EXHIBIT 1.3
FORM OF
EQUITY DISTRIBUTION AGREEMENT
[date]
[Name and Address of Manager]
Ladies and Gentlemen:
Lucent Technologies Inc. (the "Company"), confirms its agreement with
_____________________ (the "Manager"), as follows:
SECTION 1. Description of Securities. The Company proposes to issue and
sell through or to the Manager, as sales agent and/or principal, up to
_________________ shares (the "Shares") of the Company's common stock, par value
$0. 01 per share (the "Common Stock"), on the terms set forth in Section 3 of
this Agreement. The Company agrees that whenever it determines to sell Shares
directly to the Manager as principal, it will enter into a separate agreement
(each, a "Terms Agreement") in substantially the form of Annex I hereto,
relating to such sale in accordance with Section 3 of this Agreement.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to the Manager that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"). A registration statement on Form S-3
(Registration No. 333-_____) with respect to the Shares, including a form of
prospectus and such amendments or supplements to such registration statement as
may have been required prior to the date of this Agreement, has been prepared by
the Company under the provisions of the Act, has been filed with the Securities
and Exchange Commission (the "Commission"), and has become effective and
incorporates by reference documents which the Company has filed in accordance
with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (collectively called the "Exchange Act"). The
Company has prepared a prospectus supplement (the "Prospectus Supplement"),
including the prospectus included in the registration statement referred to
above and the documents incorporated by reference therein, setting forth the
terms of the offering, sale and plan of distribution of the Shares and
additional information concerning the Company and its business. No stop order
suspending the effectiveness of the registration statement or any post-effective
amendment thereto has been issued and served on the Company, and no proceedings
for that purpose are pending or, to the knowledge of the Company, threatened by
the Commission. Copies of such registration statement and prospectus, any such
amendment or supplement and all documents incorporated by reference therein that
were filed with the Commission on or prior to the date of this Agreement have
been made available or delivered to the Manager. Such registration statement, as
it may have heretofore been amended, is referred to herein as the "Registration
Statement," and the final form of prospectus included in the Registration
Statement, as amended or supplemented from time to time, is referred to herein
as the "Prospectus." Any reference herein to the Registration Statement, the
Prospectus or any amendment or supplement thereto shall be deemed to refer to
and include the documents incorporated (or deemed to be incorporated) by
reference therein, and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or Prospectus shall be
deemed to refer to and include the filing after the execution hereof of any
document with the Commission deemed to be incorporated by reference therein. As
of the close of business on __________, an indeterminate number of shares of the
Common Stock having an aggregate initial offering price not exceeding
$____________ were available for issuance pursuant to the Registration
Statement, which permits their sale in the manner contemplated by this
Agreement;
(b) Each part of the Registration Statement, when such part became
or becomes effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each Filing
Date (as defined below), did or will in all material respects comply with all
applicable provisions of the Act and the Exchange Act. Each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. The Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission, did not
or 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; and 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 have been so described or filed. The foregoing
representations and warranties in this Section 2(b) do not apply to any
statements or omissions made in reliance on and in conformity with information
relating to the Manager furnished in writing to the Company by the Manager
specifically for inclusion in the Registration Statement or Prospectus or any
amendment or supplement thereto. The Company has not distributed any offering
material in connection with the offering or sale of the Shares other than the
Registration Statement, the Prospectus or any other materials, if any, permitted
by the Act;
(c) The documents which are incorporated by reference in the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or from which information is so incorporated by reference, when they
become effective or were filed with the Commission, as the case may be, complied
in all material respects with the requirements of the Act or the Exchange Act,
as applicable, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or omitted 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 and any further
documents so filed and incorporated by reference shall, when they became or
become effective under the Act or when they were or are filed with the
Commission, conform in all material respects with the requirements of the Act or
the Exchange Act, as applicable;
(d) The Company and each of its significant subsidiaries, as such
term is defined in Rule 1-02 of Regulation S-X under the Act (each a
"Significant Subsidiary" and collectively, the "Significant Subsidiaries"), is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. The Company and each of its Significant
Subsidiaries has the corporate power and authority to conduct its business as
described in the Prospectus. The Company and each of its Significant
Subsidiaries is duly licensed or qualified to do business and in good standing
as a foreign corporation in all jurisdictions in which the nature of the
activities conducted by it makes such licensing or qualification necessary,
except where the failure to so qualify could not reasonably be expected to have
a material adverse effect on the business, properties, condition (financial or
otherwise) or results of operations of the Company and the Significant
Subsidiaries taken as a whole (a "Material Adverse Effect"). All of the
outstanding shares of the capital stock of the Significant Subsidiaries have
been duly authorized and validly issued and are fully paid and non-assessable
and are owned by the Company or a Significant Subsidiary, to the extent and as
is described in the Prospectus, free and clear of all liens, encumbrances and
claims whatsoever;
(e) The accountants who have opined or shall opine on the annual
financial statements filed and to be filed with the Commission as parts of the
Registration Statement and the Prospectus are public or certified accountants,
independent with respect to the Company, as required by the Act and the rules
and regulations of the Commission thereunder. The financial statements of the
Company, together with the related notes thereto, which are incorporated by
reference into the Registration Statement and any Final Prospectus, present
fairly in all material respects the financial position and the results of
operations, changes in stockholders' equity and changes in cash flows of the
Company as of the respective dates and for the respective periods specified
therein. All of such financial statements and related notes have been prepared
in conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved and comply as to form in all
material respects with the applicable accounting requirements included in
Regulation S-X under the Act;
(f) All of the outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws and were not
issued in violation of any preemptive right, resale right, right of first
refusal or similar right; the Shares to be issued and sold by the Company
pursuant to this Agreement and any Terms Agreement have been duly authorized and
upon such issuance will be validly issued, fully paid and nonassessable and are
not subject to any preemptive right, resale right, right of first refusal or
similar right; and the holders of the Shares will not be subject to personal
liability by reason of being such holders. Except as set forth in the Prospectus
and except for such amounts that could not have a Material Adverse Effect, there
are no options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible or exchangeable into, or any contracts,
commitments, plans or arrangements to issue or sell, any shares of capital stock
of the Company, any shares of capital stock of any Significant Subsidiary or any
such warrants, convertible or exchangeable securities or obligations;
(g) Subsequent to the respective dates as of which information is
given in the Prospectus, except as set forth in or contemplated by the
Prospectus, (i) there has not been any material change in the capitalization of
the Company or any other change which would have a Material Adverse Effect, (ii)
neither the Company nor any of its Significant Subsidiaries has incurred any
material liabilities or obligations, direct or contingent, nor has it entered
into any material transactions other than (x) pursuant to this Agreement and the
transactions referred to herein, (y) pursuant to other distribution agreements
or agreements of a similar nature permitted pursuant to Section 12 of this
Agreement or (z) in the ordinary course of business and (iii) except for
dividends on shares of its capital stock, if and when declared, neither the
Company nor any of its Significant Subsidiaries has paid or declared any
dividends or other distributions of any kind on any class of their respective
classes of capital stock;
(h) Except as set forth in the Prospectus, there are no actions,
suits or proceedings, including material labor disputes, pending or threatened
in writing against the Company or any of its Significant Subsidiaries or any of
their respective officers in their capacity as such, before or by any federal or
state court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, wherein an unfavorable ruling, decision
or finding might result in a Material Adverse Effect;
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(i) The Company and each of its Significant Subsidiaries has (i)
all governmental licenses, permits, consents, orders, approvals and other
authorizations, and has made all governmental or regulatory filings, as are
