EXHIBIT 1.2
PURCHASE AGREEMENT FOR
CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2034
XXXXX INDUSTRIES, INC.
(a Delaware corporation)
Convertible Senior Subordinated Notes due 2034
PURCHASE AGREEMENT
Dated: December 22, 2003
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EXECUTION COPY
XXXXX INDUSTRIES, INC.
(a Delaware corporation)
$506,304,000 at Maturity
Convertible Senior Subordinated Notes due 2034
PURCHASE AGREEMENT
December 22, 2003
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc One Capital Markets, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
McDonald Investments Inc., a KeyCorp Company
SunTrust Capital Markets, Inc.
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxxx Industries, Inc., a Delaware corporation (the "Company"),
confirms its agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") Banc One Capital Markets, Inc., Xxxxxx X.
Xxxxx & Co. Incorporated, McDonald Investments Inc., a KeyCorp Company and
SunTrust Capital Markets, Inc., and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx, Banc One Capital Markets, Inc., Xxxxxx X. Xxxxx
& Co. Incorporated, McDonald Investments Inc., a KeyCorp Company and SunTrust
Capital Markets, Inc. are acting as representatives (in such capacity, the
"Representatives"), with respect to (i) the issue and sale by the Company and
the purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts at maturity set forth in said Schedule A of
$506,304,000 aggregate principal amount at maturity of the Company's Convertible
Senior Subordinated Notes due 2034 (the "Convertible Notes"), and (ii) with
respect to the grant by the Company to the Underwriters, acting severally and
not jointly, of the option described in Section 2(b) hereof to purchase all or
any part of an additional $75,945,000 principal amount at maturity of
Convertible Notes to cover overallotments, if any. The aforesaid $506,304,000
principal amount at maturity of Convertible Notes (the "Initial Securities") to
be purchased by the Underwriters and all or any part of the $75,945,000
principal amount at maturity of Convertible Notes subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities."
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The Securities are to be issued pursuant to the first supplemental indenture
dated as of December 29, 2003 to the indenture dated as of November 28, 2003
(the indenture as so supplemented, the "Indenture") between the Company and
SunTrust Bank, as trustee (the "Trustee"). Notes issued in book-entry form will
be issued to Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated prior to the First Delivery Date (as
defined in Section 2(b)) (the "DTC Agreement"), between the Company and DTC.
The Securities are convertible into shares of common stock, par value
$0.01 per share, of the Company (the "Underlying Common Stock") in accordance
with the terms of the Securities and the Indenture, at the initial conversion
price specified in Schedule B hereto.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered. The Indenture has been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-110491), for the
registration of debt securities, common stock, stock purchase contracts and
equity units (including the Securities and the Underlying Common Stock) under
the Securities Act of 1933 (the "1933 Act"). Such registration statement was
declared effective by the Commission on December 1, 2003. Such registration
statement, as amended, including the financial statements, exhibits and
schedules thereto, in the form in which it was declared effective by the
Commission under the 1933 Act (the "1933 Act Regulations"), including all
documents incorporated or deemed incorporated by reference therein and any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A (the "Rule 430A Information") under the 1933 Act or the Securities
Exchange Act of 1934 (the "1934 Act") is called the "Registration Statement."
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The Company has prepared and filed with the
Commission a preliminary prospectus supplement relating to the Securities
together with the prospectus included in the Registration Statement at the time
it was declared effective (collectively, together with all documents
incorporated or deemed incorporated therein by reference, the "preliminary
prospectus"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a final prospectus supplement relating to the
Securities together with the prospectus included in the Registration Statement
at the time it was declared effective, in accordance with the provisions of Rule
424(b) of the 1933 Act. Such final prospectus supplement and prospectus in the
form first furnished to the Underwriters to confirm sales of the Securities,
together with all documents incorporated by reference therein pursuant to the
1933 Act or the 1934 Act, is herein called the "Prospectus." For purposes of
this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or
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supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act"), which is incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
The Securities are being issued in connection with the Company's
redemption of its outstanding senior notes. The Company has also entered into a
purchase agreement dated as of December 22, 2003 (the "Common Stock Purchase
Agreement") with a group of underwriters in connection with the sale of
4,200,000 shares of common stock (the "Common Stock"), with an option to
purchase all or any part of 630,000 additional shares of Common Stock to cover
overallotments, if any. The Company also intends to enter into $625.0 million
principal amount of senior secured credit facilities in connection with the
Neptune Acquisition (the "New Senior Secured Credit Facilities") by and among
the Company, the other credit parties party thereto, XX Xxxxxx Chase Bank as
administrative agent, Wachovia Bank National Association as syndication agent,
Xxxxxxx Xxxxx Capital Corporation as documentation agent and the lenders party
thereto. The Company intends to use all of the proceeds from the sale of the
Securities to redeem its outstanding senior notes. The Company intends to use
the proceeds from the Common Stock offering together with borrowings under the
New Senior Secured Credit Facilities to pay for the Neptune acquisition and the
cash portion of the DAP Technologies acquisition, repay the Company's existing
revolving credit facility and pay related fees and expenses.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act
and has complied with the requirements of Rule 415 with respect to the
Registration Statement. Each of the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendment thereto
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the date hereof (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations and the 1939 Act and the rules
and regulations of the Commission under the 1939 Act (the "1939 Act
Regulations") and did not and will 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.
