EXHIBIT 1.1
25,800,000 SHARES
ZD INC.
COMMON STOCK, $.01 PAR VALUE
UNDERWRITING AGREEMENT
April 28, 1998
April 28, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Sachs & Co.
Xxxxxxxxx Xxxxxx & Xxxxxxxx
Securities Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Xxxxxxx Sachs International
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
ZD Inc., a Delaware corporation (the "COMPANY"), proposes to issue and
sell to the several Underwriters (as defined below) 25,800,000 shares (the
"FIRM SHARES") of its Common Stock, par value $.01 per share (the "COMMON
STOCK").
It is understood that, subject to the conditions hereinafter stated,
20,640,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the several
U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS") in
connection with the offering and sale of such U.S. Firm Shares in the
United States and Canada to United States and Canadian Persons (as such
terms are defined in the Agreement Between U.S. and International
Underwriters of even date herewith), and 5,160,000 Firm Shares (the
"INTERNATIONAL SHARES") will be sold to the several International
Underwriters named in Schedule II hereto (the "INTERNATIONAL UNDERWRITERS")
in connection with the offering and sale of such International Shares
outside the United States and Canada to persons other than
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United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX"), Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated,
Xxxxxxx Sachs & Co. and Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
shall act as representatives (the "U.S. REPRESENTATIVES") of the several
U.S. Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited, Xxxxxxx
Xxxxx International, Xxxxxxx Sachs International and Xxxxxxxxx Xxxxxx &
Xxxxxxxx International shall act as representatives (the "INTERNATIONAL
REPRESENTATIVES") of the several International Underwriters. The U.S.
Underwriters and the International Underwriters are hereinafter
collectively referred to as the "UNDERWRITERS."
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional 3,870,000 shares of Common Stock
(the "ADDITIONAL SHARES") if and to the extent that the U.S.
Representatives shall have determined to exercise, on behalf of the U.S.
Underwriters, the right to purchase such shares of Common Stock granted to
the U.S. Underwriters in Section hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "SHARES."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Shares. The
registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used
in connection with the offering and sale of Shares in the United States and
Canada to United States and Canadian Persons, and the international
prospectus, to be used in connection with the offering and sale of Shares
outside the United States and Canada to persons other than United States
and Canadian Persons. The international prospectus is identical to the
U.S. prospectus except for the outside front cover page. The registration
statement as amended at the time it becomes effective, including the
information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of
1933, as amended (the "SECURITIES ACT"), is hereinafter referred to as the
"REGISTRATION STATEMENT"; the U.S. prospectus and the international
prospectus in the respective forms first used to confirm sales of Shares
are hereinafter collectively referred to as the "PROSPECTUS." If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such
Rule 462 Registration Statement.
As part of the offering contemplated by this Agreement, Xxxxxx Xxxxxxx &
Co. Incorporated ("XXXXXX XXXXXXX") has agreed to reserve out of the Shares
set forth opposite its name on Schedule I to this Agreement, up
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to 1,550,000 shares, for sale to the Company's employees, officers, and
directors and other parties associated with the Company (collectively,
"PARTICIPANTS"), as set forth in the Prospectus under the heading
"Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
Xxxxxx Xxxxxxx pursuant to the Directed Share Program (the "DIRECTED
SHARES") will be sold by Xxxxxx Xxxxxxx pursuant to this Agreement at the
public offering price. Any Directed Shares not orally confirmed for
purchase by any Participants by the end of the business day on which this
Agreement is executed will be offered to the public by Xxxxxx Xxxxxxx as
set forth in the Prospectus.
It is understood and agreed that as of the Closing Date (as defined
below), the Company will consummate a series of transactions pursuant to
which (i) all of the stock of Xxxx-Xxxxx Inc. ("ZDI"), ZD COMDEX and Forums
Inc. ("ZDCF") and ZD Holdings (U.K.) Limited will be contributed to the
Company by SOFTBANK Holdings Inc., a wholly owned subsidiary of SOFTBANK
Corp., in exchange for 74,200,000 shares of Common Stock, (ii) certain
obligations owed to SOFTBANK Corp. will be converted to equity, (iii) the
Company will enter into a U.S.$1.35 billion Credit Agreement with The Bank
of New York, Morgan Xxxxxxx Senior Funding and other lenders (the "CREDIT
AGREEMENT") and borrow $1.25 billion thereunder, (iv) the Company will
issue and sell the Shares pursuant to this Agreement and shall issue and
sell $250 million principal amount of its [ ]% Senior Subordinated Notes
due 2008 (the "NOTES") pursuant to an underwriting agreement (the "DEBT
UNDERWRITING AGREEMENT") of even date herewith and (v) the Company will
apply the proceeds of the sale of the Shares and the Notes, together with
amounts borrowed under the Credit Agreement, to purchase from MAC Inc.
