1
THE SEAGRAM COMPANY LTD.
XXXXXX X. XXXXXXX & SONS, INC.
-% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
-------------
Underwriting Agreement
-------------
June -, 1999
Xxxxxxx, Sachs & Co.
Bear, Xxxxxxx & Co. Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
The Seagram Company Ltd., a Canadian corporation (the "Company")
proposes, subject to the terms and conditions stated herein, to enter into the
Purchase Contracts (the "Purchase Contracts") with you on behalf of the
Underwriters named in Schedule I hereto (the "Underwriters"). The Purchase
Contracts are evidenced by the Unit Certificates and are referred to in the
Purchase Contract Agreement to be dated as of June -, 1999 (the "Purchase
Contract Agreement") between the Company and The Bank of New York, as Purchase
Contract Agent (the "Purchase Contract Agent"), underlying an aggregate of
18,500,000 -% Adjustable Conversion-rate Equity Security Units (the "Firm
Units"). In connection therewith, the Company and its subsidiary, Xxxxxx X.
Xxxxxxx, Inc., an Indiana corporation ("JES"), propose, subject to the terms and
conditions stated herein, that JES issue and sell to the Underwriters an
aggregate of 18,500,000 -% Subordinated Deferrable Notes (the "Notes"),
guaranteed by the Company (the "Guarantees"). In connection with the Purchase
Contract Agreement, pursuant to the Pledge Agreement, to be dated as of June -,
1999 (the "Pledge Agreement"), among the Company, the Purchase Contract Agent
and Citibank, N.A., as collateral agent and securities intermediary (the
"Collateral Agent"), the Notes underlying the Units will be pledged by the
Purchase Contract Agent on behalf of the holders of the Units to secure the
holders' obligations to the Company under
1
2
the Purchase Contracts underlying such Units. The rights to purchase newly
issued common shares of the Company (the "Common Shares") under a Purchase
Contract, together with the Notes or other Pledged Securities securing such
Purchase Contract, subject to (a) the obligations owed to the Company under such
Purchase Contract and (b) the pledge arrangements under the Pledge Agreement
securing the foregoing obligations, collectively constitute an Adjustable
Conversion-rate Equity Security Unit (a "Unit"). Unless the context otherwise
requires, for purposes of this Agreement, the act of entering into a Purchase
Contract underlying a Unit and purchasing a Note underlying a Unit shall be
referred to as a "purchase" of such Unit. In addition to the purchase of Firm
Units subject to the terms and conditions herein, the Company and JES propose to
grant the Underwriters an option to purchase up to 2,775,000 additional Units
(the "Optional Units"). The Firm Units and any Optional Units purchased by the
Underwriters are herein called the "Units".
Capitalized terms used herein without definition shall be used as
defined in the Purchase Contract Agreement (as defined herein).
1. The Company and JES represent and warrant to, and agree with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-78395
(the "Initial Registration Statement") in respect of the Units, the
Purchase Contracts, the Notes, the Guarantees and the Common Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you
for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering or offerings (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, the documents incorporated by reference therein, any
post-effective amendment thereto and any preliminary prospectus filed
pursuant to Rule 424(b), no other document with respect to the Initial
Registration Statement or document incorporated by reference therein
has heretofore been filed or transmitted for filing with the
Commission; and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act is
hereinafter called a "Preliminary Prospectus"); the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and including (i) the
information contained in any Preliminary Prospectus or the form of
final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference
2
3
in the prospectus contained in the Initial Registration Statement at
the time such part of the Initial Registration Statement became
effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statement"; and
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "Prospectus"; and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Initial Registration Statement shall
be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents,
as of their respective effective or filing dates, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not, as of their respective effective or filing dates, contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and
3
4
warranty shall apply only to documents so filed and incorporated by
reference during the period that a prospectus relating to the Units is
required to be delivered in connection with sales of such Units by any
underwriters (such period being hereinafter sometimes referred to as
the "prospectus delivery period"), and provided further, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx,
Sachs & Co. expressly for use therein.
(d) The Registration Statement, as of its effective date,
conformed, and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus, as of their respective
effective or filing dates, will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the rules and regulations of
the Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall apply
only to amendments or supplements filed or made during the prospectus
delivery period, and provided, further, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly
for use therein.
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements of
the Company included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree which is
material to the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any
material decrease in the capital stock or increase in long-term debt of
the Company and its subsidiaries taken as a whole, or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, otherwise than as
set forth or contemplated in the Prospectus;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing (in this section references
to the good standing of any Canadian corporation refer only to the fact
that such corporation has a current certificate of compliance) under
the laws of Canada, with power and authority to own its properties and
conduct its business as described in the Prospectus. Each of the
following subsidiaries of the Company has been duly incorporated and is
4
5
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, such subsidiaries being hereinafter
sometimes referred to as the "Specified Subsidiaries": X.X. Xxxxxxx
Corp., Xxxxxx X. Xxxxxxx & Sons, Inc., JES Developments, Inc., PolyGram
N.V. and Universal Studios, Inc.;
(g) All of the issued common shares of the Company have been
duly and validly authorized and issued, and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
of the Specified Subsidiaries have been duly and validly authorized and
issued, are fully paid and non-assessable and, except for Polygram N.V.