Neither the Prospectus nor any amendments or supplements thereto, at
the time the Prospectus or any such amendment or supplement was issued
and at the Closing Time (and, if any Option Securities are
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purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly for
use in the Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto).
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto complied when so filed in all material respects with
the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with
this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), at the time they
were or are filed, they did not and will 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.
(iii) Independent Accountants. PricewaterhouseCoopers LLP,
who certified the financial statements and supporting schedules
included in the Registration Statement, is an independent public
accountant with respect to the Company as required by the 1933 Act and
the 1933 Act Regulations. PricewaterhouseCoopers LLP has not provided
to the Company or its subsidiaries any non-audit services, the
provision of which is prohibited by applicable law or accounting
standards. To the knowledge of the Company, PricewaterhouseCoopers LLP,
who certified Neptune's financial statements included in the
Registration Statement, is an independent public accountant with
respect to Neptune as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have
been prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the
periods involved. To the knowledge of the Company, the financial
statements of Neptune included in the Registration Statement and the
Prospectus, together with the related schedules and notes, present
fairly in all material respects the financial position of Neptune and
its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of Neptune and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectus
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present fairly in all material respects the information shown therein,
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein, and in the Company's
opinion the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular dividends on the Common Stock in
amounts per share that are consistent with past practice, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into
and perform its obligations under this Agreement; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing could not reasonably be expected to result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the
Company over which the Company controls a majority of the vote or has a
majority of the economic interest has been duly organized and is
validly existing as a corporation, partnership or limited liability
company (or the equivalent concept in a foreign jurisdiction) in good
standing under the laws of the jurisdiction of its incorporation or
organization, has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation, partnership
or limited liability company to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing could not reasonably be expected to result in a Material
Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock, limited
partnership interests or membership interests of each such subsidiary
has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock, limited partnership interests or membership
interests of any subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such subsidiary.
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(viii) Capitalization. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" as of the date shown in the Prospectus (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus. The shares of issued and
outstanding capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Power and Authority. The Company has all requisite
corporate or such other similar power and authority to enter into and
perform its obligations under this Agreement, the Indenture, the
Securities, the Underlying Common Stock, the New Senior Secured Credit
Facilities, the DTC Agreement and the Stock Purchase Agreement, in each
case to the extent a party thereto, and to consummate all the
transactions in connection therewith as contemplated in the
Registration Statement and the Prospectus.
(x) Authorization of Agreement. This Agreement has been
duly authorized, executed, and delivered by the Company.
(xi) Authorization of the Indenture. The Indenture has
been duly authorized by the Company and duly qualified under the 1939
Act and, when duly executed and delivered by the Company and the
Trustee, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(xii) Authorization of the Securities. The Securities have
been duly authorized and, at the Closing Time, will have been duly
executed by the Company and, when authenticated, issued and delivered
in the manner provided for in the Indenture and delivered against
payment of the purchase price therefor as provided in this Agreement,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law),
and will be in the form contemplated by, and entitled to the benefits
of, the Indenture.
(xiii) Authorization and Description of the Underlying
Common Stock. The Underlying Common Stock conforms to all statements
relating thereto contained or incorporated by reference in the
Prospectus. Upon issuance and delivery of the Securities in accordance
with this Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof for shares of
Underlying Common Stock in accordance with the terms of the Securities
and the Indenture; the shares of Underlying Common Stock issuable upon
conversion of the Securities have been duly authorized and reserved
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for issuance upon such conversion by all necessary corporate action and
such shares, when issued upon such conversion, will be validly issued
and will be fully paid and non-assessable; no holder of such shares
will be subject to debts or liabilities of the Company by reason of
being such a holder; and the issuance of such shares upon such
conversion will not be subject to the preemptive or other similar
rights of any securityholder of the Company.
(xiv) Authorization of the Stock Purchase Agreement. The
Stock Purchase Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement
of the Company enforceable against the Company in accordance with its
terms, subject, as to enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
rights and remedies of creditors generally and the effect of general
principles of equity.
(xv) Authorization of the New Senior Secured Credit
Facilities. The New Senior Secured Credit Facilities have been
authorized by the Company and, when executed and delivered by the
Company, will constitute valid and binding agreements of the Company
enforceable against the Company in accordance with their terms,
subject, as to enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally and to the effect of general principles
of equity.
(xvi) Description of the Securities, the Indenture, the New
Senior Secured Credit Facilities and the Stock Purchase Agreement. The
Securities, the Indenture, the New Senior Secured Credit Facilities and
the Stock Purchase Agreement will conform in all material respects to
the respective statements relating thereto contained in the Prospectus
and will be in substantially the respective forms filed or incorporated
by reference, as the case may be, as exhibits to the Registration
Statement.
(xvii) Absence of Defaults and Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or
by-laws or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments")
except for such defaults that could not reasonably be expected to
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture, the New Senior Secured
Credit Facilities, the DTC Agreement and the Stock Purchase Agreement
and the consummation of the transactions contemplated herein and
therein and in the Registration Statement after giving pro forma effect
to all such transactions collectively (including the issuance and sale
of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds" and the issuance of the shares of Underlying Common Stock
issuable upon conversion of the Securities) and compliance by the
Company with its obligations hereunder and under the Indenture and the
Securities have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, the
Agreements and Instruments (except for
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such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that, singly or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect), nor
will such action result in any violation (except for such violations
that, singly or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect) of the provisions of the charter
or by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any subsidiary.