necessary to carry on its business as contemplated in the Prospectus, (ii)
complied in all material respects with all laws, regulations and orders
applicable to it or its business and (iii) performed all its obligations
required to be performed by it, and is not in breach of or default under, any
indenture, mortgage, deed of trust, voting trust agreement, loan agreement,
bond, debenture, note agreement, lease, contract or other agreement or
instrument (collectively, a "contract or other agreement") to which it is a
party or by which its property is bound or affected, the effect of any of which
might result in a Material Adverse Effect and no event has occurred which with
notice, lapse of time or both would result in such breach or default. Neither
the Company nor any of its Significant Subsidiaries is in violation of any
provision of its charter or by-laws;
(j) The Company has full corporate power and authority to enter
into this Agreement and will have, at the time of execution thereof, full
corporate power and authority to enter into any Terms Agreement. This Agreement
has been and any Terms Agreement will have been, at the time of execution and
delivery thereof, duly authorized, executed and delivered by the Company and
constitutes and, in the case of any Terms Agreement will constitute, a valid and
binding agreement of the Company and is enforceable, and, in the case of any
Terms Agreement, will be enforceable, against the Company in accordance with its
terms, except as the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws affecting creditors'
rights generally and moratorium laws in effect from time to time and by
equitable principles restricting the availability of equitable remedies. The
execution and delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement and any Terms Agreement and the
consummation of the transactions contemplated hereby will not result in the
creation or imposition of any lien, charge or encumbrance upon any of the assets
of the Company or any of its Significant Subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration of any
obligation under, the charter or by-laws of the Company or any of its
Significant Subsidiaries, any agreement to which the Company or any of its
Significant Subsidiaries is a party or by which the Company or any of its
Significant Subsidiaries is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business of the Company or
any of its Significant Subsidiaries the effect of any of which might have a
Material Adverse Effect;
(k) No consent, approval, authorization or order of, or any filing
or declaration with, any court or any national, state or local governmental
agency, regulatory commission, board, authority or body is required in
connection with the (i) authorization, issuance, sale or delivery of the Shares
by the Company, (ii) the execution, delivery and performance of this Agreement
and any Terms Agreement by the Company or (iii) the taking by the Company of any
other action contemplated hereby, except such as have been obtained under the
Act and such as may be required under state securities or Blue Sky laws or the
by-laws and rules of the New York Stock Exchange (the "NYSE") in connection with
the offer by sale through the Manager of the Shares;
(l) The Company is not, and if operated in the manner described in
the Prospectus and after giving effect to the offering and sale of the Shares,
it will not be, an "investment company," an entity "controlled" by an
"investment company" or an "affiliated person", or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(m) Neither the Company nor any of its directors or officers has
taken, directly or indirectly, any action intended, or which might reasonably be
expected, to cause or result, under the Act or otherwise, in, or which has
constituted, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(n) No person has the right, contractual or otherwise, to cause
the Company to issue to it, or register pursuant to the Act, any securities of
the Company because of the filing of the Registration Statement or the offering
of the Shares, nor does any person have preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any of the Shares other than
those that have been expressly waived prior to the date hereof;
(o) The Company is not, and if operated in the manner described in
the Prospectus, will not be a "broker" within the meaning of Section 3(a)(4) of
the Exchange Act or a "dealer" within the meaning of Section 3(a)(5) of the
Exchange Act or required to be registered pursuant to Section 15(a) of the
Exchange Act;
(p) The Common Stock is an "actively-traded security" excepted
from the requirements of Rule 101 of Regulation M under the Exchange Act by
subsection (c)(1) of such rule;
(q) Except as contemplated by Section 3 of this Agreement, the
Company has not incurred any liability for any finder's fees or similar payments
in connection with the transactions herein contemplated for the Shares; and
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(r) The Company has not entered into any other sales agency
agreements or other similar arrangements with any agent or other representative
in respect of the Shares covered by this Agreement.
SECTION 3. Sale and Delivery of Securities. (a) On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Manager, as sales agent, and the Manager agrees to use its
reasonable best efforts to sell, as sales agent for the Company, the Shares on
the following terms:
(i) The Shares are to be sold on a daily basis or
otherwise as shall be agreed to by the Company and the Manager on any
day that is a trading day for the NYSE (other than a day on which the
NYSE is scheduled to close prior to its regular weekday closing time).
The Company will designate the maximum amount of Shares to be sold by
the Manager daily as reasonably agreed to by the Manager and in any
event not in excess of the amount available for issuance under the
currently effective Registration Statement. Subject to the terms and
conditions hereof, the Manager shall use its reasonable best efforts to
sell all of the designated Shares. The gross proceeds from sales of any
Shares sold under this Section 3(a) shall be based on the market price
for shares of the Company's Common Stock sold by the Manager under this
Section 3(a) on the NYSE at the time of such sale and the number of
Shares sold by the Manager.
(ii) Notwithstanding the foregoing, the Company may, at
any time and from time to time, instruct the Manager by telephone
(confirmed promptly by telecopy) not to sell Shares if such sales
cannot be effected at or above the price designated by the Company in
any such instruction. Furthermore, the Company shall not authorize the
issuance and sale of, and the Manager shall not be obligated to use its
reasonable best efforts to sell, any Share at a price lower than the
minimum price therefor designated from time to time by the Company's
Common Stock Committee of the Board of Directors and notified to the
Manager in writing. In addition, the Company or the Manager may, upon
notice to the other party hereto by telephone (confirmed promptly by
telecopy), suspend the offering of the Shares; provided, however, that
such suspension or termination shall not affect or impair the parties'
respective obligations with respect to the Shares sold hereunder prior
to the giving of such notice. Written notice of reactivation will be
required after any such written notice of suspension before the Manager
will accept telephone instructions to resume the sale of Shares on a
reasonable best efforts basis.
(iii) The Manager hereby covenants and agrees not to make
any sales of Shares on behalf of the Company, pursuant to this Section
3(a), other than (a) by means of ordinary brokers' transactions between
members of the NYSE that qualify for delivery of a Prospectus to the
NYSE in accordance with Rule 153 under the Act (such transactions are
hereinafter referred to as "At the Market Offerings") and (b) such
other sales of Shares on behalf of the Company in its capacity as agent
of the Company as shall be agreed by the Company and the Manager. The
Company acknowledges and agrees that in the event a sale of Shares on
behalf of the Company would constitute the sale of a "block" under Rule
10b-18(a)(14) under the Exchange Act or a "distribution" within the
meaning of Regulation M under the Exchange Act or the Manager
reasonably believes it may be deemed an "underwriter" under the Act in
a transaction that is not an At the Market Offering, the Company will
provide to the Manager, at the Manager's request and upon reasonable
advance notice to the Company, on or prior to the Settlement Date, the
opinions of counsel, accountants' letters and officer's certificate
pursuant to Section 5 hereof that the Company would be required to
provide to the Manager in connection with a sale of Shares pursuant to
a Terms Agreement, each dated the Settlement Date. The Manager hereby
covenants and agrees that it shall not engage in a sale of Shares on
the Company's behalf that would constitute the sale of a "block" or a
"distribution", each as described above, without the Company's prior
written consent.
(iv) The compensation to the Manager for sales of Shares,
as an agent of the Company, shall be _____% of the gross sales price of
the Shares sold pursuant to this Section 3(a), and such rate of
compensation shall not apply when the Manager acts as principal. The
remaining proceeds, after further deduction for any transaction fees
imposed by any governmental or self-regulatory organization in respect
of such sales, shall constitute the net proceeds to the Company for
such Shares (the "Net Proceeds").
(v) The Manager shall provide written confirmation to the
Company following the close of trading on the NYSE each day in which
Shares are sold under this Section 3(a) setting forth the number of
Shares sold on such day, the Net Proceeds to the Company, and the
compensation payable by the Company to the Manager and any other fees
deducted with respect to such sales.
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(vi) Settlement for sales of Shares pursuant to this
Section 3(a) will occur on the third business day following the date on
which such sales are made (each such day, a "Settlement Date"). On each
Settlement Date, the Shares sold through the Manager for settlement on
such date shall be issued and delivered by the Company to the Manager
against payment of the Net Proceeds for the sale of such Shares.