certain operations and assets relating to certain publications and trade
shows and to repay certain Indebtedness owed to SOFTBANK Corp. and its
affiliates (all such transactions, as more fully described in the
Prospectus, shall collectively be referred to herein as the
"REORGANIZATION"), which transactions shall be deemed to take place
simultaneously on the Closing Date. In connection with the Reorganization,
the Company will change its name to "Xxxx-Xxxxx Inc." and ZDI will change
its name to "ZD Inc."
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(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 Company's knowledge, threatened by the Commission.
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(b) (i) The Registration Statement, when it became
effective, did 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 required to be stated therein or
necessary to make the statements therein not misleading, (ii) 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 (iii) 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 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 through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus.
(d) Each entity that will be a subsidiary of the Company
after giving effect to the Reorganization (each a "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 described in the Prospectus 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
a whole; all of the issued shares of capital stock of each Subsidiary
of the Company (including, but not limited to, ZDI, ZDCF and Holdings)
have been duly and validly authorized and issued, are fully paid and
non-assessable and, as of the Closing Date, will be owned directly by
the Company, free and clear of all liens, encumbrances, equities or
claims.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
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(f) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(g) The shares of Common Stock to be outstanding as of the
Closing Date (other than the Shares) have been duly authorized and,
upon consummation of the transactions comprising the Reorganization,
will be validly issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
and the consummation of the transactions comprising the Reorganization
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or 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 of the foregoing, a "CONSENT"), any governmental body or agency
is required for the performance by the Company of its obligations
under this Agreement or the consummation of the transactions
comprising the Reorganization, except (i) 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 Shares and (ii) for Consents the
failure of which to have been obtained would not have a material
adverse effect on the Company and its Subsidiaries taken as a whole.
(j) There has not occurred any material adverse change, 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 or contemplated by the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement).
(k) There are no 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 are required to
be described in the
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Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) 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.
(m) The Company is not and, after giving effect to the
Reorganization will not be, an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(n) Except as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement.
(o) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) the Company and its Subsidiaries have not incurred any liability
or obligation, direct or contingent that is material to the Company
and its Subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business that is material to
the Company and its Subsidiaries, taken as a whole, and (ii) there has
not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its consolidated subsidiaries,
except in each case as described in or contemplated by the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement).
(p) The Company and its Subsidiaries have good and
marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
Subsidiaries; the Company does not hold title to any real property
that is material to the Company and its
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Subsidiaries, taken as a whole; and any real property and buildings
held under lease by the Company and its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed
to be made of such property and buildings by the Company and its
Subsidiaries, in each case except as described in or contemplated by
the Prospectus.
(q) The Company and its Subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them, the loss or failure to obtain of which would not
have a material adverse effect on the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole, and neither the Company nor
any of its Subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in any 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.
(r) The Company and each of its Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(s) No material labor dispute with the employees of the
Company or any of its Subsidiaries exists, except as described in or
contemplated by the Prospectus, or, to the knowledge of the Company,
is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or
in the earnings,
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business or operations of the Company and its Subsidiaries, taken as a
whole.
(t) As of the Closing Date, the Reorganization will have
been completed as described in the Prospectus.
Furthermore, the Company represents and warrants to Xxxxxx
Xxxxxxx that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements
thereto will comply, with any applicable laws or regulations of foreign
jurisdictions in which the Prospectus or any preliminary prospectus, as
amended or supplemented, if applicable, are distributed in connection with
the Directed Share Program, and that (ii) no authorization, approval,
consent, license, order, registration or qualification of or with any
government, governmental instrumentality or court, other than such as have
been obtained, is necessary under the securities laws and regulations of
foreign jurisdictions in which the Directed Shares are offered outside the
United States.
The Company has not offered, or caused the Underwriters to offer,
Shares to any person pursuant to the Directed Share Program with the
specific intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company, or (ii) a trade journalist or publication to write or
publish favorable information about the Company or its products.
2. Agreements to Sell and Purchase. The Company hereby agrees
to sell to the 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 numbers of Firm Shares set forth
in Schedules I and II hereto opposite its names at U.S.$______ a share (the
"PURCHASE PRICE").