(xviii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, could reasonably be expected to
result in a Material Adverse Effect.
(xix) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which, singly or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect, or which, singly or in the aggregate, could reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations
hereunder.
(xx) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, except where the failure
to own or have the right to use could not reasonably be expected to
have a Material Adverse Effect, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or any of its subsidiaries therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, could reasonably be expected to result in a Material
Adverse Effect.
(xxi) Stabilization or Manipulation. Neither the Company
nor any affiliate of the Company has taken, nor will the Company or any
affiliate take, directly or indirectly, any action which is designed to
or which has constituted or which would be expected to cause or result
in stabilization or manipulation of the price of any security of the
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Company to facilitate the sale or resale of the Securities or the
Underlying Common Stock. The Company has not distributed and, prior to
the later to occur of (i) the Closing Time and (ii) completion of the
distribution of the Securities, will not distribute any offering
material in connection with the offering and sale of the Securities
other than the preliminary or final prospectus, if any, permitted by
the 1933 Act and approved by the Representatives.
(xxii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder, the issuance of shares of Underlying
Common Stock upon conversion of the Securities, the consummation of the
transactions contemplated by this Agreement or for the due execution,
delivery or performance of this Agreement, the Indenture, the DTC
Agreement, the New Senior Secured Credit Facilities or the Stock
Purchase Agreement by the Company, except such as have been already
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and except for the qualification
of the Indenture under the 1939 Act.
(xxiii) Possession of Licenses and Permits. The Company and
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure so to possess could not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect; the Company and its subsidiaries are in compliance with the
terms and conditions of all such Governmental Licenses, except where
the failure so to comply could not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; all of
the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure
of such Governmental Licenses to be in full force and effect could not,
singly or in the aggregate, reasonably be expected to result in a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could reasonably be expected to result in a Material
Adverse Effect.
(xxiv) Title to Property. The Company and its subsidiaries
have good and marketable title to all real property owned by the
Company and its subsidiaries and good title to all material personal
property owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under such material
lease or sublease, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such material lease or sublease.
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(xxv) Tax Returns. All United States federal income tax
returns of the Company and its subsidiaries required by law to be filed
have been filed, except where the failure to file such returns could
not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and all taxes shown by such returns or
otherwise assessed, which are due and payable, have been paid, except
assessments against which appeals have been or will be promptly taken
and as to which adequate reserves have been provided. The Company and
its subsidiaries have filed all other tax returns that are required to
have been filed by them pursuant to applicable foreign, federal, state,
local or other law except insofar as the failure to file such returns
could not reasonably be expected to result in a Material Adverse
Effect, and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company and its
subsidiaries, except for such taxes, if any, as are being contested in
good faith and by appropriate proceedings and as to which adequate
reserves have been provided. The charges, accruals and reserves on the
books of the Company in respect of all federal, state, local and
foreign tax liabilities of the Company and its subsidiaries for any
years not finally determined are adequate to meet any assessments or
re-assessments for additional income tax for any years not finally
determined, except to the extent of any inadequacy that could not
reasonably be expected to result in a Material Adverse Effect.
(xxvi) Insurance. The Company and its subsidiaries carry or
are entitled to the benefits of insurance, with financially sound and
reputable insurers, in such amounts, containing such deductibles and
covering such risks as commercially prudent under the circumstances,
except where the failure to do so could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and all such insurance is in full force and effect.
(xxvii) Related Party Transactions. No relationship, direct
or indirect, exists between or among any of the Company or any
affiliate of the Company on the one hand, and any former or current
director, officer, stockholder, customer or supplier of any of them, on
the other hand, which is required by the 1933 Act or by the rules and
regulations enacted thereunder to be described in the Registration
Statement or the Prospectus which is not so described or is not
described as required.
(xxviii) Suppliers. No contract manufacturer or supplier of
merchandise to the Company or any of its subsidiaries has ceased
shipments of merchandise to the Company or any of its subsidiaries
since September 30, 2003, other than in the normal and ordinary course
of business consistent with past practices, which cessation could not
reasonably be expected to result in a Material Adverse Effect.
(xxix) Accounting Controls. The Company and its consolidated
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's authorization; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's authorization;
(D) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences; (E) material information relating to
the Company and its consolidated subsidiaries is promptly made known to
the officers responsible for establishing and maintaining the system of
internal accounting controls; and (F) any significant deficiencies or
weaknesses in the design or operation of internal accounting
10
controls which could adversely affect the Company's ability to record,
process, summarize and report financial data, and any fraud whether or
not material that involves management or other employees who have a
significant role in internal controls, are adequately and promptly
disclosed to the Company's independent auditors and the audit committee
of the Company's board of directors.
(xxx) Disclosure Controls. The Company and its consolidated
subsidiaries employ disclosure controls and procedures that are
designed to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange Act
is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms, and is
accumulated and communicated to the Company's management, including its
principal executive officer or officers and principal financial officer
or officers, as appropriate to allow timely decisions regarding
disclosure.
(xxxi) Investment Company Act. The Company is not required,
and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxxii) Environmental Laws. Except as described in the
Registration Statement and except as could not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products or
asbestos-containing materials (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that would reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(xxxiii) Stock Purchase Agreement. To the knowledge of the
Company, the representations and warranties of Neptune contained in the
Stock Purchase Agreement are true and correct in all material respects.