Settlement for all such Shares shall be effected by free delivery of
Shares to the Manager's account at The Depository Trust Company in
return for payments in same day funds delivered to the account
designated by the Company. If the Company shall default on its
obligation to deliver Shares on any Settlement Date, the Company shall
(a) hold the Manager harmless against any loss, claim or damage arising
from or as a result of such default by the Company and (b) pay the
Manager any commission to which it would otherwise be entitled absent
such default. If the Manager fails to deliver proceeds on any
Settlement Date for Shares delivered by the Company, the Manager shall
pay the Company interest on the amount of the proceeds to which the
Company is entitled based on the effective overnight Federal Funds Rate
(as defined below) plus twenty-five basis points until such proceeds
plus interest are paid. For purposes of this Agreement, "Federal Funds
Rate" means, for any day, the weighted average of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the
next succeeding business day by the Federal Reserve Bank of New York
or, if such rate is not so published for any day that is a business
day, the average quotations, for the day, of such transactions received
by the Manager from three Federal funds brokers of recognized standing
selected by it.
(vii) At each Settlement Date and Filing Date (as defined
below), the Company shall be deemed to have affirmed each
representation and warranty contained in this Agreement. The Company
covenants and agrees with the Manager that, on or prior to each Filing
Date following the end of such fiscal quarter in which sales of Shares
were made by the Manager pursuant to this Section 3(a), the Company
will file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b), which prospectus supplement will
set forth, with regard to such quarter, the number of Shares sold
through the Manager as agent pursuant to this Section 3(a) in At the
Market Offerings, the Net Proceeds to the Company and the compensation
paid by the Company with respect to such sales of Shares pursuant to
this Section 3(a) and deliver such number of copies of each such
prospectus supplement to the NYSE as are required by such Exchange. For
purposes of this Agreement, a "Filing Date" shall mean (a) with respect
to each of the Company's first three fiscal quarters, the date on which
the Company shall be obligated to file a quarterly report on Form 10-Q
in respect of such quarter and (b) with respect to the Company's fourth
fiscal quarter, the date which is ninety (90) days after the date on
which the Company shall be obligated to file a quarterly report on Form
10-Q in respect of the third fiscal quarter of such year (or, if such
date is not a business day, on the first business day following such
date). Any obligation of the Manager to use its reasonable best efforts
to sell the Shares on behalf of the Company shall be subject to the
continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations
hereunder and to the continuing satisfaction of the additional
conditions specified in Section 5 of this Agreement.
(b) If the Company wishes to issue and sell Shares other than as
set forth in Section 3(a) of this Agreement (each, a "Placement"), it will
notify the Manager of the proposed terms of such Placement. If the Manager,
acting as principal, wishes to accept such proposed terms (which it may decline
to do for any reason in its sole discretion) or, following discussions with the
Company, wishes to accept amended terms, the Manager and the Company will enter
into a Terms Agreement setting forth the terms of such Placement. The terms set
forth in a Terms Agreement will not be binding on the Company or the Manager
unless and until the Company and the Manager have each executed such Terms
Agreement accepting all of the terms of such Terms Agreement. In the event of a
conflict between the terms of this Agreement and the terms of a Terms Agreement,
the terms of such Terms Agreement will control.
(c) Under no circumstances shall the number of Shares sold
pursuant to this Agreement and any Terms Agreement exceed the number set forth
in Section 1 or the number of shares of Common Stock available for issuance
under the currently effective Registration Statement.
(d) If either party has reason to believe that the exemptive
provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act
are not satisfied with respect to the Shares, it shall promptly notify the other
party and sales of Shares under this Agreement and any Terms Agreement shall be
suspended until that or other exemptive provisions have been satisfied in the
judgment of each party. The Manager shall calculate on a weekly basis the
average daily trading volume (as defined by Rule 100 of Regulation M under the
Exchange Act) of the Common Stock.
(e) Each sale of Shares to the Manager shall be made in accordance
with the terms of this Agreement and, if applicable, a Terms Agreement, which
will provide for the sale of such Shares to, and the purchase thereof by, the
Manager. A Terms Agreement may also specify certain provisions relating to the
reoffering of such Shares by the Manager. The commitment of the Manager to
purchase Shares pursuant to any Terms Agreement shall be deemed to have been
made on the basis of the representations and warranties of the Company herein
contained and shall be subject to the terms and conditions herein set forth.
Each Terms Agreement shall specify the number of Shares to be purchased by the
Manager pursuant thereto,
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the price to be paid to the Company for such Shares, any provisions relating to
rights of, and default by, underwriters acting together with the Manager in the
reoffering of the Shares, and the time and date (each such time and date being
referred to herein as a "Time of Delivery") and place of delivery of and payment
for such Shares. Such Terms Agreement shall also specify any requirements for
opinions of counsel, accountants' letters and officers' certificates pursuant to
Section 5 of this Agreement and any other information or documents required by
the Manager.
(f) The Manager agrees that in carrying out the transactions
contemplated by this Agreement, it will observe and comply with (i) all
applicable securities laws, regulations, rules and ordinances of any
jurisdiction in which the Shares may be offered, sold or delivered and (ii) all
applicable regulations and rules of the NYSE (or any other stock exchange with
which the Common Stock may be listed or admitted to trading) on which such
transactions are executed.
SECTION 4. Covenants of the Company. The Company agrees with the
Manager:
(a) From the time solicitation regarding sale of the Shares is
begun until all of the Shares have been sold, to advise the Manager promptly of
any proposal to amend or supplement the Registration Statement or the Prospectus
relating to the Shares by means of a post-effective amendment, sticker, or
supplement (including a prospectus filed pursuant to Rule 424(b) of the
Regulations under the Act that differs from the Prospectus relating to the
Shares first filed pursuant to such Rule 424(b) but excepting post-effective
amendments, supplements, and stickers relating solely to (1) pricing, if any,
(2) incorporation of document(s) by reference into the Registration Statement or
the Prospectus relating to the Shares or (3) the filing of other distribution
agreements entered into by the Company); to afford the Manager a reasonable
opportunity to comment on any such proposed post-effective amendment, sticker or
supplement; to advise the Manager of the filing with the Commission of any such
post-effective amendment, sticker or supplement unless a copy thereof has been
submitted to the Manager a reasonable period of time before the filing; and to
file all reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares and to advise the
Manager of any such filing;
(b) To promptly advise the Manager of any request by the
Commission for amendments or supplements to the Registration Statement or
Prospectus or for additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order suspending the
effectiveness of the Registration Statement and, if the Commission should enter
a stop order suspending the effectiveness of the Registration Statement, to make
every reasonable effort to obtain the lifting or removal of such order as soon
as possible;
(c) To make available to the Manager, as soon as practicable after
the Registration Statement becomes effective, and thereafter from time to time
to furnish to the Manager, copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration Statement) in
such quantities and at such locations as the Manager may reasonably request for
the purposes contemplated by the Act, which Prospectus and any amendments or
supplements thereto furnished to the Manager will be materially identical to the
version created to be transmitted to the Commission for filing via XXXXX, except
to the extent permitted by Regulation S-T; and for so long as this agreement is
in effect, the Company will prepare and file promptly such amendment or
amendments to the Registration Statement and the Prospectus as may be necessary
to comply with the requirements of Section 10(a)(3) of the Act; the Company
shall be deemed to have complied with this Section 6(c) upon filing of all
documents required under this Section with the Commission via XXXXX, provided
the Company shall furnish the Manager with a copy of all documents required
under this Section not previously furnished prior to filing such documents with
the Commission and provided further that the Company shall promptly notify the
Manager of (x) any such filing that is not timely made with the Commission and
(y) any filing by the Company of a Form 12b-25;
(d) To promptly notify the Manager to suspend the offering of
Shares upon the happening of any event known to the Company within the time
during which a Prospectus relating to the Shares is required to be delivered
under the Act which, in the judgment of the Company, would require the making of
any change in the Prospectus then being used, or in the information incorporated
therein by reference, so that the Prospectus would not include an untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they are
made, not misleading, and, during such time, to prepare and furnish, at the
Company's expense, to the Manager promptly such amendments or supplements to
such Prospectus as may be necessary to reflect any such change and, to the
extent it relates solely to the Shares, to furnish the Manager with a copy of
such proposed amendment or supplement before filing any such amendment or
supplement with the Commission and thereafter promptly to furnish at the
Company's own expense to the Manager, copies in such quantities and at such
