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EXECUTION COPY
_690,000,000
XXXXXX.XXX, INC.
6.875% CONVERTIBLE SUBORDINATED NOTES DUE 2010
UNDERWRITING AGREEMENT
February 11, 2000
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February 11, 2000
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxxxxx, Lufkin & Xxxxxxxx International
c\o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Dear Sirs and Mesdames:
Xxxxxx.xxx, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Underwriters") _690,000,000 principal amount at maturity of its 6.875%
Convertible Subordinated Notes due 2010 (the "Securities") to be issued pursuant
to the provisions of an Indenture dated as of February 16, 2000 (the
"Indenture") between the Company and The Bank of New York as Trustee (the
"Trustee"). The Securities will be convertible into shares of common stock of
the Company, par value $0.01 per share (the "Underlying Securities").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (registration no. 333-78797), including a
prospectus, relating to certain securities and has filed with, or transmitted
for filing to, or shall promptly hereafter file with or transmit for filing to,
the Commission a preliminary prospectus supplement and a final prospectus
supplement (with the preliminary prospectus supplement, each a "Prospectus
Supplement") specifically relating to the Securities pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "Securities Act"). The term
"Registration Statement" means the registration statement, including the
exhibits thereto, as amended to the date of this Agreement. The term "Basic
Prospectus" means the prospectus included in the Registration Statement. The
term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Securities, together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you that:
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(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company or its counsel, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter expressly for use
therein or (B) to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) The Company's material subsidiaries consist of Xxxxxx.xxx.
Holdings, Inc. and Xxxxxx.xxx LLC. Each such subsidiary has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as currently conducted
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as whole; all of the issued shares of
capital stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned of record directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims; except to the extent that the failure of such issued shares and
capital stock to be so duly and validly authorized and issued,
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fully paid and non-assessable and owned of record directly or indirectly by the
Company would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The shares of Common Stock outstanding on the date hereof have
been duly authorized and are validly issued, fully paid and non-assessable.
(g) The authorized capital stock of the Company was, as of the date
so indicated, as set forth in the Prospectus under the caption "Capitalization"
and conforms as to legal matters to the description thereof contained in the
Prospectus.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture.
(i) The Underlying Securities reserved for issuance upon conversion
of the Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
(j) The Indenture has been duly authorized and, on the Closing Date,
will be duly qualified under the Trust Indenture Act and will be duly executed
and delivered by the Company, and be a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not (a) contravene any provision of applicable
law or the Company's Restated Certificate of Incorporation or Bylaws, (b)
contravene any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture or the Securities, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities.
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(l) There has not occurred any material adverse change (including,
without limitation, a change in management resulting from the resignation or
termination of employment of Xxxx Xxxxx), or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus.
(m) There are no (A) legal or governmental proceedings pending or,
to the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that (i) are required to be described in the
Registration Statement or the Prospectus and that are not so described, or (ii)
limit the power or ability of the Company to perform its obligations under this
Agreement, the Indenture or the Securities or to consummate the transactions
contemplated by the Prospectus; or (B) statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(n) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(p) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals, would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(q) The Company and each of its subsidiaries has good and marketable
title to all personal property owned by it, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company or its subsidiaries, and any real property and buildings held
under lease by the Company are held under valid, subsisting and enforceable
leases, with such
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exceptions as are not material to the Company and its subsidiaries, taken as a
whole, and do not materially or adversely interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries.
(r) To the Company's knowledge, each of the Company and its
subsidiaries owns or possesses, or can acquire on reasonable terms, all material
patents, patent applications, trademarks, service marks, trade names, licenses,
know-how, copyrights, trade secrets and proprietary or other confidential
information necessary to operate the business now operated by it. Neither the
Company nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as disclosed in the Prospectus.
(s) Each of the Company and its subsidiaries possesses all material
consents, licenses, certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, except as described in the Prospectus.
(t) Ernst & Young, who have certified certain financial statements
of the Company and each of its subsidiaries and delivered their report with
respect to the audited financial statements incorporated by reference in the
Prospectus, are independent public accountants within the meaning of such term
for purposes of the Securities Act and the applicable rules and regulations
thereunder.
(u) The financial statements of the Company included in (or
incorporated by reference in) the Prospectus were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved (except as otherwise noted therein) and they
present fairly the financial condition of the Company as of the dates at which
they were prepared and the results of operations of the Company in respect of
the periods for which they were prepared.
(v) The Company and each of its subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for (i) any such assessment,
fine or penalty that is currently being contested in good faith, (ii) in any
case in which the failure so to file or pay would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, or (iii) as
described in or contemplated by the Prospectus.