All consents from third parties and government entities necessary to
consummate the Neptune Acquisition have been obtained.
11
(xxxiv) Tax Treatment of Convertible Notes. The Company
believes, based on the advice of its tax counsel, that the Convertible
Notes will be treated as indebtedness for U.S. federal income tax
purposes and will be subject to U.S. Treasury regulations section
1.1275-4(b).
(xxxv) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price set forth in Schedule B, the aggregate principal
amount at maturity of Initial Securities set forth in Schedule A opposite the
name of such Underwriter, plus any additional aggregate principal amount at
maturity of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
$75,945,000 principal amount at maturity of Securities at the same price set
forth in Schedule B for the Initial Securities, plus accrued interest, if any,
from the Closing Date to the Date of Delivery (as defined below). The option
hereby granted will expire 13 days after the date of the issuance of the Initial
Securities and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the
offering and distribution of the Initial Securities upon notice by Xxxxxxx Xxxxx
to the Company setting forth the number of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities, which shall be no earlier than
two business days following the date on which the Company receives such notice
or as otherwise agreed to by the parties hereto. Subject to the foregoing, any
such time and date of delivery (a "Date of Delivery") shall be determined by
Xxxxxxx Xxxxx, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the aggregate principal amount at maturity of
Option Securities then being purchased which the aggregate principal amount at
maturity of Initial Securities set forth in Schedule A opposite the name of such
Underwriter bears to the aggregate principal amount of Initial Securities.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of King &
Spalding LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX 00000, or at such other place as
shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(Eastern time) on December 29, 2003 (unless postponed in accordance
12
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives, through the facilities of the DTC, for the respective
accounts of the Underwriters of the Securities to be purchased by them. It is
understood that each Underwriter has authorized the Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the Initial Securities and the Option Securities, if any, which it
has agreed to purchase. Xxxxxxx Xxxxx, individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the
purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the
Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Representatives
immediately (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus
or any amended Prospectus, in each case relating to the Securities,
shall have been filed, (ii) of the receipt of any comments from the
Commission relating to the Prospectus or the Registration Statement,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus
or any document incorporated by reference therein and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will effect the
filings of the preliminary prospectus and the Prospectus as necessary
pursuant to Rule 424(b) in compliance with such rule. The Company will
make every reasonable effort to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(b) Filing of Amendments. Until the end of the period
during which a Prospectus is required to be delivered under the 1933
Act in connection with the offering of Securities, the Company will
give the Representatives notice of its intention to file or prepare any
amendment to the Registration Statement (including any filing under
Rule 462(b)) or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, but in either case only to the extent
that such amendment, supplement or revision relates to the Securities
to be sold hereunder, whether pursuant to the 1933 Act, the 1934 Act or
13
otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall object.
This subsection (b) shall not apply to regular filings of periodic or
current reports pursuant to the 1934 Act.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto relating to
the Securities (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto relating to
the Securities (without exhibits) for each of the Underwriters. The
copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the
extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations, the
1934 Act Regulations and the 1939 Act and the 1939 Act Regulations so
as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend
the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
14
(f) Blue Sky Qualifications. The Company will use its
best efforts, in cooperation with the Underwriters, to qualify the
Securities and the shares of Underlying Common Stock issuable upon
conversion of Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions (domestic or
foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from
the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will
also supply the Underwriters with such information as is necessary for
the determination of the legality of the Securities for investment
under the laws of such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Reservation of Securities. The Company will reserve
and keep available at all times, free of preemptive or other similar
rights, a sufficient number of shares of common stock, for the purpose
of enabling the Company to satisfy any obligations to issue such
Underlying Common Stock upon conversion of the Securities.
(i) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(j) Rating of Securities. The Company shall take all
reasonable action necessary to enable Standard & Poor's Rating
Services, a division of McGraw Hill, Inc. ("S&P"), and Xxxxx'x
Investors Service, Inc. ("Moody's"), to provide the credit ratings of
the Securities.
(k) Listing. The Company will use its best efforts to
effect the listing of the Underlying Common Stock issuable upon
conversion of the Securities on the New York Stock Exchange.
(l) Restriction on Sale of Securities. During a period of
180 days from the date of the Prospectus, the Company will not, without
the prior written consent of Xxxxxxx Xxxxx, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale
of, or otherwise transfer or dispose of, any debt securities of the
Company.
(m) Restriction on Sale of Underlying Common Stock.
During a period of 90 days from the date of the Prospectus, the Company
will not, without the prior written consent of Xxxxxxx Xxxxx, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Underlying Common Stock or any
securities convertible into or exercisable or exchangeable for
Underlying Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other
15
agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the
Underlying Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Underlying
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Underlying Common Stock issued by the
Company upon the exercise of an option or warrant or the conversion of
a security outstanding on the date hereof and referred to in the
Prospectus, (C) any shares of Underlying Common Stock issued or options
to purchase Underlying Common Stock granted pursuant to existing
employee or director benefit plans of the Company referred to in the
Prospectus and registrations in connection with the such issuances of
grants, (D) any shares of Common Stock sold pursuant to the Common
Stock Purchase Agreement, (E) issuances of Underlying Common Stock
pursuant to any rights plan or any shares of Underlying Common Stock
issued pursuant to any non-employee director stock plan or dividend
reinvestment plan or any related registration, (F) issuances of
Underlying Common Stock in connection with strategic or other
significant investments in which the purchaser agrees to be bound for
any remaining portion of such 90 day period on the above terms or (G)
any shares of Underlying Common Stock issued in any business
combination and registrations related thereto so long as the recipient
agrees to be bound for any remaining portion of such 90 day period on
the above terms.
