Form of Underwriting Agreement
America Online, Inc.
Convertible Subordinated Notes Due 0000
Xxxxxxxxxxxx Xxxxxxxxx
Xxx Xxxx, Xxx Xxxx
December 1, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated,
as Representatives of the several Underwriters
named in Schedule II hereto,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
America Online, Inc., a corporation organized under the laws
of Delaware (the "Company"), proposes to sell to the several underwriters named
in Schedule II hereto (the "Underwriters"), for whom you (the "Representatives")
are acting as Representatives, its Convertible Subordinated Notes Due 2019, to
be issued under an indenture to be dated as of December 6, 1999, as supplemented
by Supplemental Indenture No. 1 to be dated as of December 6, 1999
(collectively, the "Indenture"), between the Company and State Street Bank and
Trust Company, as trustee (the "Trustee"), in the aggregate principal amount at
maturity identified in Schedule II hereto (said Convertible Subordinated Notes
Due 2019 to be issued and sold by the Company being hereinafter called the
"Underwritten Securities"). The Company also proposes to grant to the
Underwriters an option to purchase Convertible Subordinated Notes Due 2019 with
an aggregate principal amount at maturity of up to the aggregate principal
amount set forth in Schedule I hereto to cover over-allotments (the "Option
Securities"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "Securities"). To the extent there are no
additional Underwriters listed on Schedule II other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 17 hereof.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3
under the Act and has prepared and filed with the Commission the Registration
Statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, including a related basic prospectus, for registration under the Act of the
offering and sale of the Securities and the shares of Common Stock issuable upon
conversion of the Securities. 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. The Company may have filed
one or more amendments thereto, including a Preliminary Final Prospectus, each
of which has previously been furnished to you. The Company will next file with
the Commission the Final Prospectus in accordance with Rules 415 and 424(b). As
filed, such Final Prospectus shall contain all Rule 430A Information, together
with all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the requirements set forth
in Rule 415(a)(1)(x).
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act, and incorporated by reference in the Final Prospectus,
complied or will comply when so filed in all material respects with the Exchange
Act and the applicable rules and regulations of the Commission thereunder; (ii)
on the Effective Date, the Registration Statement did or will, and when the
Final Prospectus is first filed (if required) in accordance with Rule 424(b) and
on the Closing Date (as defined herein) and on any date on which Option
Securities are to be purchased, if such date is not the Closing Date (a
"settlement date"), the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules thereunder;
(iii) on the Effective Date and at the Execution Time, the Registration
Statement did not and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; (iv) on the Effective Date,
on the Closing Date and on any settlement date the Indenture did and will comply
in all material respects with the applicable requirements of the Trust Indenture
Act and the rules thereunder; and (v) on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Final Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
representations and warranties set forth in this paragraph do not apply to the
information contained in the Registration Statement or the Final Prospectus (or
any supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto).
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Final 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.
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the Final 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 have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly
or indirectly by the Company (excepting Digital City, Inc., which is not wholly
owned 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; the Indenture has been duly authorized and, assuming
due authorization, execution and delivery thereof by the Trustee, when executed
and delivered by the Company, will constitute a legal, valid and binding
instrument enforceable against the Company in accordance with its terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity); the
Securities have been duly authorized, and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Underwriters, will have been duly executed and delivered by the Company and
will constitute the legal, valid and binding obligations of the Company entitled
to the benefits of the Indenture (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect and to general
principles of equity) and will be convertible into Common Stock in accordance
with their terms.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained or incorporated by reference
in the Final Prospectus.
(g) The shares of Common Stock outstanding have been duly
authorized and are validly issued, fully paid and non-assessable.
