreement is executed and at the
Closing Date (and, with respect to the Additional U.S. Shares, the
Additional Closing Date), you shall have received a letter, from
Ernst & Young LLP, dated the date of
31
its delivery, addressed to the U.S. Underwriters and the Managers and
in form and substance reasonably satisfactory to you, to the effect
that: (i) they are independent accountants with respect to First Xxxx
Line within the meaning of the Act and the Regulations; (ii) in their
opinion, the First Xxxx Line Financials audited by such firm and
included in the Registration Statement and the Prospectuses comply as
to form in all material respects with the applicable accounting
requirements of the Act and the applicable published rules and
regulations thereunder; (iii) on the basis of procedures (but not an
audit made in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited interim
consolidated financial statements of First Xxxx Line and its
subsidiaries, a reading of the minutes of meetings and consents of
the stockholders and boards of directors of First Xxxx Line and its
subsidiaries and the committees of such boards subsequent to
September 30, 1996, inquiries of certain officials of First Xxxx Line
and its subsidiaries who have responsibility for financial and
accounting matters of such companies with respect to transactions and
events subsequent to September 30, 1996, and other specified
procedures and inquiries to a date not more than five days prior to
the date of such letter, nothing has come to their attention that
would cause them to believe that: (A) the unaudited historical
condensed consolidated financial statements of First Xxxx Line and
its subsidiaries included in the Registration Statement and the
Prospectuses do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the published
rules and regulations thereunder or that any material modification
should be made to such unaudited consolidated financial statements
for them to be in conformity with US GAAP; (B) with respect to the
period subsequent to September 30, 1996 there were, as of the date of
the most recent available monthly consolidated financial data of
First Xxxx Line and its subsidiaries, if any, and as of a specified
date not more than five days prior to the date of such letter, any
changes in the capital stock or increases in long-term indebtedness
of First Xxxx Line or any decrease in stockholders' equity of First
Xxxx Line, in each case as compared with the amounts shown in the
most recent balance sheet included in the Registration Statement and
the Prospectuses, except for changes or decreases that the
Registration Statement and the Prospectuses disclose have occurred or
may occur; or (C) that during the period from September 30, 1996 to
the date of the most recent available monthly consolidated financial
data of First Xxxx
32
Line and its subsidiaries, if any, and to a specified date not more
than five days prior to the date of such letter, there was any
decrease, as compared with the corresponding period in the prior
fiscal year, in total revenues, or total or per share net income,
except for decreases that the Prospectuses disclose have occurred or
may occur; and (iv) stating that they have compared certain financial
information pertaining to First Xxxx Line and its subsidiaries set
forth in the Prospectuses, which have been specified by you prior to
the date of this Agreement, to the extent that such information may
be derived from the general accounting and financial records that are
subject to the internal control structure policies and procedures of
First Xxxx Line's and its subsidiaries' accounting systems or that
have been derived directly from such accounting records by analysis
or computation, and excluding any questions requiring an
interpretation by legal counsel, with the results obtained from the
application of specified readings, inquiries, and other appropriate
procedures specified by you (which procedures do not constitute an
examination in accordance with generally accepted auditing standards)
set forth in such letter, and found them to be in agreement.
(g) All proceedings taken in connection with the sale of the
Shares as contemplated by the Underwriting Agreements shall be
reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, and you shall have received from Underwriters'
Counsel a written opinion, dated as of the Closing Date and addressed
to the U.S. Underwriters and the Managers, with respect to the sale
of the Firm U.S. Shares, and dated as of the Additional Closing Date
with respect to the sale of the Additional U.S. Shares, as to such
matters as you reasonably may require, and the Company shall have
furnished to Underwriters' Counsel such documents as Underwriters'
Counsel may request for the purpose of enabling Underwriters' Counsel
to pass upon such matters.
(h) The NASD, upon review of the terms of the underwriting
arrangements for the public offering of the Shares, shall have raised
no objections thereto.
(i) The Shares shall have been listed on the NYSE, subject
to official notice of issuance.
(j) At the time this Agreement is executed, the Company
shall have furnished to you the written undertakings
33
referred to in the last sentence of Section 6(f) hereof, in form and
substance satisfactory to Underwriters' Counsel.