(n) DTC Clearance. The Company will use its best efforts
in cooperation with the Underwriters to permit the Securities to be
eligible for clearance and settlement through DTC.
(o) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters, the Indenture
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities or the issuance or
delivery of the Underlying Common Stock issuable upon conversion thereof, (iii)
the preparation, issuance and delivery of the certificates for the Securities to
the Underwriters, if any, and the certificates for the Underlying Common Stock
issuable upon conversion thereof, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors, (v) the qualification of the
Securities and the Underlying Common Stock under securities laws in accordance
with the provisions of Section 3(f) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)
the fees and expenses of the Trustee, including the fees and disbursements of
counsel for the Trustee in connection with the Indenture and the Securities,
(ix) the fees and expenses of any transfer agent or registrar for the Underlying
Common Stock, (x) the costs and expenses of the Company relating to investor
presentations on any "road show"
16
undertaken in connection with the marketing of the Securities, including without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of aircraft and
other transportation chartered in connection with the road show (xi) any fees
payable in connection with the rating of the Securities, and (xi) the filing
fees incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National Association of
Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Securities
and the fees and expenses incurred in connection with the listing of the
Underlying Common Stock issuable upon conversion of the Securities on the New
York Stock Exchange and (xiii) the fees and expenses provided for in the
Engagement Letter dated as of October 21, 2003 by and among the Company and
Xxxxxxx Xxxxx, Xxxxxx Xxxxxx & Xxxxx Incorporated, X. X. Xxxxxx Securities, Inc.
and Wachovia Capital Markets, LLC.
(b) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, shall remain effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters.
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the opinion, dated as of Closing
Time, of King & Spalding LLP, counsel for the Company, in the form
attached hereto as Exhibit A. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States and the General Corporation Law of the State of Delaware, upon
the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time,
the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, together with signed or reproduced copies
of such letter for each of the other Underwriters with respect to the
matters set forth in clauses (i), (vi), (vii), (viii), (xii), (xiii),
(xvi) (solely as to the information in the Prospectus under
"Description of Notes") and the paragraph
17
immediately preceding the penultimate paragraph of Exhibit A hereto. In
giving such opinion such counsel may rely, as to all matters governed
by the laws of jurisdictions other than the law of the State of New
York, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory
to the Representatives. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent
they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise or Neptune together with its
subsidiaries taken as a whole, as the case may be, whether or not
arising in the ordinary course of business, and the Representatives
shall have received a certificate of the Company signed by the
President or a Vice President of the Company and by the chief financial
or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change,
(ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time, and (iv) 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, to their knowledge, contemplated by the Commission.
(e) Accountant's Comfort Letters. At the time of the
execution of this Agreement, the Representatives shall have received
from PricewaterhouseCoopers LLP letters dated such date, in form and
substance satisfactory to the Representatives, together with signed or
reproduced copies of such letters for each of the other Underwriters
containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus of the Company and Neptune.
(f) Bring-down Comfort Letters. At Closing Time, the
Representatives shall have received from PricewaterhouseCoopers LLP
letters, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letters furnished pursuant to subsection (e) of
this Section with respect to the Company and Neptune, except that the
specified date referred to shall be a date not more than three business
days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the
Securities shall be rated at least B1 by Moody's Investor's Service
Inc. and BB- by Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc., and the Company shall have delivered to the
Representatives a letter dated the Closing Time, from each such rating
agency, or other evidence satisfactory to the Representatives,
confirming that the Securities have such ratings; and since the date of
this Agreement, there shall not have occurred a downgrading in the
rating assigned to the Securities or any of the Company's other
securities.
18
(h) Approval of Listing. At Closing Time, the Securities
and the Underlying Common Stock issuable on conversion thereof shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(i) No Objection. The NASD has confirmed that it has not
raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(j) Lock-up Agreements. At the date of this Agreement,
the Representatives shall have received an agreement substantially in
the form of Exhibit B-1 and B-2 hereto signed by the persons listed on
Schedule C hereto.
(k) No Material Changes to Stock Purchase Agreement. At
Closing Time, there shall not have been any material amendments,
waivers, or modifications to the Stock Purchase Agreement.
(l) Chief Financial Officer's Certificate. At the Closing
Time, the Underwriters shall have received certificates of the Chief
Financial Officer of the Company with respect to the Company's
financial statements and certain financial information of the Company
and its consolidated subsidiaries, in the form of Exhibit C attached
hereto.
(m) Closing of the Neptune Acquisition, the New Senior
Secured Credit Facilities and Common Stock Sale. At Closing Time, the
Neptune Acquisition and the New Senior Secured Credit Facilities shall
have all closed on substantially the terms set forth in the
Registration Statement.
(n) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and
the statements in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the Company signed by its President or a Vice
President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the
certificate delivered at the Closing Time pursuant to Section
5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinion of Counsel for Company. The opinion of King &
Spalding LLP, counsel for the Company dated such Date of
Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date
of Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
19
(iv) Bring-down Comfort Letters. Letters from
PricewaterhouseCoopers LLP, in form and substance satisfactory
to the Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letters
furnished to the Representatives pursuant to Section 5(f)
hereof, except that the "specified date" in the letters
furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(v) No Downgrading. Subsequent to the date of this
Agreement, no downgrading shall have occurred in the rating
accorded the Securities or of any of the Company's other
securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such
organization shall have publicly announced that it has under
surveillance or review its ratings of any of the Company's
securities.