(h) The shares of Common Stock initially issuable upon
conversion of the Securities when issued upon conversion against payment of the
conversion price and in accordance with the terms of the Indenture and the
Securities, will be validly issued, fully paid and nonassessable; the Board of
Directors of the Company has duly and validly adopted resolutions reserving such
shares of Common Stock for issuance upon conversion; and the holders of the
outstanding shares of capital stock of the Company are not entitled to any
preemptive or other rights to subscribe for the Securities or the shares of the
Common Stock issuable upon conversion thereof; and, except as set forth in the
Final Prospectus or otherwise disclosed in writing to the Underwriters, no
options, warrants or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or exchange any securities
for, shares of capital stock of or ownership interests in the Company are
outstanding.
(i) (1) The rights to be attached to the shares of Common
Stock initially issuable upon conversion of the Securities have been duly
authorized and, when such shares of Common Stock have been duly and validly
issued in accordance with the terms of this Agreement, will be validly issued.
(2) The rights attached to the shares of Common Stock
outstanding prior to the issuance of the shares of Common Stock issuable upon
conversion of the Securities have been duly authorized and are validly issued.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement 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 governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, except such
as may be required by the Act and the applicable rules and regulations of the
Commission thereunder and the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Securities or the shares of Common
Stock into which they are convertible.
(k) There has not occurred any material adverse change, or any
development, which insofar as can reasonably be foreseen, involves a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Final Prospectus (exclusive of any amendments
or supplements thereto subsequent to the date of this Agreement).
(l) 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
Registration Statement or the Final 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 Final Prospectus or to be filed
as exhibits to the Registration Statement that are not described or filed as
required.
(m) The Company and each of its subsidiaries have all
necessary consents, authorizations, approvals, orders, certificates and permits
of and from, and have made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease, license and use
their respective properties and assets and to conduct their business in the
manner described in the Final Prospectus, except to the extent that the failure
to obtain such consents, authorizations, approvals, orders, certificates and
permits or make such declarations or filings would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(n) Each Preliminary Prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act and the applicable rules and regulations of the
Commission thereunder.
(o) The Company is not and, after giving effect to the
offering and the sale of the Securities and the application of the proceeds
thereof as described in the Final Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(p) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, the "Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(q) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to include any securities with the Securities registered pursuant to the
Registration Statement.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Schedule I hereto the principal amount of the Securities set forth
opposite such Underwriter's name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly,
Option Securities with an aggregate principal amount at maturity of up to the
aggregate principal amount set forth in Schedule I hereto at the same purchase
price per Security as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover over-allotments in the
sale of the Underwritten Securities by the Underwriters. Said option may be
exercised in whole or in part at any time (but not more than once) on or before
the 30th day after the date of this Agreement upon written or telegraphic notice
by the Representatives to the Company setting forth the aggregate principal
amount at maturity of the Option Securities as to which the several Underwriters
are exercising the option and the settlement date. The aggregate principal
amount at maturity of the Option Securities to be purchased by each Underwriter
shall be the same percentage of the total aggregate principal amount at maturity
of the Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
(c) Each Underwriter represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 of the
United Kingdom, (ii) it has complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 of the United Kingdom with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom the
document may otherwise lawfully be issued or passed on.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made on the date and at the time
specified in Schedule I hereto or at such time on such later date not more than
three Business Days after the foregoing date as the Representatives shall
designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price thereof
to or upon the order of the Company by wire transfer payable in same-day funds
to an account specified by the Company. Delivery of the Underwritten Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives, at
000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement or supplement (including the Final
Prospectus or any Preliminary Final Prospectus) to the Basic Prospectus
or any Rule 462(b) Registration Statement, unless the Company has
furnished you a copy for your review prior to filing and will not,
unless the Company has been advised by legal counsel that such filing
is required by law, file any such proposed amendment or supplement to
which you reasonably object in a timely manner. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Final Prospectus is
otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Final Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to
Rule 424(b) or when any Rule 462(b) Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Registration Statement