locations as the Manager may from time to time reasonably request of an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will (i) reflect
such change, or (ii) not, in the light of the circumstances when it is so
delivered, be misleading, or (iii) comply with applicable securities laws; the
Company shall be deemed to have complied with this Section 4(d) upon filing
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of all documents required under this Section with the Commission via XXXXX,
provided the Company shall furnish the Manager with a copy of all documents
required under this Section not previously furnished prior to filing such
documents with the Commission and provided further that the Company shall
promptly notify the Manager of (x) any such filing that is not timely made with
the Commission and (y) any filing by the Company of a Form 12b-25;
(e) To furnish such information as may be required and otherwise
to cooperate in qualifying the Shares for offering and sale under the securities
or blue sky laws of such states as the Manager may reasonably designate and to
maintain such qualifications in effect so long as required for the distribution
of the Shares; provided that the Company shall not be required to qualify as a
foreign corporation or to consent to the service of process under the laws of
any such state (except service of process with respect to the offering and sale
of the Shares); and to promptly advise the Manager of the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Shares for sale in any jurisdiction or the initiation or threatening in writing
of any proceeding for such purpose;
(f) To furnish to the Manager any of the following items that are
not filed with the Commission via XXXXX: (i) copies of any reports or other
communications which the Company shall send directly to its stockholders (except
with respect to information on the Company's website), and (ii) copies of any
financial statements or reports filed with any national securities exchange on
which any class of securities of the Company is listed, in each case as soon as
such reports, communications, documents or information becomes available;
provided that the Company shall promptly notify the Manager of (x) any required
filing that is not timely made with the Commission and (y) any filing by the
Company of a Form 12b-25;
(g) To make generally available to its security holders, and to
deliver to the Manager, an earnings statement of the Company (which will satisfy
the provisions of Section 11(a) and Rule 158 of the Act) covering a period of
twelve months beginning after the end of the fiscal quarter of the Company in
which occurred the effective date of the Registration Statement (as defined in
Rule 158(c) of the Act) as soon as is reasonably practicable after the
termination of such twelve-month period;
(h) Whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, to pay all of its expenses incident
to the performance of its obligations hereunder, including, but not limited to,
such costs, expenses, fees and taxes in connection with (i) the preparation and
filing of the Registration Statement, the Prospectus, each Prospectus
Supplement, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Manager (including costs of mailing
and shipment), (ii) the registration, issue, sale and delivery of the Shares,
(iii) any power of attorney and any closing documents (including compilations
thereof) and the reproduction and/or printing and furnishing of copies of each
thereof to the Manager (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and the
determination of their eligibility for investment under state law as aforesaid
(including the reasonable legal fees and filing fees and other disbursements of
counsel for the Manager) and the printing and furnishing of copies of any blue
sky surveys to the Manager, (v) the listing of the Shares on the NYSE and any
registration thereof under the Exchange Act, (vi) any filing for review of the
public offering of the Shares by the NASD (including the reasonable legal fees
and other reasonable disbursements of counsel for the Manager in connection with
any such filing) and (vii) the reasonable fees and disbursements of the
Company's counsel and accountants. The Manager will pay its own out-of-pocket
costs and expenses incurred in connection with entering into this Agreement and
the transactions contemplated by this Agreement, including, without limitation,
travel, reproduction, printing and similar expenses as well as the fees and
disbursements of its legal counsel;
(i) To apply the net proceeds from the sale of the Shares in the
manner set forth in the Prospectus;
(j) Not to sell, offer or agree to sell, contract to sell, grant
any option to sell or otherwise dispose of, directly or indirectly, any shares
of Common Stock or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or other rights to purchase Common Stock or any
other securities of the Company that are substantially similar to Common Stock
or permit the registration under the Act of any shares of Common Stock, except
for (i) the registration of the Shares and the sales through the Manager
pursuant to this Agreement or to the Manager pursuant to any Terms Agreement,
(ii) sales of shares through any dividend reinvestment and stock purchase plan
of the Company, (iii) shares and/or options granted pursuant to employee benefit
plans and shares of Common Stock issuable upon the exercise of such outstanding
options during the period from the date of this Agreement through the final
Filing Date for the sale of Shares pursuant to Section 3(a) of this Agreement,
(iv) issuances of shares in privately negotiated transactions exempt from
registration pursuant to Section 3(a)(9) of the Act, (v) issuances and sales of
shares in private transactions exempt from registration under the Act, (vi)
issuances of shares to a trust or trusts for the benefit of certain of the labor
unions covering the Company's employees, (vii) issuances of shares pursuant to
Section 3(a)(10) of the Act, and (viii) the exercise or conversion of any
security which can be converted for Common Stock, without giving the Manager at
least three business days' prior notice as provided in Section 3(a)(ii)
requiring the Manager to suspend activity under this program;
7
(k) Prior to commencement of the offering of Shares under this
Agreement, to ensure that the Shares will be authorized for listing, subject to
official notice of issuance, on the NYSE;
(l) Upon commencement of the offering of Shares under this
Agreement, and each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented (other than (A) a Prospectus Supplement filed
pursuant to Rule 424(b) under the Act pursuant to Section 3(a)(vii) of this
Agreement or (B) the Registration Statement or Prospectus is amended or
supplemented in order to describe an offering of securities other than the
Shares), (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus (other than a Current Report on Form 8-K, unless
the Manager shall otherwise reasonably request), or (iii) Shares are delivered
to the Manager pursuant to a Terms Agreement, to furnish or cause to be
furnished to the Manager forthwith a certificate dated and delivered the date of
effectiveness of such amendment, the date of filing with the Commission of such
supplement or other document, or the Time of Delivery, as the case may be, in
form satisfactory to the Manager to the effect that the statements contained in
the certificate referred to in Section 5(e) of this Agreement which were last
furnished to the Manager are true and correct at the time of such amendment,
supplement, filing, or delivery, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same tenor as the
certificate referred to in said Section 5(e), modified as necessary to relate to
the Registration Statement and the Prospectus as amended and supplemented to the
time of delivery of such certificate;
(m) Upon commencement of the offering of Shares under this
Agreement, and each time that (i) the Registration Statement or the Prospectus
is amended or supplemented (other than (A) a Prospectus Supplement filed
pursuant to Rule 424(b) under the Act pursuant to Section 3(a)(vii) of this
Agreement or (B) the Registration Statement or Prospectus is amended or
supplemented in order to describe an offering of securities other than the
Shares), or (ii) Shares are delivered to the Manager pursuant to a Terms
Agreement, to furnish or cause to be furnished forthwith to the Manager and to
counsel to the Manager a written opinion of counsel to the Company ("Company
Counsel") satisfactory to the Manager, dated and delivered the date of
effectiveness of such amendment, the date of filing with the Commission of such
supplement or other document, or the Time of Delivery, as the case may be, in
form and substance satisfactory to the Manager, of the same tenor as the
opinions set forth in Annex II of this Agreement, but modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion;
(n) Upon commencement of the offering of Shares under this
Agreement, and each time that (i) the Registration Statement or the Prospectus
is amended or supplemented (other than (A) a Prospectus Supplement filed
pursuant to Rule 424(b) under the Act pursuant to Section 3(a)(vii) of this
Agreement or (B) the Registration Statement or Prospectus is amended or
supplemented in order to describe an offering of securities other than the
Shares), (ii) there is filed with the Commission any document incorporated by
reference into the Prospectus (other than a Current Report on Form 8-K, unless
the Manager shall otherwise reasonably request), or (iii) Shares are delivered
to the Manager pursuant to a Terms Agreement, to furnish or cause to be
furnished forthwith to the Manager and to counsel to the Manager a written
opinion of the general counsel of the Company ("General Counsel"), dated and
delivered the date of effectiveness of such amendment, the date of filing with
the Commission of such supplement or other document, or Time of Delivery, as the
case may be, in form and substance satisfactory to the Manager, of the same
tenor as the opinions set forth in Annex III of this Agreement (and, to the
extent required in Section 5(f) of this Agreement, as set in forth in Annex II
of this Agreement), but modified as necessary to relate to the Registration
Statement and the Prospectus as amended and supplemented to the time of delivery
of such opinion;
(o) Upon commencement of the offering of Shares under this
Agreement, and each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented to include additional amended financial
information, (ii) Shares are delivered to the Manager pursuant to a Terms
Agreement, or (iii) the Company shall file an annual report on Form 10-K, to
cause the Accountants, or other independent accountants reasonably satisfactory