(o) Additional Documents. At Closing Time and at each
Date of Delivery, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as
herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(p) Termination of Agreement. If any condition specified
in this Section shall not have been fulfilled when and as required to
be fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the
Representatives by notice to the Company at any time at or prior to
Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto in connection with
the offering of the Securities), including the Rule 430A Information or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged
20
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) and provided, further, that the Company will not be liable
to any of the Underwriters with respect to the Prospectus to the extent that the
Company shall sustain the burden of proving that any such loss, liability,
claim, damage or expense resulted from the fact that such Underwriter, in
contravention of a requirement of this Agreement or applicable law, sold
Securities to a person to whom such Underwriter failed to send or give, at or
prior to the Closing Time, a copy of the final prospectus, as then amended or
supplemented if the Company has previously furnished copies thereof
(sufficiently in advance of the Closing Time to allow for distribution by the
Closing Time) to the Underwriters and the loss, liability, claim, damage or
expense of such Underwriter resulted from an untrue statement or omission of a
material fact contained in or omitted from the preliminary prospectus which was
corrected in the final prospectus as, if applicable, amended or supplemented
prior to the Closing Time.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Xxxxxxx Xxxxx expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
21
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action and
may assume the defense thereof with counsel satisfactory to such indemnified
party, and shall pay the fees and expenses of such counsel; provided, however,
(i) if the indemnifying party fails to assume such defense in a timely manner or
(ii) if there exists or is reasonably likely to exist in the opinion of the
indemnified party a conflict of interest or different defenses that would make
it inappropriate in the judgment of such indemnified party for the same counsel
to represent both the indemnified party and the indemnifying party, then such
indemnified party shall be entitled to retain its own counsel at the expense of
the indemnifying party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) 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 of the Underwriters on the
other hand in
22
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus bear to the aggregate initial public
offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the principal
amount at maturity of Initial Securities set forth opposite their respective
names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of
23
officers of the Company or any of its subsidiaries submitted pursuant hereto,
shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its Affiliates or
selling agents, any person controlling any Underwriter, its officers or
directors or any person controlling the Company and (ii) delivery of and payment
for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed
10% of the aggregate principal amount at maturity of the Securities to
be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
24
(ii) if the number of Defaulted Securities exceeds 10% of
the aggregate principal amount at maturity of the Securities to be
purchased on such date, this Agreement or, with respect to any Date of
Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either (i) the Representatives or (ii) the Company shall
have the right to postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, attention of Xxxxx Xxxxxx with a copy to
Xxxxxxx Xxxx Jacob at Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, Xxx Xxx Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and notices to the Company shall be directed to
it at 0000 Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxx, XX 00000, attention of Xxxxxx
Xxxxxxx with a copy to Xxxx Xxxxxxx at Xxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000.
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
25
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 16. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 17. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
XXXXX INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Title: Vice President and
Chief Financial
Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
McDONALD INVESTMENTS INC., a KEYCORP COMPANY
SUNTRUST CAPITAL MARKETS, INC.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
27
SCHEDULE A
Principal
Amount of
Securities at
Name of Underwriter Maturity
------------------- -------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx .................. 425,295,000
Incorporated
Banc One Capital Markets, Inc. ......................... 25,315,000
Xxxxxx X. Xxxxx & Co. Incorporated ..................... 15,190,000
McDonald Investments Inc., a KeyCorp Company ........... 20,252,000
SunTrust Capital Markets, Inc. ......................... 20,252,000
------------
Total .................................................. $506,304,000
============
Sch A - 1
SCHEDULE B
XXXXX INDUSTRIES, INC.
Convertible Senior Subordinated Notes due 2034
1. The initial public offering price of the Securities shall be
39.502% of the principal amount at maturity thereof, plus accrued interest, if
any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the
Initial Securities shall be 38.6132% of the principal amount at maturity
thereof.
3. The yield to maturity on the Securities shall be 3 3/4% per
annum.
4. The Securities shall be convertible into shares of common
stock, par value $0.01 per share, of the Company at an initial conversion price
of $63.60 per share (equivalent to a conversion rate of 6.2110 shares per
$1,000 principal amount at maturity of Securities or per $395.02 initial
accreted value of Securities).
Sch B - 1
SCHEDULE C
[List of persons and entities
subject to lock-up]
Exhibit B-1
Xxxxx X. Xxxxxxxx
Xxxxxxx X. Key
Exhibit B-2
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
C. Xxxxxx X'Xxxxx
W. Xxxxxxxx Xxxxx
Xxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxxxx
Xxxx X. Fort III
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxx Xxxxxx-Riaucour
Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxxxxx Xxxxxx
B-1
Exhibit A
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Banc One Capital Markets, Inc.
Xxxxxx X. Xxxxx & Co. Incorporated
McDonald Investments Inc., a Key Corporation Company
SunTrust Capital Markets, Inc.