shall have been filed or become effective, (4) of any request by the
Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Final Prospectus or for any additional information,
(5) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of
the qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (1) notify the
Representatives of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Final Prospectus and the Final Prospectus and any supplement thereto as
the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities and will pay any fee of the National Association of
Securities Dealers, Inc., in connection with its review of the
offering; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of Xxxxxxx Xxxxx
Xxxxxx Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or any
affiliate of the Company, directly or indirectly, including the filing (or
participation in the filing) of a registration statement with the Commission in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act, of any debt securities issued or guaranteed by the Company (other
than the Securities), any shares of capital stock of the Company or any
securities convertible or exercisable or exchangeable for such capital
securities (other than the Securities) or publicly announce an intention to
effect any such transaction, until the Business Day set forth on Schedule I
hereto; provided, however, that notwithstanding the foregoing, the Company may
(i) issue Common Stock, or grant options to purchase Common Stock or other
awards, in each case under its stock or bonus plans, to employees and directors
of the Company, (ii) file Form S-8 Registration Statements relating to, and
issue common stock of the Company pursuant to, restricted stock agreements with
employees and employee stock option plans of the Company or its subsidiaries,
(iii) file Form S-4 Registration Statements relating to, and issue common stock
pursuant to, mergers with, or acquisitions of, other entities by the Company,
and (iv) announce its intentions with regard to such stock option plans,
restricted stock agreements, mergers and/or acquisitions.
(g) The Company will reserve and keep available at all times,
free of preemptive rights, the full number of shares of Common Stock
issuable upon conversion of the Securities.
(h) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably
be expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Execution Time, the Closing Date and any settlement date pursuant to Section
3 hereof, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have requested and caused Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the Company, to have
furnished to the Representatives their opinion, dated the Closing Date
and addressed to the Representatives, 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 jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Final Prospectus;
(ii) the shares of Common Stock initially issuable
upon conversion of the Securities have been duly and validly
authorized and, when issued upon conversion against payment of
the conversion price and in accordance with the provisions of
the Indenture and the Securities, will be validly issued,
fully paid and nonassessable;
(iii) the rights to be attached to the shares of
Common Stock initially issuable upon conversion of the
Securities have been duly authorized and, when the Securities
are converted into shares of Common Stock in accordance with
the terms of the Indenture and the Securities, will be validly
issued;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and, assuming due execution by the Trustee,
constitutes a legal, valid and binding instrument, enforceable
against the Company in accordance with its terms (subject, as
to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity, including,
without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether considered
in a proceeding in equity or at law, all such factors being
collectively referred to as "Creditors' Rights and Equitable
Principles"); and the Securities have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Underwriters pursuant to this Agreement, will constitute
legal, valid and binding obligations of the Company entitled
to the benefits of the Indenture, subject to Creditor's Rights
and Equitable Principles, and will be convertible into Common
Stock in accordance with their terms;
(vi) the statements (A) in the Final Prospectus under
the captions "Description of Debt Securities", "Description of
Common Stock", "Description of Notes" and "Federal Income Tax
Considerations" and (B) in the Registration Statement in Item
15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings
and fairly summarize the matters referred to therein;
(vii) based solely upon such counsel's participation
in the preparation of the Registration Statement and Final
Prospectus and review and discussion of the contents thereof
with Xxxxxx X. Xxxxxxxxxx, Associate General Counsel of the
Company, such counsel does not know of any legal or
governmental proceedings pending or 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 Registration
Statement or the Final Prospectus and are not so described or
of any statutes, regulations, contracts or other documents
that are required to be described in the Registration
Statement or the Final Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed
as required;
(viii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Prospectus,
will not be an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended; and
(ix) such counsel (A) is of the opinion that each
document filed pursuant to the Exchange Act and incorporated
by reference in the Registration Statement and the Final
Prospectus (except for financial statements and schedules and
other financial and statistical information included therein
as to which such counsel need not express any opinion)
complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations
of the Commission thereunder and (B) is of the opinion that
the Registration Statement and Final Prospectus (except for
financial statements and schedules and other financial and
statistical information included therein as to which such
counsel need not express any opinion) comply as to form in all
material respects with the Act, the Exchange Act, the Trust
Indenture Act and the respective rules and regulations
thereunder.