and Universal Studios, Inc., are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
The Company indirectly owns approximately 91.9% of each of PolyGram
N.V. and Universal Studios, Inc;
(h) The Notes have been duly authorized and, when the Notes
are executed, authenticated, and delivered in connection with the
purchase of the Units hereunder, the Notes will constitute valid and
legally binding obligations of JES, enforceable in accordance with
their terms and entitled to the benefits provided by the indenture,
dated as of September 15, 1991, as supplemented as of June __, 1999
(the "Indenture") among JES, the Company, as guarantor and The Bank of
New York, as Trustee (the "Trustee"); the Guarantees have been duly
authorized by the Company and, upon the due execution, authentication
and delivery of the Notes and due endorsement of the Guarantees
thereon, such Guarantees will have been duly executed and delivered and
will constitute valid and binding obligations of the Company,
enforceable in accordance with their terms and entitled to the benefits
provided by the Indenture; the Indenture has been fully authorized by
JES and the Company and at the Time of Delivery (as defined below), the
Indenture will be duly qualified under the Trust Indenture Act and will
constitute a valid and legally binding instrument of JES and the
Company, enforceable in accordance with its terms, in each case subject
to the qualification that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law), by an implied covenant of good faith
and fair dealing and, in the case of the Company, by the provisions of
the Currency Act (Canada) or the provisions of the Code of Civil
Procedure of Quebec relating to exclusive jurisdiction of Quebec courts
and imperative rules of law in certain matters; and the Notes, the
Guarantees and the Indenture conform to the descriptions thereof in the
Prospectus;
(i) The Common Shares to be issued and sold by the Company
pursuant to the Purchase Contracts and the Purchase Contract Agreement
have been duly authorized and reserved for issuance and, when issued
and delivered against payment therefor as provided in the Purchase
Contracts and the Purchase Contract Agreement, will be validly issued
and fully paid and non-assessable and currently conform to the
description of the common shares of the Company in the Prospectus;
(j) The execution, delivery and performance of this Agreement,
the Indenture, the Purchase Contract Agreement, the Pledge Agreement
and the
5
6
Remarketing Agreement by the Company and JES, as applicable, and the
consummation by the Company and JES of the transactions contemplated
hereby and thereby and the issuance and delivery of the Units, the
Purchase Contracts, the Notes, the Guarantees and the Common Shares to
be issued and sold pursuant to the Purchase Contracts, will not
conflict with or result in a material breach of any of the terms or
provisions of, or constitute a material default under, or result in the
creation or imposition of any material lien, charge or encumbrance upon
any of the property or assets of the Company or any of its Specified
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument material to the
operations of the Company to which the Company or any of its Specified
Subsidiaries is a party or by which the Company or any of its Specified
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Specified Subsidiaries is subject,; nor will such
action result in any violation of the provisions of the Certificate of
Amalgamation, as amended, or the General By-laws of the Company, or any
statute or any order, rule or regulation of any court or governmental
agency or body in the United States having jurisdiction over the
Company or any of its Specified Subsidiaries or any of their respective
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency over the Company or JES is required for the execution, delivery
and performance of this Agreement, the Indenture, the Purchase Contract
Agreement, the Pledge Agreement and the Remarketing Agreement by the
Company and JES, as applicable, and the consummation by the Company and
JES of the transactions contemplated hereby and thereby and the
issuance and delivery of the Units, the Purchase Contracts, the Notes,
the Guarantees and the Common Shares to be issued and sold pursuant to
the Purchase Contracts, except, in connection with the remarketing of
the Notes pursuant to the Remarketing Agreement, the registration under
the Act of the Notes and the approval of listing of the Units by the
New York Stock Exchange ("NYSE"), such consents as have been obtained
under the Act, the Exchange Act and the Trust Indenture Act, and such
consents, authorizations, registrations or qualifications as may be
required under state, provincial or other foreign securities or Blue
Sky laws in connection with the purchase and distribution of the Units
by the Underwriters;
(k) The Units have been duly authorized and, when duly
executed, authenticated, and delivered, and upon payment therefor as
set forth herein will constitute valid and legally binding obligations
of the Company enforceable in accordance with their terms and entitled
to the benefit provided by the Purchase Contract Agreement, subject to
the qualification that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law), by an implied covenant of good faith
and fair dealing and, by the provisions of the Currency Act (Canada) or
the provisions of the Code of Civil Procedure of Quebec relating to
exclusive jurisdiction of Quebec courts and imperative rules of law in
certain matters; and the Units conform to the descriptions thereof in
the Prospectus;
6
7
(l) The Purchase Contract Agreement and the Pledge Agreement
have been duly authorized by the Company, and, when executed and
delivered by the other parties thereto, will constitute valid and
legally binding obligations of the Company, enforceable in accordance
with their terms, subject, to the qualification that enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally, by
general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law), by an implied
covenant of good faith and fair dealing, by the provisions of the
Currency Act (Canada) or the provisions of the Code of Civil Procedure
of Quebec relating to exclusive jurisdiction of Quebec courts and
imperative rules of law in certain matters; the Purchase Contract
Agreement, the Pledge Agreement and the Remarketing Agreement conform
or will conform to the descriptions thereof in the Prospectus; and the
provisions of the Pledge Agreement are effective to create in favor of
the Collateral Agent for the benefit of the Company, a valid and
perfected security interest under the New York Uniform Commercial Code
as in effect on the date hereof in the State of New York in the Pledged
Securities from time to time credited to the Collateral Account;
(m) This Agreement has been duly authorized, executed and
delivered by each of the Company and JES; and the Remarketing Agreement
to be entered into by the Company, JES and a remarketing agent, has
been duly authorized by the Company and JES and will be, when executed
and delivered by the Company and JES, duly executed and delivered by
the Company and JES, and will conform to the description thereof set
forth in the Prospectus;
(n) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, are reasonably
expected to have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and
(o) PricewaterhouseCoopers LLP and KPMG Accountants N.V., who
have certified certain financial statements of the Company and its
subsidiaries, are each independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, (a) the
Company and each of the Underwriters, severally and not jointly, agree to enter
into the Purchase Contracts underlying the number of Firm Units set forth
opposite the name of such Underwriter in Schedule I hereto, (b) JES agrees that
it will issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from JES, at a purchase price of
____% of the principal amount thereof, the principal amount of Notes underlying
the number of Firm Units set forth opposite the name of such Underwriter in
Schedule I hereto, and (c) in the event and to the extent that the Underwriters
shall exercise the election to enter into additional Purchase Contracts
7
8
underlying Optional Units as provided below, (i) the Company and each of the
Underwriters, severally and not jointly, agree to enter into that number of
additional Purchase Contracts as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional Purchase
Contracts) determined by multiplying the aggregate number of additional Purchase
Contracts the Underwriters elect to purchase by a fraction, the numerator of
which is the maximum number of Optional Units set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Units set forth in total opposite the names of all
such Underwriters in Schedule I hereto and (ii) JES agrees that it will issue
and sell to each of the Underwriters and each of the Underwriters agrees,
severally and not jointly, to purchase from JES at the purchase price set forth
in clause (a) of this Section II, plus accrued interest on the Notes, and minus
accrued Purchase Contract Fees payable to the Company under the Purchase
Contract Agreement, if any, an aggregate amount of Notes underlying such
additional Purchase Contracts.