As representatives of the several Underwriters named
on Schedule A to the Purchase Agreement
World Financial Center
Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
RE: Xxxxx Industries, Inc., $582,249,000 Aggregate Principal Amount
at Maturity of Senior Subordinated Convertible Notes due 2034
Ladies and Gentlemen:
We have acted as counsel for Xxxxx Industries, Inc., a
Delaware corporation (the "Company"), in connection with the offering of
securities by the Company described below. We are delivering this opinion to
you pursuant to Section 5(b) of the Purchase Agreement dated December 22, 2003
(the "Purchase Agreement"), among the Company and the several underwriters
named in Schedule A thereto (the "Underwriters"), which provides for the
purchase by the Underwriters of $582,249,000 aggregate principal amount at
maturity of the Company's Senior Subordinated Convertible Notes due 2034 (the
"Securities"), to be issued under the indenture dated as of November 28, 2003
(the "Base Indenture"), as supplemented by the First Supplemental Indenture
dated as of December 29, 2003 (the "Supplemental Indenture" and, together with
the Base Indenture, the "Indenture"), each between the Company and SunTrust
Bank, as trustee (the "Trustee"). Unless otherwise indicated in this opinion,
all capitalized terms used in this opinion and not otherwise defined herein
shall have the same meanings as in the Purchase Agreement.
In our capacity as such counsel, we have reviewed (i) signed
copies of the registration statement on Form S-3 (Registration No. 333-110491)
filed by the Company with the Commission on November 28, 2003, as it became
effective under the 1933 Act (the "Registration Statement") and the related
registration statement on Form S-3 (Registration No. 333-111472) filed by the
Company pursuant to Rule 462(b) promulgated under the 1933 Act (together with
the Registration Statement, the "Registration Statements"), (ii) the prospectus
dated December 1, 2003, as supplemented by the prospectus supplement dated
December 29, 2003, filed pursuant to Rule 424(b) promulgated under the 1933 Act
(the "Prospectus"), (iii) the
Purchase Agreement, (iv) the Base Indenture, (v) the Supplemental Indenture,
(vi) specimen forms of the Securities and (vii) the Credit Agreement dated as
of December 29, 2003, among the Company, certain foreign subsidiaries of the
Company, the several banks and other financial institutions named therein,
Xxxxxxx Xxxxx Capital Corporation, as documentation agent, Wachovia Bank,
National Association, as syndication agent, and JPMorgan Chase Bank, as
administrative agent (the "Credit Agreement").
We have reviewed such matters of law and examined original,
certified, conformed or photographic copies of such other documents, records,
agreements and certificates as we have deemed necessary as a basis for the
opinions hereinafter expressed. In such review, we have assumed the genuineness
of signatures on all documents submitted to us as originals and the conformity
to original documents of all copies submitted to us as certified, conformed or
photographic copies. We have relied, as to the matters set forth therein, on
certificates of public officials.
As to certain matters of fact material to this opinion, we
have relied to the extent we deemed appropriate, without independent
verification, upon (i) certificates of officers of the Company and (ii) the
representations and warranties of the Company contained in the Purchase
Agreement. Whenever our opinion with respect to any matter is stated to be
given "to our knowledge" such qualification confirms that, no information has
come to the attention of any attorney in this firm who is involved in
representing the Company on substantive legal matters that would give such
attorney actual current awareness of the existence or absence of such matter.
This opinion is limited in all respects to the federal laws
of the United States of America, the laws of the State of New York and the
Delaware General Corporation Law, and no opinion is expressed with respect to
the laws of any other jurisdiction or any effect that such laws may have on the
opinions expressed herein. This opinion is limited to the matters stated
herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein.
Based upon the foregoing, and subject to the assumptions,
qualifications and limitations set forth herein, we are of the opinion that:
(i) The Company is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation
to transact business and is in good standing in each of the
jurisdictions set forth in Annex A to this opinion.
(iv) The authorized, issued and outstanding capital stock of
the Company as of September 30, 2003 was as set forth in the
Prospectus in the column entitled "Actual" under the caption
"Capitalization" (except for any subsequent conversion of the
Securities in accordance with their terms, any subsequent issuances
pursuant to offerings, reservations, agreements or employee benefit
plans referred to in the Prospectus or pursuant to the exercise of
options referred to in the Prospectus).
(v) Each of the Subsidiaries of the Company listed on Annex B
is validly existing as a corporation, limited liability company or
limited partnership (as applicable) in good standing under the laws of
the State if Delaware, and has corporate, limited liability or
partnership power and authority to own, lease and operate its
properties and to conduct its business as currently conducted.
(vi) The Purchase Agreement has been duly authorized,
executed and delivered by the Company.
(vii) Each of the Base Indenture and the Supplemental
Indenture have been duly authorized, executed and delivered by the
Company and, assuming that the Trustee has duly authorized, executed
and delivered the Base Indenture and the Supplemental Indenture and
has otherwise satisfied all legal requirements applicable to it to the
extent necessary to make the Base Indenture and the Supplemental
Indenture enforceable against it, each of the Base Indenture and the
Supplemental Indenture constitute valid and binding agreements of the
Company, enforceable against the Company in accordance with their
terms, subject, as to the enforcement of remedies, to bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
rights and remedies of creditors generally, and the effects of general
principles of equity. The Indenture has been duly qualified under the
1939 Act.
(viii) The issuance, execution and delivery of the Securities
have been duly authorized by the Company. The Securities when duly
executed and delivered by the Company and duly authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters in accordance with the terms of the Purchase
Agreement, will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
subject, as to the enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights and
remedies of creditors generally, and the effects of general principles
of equity.