to the Manager, forthwith to furnish the Manager a letter, dated the date of
effectiveness of such amendment, the date of filing of such supplement or other
document with the Commission, or the Time of Delivery, as the case may be, in
form reasonably satisfactory to the Manager, of the same tenor as the letter
referred to in Section 5(d) of this Agreement but modified to relate to the
Registration Statement and the Prospectus, as amended and supplemented to the
date of such letter;
(p) That it consents to the Manager trading in the Company's
Common Stock for the Manager's own account and for the account of its clients at
the same time as sales of Shares occur pursuant to this Agreement or pursuant to
a Terms Agreement;
(q) If to the knowledge of the Company, any condition set forth in
clause (a), (b), (c), (d), (e), (f), (h) or (i) of Section 5 of this Agreement
shall not have been satisfied on the applicable Settlement Date, to offer to any
person who has agreed to purchase Shares from the Company as the result of an
offer to purchase solicited by the Manager the right to refuse to purchase and
pay for such Shares;
8
(r) Not to at any time, directly or indirectly, take any action
intended, or which might reasonably be expected, to cause or result in, or which
will constitute, stabilization of the price of the shares of Common Stock to
facilitate the sale or resale of any of the Shares;
(s) To disclose, as required by the Exchange Act, in the Company's
quarterly reports on Form 10-Q and annual reports on Form 10-K, the information
with respect to sales of Shares pursuant to this Agreement;
(t) That each acceptance by the Company of an offer to purchase
Shares hereunder through the Manager as sales agent, and each execution and
delivery by the Company of a Terms Agreement, shall be deemed to be an
affirmation to the Manager that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and correct as
of the date of such acceptance or of such Terms Agreement as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the Settlement Date for the Shares relating to
such acceptance or as of the Time of Delivery relating to such sale, as the case
may be, as though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Shares); and
(u) To furnish to the Manager during the term of this Agreement
such other information as the Manager may reasonably request regarding the
Company and its Significant Subsidiaries necessary for the Manager to confirm
information included in the Prospectus, in any Prospectus Supplement in which
the Manager is named and in the Registration Statement, provided the Manager and
its counsel reasonably believe such information to be necessary in order for the
Manager to satisfy its diligence obligations and such information is not
otherwise publicly available or obtainable by the Manager without incurring
undue expense.
SECTION 5. Conditions of Manager's Obligations. The obligations of the
Manager hereunder and under any Terms Agreement are subject to (i) the accuracy
of the representations and warranties on the part of the Company on the date
hereof, any applicable date referred to in Section 4(l) of this Agreement, the
date of any executed Terms Agreement and as of each Settlement Date and Time of
Delivery, (ii) the performance by the Company of its obligations hereunder and
(iii) to the following additional conditions precedent:
(a) No stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act, and no order directed at or in
relation to any document incorporated by reference therein and no order
preventing or suspending the use of the Prospectus has been issued by the
Commission, and no suspension of the qualification of the Shares for offering or
sale in any jurisdiction, or to the knowledge of the Company or the Manager of
the initiation or threatening of any proceedings for any of such purposes, has
occurred; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and (iii) the
Prospectus and all amendments or supplements thereto, or modifications thereof,
if any, shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they are made,
not misleading.
(b) No material and unfavorable change, financial or otherwise
(other than as referred to in the Registration Statement and Prospectus), in the
business or condition of the Company and its Significant Subsidiaries, taken as
a whole, shall have occurred.
(c) The Company shall furnish to the Manager, at every date
specified in Section 4(m) of this Agreement, an opinion of Company Counsel,
addressed to the Manager, and dated as of such date, and in form satisfactory to
the Manager, stating those opinions set forth in Annex II of this Agreement. In
rendering the foregoing opinion, counsel may rely, to the extent they deem such
reliance proper, on the opinions (in form and substance reasonably satisfactory
to the Manager) of other counsel acceptable to the Manager as to matters
governed by the laws of jurisdictions other than the United States, the State of
Delaware and the State of New York, and as to matters of fact, upon certificates
of officers of the Company and of government officials; provided that such
counsel shall state that the opinion of any other counsel is in form
satisfactory to such counsel and, in such counsel's opinion, such counsel and
the Manager are justified in relying on such opinions of other counsel.
(d) At the dates specified in Section 4(o) of this Agreement, the
Manager shall have received from the Accountants letters dated the date of
delivery thereof and addressed to the Manager in form and substance reasonably
satisfactory to the Manager.
(e) The Company will deliver to the Manager a certificate of the
Company, (i) dated as of and delivered on each Filing Date and (ii) dated as of
and delivered on the Time of Delivery pursuant to any Terms Agreement (each, a
"Certificate Date"), of one of its executive officers or other individual who
has been delegated authority by such executive officer to act in the officer's
capacity certifying on behalf of the Company that to the best of his or her
knowledge (A) the representations and
9
warranties of the Company as set forth in this Agreement are true and correct as
of the Certificate Date, (B) the Company has performed such of its obligations
under this Agreement as are to be performed at or before each such Certificate
Date, and (C) the conditions set forth in paragraphs (a) and (b) of Section 5
have been met.
In addition, on each Certificate Date, the certificate shall also state
that the Shares to be sold on that date have been duly and validly authorized by
the Company and that all corporate action required to be taken for the
authorization, issuance and sale of the Shares on that date has been validly and
sufficiently taken.
(f) The Manager shall have received, at every date specified in
Section 4(n) of this Agreement, the favorable opinion of the General Counsel or
such other in-house counsel reasonably satisfactory to the Manager, dated as of
such date, and in form and substance reasonably satisfactory to the Manager,
stating those opinions set forth in Annex III of this Agreement; provided,
however, that, on any date that (x) the General Counsel is required to deliver
an opinion pursuant to Section 4(n) of this Agreement and (y) the Company
Counsel is not required to deliver an opinion pursuant to Section 4(m) of this
Agreement, the opinion to be provided by the General Counsel on such date
pursuant to this Section 5(f) shall also include the opinions set forth in
paragraphs (2) through (9) of Annex II of this Agreement.
In rendering the foregoing opinion, counsel may rely, to the extent it
deems such reliance proper, on the opinions (in form and substance satisfactory
to the Manager) of other counsel acceptable to the Manager as to matters
governed by the laws of jurisdictions other than the United States and the State
of Delaware, and as to matters of fact, upon certificates of officers of the
Company and of government officials; provided that such counsel shall state that
the opinion of any other counsel is in form satisfactory to such counsel and, in
such counsel's opinion, such counsel and the Manager are justified in relying on
such opinions of other counsel.
(g) The Manager shall have received, at every date specified in
Section 4(n) of this Agreement, the favorable opinion of counsel to the Manager,
dated as of such date, and in form and substance satisfactory to the Manager;
provided, however, that such opinion may be limited to the matters specified in
paragraphs (1), (2), (3), (6), (7), (8) and (10) of Annex II to this Agreement.
(h) All filings with the Commission required by Rule 424 under the
Act to have been filed by the Settlement Date or the Time of Delivery, as the
case may be, shall have been made within the applicable time period prescribed
for such filing by Rule 424.
(i) The Shares shall have been approved for listing on the NYSE,
subject only to notice of issuance at or prior to the Settlement Date or the
Time of Delivery, as the case may be.
SECTION 6. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless the
Manager, its directors and officers, and any person who controls the Manager
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which the Manager or any such person may incur under the Act, the
Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 6 being deemed to include the Prospectus and the
Prospectus as amended or supplemented by the Company), or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in either such Registration Statement or Prospectus or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading, except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of the Manager to the Company
expressly for use with reference to the Manager in such Registration Statement
or such Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in such Registration Statement or such Prospectus or necessary to
make such information not misleading; provided, however, that any such indemnity
with respect to such Registration Statement or Prospectus shall not inure to the
benefit of the Manager (or of any person controlling the Manager) on account of
any losses, liabilities, claims or damages arising from the sale of Shares to
any person if any amendments or supplements to such Registration Statement or
Prospectus shall have been furnished to the Manager on a timely basis to permit
the Manager to send or give to such person, with or prior to the written
confirmation of such sale, a copy of such amended or supplemented Prospectus,
except the documents incorporated by reference therein, and the untrue statement
or omission of a material fact contained in such Prospectus and giving rise to
such losses, liabilities,
10
claims or damages was corrected in such amended or supplemented Prospectus
(including the documents incorporated by reference therein).