In addition to the matters set forth above, such
opinion shall also include a statement to the effect that nothing has
come to the attention of such counsel which has caused them to believe
that the Registration Statement or the Final Prospectus included
therein, as of the time the Registration Statement became effective or
on the date of this Agreement, contains an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
the Final Prospectus, as amended or supplemented, as of the Closing
Date, contains an untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (except that such counsel need express no view as to
financial statements and schedules and other financial and statistical
information included therein). With respect to such statements, Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C. may state that such
statements are based solely upon (i) their participation in the
preparation of the Registration Statement and Final Prospectus and any
amendments or supplements thereto, (ii) their limited involvement in
the preparation of the documents incorporated therein by reference and
(iii) their review and discussion of the contents of the Registration
Statement and Final Prospectus with certain representatives of the
Company, but is without independent check or verification.
(c) The Company shall have requested and caused either the
Senior Vice President and General Counsel or the Senior Vice President,
Legal, of the Company to have furnished to the Representatives his or
her opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Prospectus, and
is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which
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;
(ii) each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own or lease, as the case may
be, and to operate its property and to conduct its business as
described in the Final 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;
(iii) all of the issued shares of capital stock of
each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and
clear of all liens, encumbrances, equities or claims;
(iv) the Company's authorized equity capitalization
is as set forth in the Final Prospectus; and the Securities
conform in all material respects to the description thereof
contained in the Final Prospectus; the outstanding shares of
Common Stock have been duly and validly authorized and are
fully paid and nonassessable; the shares of Common Stock
initially issuable upon conversion of the Securities have been
duly and validly authorized and, when issued upon conversion
against payment of the conversion price and in accordance with
the provisions of the Indenture and the Securities, will be
validly issued, fully paid and nonassessable; the Board of
Directors of the Company has duly and validly adopted
resolutions reserving such shares of Common Stock for issuance
upon conversion; the holders of the outstanding shares of
capital stock of the Company are not entitled to any
preemptive or other rights to subscribe for the Securities or
the shares of Common Stock issuable upon conversion thereof;
and, except as set forth in the Final Prospectus or otherwise
disclosed in writing to the Underwriters, no options, warrants
or other rights to purchase, agreements or other obligations
to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or
ownership interests in the Company are outstanding;
(v) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect and to general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, regardless of
whether considered in a proceeding in equity or at law, all
such factors being collectively referred to as "Creditors'
Rights and Equitable Principles"); and the Securities have
been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture, subject to Creditors' Rights and Equitable
Principles, and will be convertible into Common Stock in
accordance with their terms;
(vi) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement and the Indenture will not contravene (A) the
certificate of incorporation or by-laws of the Company or (B)
any agreement or other instrument known to such counsel to be
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a
whole, or (C) any judgment, order or decree known to such
counsel to be applicable to the Company of any governmental
body, agency or court having jurisdiction over the Company or
any subsidiary that is material for the Company and its
subsidiaries, taken as a whole; and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the Act and the applicable rules
and regulations of the Commission thereunder and the
securities or Blue Sky laws of the various states in
connection with the offer and sale of the Securities;
(vii) the statements (A) in the Final Prospectus
under the captions "Risk Factors", "Description of Debt
Securities", "Description of Common Stock", and "Description
of Notes", (B) in "Item 3, Legal Proceedings" of the Company's
most recent report on Form 10-K incorporated by reference in
the Final Prospectus, (C) in "Item 1, Legal Proceedings" of
Part II of the Company's quarterly reports on Form l0-Q, filed
since such annual report, and (D) in the Company's
Registration Statement on Form 8-A registering the Company's
Common Stock (including any amendments and reports filed for
the purpose of updating such Registration Statement) setting
forth a description of the Company's capital stock, in each
case insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein,
fairly present the information required with respect to such
legal matters, documents and proceedings and fairly summarize
the matters referred to therein;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or 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 Registration Statement or the Final Prospectus and are not
so described or of any statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Final Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required.