The Company hereby grants to the Underwriters the right to enter into,
at their election, Purchase Contracts underlying up to 2,775,000 Optional Units
and JES hereby grants the Underwriters the right to purchase from JES at their
election up to an aggregate of $________________ principal amount of Notes
underlying such Optional Units, for the sole purpose of covering overallotments
in the sale of the Firm Units. Any such election to enter into such additional
Purchase Contracts and purchase such Notes may be exercised only by written
notice from you to the Company and JES, given within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number of
such additional Purchase Contracts to be entered into and principal amount of
Notes to be purchased and the date on which the related Optional Units are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section 4 hereof) or, unless you, the Company and JES
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
The Underwriters agree to pledge to the Collateral Agent, on behalf of
the initial purchasers of the Units, the Notes underlying the Units. Such pledge
shall be effected by the delivery to the Collateral Agent in New York by the
Underwriters of the Notes to be pledged at the appropriate Time of Delivery (as
defined below) in accordance with the Pledge Agreement.
3. Upon the authorization by you of the release of the Firm Units, the
several Underwriters propose to offer the Firm Units for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Units to be purchased by each Underwriter hereunder will be
represented by one or more definitive global Units in book-entry form which will
be deposited by or on behalf of the Company and JES with The Depository Trust
Company ("DTC") or its designated custodian and delivered to Xxxxxxx, Sachs &
Co., for the account of each Underwriter, upon at least forty-eight hours' prior
notice to the Company and JES by Xxxxxxx Xxxxx & Co. and against payment by or
on behalf of such Underwriter of the purchase price therefor by transfer of
Federal (same day) funds to the account designated by JES and delivery to the
Collateral Agent of the Notes relating to such Units at least forty-eight hours
in advance. The Company will cause the certificates representing the Units to be
made available for checking at least twenty-four hours prior to
8
9
the Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Units, 10:00 a.m., New York time, on
June -, 1999 or such other time and date as Xxxxxxx, Sachs & Co., the Company
and JES may agree upon in writing, and, with respect to the Optional Units,
10:00 a.m., New York time, on the date specified by Xxxxxxx, Xxxxx & Co. in the
written notice given by Xxxxxxx, Sachs & Co. of the Underwriters' election to
purchase such Optional Units, or such other time and date as Xxxxxxx, Xxxxx &
Co., the Company and JES may agree upon in writing. Such time and date for
delivery of the Firm Units is herein called the "First Time of Delivery", such
time and date for delivery of the Optional Units, if not the First Time of
Delivery, is herein called the "Second Time of Delivery", and each such time and
date for delivery is herein called a "Time of Delivery";
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Units and any additional documents requested by the
Underwriters pursuant to Section 7(k) hereof, will be delivered at the offices
of Xxxxxxxx & Xxxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Closing
Location"), and the Units will be delivered at the Designated Office, all at
each Time of Delivery. A meeting will be held at the Closing Location at ___
p.m., New York City time, on the New York Business Day next preceding each Time
of Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. (a) The Company and JES agree with each of the
Underwriters:
(i) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the offering
or sale of the Units; to advise you, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Units for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending
9
10
the use of any Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal of such
order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Units for offering and sale under the
securities laws of such jurisdiction in the United States as you may request and
to comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Units, provided that in connection therewith neither the
Company nor JES shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(iii) Prior to noon New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Prospectus in such quantities as
you may reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Units and if at such
time any events shall have occurred as a result of which such Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to prepare and file with the
Commission an amendment, supplement or document which will correct such
statement or omission or effect such compliance and to furnish without charge to
each Underwriter and to any dealer in securities as many copies as you may from
time to time reasonably request of any such amended Prospectus or supplement to
the Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus in
connection with sales of any such Units at any time nine months or more after
the time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act;
(iv) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus,
not to offer, sell, contract to sell or otherwise dispose of, except as
otherwise set forth in the Prospectus or provided hereunder, any securities of
the Company or JES that are substantially similar to the Units, including but
not limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, common shares or any such substantially
similar securities (other than (A) the issuance of 2 million common shares to
one or more of the Selling Shareholders prior to the First Time of Delivery, or
(B) pursuant to employee stock option plans existing on, or upon the conversion
or exchange of convertible or exchangeable securities outstanding as of, the
date of this Agreement), without your prior written consent;
10
11
(v) To use the net proceeds received by JES from the sale of
the Units pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(vi) To use their best efforts to list, subject to notice of
issuance, the Units on the NYSE; and
(vii) If the Company and JES elect to rely upon Rule 462(b),
they shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(b) The Company also represents and warrants to, and agrees
with, each of the Underwriters to make generally available to its
securityholders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Registration Statement, earnings
statements of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158).