(k) Prior to the Closing Date, and with respect to the
Additional U.S. Shares, the Additional Closing Date, the Company
shall have furnished to you such further information, certificates
and documents as you may reasonably request.
(l) The closing of the purchase of the International Shares
pursuant to the International Underwriting Agreement shall occur
concurrently with (i) the closing described in Section 4(a)(ii)
hereof, in the case of the Firm U.S. Shares , and (ii) the closing
described in Section 4(b)(ii) hereof, in the case of the Additional
U.S. Shares.
If any of the conditions specified in this Section 8 shall
not have been fulfilled when and as required by this Agreement, or if any of
the certificates, opinions, written statements, or letters furnished to you or
to Underwriters' Counsel pursuant to this Section 8 shall not be in all
material respects reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, all obligations of the U.S. Underwriters hereunder not
theretofore discharged may be canceled by you at, or at any time prior to, the
Closing Date and with respect to the Additional U.S. Shares, the Additional
Closing Date. Notice of such cancellation shall be given to the Company in
writing, or by telephone or telephonic facsimile, confirmed in writing.
9. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
U.S. Underwriter, including Bear, Xxxxxxx in its capacity as U.S. Underwriter
and in its capacity as Qualified Independent Underwriter, as such term is
defined in the Registration Statement, and each person, if any, who controls
any U.S. Underwriter within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to attorneys' fees
and any and all expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation, provided that such settlement was effected with the Company's
written consent in accordance with Section 9(c) hereof), joint or several, to
which they or any of them may become subject under the Act, the Exchange Act
or
34
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact made by the Company
contained in the Registration Statement or the U.S. Prospectus or any
Preliminary Prospectus, or in any supplement thereto or amendment thereof, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of the U.S. Prospectus, in light of the
circumstances under which they were made) not misleading; provided, however,
that the Company shall not be liable under this subsection 9(a) to any U.S.
Underwriter in any such case to the extent but only to the extent that any
such loss, liability, claim, damage or expense arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by or on your behalf with respect to the U.S.
Underwriters; and provided further, that with respect to any Preliminary
Prospectus, such indemnity shall not inure to the benefit of any U.S.
Underwriter (or the benefit of any person controlling such U.S. Underwriter)
if the person asserting any such losses, liabilities, claims, damages or
expenses purchased the Shares that are the subject thereof from such U.S.
Underwriter and if such person was not sent or given a copy of the U.S.
Prospectus at or prior to confirmation of the sale of such Shares to such
person in any case where such sending or giving is required by the Act and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the U.S. Prospectus. This indemnity agreement will
be in addition to any liability that the Company may otherwise have to any
U.S. Underwriter or to any controlling person of such U.S. Underwriter,
including under this Agreement.
(b) Each U.S. Underwriter, severally and not jointly, agrees
to indemnify and hold harmless the Company, each of the directors of the
Company, each of the officers of the Company who shall have signed the
Registration Statement, and each other person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and any and
all amounts paid in settlement of any claim or litigation, provided that such
settlement was effected with such U.S. Underwriter's written consent in
accordance with Section 9(c) hereof), joint or several, to which
35
they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the U.S. Prospectus or any Preliminary Prospectus,
or in any amendment thereof or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the U.S. Prospectus, in light of the circumstances under which
they were made) not misleading, in each case to the extent, but only to the
extent, that any such loss, liability, claim, damage or expense arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company by you or on your behalf with
respect to such U.S. Underwriter expressly for use in the Registration
Statement or U.S. Prospectus; provided, however, that in no case shall such
U.S. Underwriter be liable or responsible for any amount in excess of the
underwriting discount applicable to the Shares purchased by such U.S.
Underwriter hereunder. This indemnity will be in addition to any liability
that the U.S. Underwriter may otherwise have to the Company or any such
director, officer or controlling person, including under this Agreement. The
Company acknowledges that the statements set forth in the last paragraph of
the cover page, the legend concerning stabilization on page two of the U.S.
Prospectus and the statements set forth under the captions "Underwriting" and
"Notice to Canadian Residents" in the U.S. Prospectus constitute the only
information furnished in writing by or on behalf of any U.S. Underwriter
expressly for use in the Registration Statement, any related Preliminary
Prospectus and the U.S. Prospectus.