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees
to sell to the U.S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 3,870,000 Additional Shares at the Purchase Price. If the
U.S. Representatives, on behalf of the U.S. Underwriters, elect to exercise
such option, the U.S. Representatives shall so notify the Company in
writing not later than 30 days after the date of this Agreement, which
notice shall specify the number of Additional Shares to be purchased by the
U.S. Underwriters and the date on which such shares are to be purchased.
Such date may be the same as the Closing Date (as defined below) but not
earlier than the Closing Date nor later than ten business days after the
date of
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such notice. Additional Shares may be purchased as provided in Section
hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. If any Additional Shares
are to be purchased, each U.S. Underwriter agrees, severally and not
jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in
Schedule I hereto opposite the name of such U.S. Underwriter bears to the
total number of U.S. Firm Shares.
The Company hereby agrees that, without the prior written consent
of Xxxxxx Xxxxxxx on behalf of the Underwriters, neither it nor any of its
affiliates will, during the period ending 180 days after the date of the
Prospectus, directly or indirectly, (i) 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 (ii) 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 (i) or (ii) 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 (A) the Shares to be sold
hereunder, (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof of which the Underwriters have been advised
in writing, (C) transactions by any person other than the Company relating
to shares of Common Stock or other securities acquired in open market
transactions after the completion of the offering of the Shares, (D) the
issuance of shares of Common Stock in connection with the Reorganization or
(E) the issuance of up to [ ] shares of Common Stock in connection with
the Company's Employee Stock Purchase Plan.
3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The
Company is further advised by you that the Shares are to be offered to the
public initially at U.S.$___ a share (the "PUBLIC OFFERING PRICE") and to
certain dealers selected by you at a price that represents a concession not
in excess of U.S.$____ a share under the Public Offering Price, and that
any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of U.S.$___ a share, to any Underwriter or to certain other
dealers.
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4. Payment and Delivery. Payment for the Firm Shares shall be made
to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on May [4],
1998, or at such other time on the same or such other date, not later than
May [11], 1998, as shall be designated in writing by you. The time and
date of such payment are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the
several U.S. Underwriters at 10:00 a.m., New York City time, on the date
specified in the notice described in Section or at such other time on the
same or on such other date, in any event not later than June [12], 1998, as
shall be designated in writing by the U.S. Representatives. The time and
date of such payment are hereinafter referred to as the "OPTION CLOSING
DATE."
Certificates for the Firm Shares and Additional Shares shall be in
definitive form 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 or the Option Closing Date, as the case may be. The
certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters (or
the several U.S. Underwriters, in the case of Additional Shares), with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares
on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 5:30 p.m. (New York
City time) on the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
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indicate the direction of the possible change, 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) 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 the judgment of Xxxxxx Xxxxxxx, is material
and adverse and that makes it, in the judgment of Xxxxxx Xxxxxxx,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
a certificate from the Company, dated the Closing Date and signed by
an executive officer of the Company to the effect set forth in Section
5(a)(i) 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 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.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion or opinions of Xxxxxxxx & Xxxxxxxx, counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware and has the corporate power and authority to
own its property and to conduct its business as described in the
Prospectus;
(ii) each of ZDI and ZDCF has been duly incorporated,
is validly existing as a corporation in good standing under the
laws of the State of Delaware and has the corporate power and
authority to own its property and to conduct its business as
described in the Prospectus;
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(iii) the authorized capital stock of the Company
is as set forth in the Prospectus under the caption
"Capitalization";
(iv) all of the outstanding shares of the Company's
Common Stock, including the Shares, have been duly authorized and
validly issued and are fully paid and non-assessable;
(v) all of the issued and outstanding shares of capital
stock of each of ZDI and ZDCF have been duly authorized and
validly issued, are fully paid and non-assessable and are owned
directly by the Company and, to the best of such counsel's
knowledge, are owned by the Company, free and clear of all liens,
encumbrances and claims;
(vi) this Agreement has been duly authorized, executed
and delivered by the Company;
(vii) none of (A) the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, this Agreement, (B) the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, the agreements entered into by the Company in connection
with the transactions comprising the Reorganization or (C) the
transfer of the shares of Common Stock to SOFTBANK Corp. or its
affiliates in exchange for the stock of ZDI and ZDCF, the
purchase of the MAC Assets and the repayment of approximately
$1.589 billion of obligations to SOFTBANK Corp., all in
connection with the Reorganization: (1) will violate the
Company's certificate of incorporation or by-laws, (2) to the
best of such counsel's knowledge, result in a default under or
breach of any agreement or other instrument binding upon the
Company or any of its Subsidiaries that is filed as an exhibit to
the Registration Statement or (3) violate any Federal law of the
United States or law of the State of New York applicable to the
Company; provided, however, that for the purposes of this
paragraph, such counsel need express no opinion with respect to
Federal or state securities laws, other antifraud laws and
fraudulent transfer laws; provided, further, that insofar as
performance by the Company of its obligations under agreements
entered into by the Company in connection with the Reorganization
and this Agreement are concerned, such counsel need express no
opinion as to bankruptcy,
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insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights.