6. The Company covenants and agrees with the several Underwriters that
(a) the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Units under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, and
any other documents in connection with the offering, purchase, sale and delivery
of the Units; (iii) all expenses in connection with the qualification of the
Units for offering and sale under state securities laws as provided in Section
5(b) hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) all fees and expenses in connection with listing the Units
on the NYSE; (v) any fees charged by securities rating services for rating the
Units; (vi) the cost of preparing the Units, the Notes and any Common Shares;
(vii) the fees and expenses of the Purchase Contract Agent and Collateral Agent
and any agent of the Purchase Contract Agent and Collateral Agent and the fees
and disbursements of any counsel for the Purchase Contract Agent, Collateral
Agent or Remarketing Agent in connection with the Purchase Contract Agreement,
the Pledge Agreement or the Remarketing Agreement; (viii) the fees and expenses
of the Trustee under the Indenture, and any agent of the Trustee, and the fees
and disbursements of any counsel for the Trustee in connection with the
Indenture and the Notes; and all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that the Company shall
bear the cost of any other matters not directly relating to the sale and
purchase of the Units pursuant to this Agreement, and that, except as provided
in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on
11
12
resale of any of the Units by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Units to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and JES are, at and as of such Time of Delivery, true and correct,
the condition that the Company and JES shall have performed all of their
respective obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, U.S. counsel for the Underwriters,
and Xxxxxx Xxxxxxx S.E.N.C., Canadian counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated
such Time of Delivery, with respect to, in the case of Xxxxxx Xxxxxxx
S.E.N.C., the matters covered by Section 7(d)(iii) and (xi) and, in the
case of Xxxxxxxx & Xxxxxxxx, the incorporation of JES, the validity of
the Notes, the Guarantees, the Indenture, the Purchase Contract, the
Pledge Agreement, the Common Shares, the accuracy of the Registration
Statement and the Prospectus and such other related matters as you may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters (Xxxxxxxx & Xxxxxxxx being entitled to rely, as to
all matters of Canadian law upon the opinion of Canadian counsel
described in paragraph (d) of this Section 7, and, as to all matters of
law of the State of Indiana upon the opinion of Xxxxxx & Xxxxxxxxx);
(c) Xxxxxxx Xxxxxxx & Xxxxxxxx, U.S. counsel for the Company,
shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you (such counsel being
entitled to state that they have assumed that any document referred to
in their opinion and executed by the Company has been duly authorized,
executed and delivered pursuant to Canadian law and being entitled to
rely, as to all matters of Canadian law, solely upon the opinion of
Canadian counsel described in paragraph (d) of this Section 7) (such
counsel also being entitled to rely in respect of matters of law other
than of United States federal or New York law on opinions of local
counsel of the Company and its subsidiaries and as to matters of fact
upon certificates of public officials and of officers of the Company or
its subsidiaries, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates), to the effect that:
12
13
(i) Xxxxxx X. Xxxxxxx & Sons, Inc. has been duly
incorporated and is validly existing as a corporation under
the laws of the State of Indiana; and each of X.X. Xxxxxxx
Corp., JES Developments, Inc. and Universal Studios, Inc. has
been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware;
(ii) All of the outstanding shares of capital stock
of JES have been duly authorized by JES and are validly
issued, fully paid and non-assessable and are owned indirectly
by the Company, to the knowledge of such counsel, free and
clear of any adverse claim; all of the outstanding shares of
capital stock of X.X. Xxxxxxx Corp. have been duly authorized
by X.X. Xxxxxxx Corp. and are validly issued, fully paid and
non-assessable and are owned directly by the Company to the
knowledge of such counsel free and clear of any adverse claim;
all of the outstanding shares of capital stock of JES
Developments, Inc. have been duly authorized by JES
Developments Inc. and are validly issued, are fully paid and
non-assessable, and are owned indirectly by JES to the
knowledge of such counsel, free and clear of any adverse
claim; and all the outstanding Shares of capital stock of
Universal Studios, Inc. have been duly authorized by Universal
Studios, Inc. and are validly issued, are fully paid and
non-assessable, and such that are owned indirectly by the
Company, to the knowledge of such counsel, free and clear of
any adverse claim;
(iii) To such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which
are required to be described in the Prospectus which are not
described as required; and to such counsel's knowledge no such
proceedings have been asserted by governmental authorities or
by others;
(iv) This Agreement has been duly authorized,
executed and delivered by the Company and JES;
(v) Assuming that the Purchase Contract Agreement and
Pledge Agreement have been duly authorized, executed and
delivered by Seagram and, assuming that the Purchase Contract
Agreement is the valid and binding obligation of the Purchase
Contract Agent and that the Pledge Agreement is the valid and
binding obligation of the Collateral Agent and Securities
Intermediary, the Purchase Contract Agreement and the Pledge
Agreement constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with
their respective terms;
(vi) The provisions of the Pledge Agreement are
effective to create in favor of the Collateral Agent for the
benefit of the Company, a valid and perfected security
interest under the New York Uniform Commercial Code as in
effect on the date hereof in the State of New York in the
Pledged Securities from time to time credited to the
Collateral Account;
13
14
(vii) The Notes have been duly authorized, executed
and delivered by JES and, assuming due authentication hereof
by the Trustee, and upon payment and delivery in accordance
with this Agreement, will constitute valid and legally binding
obligations of JES enforceable against JES in accordance with
their terms and entitled to the benefits of the Indenture;