(c) Promptly after receipt by an indemnified party under
subsection 9(a) or (b) above of notice of the assertion of any claim, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but
the failure so to notify an indemnifying party shall not relieve it from any
liability that it may have under this Section 9 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability that it may have otherwise). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein, and to the extent it may elect by written notice
36
delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by one of the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement
of the action, or (iii) such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them that
are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties with respect to such different defenses), in any of which
events such fees and expenses shall be borne by the indemnifying parties. The
indemnifying party under subsection 9(a) or (b) above shall only be liable for
the legal expenses of one counsel for all indemnified parties in each
jurisdiction in which any claim or action is brought; provided, however, that
the indemnifying party shall be liable for separate counsel for any
indemnified party in a jurisdiction, if counsel to the indemnified parties
shall have reasonably concluded that there may be defenses available to such
indemnified party that are different from or additional to those available to
one or more of the other indemnified parties and that separate counsel for
such indemnified party is prudent under the circumstances. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such written consent was not unreasonably
withheld.
10. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 9(a) hereof
is for any reason held to be unavailable from the Company or is insufficient
to hold harmless a party indemnified thereunder, the Company and the U.S.
Underwriters shall contribute to the aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provisions (including any investigation, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, claims, damages, liabilities and expenses
37
suffered by the Company, any contribution received by the Company from
persons, other than one or more of the U.S. Underwriters, who may also be
liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act,
officers of the Company who signed the Registration Statement and directors of
the Company) to which the Company and one or more of the U.S. Underwriters may
be subject, in such proportions as are appropriate to reflect the relative
benefits received by the Company, on the one hand, and the U.S. Underwriters,
on the other hand, from the offering of the U.S. Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 9 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the
Company, on the one hand, and the U.S. Underwriters, on the other hand, in
connection with the statements or omissions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on
the one hand, and the U.S. Underwriters, on the other hand, shall be deemed to
be in the same proportion as (x) the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company and (y) the underwriting discounts received by the U.S.
Underwriters, respectively, in each case as set forth in the table on the
cover page of the U.S. Prospectus. The relative fault of the Company, on the
one hand, and of the U.S. Underwriters, on the other hand, shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or the U.S. 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 Company and the U.S. Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 10
were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to above.
The Underwriters' obligations in this Section 10 to contribute are several and
not joint. Notwithstanding the provisions of this Section 10, (i) in no case
shall any U.S. Underwriter be required to contribute any amount in excess of
the amount by which the aggregate public offering price of the U.S. Shares
underwritten by it and distributed to the public exceeds the amount of any
damages that such U.S. Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or such omission or alleged
38
omission, and (ii) no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 10, each person, if any, who controls any U.S.
Underwriter within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act shall have the same rights to contribution as such U.S.
Underwriter and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and
each director of the Company shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 10. Any
party entitled to contribution shall, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this Section 10, notify such party or parties from whom contribution may
be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under this Section 10 or otherwise. No party
shall be liable for contribution with respect to any action or claim settled
without its written consent; provided, however, that such written consent was
not unreasonably withheld.
11. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements of the U.S.
Underwriters and the Company contained in this Agreement, including without
limitation the agreements contained in Sections 5, 6 and 7 hereof, the
indemnity agreements contained in Section 9 hereof and the contribution
agreements contained in Section 10 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
U.S. Underwriters or any controlling person of any U.S. Underwriter or by or
on behalf of the Company, any of its officers and directors, and shall survive
delivery of the U.S. Shares to and payment for the U.S. Shares by the U.S.
Underwriters. The representations contained in Section 3 hereof and the
agreements contained in this Section 11 and Sections 5, 6, 7, 9, 10 and 13(d)
hereof shall survive the termination of this Agreement including pursuant to
Section 12 or 13 hereof; provided, however, that if this Agreement is
terminated pursuant to Section 12 or 13 hereof or if for any reason the
purchase of the U.S. Shares by the U.S. Underwriters as contemplated hereunder
is not consummated, the agreements contained in Sections 5 and 6 hereof shall
not survive.