(viii) all regulatory consents, authorizations,
approvals and filings required to be obtained or made by the
Company under the Federal laws of the United States and the
General Corporation Law of the State of Delaware for the
issuance, sale and delivery of the Shares by the Company to you
have been obtained or made.
(ix) after due inquiry, such counsel does not know of
any litigation or governmental proceedings instituted or
threatened against the Company or any of its Subsidiaries that
are required to be disclosed in the Registration Statement or the
Prospectus and are not so disclosed or of any documents that are
required to be summarized in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not summarized or filed as required;
(x) the Company is not and, after giving effect to the
Reorganization will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(xi) the Registration Statement, as of the effective
date of the Registration Statement, and the Prospectus, as of the
date of the Prospectus, appeared on their face to be
appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations
of the Commission thereunder; nothing that came to such counsel's
attention in the course of their review has caused such counsel
to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein
or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Prospectus, contained
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. Such counsel may state that they do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus except for those made under the captions "Description
of Capital Stock," "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock," and "Underwriters" in the
Prospectus, insofar as they relate to provisions of documents or
of
13
Delaware General Corporation Law or United States Federal tax law
therein described. Such counsel may also state that they do not
express any opinion or belief as to the financial statements or
other financial or statistical data contained in the Registration
Statement or the Prospectus.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(vi) and 5(c)(xi) (but with specific reference only as to the
statements in the Prospectus under "Description of Capital Stock" and
"Underwriters") above and to the effect that the Shares have been duly
authorized and, when issued and delivered in accordance with this
Agreement, will be validly issued, fully paid and non-assessable.
With respect to Section 5(c)(xi) above, Xxxxxxxx and Xxxxxxxx and
Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are
based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
The opinion of Xxxxxxxx & Xxxxxxxx described in Section (c) above
shall be rendered to the Underwriters at the request of the Company
and shall so state therein. The matters covered in Section 5(c)(iv)
and (v) shall give effect to the Reorganization as of the Closing
Date.
(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 Price Waterhouse, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements of the Company, ZDI and ZDCF,
and certain financial information contained in the Registration
Statement and the Prospectus (including pro forma and other unaudited
combined financial data); provided that the letters delivered on the
Closing Date shall use a "cut-off date" not earlier than the date
hereof.
(f) You shall have received evidence satisfactory to you
that the contribution to the Company of the stock of ZDI, ZDCF and ZD
Holdings (U.K.) Ltd. by SOFTBANK Holdings Inc. shall have occurred,
and that the other transactions comprising the Reorganization shall
have occurred
14
or will occur as of the Closing Date, including the concurrent
closings of the issuance and sale of the Notes contemplated by the
Debt Underwriting Agreement and the borrowings under the Credit
Agreement.
(g) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and each of (i) the executive
officers and directors of the Company and (ii) SOFTBANK Corp.,
relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the
date hereof, shall be in full force and effect on the Closing Date.
(h) The Shares shall have been approved for listing on the
New York Stock Exchange, subject to notice of issuance.
The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Shares and other matters
related to the issuance of the Additional Shares.
6. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:
(a) To furnish to you, without charge, five signed copies 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
you 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 and any supplements and amendments
thereto or to the Registration Statement as you may reasonably
request.
(b) Before filing any amendment or supplement to the
Registration Statement or the Prospectus, to furnish to you a copy of
each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which you reasonably object, and
to file with the Commission within the applicable period specified in
Rule 424(b) under the Securities Act any prospectus required to be
filed pursuant to such Rule.
15
(c) If, during such period after the first date of the
public offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to 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 reasonable opinion of
counsel for the Underwriters, 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 you will
furnish to the Company) to which Shares may have been sold by you 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, in cooperation with the Representatives, to
qualify the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions as you shall reasonably request; provided
that the Company shall not be required to qualify to do business in
any jurisdiction where it is not now qualified or to take any action
which would subject it to general or unlimited service of process in
any jurisdiction where it is not now so subject or to subject itself
to taxation in respect of doing business in any jurisdiction in which
it is not otherwise subject.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending June 30, 1999 that satisfies
the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder.