assuming the Guarantees relating to the Notes have been duly
authorized, endorsed on the Notes and executed, issued and
delivered in accordance with Canadian law, the Guarantees will
constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms and
entitled to the benefits of the Indenture; and the Notes, such
Guarantees and the Indenture conform to the descriptions
thereof in the Prospectus;
(viii) The Indenture has been duly authorized,
executed and delivered by the JES and duly qualified under the
Trust Indenture Act and, assuming the due authorization,
execution and delivery thereof by the Company and the Trustee
(other than Section 516 thereof as to which such counsel need
not express any opinion), constitutes a valid and legally
binding instrument of JES and the Company enforceable in
accordance with its terms;
(ix) Assuming that the Units have been duly
authorized, executed and delivered by Seagram and, assuming
due execution by the Purchase Contract Agent as
attorney-in-fact of the holders thereof and due authentication
by the Purchase Contract Agent and upon payment and delivery
in accordance with the Underwriting Agreement, the Units will
constitute valid and legally binding obligations of Seagram
entitled to the benefits of the Purchase Contract Agreement
and enforceable against Seagram in accordance with their
terms;
(x) The issuance and sale of the Units and the
compliance by the Company and JES with all of the provisions
of the Underwriting Agreement will not breach or result in a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed as an exhibit
to the Registration Statement or any document or filing
incorporated by reference therein to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is
subject, nor will such action violate the charter documents,
as amended, or the By-laws of JES or, with respect to the
United States and the States of New York and Indiana, will
such action result in any violation of any statute or, to the
knowledge of such counsel, any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their
properties;
(xi) With respect to the United States and the States
of New York and Indiana, no consent, approval, authorization,
order, registration or qualification of or with any such court
or governmental agency or body is required for the issue and
the sale of the Units, and the compliance by the
14
15
Company and JES with all of the provisions of this Agreement,
except such that have been obtained or made under the Act, the
Trust Indenture Act and the Exchange Act, and such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities, or Blue Sky laws in
connection with the purchase and distribution of the Units by
the Underwriters;
(xii) Neither the Company nor JES is an "investment
company", within the meaning of the Investment Company Act of
1940, as amended;
(xiii) Such counsel does not know of any contracts or
other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to
be described in the Registration Statement or in the
Prospectus which are not filed or incorporated by reference or
described as required;
(xiv) Subject to the qualifications and limitations
stated in the Prospectus, the statements set forth in the
Prospectus under the caption "United States Federal Income Tax
Consequences," insofar as they purport to constitute summaries
of matters of United States federal tax law and regulations or
legal conclusions with respect thereto, constitute accurate
summaries of the matters described therein in all material
respects; and
(xv) Such opinion may also include a paragraph to the
effect that such counsel has not independently verified the
accuracy, completeness or fairness of the statements made or
included in the Registration Statement, the Prospectus and the
documents incorporated by reference in the Prospectus and that
such counsel takes no responsibility therefor; provided,
however, that such opinion shall state that the discussion set
forth in the Prospectus under the heading "Certain Federal
Income Tax Consequences", insofar as it relates to matters of
United States federal income tax law, is accurate in all
material respects. Such opinion may also state that in the
course of the preparation by the Company of the Registration
Statement and the Prospectus, such counsel participated in
conferences with certain officers and employees of the Company
and with representatives of the independent accountants of the
Company. Such opinion may state that such counsel did not
prepare the documents incorporated by reference in the
Prospectus; however, such counsel discussed such documents
with the Company prior to their filing with the Commission,
and that based upon such counsel's examination of the
Registration Statement, the Prospectus and the documents
incorporated by reference in the Prospectus, such counsel's
investigations made in connection with the preparation of the
Registration Statement and the Prospectus and such counsel's
participation in the conferences referred to above, (i) such
counsel is of the opinion that the Registration Statement and
any amendment thereto made by the Company made prior to such
Time of Delivery, as of its respective effective date, and the
Prospectus and any amendment or supplement thereto made by the
Company prior to such
15
16
Time of Delivery, as of their respective issue dates, complied
as to form in all material respects with the requirements of
the Act and the applicable rules and regulations of the
Commission thereunder, and (ii) such counsel has no reason to
believe that the Registration Statement or any amendment
thereto (including the documents incorporated by reference in
the Prospectus), made by the Company prior to such Time of
Delivery, as of its respective effective date, contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein, or required in
order to make the statements therein not misleading, or that
as of such Time of Delivery, either the Registration Statement
or the Prospectus or any amendment or supplement thereto made
by the Company prior to such Time of Delivery (including the
documents incorporated by reference therein), contain any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in
light of the circumstances in which the statements were made
when such documents were so filed, not misleading, except that
in each case such counsel need express no opinion with respect
to the financial statements or other financial data contained
or incorporated by reference in the Registration Statement or
any amendment thereto, or in the Prospectus and any amendment
or supplement thereto made by the Company prior to such Time
of Delivery.