If any action, suit or proceeding (together, a "Proceeding") is brought
against the Manager or any such person in respect of which indemnity may be
sought against the Company pursuant to the foregoing paragraphs, the Manager or
such person shall promptly notify the indemnifying party in writing of the
institution of such Proceeding and the Company shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify the Company shall not relieve the Company from any
liability which the Company may have to the Manager or any such person or
otherwise except to the extent the Company was materially prejudiced by such
omission. The Manager or such person shall have the right to employ its or their
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of the Manager or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from, additional to or in conflict with those
available to the Company (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company, and paid as incurred (it being understood, however, that the Company
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company shall not be liable for any
settlement of any Proceeding effected without its written consent but if settled
with the written consent of the Company, the Company agrees to indemnify and
hold harmless the Manager and any such person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested the Company to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second sentence of this paragraph, then the Company 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 60 business days after
receipt by the Company of the aforesaid request, (ii) the Company shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to settle.
The Company shall not, 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 may be 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 and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(b) The Manager agrees to indemnify, defend and hold harmless the
Company, its directors and officers and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
and in conformity with information furnished in writing by or on behalf of the
Manager to the Company expressly for use with reference to the Manager in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or in a Prospectus, or arises
out of or is based upon any omission or alleged omission to state a material
fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading.
If any Proceeding is brought against the Company or any such person in respect
of which indemnity may be sought against the Manager pursuant to the foregoing
paragraph, the Company or such person shall promptly notify the Manager in
writing of the institution of such Proceeding and the Manager shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify the Manager shall not relieve
the Manager from any liability which the Manager may have to the Company or any
such person or otherwise. The Company or such person shall have the right to
employ its own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of the Company or such person unless the
employment of such counsel shall have been authorized in writing by the Manager
in connection with the defense of such Proceeding or the Manager shall not have,
within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in conflict
with those available to the Manager (in which case the Manager shall not have
the right to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but the Manager may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of the Manager), in any of which events such fees and expenses shall be
borne
11
by the Manager and paid as incurred (it being understood, however, that the
Manager shall not be liable for the expenses of more than one separate counsel
(in addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Manager shall not be liable for any
settlement of any such Proceeding effected without the written consent of the
Manager but if settled with the written consent of the Manager, the Manager
agrees to indemnify and hold harmless the Company and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested the
Manager to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the Manager 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 60 business
days after receipt by the Manager of the aforesaid request, (ii) the Manager
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the Manager at least 30 days' prior notice of its intention to settle. The
Manager shall not, 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 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.
(c) If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 6 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Manager, on
the other hand, from the offering of the Shares or (ii) if, the allocation
provided by clause (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 (i) above but also the relative fault of the Company, on the one
hand, and the Manager, on the other, in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Manager, on the
other, shall be deemed to be in the same respective proportions as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total compensation (before deducting expenses) received by the
Manager from the sale of Shares on behalf of the Company or as principal. The
relative fault of the Company, on the one hand, and of the Manager, on the
other, shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Manager and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Company and the Manager agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this Section 6, the Manager shall not be
required to contribute any amount in excess of the amount by which the total
price at which in the aggregate all of the Shares sold by the Manager under this
Agreement exceeds the amount of any damage which the Manager has otherwise been
required to pay by reason of such untrue statement or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 6 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of the Manager, its partners, directors
or officers or any person (including each partner, officer or director of such
person) who controls the Manager within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its directors
or officers or any person who controls the Company within the meaning of Section
15 of the Act or Section 20 of the Exchange Act, and shall survive any
termination of this Agreement or the issuance and delivery of the Shares. The
Company and the Manager agree promptly to notify each other of the commencement
of any Proceeding against it and, in the case of the Company, against any of the
Company's officers or directors in connection with the issuance and sale of the
Shares, or in connection with the Registration Statement or Prospectus.
SECTION 7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto or any Terms Agreement, and the
agreements of the Manager contained in Section 6 of this Agreement, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Manager or any controlling persons, or the Company (or any
of their officers, directors or controlling persons), and shall survive delivery
of and payment for the Shares.
12
SECTION 8. Termination. (a) The Company shall have the right, by giving
written notice as hereinafter specified, to terminate the provisions of this
Agreement relating to the solicitation of offers to purchase Shares in its sole
discretion at any time. Any such termination shall be without liability of any
party to any other party except that (i) if Shares have been sold through the
Manager for the Company, then Section 4(g) shall remain in full force and
effect, (ii) with respect to any pending sale, through the Manager for the
Company, the obligations of the Company, including in respect of compensation of
the Manager, shall remain in full force and effect notwithstanding the
termination and (iii) the provisions of Section 4(h), Section 6 and Section 7 of
this Agreement shall remain in full force and effect notwithstanding such
termination.
(b) The Manager shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase Shares in its sole discretion at any
time. Any such termination shall be without liability of any party to any other
party except that the provisions of Section 4(g), Section 4(h), Section 6 and
Section 7 of this Agreement shall remain in full force and effect
notwithstanding such termination.
(c) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a) or (b) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 4(g), Section 4(h), Section
6 and Section 7 shall remain in full force and effect.
(d) Any termination of this Agreement shall be effective on the
date specified in such notice of termination; provided that such termination
shall not be effective until the close of business on the date of receipt of
such notice by the Manager or the Company, as the case may be. If such
termination shall occur prior to the Settlement Date for any sale of Shares,
such sale shall settle in accordance with the provisions of Section 3(a)(vi) of
this Agreement.
(e) In the case of any purchase by the Manager pursuant to a Terms
Agreement, the obligations of the Manager pursuant to such Terms Agreement shall
be subject to termination in the absolute discretion of the Manager, if, since
the time of execution of the Terms Agreement or the respective dates as of which
information is given in the Registration Statement and Prospectus, there shall
have occurred any downgrading, or any notice or announcement shall have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or any Significant Subsidiary by
any "nationally recognized statistical rating organization", as that term is
defined in Rule 436(g)(2) under the Act or, if, at any time prior to the Time of
Delivery, trading in securities on the NYSE or the Nasdaq National Market shall
have been suspended or limitations or minimum prices shall have been established
on the NYSE or the Nasdaq National Market, or if a banking moratorium shall have
been declared either by the United States or New York State authorities, or if
the United States shall have declared war in accordance with its constitutional
processes or there shall have occurred any material outbreak or escalation of
hostilities or other national or international calamity or crisis of such
magnitude in its effect on the financial markets of the United States as, in the
Manager's judgment, to make it impracticable to market the Shares. If the
Manager elects to terminate its obligations pursuant to this Section 8(e), the
Company shall be notified promptly in writing.
SECTION 9. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements under this Agreement and any Terms
Agreement shall be in writing and delivered by hand, overnight courier, mail or
facsimile and, if to the Manager, shall be sufficient in all respects if
delivered or sent ----------------------------------, with a copy for
information purposes to __________________________________________; if to the
Company, it shall be sufficient in all respects if delivered or sent to the
Company at the offices of the Company at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX
00000, Attention: _______________________________________________. Each party to
this Agreement and any Terms Agreement may change such address for notices by
sending to the parties to this Agreement and any Terms Agreement written notice
of a new address for such purpose.
SECTION 10. Parties. The Agreement herein set forth and any Terms
Agreement have been and are made solely for the benefit of the Manager and the
Company and to the extent provided in Section 6 of this Agreement the
controlling persons, directors and officers referred to in such section, and
their respective successors, assigns, heirs, personal representatives and
executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from any of the Manager)
shall acquire or have any right under or by virtue of this Agreement and any
Terms Agreement.