39
12. DEFAULT BY A U.S. UNDERWRITER.
(a) If any U.S. Underwriter or U.S. Underwriters shall
default in its or their obligation to purchase Firm U.S. Shares or Additional
U.S. Shares hereunder, and if the Firm U.S. Shares or Additional U.S. Shares
with respect to which such default relates do not (after giving effect to
arrangements, if any, made pursuant to subsection 12(b) below) exceed in the
aggregate 10% of the number of shares of Firm U.S. Shares or Additional U.S.
Shares, as the case may be, that all U.S. Underwriters have agreed to purchase
hereunder, then such Firm U.S. Shares or Additional U.S. Shares to which the
default relates shall be purchased by the non-defaulting U.S. Underwriters in
proportion to the respective proportions that the numbers of Firm U.S. Shares
set forth opposite their respective names in Schedule I hereto bear to the
aggregate number of Firm U.S. Shares set forth opposite the names of the
non-defaulting U.S. Underwriters.
(b) If such default relates to more than 10% of the Firm
U.S. Shares or Additional U.S. Shares, as the case may be, you may, in your
discretion, arrange for another party or parties (including any non-defaulting
U.S. Underwriter or U.S. Underwriters who so agree) to purchase such Firm U.S.
Shares or Additional U.S. Shares, as the case may be, to which such default
relates on the terms contained herein. If within five (5) calendar days after
such a default you do not arrange for the purchase of the Firm U.S. Shares or
Additional U.S. Shares, as the case may be, to which such default relates as
provided in this Section 12, this Agreement (or, in the case of a default with
respect to the Additional U.S. Shares, the obligations of the U.S.
Underwriters to purchase and of the Company to sell the Additional U.S.
Shares) shall thereupon terminate, without liability on the part of the
Company with respect thereto (except in each case as provided in Sections 7,
9(a) and 10 hereof) or the several non-defaulting U.S. Underwriters (except as
provided in Sections 9(b) and 10 hereof), but nothing in this Agreement shall
relieve a defaulting U.S. Underwriter or U.S. Underwriters of its or their
liability, if any, to the other several U.S. Underwriters and the Company for
damages occasioned by its or their default hereunder.
(c) If the Firm U.S. Shares or Additional U.S. Shares to
which the default relates are to be purchased by the non-defaulting U.S.
Underwriters, or are to be purchased by another party or parties as aforesaid,
you or the Company shall have the right to postpone the Closing Date or
Additional Closing Date, as the case may be, for a period not exceeding five
(5) business days, in order to effect whatever changes may thereby be made
40
necessary in the Registration Statement or the U.S. Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment or supplement to the Registration Statement or the U.S. Prospectus
that, in the opinion of Underwriters' Counsel, may thereby be made necessary
or advisable. The term "U.S. Underwriter" as used in this Agreement shall
include any party substituted under this Section 12 with like effect as if it
had originally been a party to this Agreement with respect to such Firm U.S.
Shares and Additional U.S. Shares.
13. EFFECTIVE DATE OF U.S. UNDERWRITING AGREEMENT;
TERMINATION.
(a) This Agreement shall become effective upon the later of
(i) when you and the Company shall have received notification of the
effectiveness of the Registration Statement and (ii) the execution and
delivery of this Agreement by the parties hereto. Until this Agreement becomes
effective as aforesaid, this Agreement may be terminated by the Company by
notifying you or by you by notifying the Company without any liability of any
party to any party hereunder. Notwithstanding the foregoing, the provisions of
this Section 13 and of Sections 6, 9, 10 and 11 hereof shall at all times be
in full force and effect.
(b) This Agreement and the obligations of the U.S.