(d) Xxxxxxx Xxxxxxxx & Xxxxxxxx S.E.N.C., Canadian counsel for
the Company, shall have furnished to you their written opinion, dated
the Time of Delivery, in form and substance satisfactory to you (such
counsel being entitled to rely, as to all matters of United States or
United States state law, solely upon the opinion of United States
counsel described in paragraph (c) of this Section 7) (such counsel
also being entitled to rely in respect of matters of law other than
matters of Canadian federal or Quebec law solely upon opinions of local
counsel and as to matters of fact upon certificates of officers of the
Company or its subsidiaries, provided that such counsel shall state
that they believe both they and you are justified in relying thereon)
to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of Canada
with corporate power and authority to own its properties and
conduct its business as described in the Prospectus, and has
received a certificate of compliance under the Canada Business
Corporations Act;
(ii) The Company has been duly qualified for the
transaction of business under the laws of the Province of
Quebec;
(iii) The Company has an authorized capitalization as
set forth in the Prospectus, and has taken all corporate
proceedings so that all of the issued common shares of the
Company have been duly and validly authorized and issued as
fully paid and non-assessable; and the common shares conform
to the description of the common shares contained in the
Prospectus;
16
17
(iv) The Common Shares to be issued and sold by the
Company pursuant to the Purchase Contracts and the Purchase
Contract Agreement have been duly authorized and reserved for
issuance and, when issued and delivered against payment
therefor as provided in the Purchase Contracts and the
Purchase Contract Agreement, will be duly and validly issued,
fully paid and non-assessable;
(v) To such counsel's knowledge and other than as set
forth or contemplated in the Prospectus, there are no legal or
governmental proceedings pending in the Province of Quebec to
which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries
is the subject, which, if determined adversely to the Company
or any of its subsidiaries, would individually or in the
aggregate be, in the opinion of such counsel, material to the
Company and its subsidiaries taken as a whole; and to such
counsel's knowledge, no such proceedings have been threatened
by governmental authorities or by others;
(vi) Each of this Agreement, the Purchase Contract
Agreement, the Purchase Contracts, which are evidenced by the
Unit Certificates being delivered at such Time of Delivery,
the Pledge Agreement and the Indenture, has been duly
authorized, executed and, to the extent delivery is governed
by the the laws of the Province of Quebec, delivered by the
Company;
(vii) The Guarantees have been duly authorized and
upon the due execution, authentication, issuance and delivery
of the Notes pursuant to this Agreement and the Indenture, and
upon the Guarantees being duly endorsed on the Notes and
executed, such Guarantees will have been duly issued and
delivered; and, assuming that the Notes and the Guarantees of
the Notes constitute valid and legally binding obligations of
JES and the Company, respectively, enforceable in accordance
with their terms under the laws of the State of New York, such
Guarantees will constitute valid and legally binding
obligations of the Company under the laws of the Province of
Quebec and the laws of Canada applicable therein, subject, as
to enforcement, to general principles of equity or principles
to substantially the same effect in civil law, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally, subject to the
qualification that specific performance and injunction are
remedies which are available only in the discretion of the
court before which any proceedings therefor may be brought,
subject to the provisions of the Currency Act (Canada), which
preclude a court in Canada from giving a judgment in a
currency other than Canadian currency and subject to the
provisions of the Criminal Code (Canada) which preclude the
enforcement of any obligation to pay interest at an effective
annual rate of interest that exceeds 60%;
(viii) The Indenture has been duly authorized,
executed and, to the extent delivery is governed by the laws
of the Province of Quebec, delivered by the Company and,
assuming that the Indenture has been duly
17
18
authorized, executed and delivered by JES and the Trustee and
is binding on JES and the Trustee, and assuming that the
Indenture constitutes a valid and legally binding instrument
of the Company enforceable in accordance with its terms under
the laws of the State of New York, the Indenture (other than
Section 516 thereof, as to which such counsel need express no
opinion) constitutes a valid and legally binding instrument of
the Company under the laws of the Province of Quebec and the
laws of Canada applicable therein, enforceable in accordance
with its terms under the laws of the Province of Quebec and
the laws of Canada applicable therein, subject, as to
enforcement, to general principles of equity or principles to
substantially the same effect in civil law, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally, subject to the
qualification that specific performance and injunction are
remedies which are available only in the discretion of the
court before which any proceedings therefor may be brought,
subject to the provisions of the Currency Act (Canada), which
preclude a court in Canada from giving a judgment in a
currency other than Canadian currency and subject to the
provisions of the Criminal Code (Canada) which preclude the
enforcement of any obligation to pay interest at an effective
annual rate of interest that exceeds 60%; and all taxes and
fees required under the laws of Canada or the Province of
Quebec to be paid with respect to the execution of the
Indenture and the issuance of the Guarantees relating to the
Notes have been paid;
(ix) The Purchase Contract Agreement, the Pledge
Agreement and the Purchase Contracts have been duly
authorized, executed and, to the extent delivery is governed
by the laws of the Province of Quebec, delivered by the
Company and, assuming due authorization, execution and
delivery by the other parties thereto, and assuming that each
such agreement constitutes a valid and legally binding
agreement of the Company enforceable in accordance with its
terms under the laws of the State of New York, each of the
Purchase Contract Agreement, the Pledge Agreement and the
Purchase Contracts constitutes a valid and legally binding
instrument of the Company under the laws of the Province of
Quebec and the laws of Canada applicable therein, subject, as
to enforcement, to general principles of equity or principles
to substantially the same effect in civil law, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights generally, subject to the
qualification that specific performance and injunction are
remedies which are available only in the discretion of the
court before which any proceedings therefor may be brought,
subject to the provisions of the Currency Act (Canada), which
preclude a court in Canada from giving a judgment in a
currency other than Canadian currency and subject to the
provisions of the Criminal Code (Canada) which preclude the
enforcement of any obligation to pay interest at an effective
annual rate of interest that exceeds 60%;
18
19
(x) The entry into the Purchase Contracts by the
Company, the issuance of Guarantees, the issue and sale of the
Common Shares by the Company pursuant to the Purchase
Contracts, the compliance by the Company with all of the
provisions of this Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement, the
Indenture and the Guarantees, and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument filed as an exhibit to the Registration Statement