SECTION 11. Adjustments for Stock Splits. The parties acknowledge and
agree that all share related numbers contained in this Agreement and any Terms
Agreement shall be adjusted to take into account any stock split effected with
respect to the Shares.
13
SECTION 12. Additional Sales Agents and/or Principals. Notwithstanding
any provision in this Agreement to the contrary, the Manager acknowledges and
agrees that the Company may, without penalty or recourse under this Agreement,
enter into separate agreements with one or more nationally prominent investment
banks whereby each such investment bank shall act as a sales agent and/or
principal for the issuance and sale of shares of the Company's securities.
SECTION 13. Entire Agreement. This Agreement and any Terms Agreement
constitute the entire agreement and supersedes all other prior and
contemporaneous agreements and undertakings, both written and oral, among the
parties hereto with regard to the subject matter hereof.
SECTION 14. Counterparts. This Agreement and any Terms Agreement may be
signed by the parties in one or more counterparts which together shall
constitute one and the same agreement among the parties.
SECTION 15. Applicable Law. This Agreement, any Terms Agreement and any
claim, counterclaim or dispute of any kind or nature whatsoever arising out of
or in any way relating to this Agreement or any Terms Agreement ("Claim"),
directly or indirectly, shall be governed by, and construed in accordance with,
the internal laws of the State of New York applicable to contracts entered into
and to be performed within such state without regard to conflicts of law
principles.
SECTION 16. Headings. The Section headings in this Agreement and any
Terms Agreement have been inserted as a matter of convenience of reference and
are not a part of this Agreement or any Terms Agreement.
SECTION 17. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company consents to the non-exclusive jurisdiction of such courts and personal
service with respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement and any Terms Agreement is brought by
any third party against the Manager or any indemnified party. Each of the
Manager and the Company (in the case of the Company on its behalf and, to the
extent permitted by applicable law, on behalf of its stockholders and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement and any Terms Agreement. The Company agrees
that a final, non-appealable judgment in any such action, proceeding or
counterclaim brought in any such court shall be conclusive and binding upon the
Company and may be enforced in any other courts in the jurisdiction of which the
Company is or may be subject, by suit upon such judgment.
SECTION 18. Miscellaneous. The Manager, an indirect, wholly owned
subsidiary of ________________, is not a bank and is separate from any
affiliated bank. Because the Manager is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by the Manager are not deposits, are not
insured by the Federal Deposit Insurance Corporation, are not guaranteed by a
branch or agency, and are not otherwise an obligation or responsibility of a
branch or agency.
A lending affiliate of the Manager may have lending relationships with issuers
of securities underwritten or privately placed by the Manager. To the extent
required under the securities laws, prospectuses and other disclosure documents
for securities underwritten or privately placed by the Manager will disclose the
existence of any such lending relationships and whether the proceeds of the
issue will be used to repay debts owed to affiliates of the Manager. If the
foregoing correctly sets forth the understanding between the Company and the
Manager, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Manager. Alternatively, the execution of this Agreement by the Company
and its acceptance by or on behalf of the Manager may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
LUCENT TECHNOLOGIES INC.
By:
-----------------------------------
Name:
Title:
ACCEPTED as of the date
first above written
14
[NAME OF MANAGER]
By: _______________________________
Name:
Title:
15
ANNEX I
LUCENT TECHNOLOGIES INC.
COMMON STOCK
TERMS AGREEMENT
______, 20 __
[name and address of manager]
Dear Sirs:
Lucent Technologies Inc. (the "Company") proposes, subject to the terms and
conditions stated herein and in the Equity Distribution Agreement, dated
________________ (the "Equity Distribution Agreement"), between the Company and
________________, to issue and sell to ______________ the securities specified
in the Schedule hereto (the "Purchased Securities") [, and solely for the
purpose of covering over-allotments, to grant to ____________________ the option
to purchase the additional securities specified in the Schedule hereto (the
"Additional Securities")]*.
[________________ shall have the right to purchase from the Company all or a
portion of the Additional Securities as may be necessary to cover
over-allotments made in connection with the offering of the Purchased
Securities, at the same purchase price per share to be paid by _______________
to the Company for the Purchased Securities. This option may be exercised by
__________ at any time (but not more than once) on or before the thirtieth day
following the date hereof, by written notice to the Company. Such notice shall
set forth the aggregate number of shares of Additional Securities as to which
the option is being exercised, and the date and time when the Additional
Securities are to be delivered (such date and time being herein referred to as
the "Option Closing Date"; provided, however, that the Option Closing Date shall
not be earlier than the Time of Delivery (as set forth in the Schedule hereto)
nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. Payment of the purchase price for
the Additional Securities shall be made at the Option Closing Date in the same
manner and at the same office as the payment for the Purchased Securities. ]*
Each of the provisions of the Equity Distribution Agreement not specifically
related to the solicitation by ____________, as agent of the Company, of offers
to purchase securities is incorporated herein by reference in its entirety, and
shall be deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement [and] [,] the Time of Delivery [and any Option
Closing Date]*, except that each representation and warranty in Section 2 of the
Equity Distribution Agreement which makes reference to the Prospectus (as
therein defined) shall be deemed to be a representation and warranty as of the
date of the Equity Distribution Agreement in relation to the Prospectus, and
also a representation and warranty as of the date of this Terms Agreement [and]
[,] the Time of Delivery [and any Option Closing Date]* in relation to the
Prospectus as amended and supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement (as defined in the Equity
Distribution Agreement), or a supplement to the Prospectus, as the case may be,
relating to the Purchased Securities [and the Additional Securities]*, in the
form heretofore delivered to you is now proposed to be filed with the Securities
and Exchange Commission.
Subject to the terms and conditions set forth herein and in the Equity
Distribution Agreement which are incorporated herein by reference, the Company
agrees to issue and sell to ___________________ and the latter agrees to
purchase from the Company the number of shares of the Purchased Securities at
the time and place and at the purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Terms Agreement, including
those provisions of the Equity Distribution Agreement incorporated herein by
reference, shall constitute a binding agreement between you and the Company.
[Signatures on next page]
* Include only if _____________ has an over-allotment option.
LUCENT TECHNOLOGIES INC.
By:
-------------------------------
Name:
Title:
ACCEPTED as of the date
first above written
]
By:
-------------------------------
Name:
Title:
I-2
SCHEDULE TO ANNEX I
Title of Purchased Securities [and Additional Securities]*:
Common Stock, par value $.01 per share
NUMBER OF SHARES OF PURCHASED SECURITIES:
[Number of Shares of Additional Securities:]*
[Price to Public:]
PURCHASE PRICE BY _______________________
Method of and Specified Funds for Payment of Purchase Price:
By wire transfer to a bank account specified by the Company in same day funds.
Method of Delivery:
Free delivery of Shares to the Manager's account at the Depository Trust Company
in return for payment of the purchase price.
TIME OF DELIVERY:
CLOSING LOCATION:
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Equity Distribution Agreement shall
be delivered as a condition to the Closing:
(1) The opinion referred to in Section 4(m).
(2) The opinion referred to in Section 4(n).
(3) The accountants' letter referred to in Section 4(o).
(4) The officers' certificate referred to in Section 4(l).
(5) Such other documents as the Manager shall reasonably request.
* Include only if ______________ has an over-allotment option.
I-3
ANNEX II
OPINIONS TO BE DELIVERED IN COMPANY COUNSEL OPINIONS
(1) Based solely on a certificate from the Secretary of State of the State of
Delaware, the Company is a corporation validly existing and in good standing
under the laws of the State of Delaware, with full corporate power and authority
to own, lease and operate its properties and conduct its business as described
in the Registration Statement and Prospectus;
(2) The Shares conform in all material respects to the description thereof
contained in the Registration Statement and Prospectus. The Shares have been
duly and validly authorized by the Company and, when issued and delivered
against payment therefor in accordance with this Agreement, will be validly
issued, fully paid and nonassessable. The Shares have been duly authorized for
listing, subject to official notice of issuance, on the New York State Exchange.