In addition to the matters set forth above, such opinion shall
also include a statement to the effect that nothing has come to the
attention of such counsel which has caused such counsel to believe that
the Registration Statement or the Final Prospectus included therein, as
of the time the Registration Statement became effective or on the date
of this Agreement, contains an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or the Final
Prospectus, as amended or supplemented, as of the Closing Date,
contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading
(except that such counsel need express no view as to financial
statements and schedules and other financial and statistical
information included or incorporated by reference therein). In
addition, such opinion shall also include a statement that nothing has
come to the attention of such counsel which has caused such counsel to
believe that the Company and its subsidiaries are not in compliance
with all applicable Environmental Laws, non-compliance with which would
have a material adverse effect on the Company and its subsidiaries,
taken as a whole. With respect to such statements, such counsel may
state that the foregoing statements are based upon his or her
participation in the preparation of the Registration Statement and
Final Prospectus and any amendments or supplements thereto and
documents incorporated therein by reference and review and discussion
of the contents thereof, but is without independent check or
verification except as specified.
(d) The Representatives shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Indenture, the Registration Statement, the Final
Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplements to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the Final
Prospectus (exclusive of any supplement thereto), there has
been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(f) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters (which may refer to letters previously
delivered to the Representatives), dated respectively as of the
Execution Time and as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the
unaudited interim financial information of the Company for the 3-month
period ended September 30, 1999, and as at September 30, 1999, in
accordance with Statement on Auditing Standards No. 71, and stating in
effect, except as provided in Schedule I hereto, that:
(i) in their opinion the audited financial statements
and financial statement schedules included or incorporated by
reference in the Registration Statement and the Final
Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
3-month period ended September 30, 1999 and as at September
30, 1999 carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and the Compensation and Management
Development Committee and the Audit Committee of the Company;
and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to September 30, 1999, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated by reference in the
Registration Statement and the Final Prospectus do
not comply as to form in all material respects with
applicable accounting requirements of the Act and
with the related rules and regulations adopted by the
Commission with respect to financial statements
included in quarterly reports on Form 10-Q under the
Exchange Act; or that said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated by
reference in the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to
September 30, 1999, there were any changes, at a
specified date not more than five days prior to the
date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the
Company or decreases in the stockholders' equity of
the Company as compared with the amounts shown on the
September 30, 1999 consolidated balance sheet
included or incorporated by reference in the
Registration Statement and the Final Prospectus, or
for the period from September 30, 1999 to such
specified date there were any decreases, as compared
with the corresponding period in the preceding
quarter, in net revenues or income before income
taxes or in total or per share amounts of net income
of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied
by an explanation by the Company as to the
significance thereof unless said explanation is not
deemed necessary by the Representatives;
(3) the information included or incorporated
by reference in the Registration Statement and Final
Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary
Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to
Fixed Charges) is not in conformity with the
applicable disclosure requirements of Regulation S-K;
and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to the
Registration Statement, including the information set forth
under the captions "Capitalization" and "Ratio of Earnings to
Fixed Charges" in the Final Prospectus, the information
included or incorporated by reference in Items 1, 2, 6, 7 and
11 of the Company's Annual Report on Form 10-K, incorporated
by reference in the Registration Statement and the Final
Prospectus, and the information included in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q, incorporated by
reference in the Registration Statement and the Final
Prospectus, agrees with the accounting records of the Company
and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(h) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
(i) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(j) The "lock-up" agreements, between you and executive
officers and directors of the Company 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.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for
the Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, xx the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through Xxxxxxx Xxxxx Barney on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will 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 any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
with reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the statements
set forth (i) in the last paragraph of the cover page regarding delivery of the
Securities, (ii) under the heading "Underwriting", the list of Underwriters and
their respective participation in the sale of the Securities, (iii) in the final
paragraph on the inside front cover, (iv) in the final paragraph under the
heading "Underwriting" and (v) in the paragraphs related to stabilization,
syndicate covering transactions and penalty bids in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. It is understood,
however, that the Company shall, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Underwriters and controlling persons,
which firm shall be designated in writing by Xxxxxxx Xxxxx Xxxxxx.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
provided, however, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
of the Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the offering (before deducting expenses) received by
it, and benefits received by the Underwriters shall be deemed to be equal to the
total underwriting discounts and commissions, in each case as set forth on the
cover page of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
the Underwriters on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule II hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining non-defaulting Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate principal amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate principal amount of Securities set forth in Schedule
II hereto, the remaining Underwriters shall have the right to purchase all, but
shall not be under any obligation to purchase any, of the Securities, and if
such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Final Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 8 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel
(fax no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx
Xxxxxx Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel; or, if sent to the Company, will be mailed, delivered or
telefaxed to General Counsel, (000) 000-0000 and confirmed to it at America
Online, Inc., 00000 XXX Xxx, Xxxxxx, Xxxxxxxx 00000-0000, attention of the Legal
Department.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock" shall mean the Company's common stock, par
value $.01 per share.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement
relating to the Securities that was first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus, together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date, shall also mean such registration statement as so amended or such
Rule 462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to
such rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(a) hereof.
"Significant Subsidiary" shall mean each subsidiary of the
Company that as of the date of this Agreement is a "Significant
Subsidiary" for purposes of Rule 1-02 of regulation S-X under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended and the rules and regulations of the Commission
promulgated thereunder.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
America Online, Inc.
By:/s/Xxxxxxx X. Xxxxxx
Name:Xxxxxxx X. Xxxxxx
Title: Senior Vice President, Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
By: Xxxxxxx Xxxxx Barney Inc.
By:/s/Xxxx X. Xxxxxx
Name:Xxxx X. Xxxxxx
Title:Vice President
For themselves and the other several Underwriters, if any, named in Schedule II
to the foregoing Agreement.
SCHEDULE I
Underwriting Agreement dated December 1, 1999
Registration Statement No. 333-79489
Representatives: Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
Title, Purchase Price and Description of Securities:
Title: Convertible Subordinated Notes Due 0000
Xxxxxxxxx principal amount at maturity of the Underwritten Securities:
$2,267,533,000
Aggregate principal amount at maturity of the Option Securities:
$340,129,950
Public offering price: $551.26 per Security
Purchase price to Underwriters (include accrued interest or
amortization, if any): $537.478 per Security
Sinking fund provisions: None
Redemption provisions: On or after December 6, 2002 and before December
6, 2004, the Securities are redeemable in whole but not in part for cash if the
closing price of the Common Stock on the New York Stock Exchange is greater than
150% of the conversion price for the Securities for at least 20 trading days in
any consecutive 30-trading day period. On or after December 6, 2004, the
Securities are redeemable for cash, in whole or in part, at any time and from
time to time. The redemption price will be equal to the issue price of the
Securities plus the accrued original issue discount to the date of redemption.
Closing Date, Time and Location: December 6, 1999 at 10:00 a.m. at
Cleary, Gottlieb, Xxxxx & Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
Type of Offering: Non-delayed
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company and other securities referred to
in Section 5(f) without the consent of the Representatives:
December 31, 1999
SCHEDULE II
Principal Amount
of Underwritten Securities
Underwriters to be Purchased
Xxxxxxx Xxxxx Barney Inc. $793,637,000
Xxxxxx Xxxxxxx & Co. Incorporated $793,637,000
Xxxxxxx, Sachs & Co. $226,753,000
Xxxxxx Brothers Inc. $226,753,000
Bear, Xxxxxxx & Co. Inc. $226,753,000
Total................... $2,267,533,000
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