(f) 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
Shares 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
16
printing costs associated therewith, and the mailing and delivering of
copies thereof to the Underwriters and dealers, in the quantities
hereinabove specified, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection
with the offer and sale of the Shares under state securities laws and
all expenses in connection with the qualification of the Shares for
offer and sale under state securities laws as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) 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 Shares by the
National Association of Securities Dealers, Inc., (v) all fees and
expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and
all costs and expenses incident to listing the Shares on the New York
Stock Exchange, (vi) the cost of printing certificates representing
the Shares, (vii) the costs and charges of any transfer agent,
registrar or depositary, (viii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in
connection with the marketing of the offering of the Shares,
including, without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants
engaged in connection with the road show presentations with the prior
approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants,
and the cost of any aircraft chartered in connection with the road
show, and (ix) 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 7 entitled
"Indemnity and Contribution", and the last paragraph of Section 9
below, the Underwriters will pay all of their costs and expenses,
including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Shares by them and any
advertising expenses connected with any offers they may make. In
addition, the Underwriters agree to pay to the Company the sum of $[
] in reimbursement of a portion of the Company's expenses for the
Offering.
(g) That in connection with the Directed Share Program, the
Company will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers,
Inc. (the
17
"NASD") or the NASD rules from sale, transfer, assignment, pledge or
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Xxxxxx Xxxxxxx will
notify the Company as to which Participants will need to be so
restricted. The Company will direct the transfer agent to place stop
transfer restrictions upon such securities for such period of time.
(h) To pay all reasonable fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share
Program and stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed
Share Program.
Furthermore, the Company covenants with Xxxxxx Xxxxxxx that the
Company will comply with all applicable securities and other applicable
laws, rules and regulations in each foreign jurisdiction in which the
Directed Shares are offered in connection with the Directed Share Program.
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 Securities Exchange Act of 1934, as
amended (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 or 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 required to be stated therein or necessary to
make the statements therein 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 through you expressly for use therein.
(b) The Company agrees to indemnify and hold harmless Xxxxxx
Xxxxxxx and each person, if any, who controls Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act ("Xxxxxx Xxxxxxx Entities"), 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) (i) caused by any untrue statement
or alleged untrue statement of a
18
material fact contained in the prospectus wrapper material prepared by or
with the consent of the Company for distribution in foreign jurisdictions
in connection with the Directed Share Program attached to the Prospectus or
any preliminary prospectus, or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statement therein, when considered in conjunction with the
Prospectus or any applicable preliminary prospectus, not misleading; (ii)
caused by the failure of any Participant to pay for and accept delivery of
the shares which, immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, the Company shall not be responsible
under this subparagraph (iii) for any losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of
Xxxxxx Xxxxxxx Entities.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Company's directors, the
Company's officers who sign the Registration Statement 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 indemnity from the Company to such Underwriter pursuant to Section 7(a)
hereof, 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.
(d) 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), 7(b) or 7(c), 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 in writing 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
19
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. Notwithstanding anything contained herein to the contrary, if
indemnity may be sought pursuant to Section 7(b) hereof in respect of such
action or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for the
reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for Xxxxxx Xxxxxxx for the defense of any
losses, claims, damages and liabilities arising out of the Directed Share
Program, and all persons, if any, who control Xxxxxx Xxxxxxx within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act.
Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co.
Incorporated, in the case of parties indemnified pursuant to Section 7(a)
or 7(b), and by the Company, in the case of parties indemnified pursuant to
Section 7(c). 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.
(e) To the extent the indemnification provided for in Section
7(a), 7(b) or 7(c) 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 indemnifying
party or parties on the one hand and the indemnified party or parties
20
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause 7(e)(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 7(e)(i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the indemnified party
or parties 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 Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Shares (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of
the Company on the one hand and 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 7 are several in proportion to the respective
number of Shares they have purchased hereunder, and not joint.
(f) 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 (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section
7(e). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately
preceding paragraph 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 7, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public 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 7 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.
21
(g) The indemnity and contribution provisions contained in this
Section 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 Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of
and payment for any of the Shares.