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(w) Except as disclosed in the Prospectus, the Company and each of
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 it is engaged; and, to the knowledge of the Company,
neither the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for.
(x) (i) The Company and each of its subsidiaries is in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations of general applicability thereunder ("ERISA");
(ii) no "reportable event" (as defined in Section 4043(c) of ERISA) for which
the 30-day notice requirement of Section 4043 of ERISA has not been waived by
statute, regulation or otherwise has occurred with respect to any "pension plan"
(as defined in Section 3(2) of ERISA) that is covered by Title IV of ERISA for
which the Company and its subsidiaries would have any liability; (iii) neither
the Company nor any of its subsidiaries has incurred or expects to incur any
liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (B) Section 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations of general application thereunder (the "Code");in each case of
(ii) and (iii), such that individually or in the aggregate, would have a
material adverse effect on the Company and its subsidiaries, taken as a whole;
and (iv) each "pension plan" for which the Company or any of its subsidiaries
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification, except for the
failure to so qualify or the loss of such qualification that would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(y) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any material term, covenant or condition of any material
indenture, mortgage, deed of trust, lease or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound.
(z) (i) No receiver or liquidator (or similar person) has been
appointed in respect of the Company or any of its subsidiaries or in respect of
any part of the assets of the Company or any of its subsidiaries; (ii) no
resolution, order of any court, regulatory body, governmental body or otherwise,
or petition or application for an order, has been passed, made or presented for
the winding up of the Company or any of its subsidiaries or for the protection
of the Company or any of its subsidiaries from its creditors; and (iii) neither
the Company nor any of its subsidiaries has stopped or suspended payments of its
debts, become unable to pay its debts or otherwise become insolvent, in each
case of (i) through (iii), with respect to the subsidiaries of the Company that
are not material, such that it would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
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2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 97.5% of the principal amount
thereof (the "Purchase Price") plus accrued interest, if any, to the Closing
Date.
The Company hereby agrees that, without your prior written consent, it
will not, during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise dispose
of any debt of the Company or warrants to purchase debt of the Company
substantially similar to the Securities (other than the sale of the Securities
under this Agreement).
The Company and certain of its executive officers and directors have
agreed that they will not (a) offer, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (b) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (a) or (b) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise for a 90-day period after
the date of the Prospectus Supplement, without the prior written consent of
Xxxxxx Xxxxxxx & Co. International Limited, except that (i) the Company may,
without such consent issue Common Stock (A) upon the exercise of outstanding
stock options or warrants or upon the conversion of any other security
outstanding on the date of the Prospectus and may grant options to employees,
directors and consultants of the Company provided such options are not
exercisable during such 90-day period and (B) in connection with acquisitions of
businesses or portions thereof, provided the parties receiving Common Stock in
any such acquisition agree to be bound by the foregoing restrictions and (ii)
certain executive officers and directors of the Company as a group may, with the
approval of the Company, sell or otherwise dispose of in the aggregate 600,000
shares of Common Stock without the consent of Xxxxxx Xxxxxxx & Co. International
Limited.
3. Terms of Offering. The Company is advised that the Underwriters propose
to make an offering of their respective portions of the Underwriters' Securities
(including a public offering in the United States) as soon as practicable after
this Agreement has been entered into as in their judgment is advisable. The
terms of such offering of the Underwriters' Securities are set forth in the
Prospectus. The Underwriters shall effect sales of Securities into the United
States through their respective US broker-dealer affiliates (the "US Underwriter
Affiliates"). The provisions of Sections 1 and 7 of this Agreement shall be for
the benefit of the US Underwriter Affiliates as well as the Underwriters.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such
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Securities for the respective accounts of the several Underwriters at 10:00
a.m., New York City time, on February 16, 2000, or at such other time on the
same or such other date, not later than February 16, 2000, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date, as the case may be for respective the
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Securities to the Underwriters duly paid,
against payment of the Purchase Price therefor plus accrued interest, if any, to
the date of payment and delivery.
5. Conditions to the Underwriter's Obligations. The obligation of the
Underwriters to purchase and pay for the Securities on the Closing Date is
subject to the following conditions:
(a)(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading, in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by a duly authorized officer of
the Company, to the effect set forth in Section 5(a)(ii) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has
complied in all material respects with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxx, Xxxx and Xxxxxxxx LLP, outside counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit A. Such opinion shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
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(d) The Underwriters shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, in form and substance satisfactory to you.
(e) The Underwriters shall have received on each of the date hereof
and the Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from Ernst
& Young LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus,
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than three days prior to the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit B, hereto, between you and certain officers and directors of the Company
relating to sales and certain other dispositions of shares of Common Stock or
certain other securities shall be in full force and effect on the Closing Date.