or an Exchange Act document incorporated or deemed
incorporated by reference therein, nor will such action result
in any violation of the provisions of the Certificate of
Amalgamation, as amended, or the General By-Laws of the
Company or, with respect to Canada or the Province of Quebec
(or, insofar as such orders are concerned, any other Province
thereof), any statute or, to the knowledge of such counsel any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent,
approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body of
Canada or the Province of Quebec is required for the entry
into the Purchase Contracts underlying the Units by the
Company, the issue of the Guarantees, the issue and sale of
the Common Shares by the Company pursuant to the Purchase
Contracts, the compliance by the Company with all of the
provisions of this Agreement, the Purchase Contracts, the
Purchase Contract Agreement, the Pledge Agreement, the
Guarantees or the Indenture or the consummation by the Company
of the transactions herein or therein contemplated, other than
those which have been obtained or made;
(xi) No filing or registration of the Registration
Statements, any Preliminary Prospectus or the Prospectus is
necessary under the laws of Canada or the Province of Quebec
in connection with the issue and sale outside of Canada of the
Units pursuant to this Agreement except for those which have
been made;
(xii) No tax or stamp duty under the laws of Canada
or the Province of Quebec is payable in connection with the
creation, issue and delivery to the Underwriters of the Notes
and the Purchase Contracts, which are evidenced by the Units,
and the Guarantees;
(xiii) Under the laws of Canada and of the Province
of Quebec currently in force and under current practice of the
courts of the Province of Quebec at the date of such opinion,
such courts would give effect to the choice of New York law as
the law governing this Agreement, the Purchase Contract
Agreement, the Purchase Contracts, the Guarantees, the
Indenture and the Pledge Agreement subject to proof of such
laws as a question of fact; provided that such choice of law
is bona fide (in the sense that it was not made with a view to
avoiding the consequences of the laws
19
20
of any other jurisdiction) and provided that such choice of
law is not contrary to public order, as that term is applied
by the courts in the Province of Quebec; and
(xiv) Subject to the qualifications and limitations
stated in the Prospectus, the statements set forth in the
Prospectus under the caption "Canadian Income Tax
Consequences", insofar as they purport to constitute summaries
of matters of Canadian tax law and regulations of legal
conclusions with respect thereto, constitute accurate
summaries of the matters described therein.
Such opinion shall also state that (i) such counsel did not
prepare the Registration Statements, the Prospectus or any documents
incorporated by reference in the Prospectus and (ii) such counsel has
no reason to believe that any Registration Statement or any amendment
thereto (including the documents incorporated by reference in the
Prospectus), as of its respective effective date (or, with respect to
any Registration Statement as to which an Annual Report on Form 10-K of
the Company has been filed subsequent to the effective date thereof and
is deemed to be incorporated by reference therein, as of the date of
filing o the most recent such Annual Report on Form 10-K) (other than
the financial statements and other financial and statistical
information contained therein, as to which such counsel need express no
belief) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein concerning the Company not
misleading or that the Prospectus or any amendment or supplement
thereto (including the documents incorporated by reference in the
Prospectus) contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not
misleading.
Such opinion shall also state that any final and conclusive
judgment obtained against the Company in the United States in respect
of the Purchase Contracts, the Purchase Contract Agreement, the
Guarantees, the Indenture and the Pledge Agreement, would be recognized
and enforced by the courts of the Province of Quebec provided that (A)
the United States court rendering such judgment had jurisdiction over
the Company, as determined under the relevant provisions of the laws of
the Province of Quebec; (B) such judgment is not subject to ordinary
remedies (such as appeal or judicial review) and is final and
enforceable in the United States; (C) such judgment was not rendered in
contravention of the fundamental principles of procedure (such as
notice of fair hearing, right to be heard, right to an independent and
impartial tribunal and rules against bias); (D) there were no
proceedings pending in the Province of Quebec and no judgment rendered
in the Province of Quebec or in another jurisdiction meeting the
necessary conditions for recognition in the Province of Quebec between
the same parties, based on the same facts and having the same object;
(E) such judgment is not manifestly inconsistent with public order as
understood in international relations; (F) such judgment does not
enforce obligations arising from foreign revenue laws, unless there is
reciprocity, or arising from other laws of a public nature, such as
20
21
expropriatory or penal laws; (G) the action to enforce such judgment is
commenced in the Province of Quebec within three (3) years after the
date of such judgment; and (H) such judgment is not contrary to any
order made by the Attorney-General of Canada under the Foreign
Extra-territorial Measures Act (Canada) or by the Competition Tribunal
under the Competition Act (Canada);
(e) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the
effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at
each Time of Delivery, PricewaterhouseCoopers LLP and KPMG Accountants
N.V., who have certified the financial statements of the Company and
its subsidiaries included or incorporated by reference in the
Registration Statement, shall each have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, delivered prior to the execution of this
Agreement;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in clause (i) or (ii), is in your
judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Units being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(g) Subsequent to the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the NYSE; (ii) a general
moratorium on commercial banking activities in Canada or New York
declared by Canadian federal, Canadian Provincial, United States
federal or New York State authorities; (iii) a suspension or material
limitation in trading in the Company's common shares on the New York
Stock Exchange; or (iv) the outbreak or escalation of hostilities
involving the United States or Canada or the declaration by the United
States or Canada of a national emergency or war, if the effect of any
such event specified in this clause (iv) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Units on the terms and in the manner contemplated in
the Prospectus;
(h) The Units to be sold by the Company at the Time of
Delivery shall have been duly listed, subject to notice of issuance, on
the NYSE;
21
22
(i) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(j) Each of the Company and JES shall have furnished or caused
to be furnished to you at such Time of Delivery certificates of
officers of the Company and JES, respectively, satisfactory to you as
to the accuracy of the representations and warranties of the Company
and JES, as applicable, herein at and as of such Time of Delivery, as
to the performance by the Company and JES of all of their respective
obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request,
and the Company and JES shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of
this Section.