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 or the National
Association of Securities Dealers, Inc., (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 the judgment of Xxxxxx Xxxxxxx, is material and adverse and (b) in
the case of any of the events specified in clauses 8(a)(i) through
8(a)(iv), such event, singly or together with any other such event, makes
it, in the judgment of Xxxxxx Xxxxxxx, impracticable to market the Shares
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 or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on
such date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate number of the Shares to be purchased
on such date, the other Underwriters shall be obligated severally in the
proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I or Schedule II bears to the aggregate number
of Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as you may specify, to purchase
the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall
the number of Shares that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such number of Shares without the written consent of
such Underwriter. If, on the
22
Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect
to which such default occurs is more than one-tenth of the aggregate number
of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 48
hours after such default, this Agreement shall terminate without liability
on the part of any non-defaulting Underwriter or 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. If,
on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of
the aggregate number of Additional Shares to be purchased, the non-
defaulting Underwriters shall have the option to (i) terminate their
obligation hereunder to purchase Additional Shares or (ii) purchase not
less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase in the absence of such
default. 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.
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 reasonable and documented out-of-
pocket expenses (including the fees and disbursements of their counsel)
incurred by such Underwriters in connection with this Agreement or the
offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
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.
23
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.
Very truly yours,
ZD INC.
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Sachs and Co.
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities
Corporation
Acting severally on behalf of themselves
and the several U.S. Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
--------------------------------------------
Name:
Title:
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Xxxxxxx Sachs International
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
Acting severally on behalf of themselves and the several International
Underwriters named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
--------------------------------------------
Name:
Title:
SCHEDULE I
NUMBER OF FIRM
SHARES
U.S. UNDERWRITER TO BE PURCHASED
---------------- ---------------
Xxxxxx Xxxxxxx & Co. Incorporated........
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated............................
Xxxxxxx Sachs and Co.....................
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities
Corporation.............................
Total U.S. Firm Shares:................
---------------
===============
1
SCHEDULE II
NUMBER OF FIRM
SHARES
INTERNATIONAL UNDERWRITER TO BE PURCHASED
------------------------- ---------------
Xxxxxx Xxxxxxx & Co. International Limited......
Xxxxxxx Xxxxx International.....................
Xxxxxxx Sachs International.....................
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International......
---------------
Total International Firm Shares:..............
===============
2
EXHIBIT A-1
[FORM OF LOCK-UP LETTER--
EXECUTIVE OFFICERS AND DIRECTORS]
____________, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Sachs & Co.
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities
Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Xxxxxxx Sachs International
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with ZD Inc., a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by
the several Underwriters, including Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of
25,800,000 shares (the "SHARES") of the Common Stock, $.01 par value, of
the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public 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 180 days after the date of the final prospectus relating to the
Public Offering (the "PROSPECTUS"), (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 (a) transactions relating to
shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering or (b) any
issuance of shares of Common Stock by the Company that is permitted under
Section 2 of the Underwriting Agreement. In addition, the undersigned
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 180 days after the date of the Prospectus, 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 Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
--------------------------------
(Name)
--------------------------------
(Address)
2
EXHIBIT A-2
[FORM OF LOCK-UP LETTER--SOFTBANK CORP.]
____________, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Sachs & Co.
Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities
Corporation
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Xxxxxxx Sachs International
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") proposes to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with ZD Inc., a Delaware corporation (the
"COMPANY"), providing for the public offering (the "PUBLIC OFFERING") by
the several Underwriters, including Xxxxxx Xxxxxxx (the "UNDERWRITERS"), of
25,800,000 shares (the "SHARES") of the Common Stock, $.01 par value, of
the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, either directly or
indirectly through its affiliates or otherwise, during the period
commencing on the date hereof and ending 180 days
after the date of the final prospectus relating to the Public Offering (the
"PROSPECTUS"), (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; provided, that with respect to sales by
SOFTBANK Kingston Inc. of shares of Common Stock issued to Kingston
Technology Company in exchange for certain assets transferred to the
Company (the "KINGSTON SHARES"), no consent shall be required for sales of
Kingston Shares in an aggregate amount equal to or less than $2,000,000.
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 Public Offering In addition, the undersigned
agrees that, without the prior written consent of Xxxxxx Xxxxxxx on behalf
of the Underwriters, it will not, either directly or indirectly through
affiliates or otherwise, during the period commencing on the date hereof
and ending 180 days after the date of the Prospectus, 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 (other than with respect to sales of the
Kingston Shares permitted hereunder).
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be
made pursuant to an Underwriting Agreement, the terms of which are subject
to negotiation between the Company and the Underwriters.
Very truly yours,
By: SOFTBANK Corp.
-----------------------------------
Name: Yoshitaka Kitao
Title: Executive Vice President
and Chief Financial Officer
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