(g) The Underwriters shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
(h) The Underlying Securities shall have been approved for listing
on the Nasdaq National Market.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriters contained in this Agreement, the Company covenants with the
Underwriters as follows.
(a) To furnish to Xxxxxx Xxxxxxx & Co. International Limited, on
behalf of the Underwriters, without charge, a signed copy of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to Xxxxxx Xxxxxxx & Co. International Limited, on behalf
of the Underwriters in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 6(c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any supplements
and amendments thereto or to the Registration Statement as the Xxxxxx Xxxxxxx &
Co. International Limited may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the Underwriters the
Prospectus is required by law to
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be delivered in connection with sales by an Underwriter or dealer, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, after
reasonable consultation with counsel for the Company, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses Xxxxxx Xxxxxxx & Co.
International Limited will furnish to the Company) to which Securities may have
been sold by Xxxxxx Xxxxxxx & Co. International Limited on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders
and to the Underwriters as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder. If such fiscal quarter is the last fiscal quarter
of the Company's fiscal year, such earning statement shall be made available not
later than 90 days after the close of the period covered thereby and in all
other cases shall be made available not later than 45 days after the close of
the period covered thereby.
(f) During the period beginning on the date of this Agreement and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company or warrants to
purchase debt securities of the Company substantially similar to the Securities
(other than (i) the Securities and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of Xxxxxx Xxxxxxx & Co.
International Limited.
(g) Use its reasonable efforts to take all actions necessary to have
the Notes approved for listing on the Luxembourg Stock Exchange.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the
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Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the qualification of the Securities for offer and
sale under state law as provided in Section 6(d) hereof, including filing fees,
(iv) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (v) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Securities by the National
Association of Securities Dealers, Inc., (vi) any fees charged by the rating
agencies for the rating of the Securities, (vii) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Securities and all costs and expenses incident to listing
the Securities on the Luxembourg Stock Exchange and the Underlying Securities on
the NASDAQ National Market and (viii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution", and
the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each Person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus as the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
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(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. International Limited, in the case
of parties indemnified pursuant to Section 8(a), and by the Company, in the case
of parties indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the
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allocation provided by clause 7(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Company
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total discounts and commissions received by the Underwriters, in each
case as set forth on the cover of the Prospectus Supplement, bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and of the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective principal amount of Securities they have purchased hereunder,
and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 7(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities resold by it in the initial
placement of such Securities were offered to investors exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriters or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Securities.
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8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc. or the Chicago Board of Options Exchange, (ii) trading
of any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as you may specify, to purchase the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Underwriter. If, on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or of the Company. In
any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
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If this Agreement shall be terminated by the Underwriters, or any of them
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters, or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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Very truly yours,
XXXXXX.XXX, INC.
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
Acting severally on behalf of
themselves and the several Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
-----------------------------------------
Name:
Title:
18
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES TO BE
UNDERWRITER PURCHASED
----------- -------------------
Xxxxxx Xxxxxxx & Co. International Limited _414,000,000
Credit Suisse First Boston (Europe) Limited _138,000,000
Xxxxxxxxx, Lufkin & Xxxxxxxx International _138,000,000
------------
Total:............................. _690,000,000
============
19
EXHIBIT A
OPINION OF XXXXXX, XXXX & XXXXXXXX
20
EXHIBIT B
FORM OF LOCK-UP LETTER FOR DIRECTORS AND OFFICERS
February ___, 2000
Xxxxxx Xxxxxxx & Co. International Limited
as Lead Manager of the Underwriters
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. International
Limited ("Xxxxxx Xxxxxxx") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Xxxxxx.xxx, Inc., a Delaware corporation (the
"Company"), providing for the offering (the "Offering") by the several
Underwriters, including Xxxxxx Xxxxxxx (the "Underwriters"), of _690,000,000
principal amount of Convertible Subordinated Notes due 2010 of the Company (the
"Securities"). The Securities will be convertible into shares of common stock,
par value $0.01 per share (including par value) of the Company (the "Common
Stock").
To induce the Underwriters that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of
the Underwriters, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the final prospectus supplement relating to
the Offering (the "Prospectus Supplement"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock*
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to transactions relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the Offering. In addition, the undersigned agrees
--------
* except in the case of Xxxx Xxxxx, Xxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxxxx,
Xxxxx Xxxx and Xxxx Xxxxxx as agreed between the Company and the Underwriters
B3-1
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that, without the prior written consent of Xxxxxx Xxxxxxx on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the Prospectus Supplement, make any demand for
or exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will be made only pursuant to
the Underwriting Agreement, the terms of which are subject to negotiation
between the Company and the Underwriters.
Very truly yours,
----------------------------------------
Name:
----------------------------------------
(Address)
B3-2