Holders of outstanding shares of Common Stock of the Company are not entitled to
preemptive rights in connection with the issuance of the Shares;
(3) This Agreement has been duly authorized, executed and delivered by the
Company;
(4) No authorization, approval or other action by, and no notice to, consent of,
order of, or filing with, any United States Federal, New York or, to the extent
required under the General Corporation Law of the State of Delaware, Delaware
governmental authority or regulatory body is required for the consummation of
the transactions contemplated by this Agreement except, (i) such as may have
been obtained or made prior to the date of such opinion and (ii) such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and distribution by the Manager of the Shares;
(5) None of the issue and sale of the Shares, the consummation of any other of
the transactions contemplated by this Agreement or the performance of the terms
of this Agreement (i) will conflict with, result in a breach of, or constitute a
default under the Amended and Restated Certificate of Incorporation or By-Laws
of the Company; or (ii) will contravene any law, rule or regulation of the
United States or the State of New York or the General Corporation Law of the
State of Delaware;
(6) The Registration Statement became effective upon the Act on
_________________, and thereupon the offering of the Shares as contemplated by
the Prospectus became registered under the Act and, to such counsel's knowledge,
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act;
(7) The Registration Statement and the Prospectus (including any documents
incorporated by reference into the Registration Statement and the Prospectus, at
the time they became effective or were filed, as amended) comply (or complied)
in all material respects as to form with the requirements of the Act or the
Exchange Act, as applicable (except that such counsel expresses no opinion as to
financial statements and related schedules and any other statistical, accounting
and financial data contained in the Registration Statement or the Prospectus, or
incorporated by reference therein);
(8) The statements contained in the Registration Statement and the Prospectus
under the captions "Description of Capital Stock", insofar as they are
descriptions of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate in all material respects
and present fairly the information purported to be described therein;
(9) The Company is not an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended; and
(10) Although such counsel has made certain inquiries and investigations in
connection with the preparation of the Registration Statement, the Prospectus
and the Prospectus Supplement, the limitations inherent in the role of outside
counsel are such that such counsel cannot and do not assume responsibility for
the accuracy or completeness of the statements made in the Registration
Statement, the Prospectus and the Prospectus Supplement, except insofar as such
statements relate to such counsel and except to the extent set forth in
subparagraph (8). Subject to the foregoing, such counsel advises the Manager
that its work in connection with this matter did not disclose any information
that gave it reason to believe that: (i) the Registration Statement, at the time
the Registration Statement became effective, the Prospectus or the Prospectus
Supplement, as of the date of such opinion (in each case except for the
financial statements and other information of a statistical, accounting or
financial nature included therein, and the Statement of Eligibility (Form T-1)
included as an Exhibit to the Registration Statement, as to which such counsel
expresses no view), was not appropriately responsive in all material respects to
the requirements of the Securities Act and the Trust Indenture Act of 1939 and
the applicable rules and regulations of the Commission thereunder, or (ii) the
Registration Statement, at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not
misleading, or that the Prospectus or the Prospectus Supplement, as of the date
of such opinion, includes 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 circumstances under which they were made, not misleading (in each case
except for the financial statements and other information of a statistical,
accounting or financial nature included therein, as to which such counsel
expresses no view).
II-2
ANNEX III
OPINIONS TO BE DELIVERED IN GENERAL COUNSEL OPINIONS
1. The Company has full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and Prospectus.
2. The Company is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which the ownership or leasing
of its business requires such qualification, other than jurisdictions in which
the failure so to qualify could not reasonably be expected to have a material
adverse effect on the condition (financial or otherwise), results of operations,
business or properties of the Company and its Significant Subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary course of
business (a "Material Adverse Effect").
3. (a) Based solely on certificates from the Secretary of State or comparable
state or local officials of its respective jurisdiction of organization, each of
the United States Significant Subsidiaries, as identified on Exhibit A, is a
corporation validly existing and in good standing under the laws of the
jurisdiction of its organization.
(b) Each United States Significant Subsidiary has full corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Registration Statement and Prospectus.
4. Each United States Significant Subsidiary is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which the ownership or leasing of its business requires such qualification,
other than jurisdictions in which the failure so to qualify could not reasonably
be expected to have a Material Adverse Effect; all of the issued shares of
capital stock of each United States Significant Subsidiary owned by 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, free and
clear of all liens, encumbrances, equities or claims, other than those
identified in either the Prospectus or the documents incorporated therein by
reference or which could not be expected to have a Material Adverse Effect.
5. Holders of outstanding shares of Common Stock of the Company are not entitled
to any non-statutory preemptive rights in connection with the issuance of the
Shares.
6. To my knowledge, there (a) is no commitment or arrangement to issue, and (b)
are no outstanding options, warrants, or other rights calling for the issuance
of any share of capital stock of the Company or any United States Significant
Subsidiary to any person or any security or other instrument that by its terms
is convertible into, exercisable for or exchangeable for capital stock of the
Company, except (x) as described in the Registration Statement or the
Prospectus, (y) such which could not have a Material Adverse Effect, and (z)
options for shares of capital stock of the Company, restricted stock awards, or
any other awards granted to employees, officers, or directors of the Company or
any subsidiary of the Company.
7. None of the issue and sale of the Shares, the consummation of any other
transactions contemplated by the Distribution Agreement and any applicable Terms
Agreement, upon execution and delivery of such Terms Agreement, or the
performance of the terms of the Distribution Agreement, and any applicable Terms
Agreement, upon execution and delivery of such Terms Agreement, will conflict
with, result in a breach of, or constitute a default under, the terms of any
material agreement or other material instrument to which the Company or any of
its United States Significant Subsidiaries is a party or bound or will
contravene any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any United States Significant
Subsidiary, other than those which could not be expected to have a Material
Adverse Effect.
8. I do not know of any legal or governmental proceedings, pending or
threatened, which (a) are required to have been disclosed as of the date hereof
by the Company pursuant to the disclosure standards of Item 103 of Regulation
S-K under the Securities Act, which have not been disclosed as of the date
hereof by the Company in substantial conformance with such disclosure standards
or (b) seek to challenge the legality or enforceability of the Distribution
Agreement.
9. The statements contained in "Item 3. Legal Proceedings" of the Company's
annual report on Form 10-K for the fiscal year ended September 30, 20__, filed
on ________________, as updated in the Company's quarterly report for the
quarterly period ended [complete as appropriate][, and the Current Reports on
Form 8-K filed by the Company], in each case insofar as they constitute
summaries of legal matters, fairly summarize the matters referred to therein.
I have not myself checked the accuracy or completeness of, or otherwise
verified, the information furnished with respect to the statements contained in
the Registration Statement and the Prospectus, but I or attorneys under my
supervision have generally reviewed and discussed with certain officers and
employees of the Company the information furnished, whether or not subject to
check and verification by me or attorneys under my supervision. Based on such
considerations, review and discussion, but
without independent check or verification, except as stated, and except as to
financial statements, pro forma financial statements, schedules, and other
statistical, accounting, or financial data contained or incorporated by
reference therein, the information under the caption "Ratio of Earnings to Fixed
Charges," and the Statement of Eligibility (Form T-1) included as an exhibit to
the Registration Statement, as to which I am not called upon to express an
opinion or belief or view: (a) I believe that (i) each part of the Registration
Statement at the time such part became effective complied, and the Registration
Statement and the Prospectus at the date of the Distribution Agreement complied,
as to form in all material respects with the requirements of the Act and the
applicable instructions, rules and regulations of the Commission thereunder;
(ii) each document or portion thereof incorporated by reference in the
Registration Statement complied as to form at the time of filing thereof with
the Commission in all material respects with requirements of the Securities
Exchange Act of 1934, as amended, together with the applicable instructions,
rules and regulations of the Commission thereunder; and (b) I hereby advise you
that nothing came to my attention which would lead me to believe (i) any part of
the Registration Statement at the time it became effective 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;
and (ii) as of the date hereof the Prospectus contains any 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, in the light of the circumstances
under which they were made, not misleading (in each case except for the
financial statements and other statistical, accounting or financial data
included therein, as to which I am not called upon to express an opinion or
belief or view). As used in this paragraph, the terms "Registration Statement"
and "Prospectus" include the documents or portions thereof incorporated by
reference therein.
III-2