8. (a) The Company and JES jointly and severally will indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment 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 not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and JES shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company and JES by any Underwriter through Xxxxxxx,
Xxxxx & Co. expressly for use therein;
(b) Each Underwriter will indemnify and hold harmless the
Company and JES against any losses, claims, damages or liabilities to which the
Company or JES may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment 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 not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company and JES by such
Underwriter through Xxxxxxx, Sachs & Co. expressly for use therein; and will
reimburse the Company and JES for any legal or other expenses
22
23
reasonably incurred by the Company or JES in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (c) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. In no event shall the indemnifying party
be liable for the fees and expenses of more than one counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, provided that this sentence shall not impair any right of an
indemnified party to be indemnified for its reasonable costs of investigation.
An indemnifying party shall not be liable for any settlement of any action or
claim for monetary damages which an indemnified party may effect without the
indemnifying party's consent, which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and JES on the one hand and the
Underwriters on the other from the offering of the Units. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and JES on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and JES on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Units purchased under this Agreement (before deducting expenses) received
by the Company and JES bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Units purchased under this
23
24
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and JES on the one hand or the Underwriters on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
JES and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (e),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Units underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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. The Underwriters' obligations in
this subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
9. (a) If any Underwriter shall default in its obligation to purchase
the Units which it has agreed to purchase hereunder at the time of delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Units on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Units, then the Company and JES shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Units on such terms. In the event that,
within the respective prescribed periods, you notify the Company and JES that
you have so arranged for the purchase of such Units, or the Company and JES
notify you that they have so arranged for the purchase of such Units, you or the
Company and JES shall have the right to postpone such Time of Delivery for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus, or in
any other documents or arrangements, and the Company and JES agree to file
promptly any amendments to the Registration Statement or the Prospectus which in
your opinion may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Units.
(b) If, after giving effect to any arrangements for the
purchase of the Units of a defaulting Underwriter or Underwriters by you and the
Company and JES as provided in subsection (a) above, the aggregate number of
such Units which remains unpurchased does not exceed one-eleventh of the
aggregate number of all of the Units to be purchased at such Time of Delivery,
then Company and JES shall have the right to require each non-defaulting
Underwriter to purchase the number of Units which such
24
25
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Units which such Underwriter agreed to purchase
hereunder) of the Units of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Units of a defaulting Underwriter or Underwriters by you and the
Company and JES as provided in subsection (a) above, the aggregate number of
such Units which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Units to be purchased at such Time of Delivery, or if the
Company and JES shall not exercise the right described in subsection (b) above
to require non-defaulting Underwriters to purchase Units of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Company and JES to sell the Optional Securities) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
and JES, except for the expenses to be borne by the Company and JES and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, JES and the several Underwriters, as set
forth in this Agreement or made by or on behalf of it, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or JES, or any officer or director or controlling person of the Company and JES,
and shall survive delivery of and payment for the Units.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company and JES in subsection (a) of Section 8 hereof, the
representations and warranties in subsections (ii), (iii) and (iv) of Section 1
hereof and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company and JES pursuant to Section 7 hereof, insofar as they may constitute a
basis for indemnification for liabilities (other than payment by the Company and
JES of expenses incurred or paid in the successful defense of any action, suit
or proceeding) arising under the Act, shall not extend to the extent of any
interest therein of a controlling person or partner of an Underwriter who is a
director, officer or controlling person of the Company and JES when the
Registration Statement has become effective, except in each case to the extent
that an interest of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as expressed in the Act.
Unless in the opinion of counsel for the Company the matter has been settled by
controlling precedent, the Company and JES will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question whether such interest is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company and JES shall not then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason any
Units are not delivered
25
26
by or on behalf of the Company and JES as provided herein, the Company and JES
will reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the purchase,
sale and delivery of the Units not so delivered, but the Company and JES shall
then be under no further liability to any Underwriter in respect of the Units
not so delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at 00 Xxx Xxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department; and if to the
Company and JES, shall be delivered or sent by mail, telex or facsimile
transmission to the respective addresses of the Company and JES set forth in the
Registration Statement, Attention: Vice President and Treasurer; provided,
however, that any notice to an Underwriter pursuant to Section 8 (d) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
and JES by you upon request.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, JES and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and JES and
each person who controls the Company, JES or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Units from any Underwriter shall be deemed
a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
26
27
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters and
the Company and JES. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
The Seagram Company Ltd.
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
Xxxxxx X. Xxxxxxx & Sons, Inc.
By: __________________________________
Name:
Title:
Accepted as of the date hereof
Xxxxxxx, Sachs & Co.
Bear, Xxxxxxx & Co. Inc.
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
By: ......................................
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
27
28
SCHEDULE I
NUMBER OF
OPTIONAL
SECURITIES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM UNITS MAXIMUM
UNDERWRITER TO BE PURCHASED OPTION EXERCISED
----------- --------------- ----------------
Xxxxxxx, Xxxxx & Co.......................................
Bear, Xxxxxxx & Co. Inc...................................
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated............................................
Xxxxxx Xxxxxxx & Co. Incorporated.........................
[Other Underwriters]
--------------- ----------------
TOTAL............................................ 18,500,000 2,775 000
=============== ================