Underwriters hereunder may be terminated by you by written notice to the
Company at any time at or prior to the Closing Date (and, with respect to the
Additional U.S. Shares, the Additional Closing Date), without liability (other
than with respect to Sections 9 and 10) on the part of any U.S. Underwriter to
the Company if, on or prior to such date, (i) the Company shall have failed,
refused or been unable to perform in any material respect any agreement on its
part to be performed hereunder, (ii) any other condition to the obligations of
the U.S. Underwriters set forth in Section 8 hereof is not fulfilled when and
as required in any material respect, (iii) trading in securities generally on
the NYSE or the American Stock Exchange or in the over-the-counter market
shall have been suspended or materially limited, or minimum prices shall have
been established on either exchange or such market by the Commission, or by
either exchange or other regulatory body or governmental authority having
jurisdiction, (iv) a general banking moratorium shall have been declared by
Federal or New York State authorities, (v) there shall have occurred any
outbreak or escalation of armed hostilities involving the United States on or
after the date hereof, or if there has been a declaration by the United States
of a national
41
emergency or war, the effect of which shall be, in your judgment, to make it
inadvisable or impracticable to proceed with the sale and delivery of the
Shares on the terms and in the manner contemplated in the Prospectuses, (vi)
in your reasonable opinion any material adverse change shall have occurred
since the respective dates as of which information is given in the
Registration Statement or the Prospectuses affecting the business, prospects,
condition (financial or other) or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, other than as set forth in the Prospectuses or contemplated
thereby, (vii) there shall have occurred such a material adverse change in the
financial markets in the United States such as, in your judgment, makes it
inadvisable or impracticable to proceed with the sale and delivery of the
Shares on the terms and in the manner contemplated in the Prospectuses, or
(viii) there shall have been any enactment, proposal, publication, decree or
other promulgation of any foreign or United States federal or state statute,
regulation, rule or order of any court or other governmental authority that
would, in your reasonable judgment, make it inadvisable or impracticable to
proceed with the sale and delivery of the Shares on the terms and in the
manner contemplated in the Prospectuses. Your right to terminate this
Agreement will not be waived or otherwise relinquished by failure to give
notice of termination prior to the time that the event giving rise to the
right to terminate shall have ceased to exist, provided that notice is given
prior to the Closing Date (and, with respect to the Additional U.S. Shares,
the Additional Closing Date).
(c) Any notice of termination pursuant to this Section 13
shall be by telephone or telephonic facsimile, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to notification by you as
provided in subsection 13(a) or 13(b) hereof), or if the sale of the U.S.
Shares provided for herein is not consummated because any condition to the
obligations of the U.S. Underwriters set forth herein is not satisfied (other
than with respect to Section 8(l) hereof as a result of a default by the
Managers in the purchase of the International Shares) or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof (other than by reason
of a default of the U.S. Underwriters), the Company agrees, subject to demand
by you, to reimburse the U.S. Underwriters for all reasonable out-of-pocket
expenses (including the reasonable fees and expenses of
42
Underwriters' Counsel), incurred by the U.S. Underwriters in connection
herewith.
14. NOTICES. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to
any one or more of the U.S. Underwriters, shall be hand delivered or faxed to
each such U.S. Underwriter in care of Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department (Fax
No. 000-000-0000); and if sent to the Company, shall be hand delivered or
faxed to the Company, 000 Xxx Xxxxxxx Xxxx, Xxxxxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Secretary (Fax No. 000-000-0000).
15. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument.
16. PARTIES. This Agreement shall inure solely to the
benefit of, and shall be binding upon, each of the U.S. Underwriters and the
Company, and the controlling persons, directors, officers, employees and
agents referred to in Sections 9 and 10 hereof, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term
"successors and assigns" shall not include a purchaser, in its capacity as
such, of U.S. Shares from the U.S.
Underwriters.
17. CONSTRUCTION. This Agreement shall be construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
18. DEFINITION OF BUSINESS DAY. For the purposes of this
Agreement, "business day" means any day on which the NYSE is open for trading.
43
If the foregoing correctly sets forth the complete agreement
among the U.S. Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
AVIS RENT A CAR, INC.
By:
-------------------------------
Name:
Title:
Accepted as of the date first above written.
BEAR, XXXXXXX & CO. INC.
XXXXXXXX & PARTNERS, X.X.
XXXXX SECURITIES INC.
XXXXXXX, SACHS & CO.
XXXXXX BROTHERS INC.
XXXXXXXXXX SECURITIES
XXXXXXXXX, XXXXXXXX & COMPANY LLC
as Representatives of the several
U.S. Underwriters named in Schedule I
annexed hereto.
By: BEAR, XXXXXXX & CO. INC.
By:
---------------------------------
Name:
Title:
44