(ix) Upon issuance and delivery of the Securities in
accordance with the Purchase Agreement and the Indenture, the
Securities shall be convertible at the option of the holder thereof
for shares of Common Stock in accordance with the terms of the
Securities and the Indenture.
(x) The shares of Common Stock initially issuable upon
conversion of the Securities have been duly authorized and reserved
for issuance and are free of any
statutory preemptive, or, to our knowledge, similar contractual rights
that will entitle any person to acquire any Securities upon issuance
thereof by the Company, and, if and when issued upon due conversion of
the Securities in accordance with the terms of the Indenture and the
Securities, will be validly issued and fully paid and non-assessable.
(xi) The Securities and the Indenture conform in all
material respects to the descriptions thereof contained in the
Prospectus.
(xii) The Registration Statements have been declared or
become effective under the 1933 Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to our knowledge,
no stop order suspending the effectiveness of the Registration
Statements has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or threatened by the
Commission.
(xiii) At the time the Registration Statements became
effective, and for the Prospectus, at the date thereof, the
Registration Statements and the Prospectus (other than the financial
statements and notes thereto, the financial statement schedules and
the other financial data included therein, as to which we express no
belief), excluding the documents incorporated by reference therein,
complied as to form in all material respects with the requirements of
the 1933 Act and the applicable 1933 Act Regulations.
(xiv) The documents incorporated by reference in the
Prospectus (other than the financial statements and notes thereto, the
financial statement schedules and the other financial data included or
incorporated by reference therein, as to which we express no belief),
when they were filed with the Commission, complied as to form in all
material respects with the requirements of the 1934 Act and the
applicable 1934 Act Regulations.
(xv) To our knowledge, there is no action, suit or proceeding
before or by any court or governmental agency or body, domestic or
foreign, now pending or threatened against or affecting the Company or
any subsidiary, or any material property of the Company, that is
required to be disclosed in the Prospectus (other than as disclosed
therein) or that could reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated by
the Purchase Agreement or the performance by the Company of its
obligations thereunder.
(xvi) The information in the Prospectus under "Description of
Common Stock," "Description of Notes," and "Certain United States
Federal Income Tax Considerations" to the extent such information
constitutes summaries of matters of law or legal conclusions, presents
fairly the information required to be disclosed therein and fairly
summarizes in all material respects such matters of law or legal
conclusions.
(xvii) To our knowledge, there are no contracts or documents
of the Company which are required to be filed as exhibits to the
Registration Statements which have not been so filed as exhibits as
required.
(xviii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than
under the 1933 Act and the 1933 Act Regulations, which have been
obtained, or as may be required under the securities or blue sky laws
of the various states and except for the qualification of the
Indenture under the 1939 Act, as to which we express no opinion) is
required to be made by the Company in connection with the
authorization, execution and delivery of the Purchase Agreement or for
the offering, issuance, sale or delivery of the Securities.
(xix) The execution, delivery and performance of the Purchase
Agreement, the issuance, sale and delivery of the Securities by the
Company, and the consummation of the transactions contemplated by the
Purchase Agreement (including the use of proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds" and the issuance of shares of Common Stock issuable upon
conversion of the Securities) and the compliance by the Company with
its obligations under the Purchase Agreement and the Indenture: (a) do
not and will not result in a breach of any of the terms or provisions
of, or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to the terms of, the Credit
Agreement or any agreement or instrument of the Company filed or
incorporated by reference as an exhibit to the most recent Annual
Report on Form 10-K filed by the Company or any subsequent Quarterly
Report on Form 10-Q or Current Report on Form 8-K filed by the
Company, except breaches, defaults, liens, charges or encumbrances
that could not reasonably be expected to have a Material Adverse
Effect, (b) do not and will not result in a violation of any law,
rule, regulation, judgment, order, writ or decree known to us to be
applicable to the Company, except for violations that could not
reasonably be expected to have a Material Adverse Effect, or (c) do
not and will not result in any violation of the provisions of the
charter or bylaws of the Company.
(xx) The Company is not required, and upon the issuance and
sale of the Securities as contemplated in the Purchase Agreement and
the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment
company" under the 1940 Act.
In our capacity as counsel for the Company, we have
participated in conferences with officers and other representatives of the
Company, the independent public accountants for the Company, the
representatives of the Underwriters, and counsel to the Underwriters during
which the contents of the Registration Statements and the Prospectus and
related matters were discussed and, although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statements or the Prospectus (except
as set forth in paragraph (xvi) above), on the basis of the information that
was developed in the course of the performance of the services referred to
above, nothing came to our attention that caused us to believe that the
Registration Statements (other than the financial statements and notes thereto,
the financial statement schedules and other financial and statistical data
included or incorporated by reference therein or omitted therefrom, as to which
we express
no belief), as of the time it became effective under the Act, 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 (other than the financial statements and
notes thereto, the financial statement schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to which
we express no belief), as of the date of the Prospectus or as of the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is furnished by us solely for the benefit of the
Underwriters in connection with the transaction described herein, and this
opinion may not be furnished to or relied upon by any other person or entity
for any purpose without our prior written consent.
This opinion is given as of the date hereof, and we assume no
obligation to advise you after the date hereof of facts or circumstances that
come to our attention or changes in law that occur which could affect the
opinions contained herein.
Very truly yours,
ANNEX A
FOREIGN QUALIFICATION OF THE COMPANY
Georgia
ANNEX B
SUBSIDIARIES
Xxxx Pumps, X.X.
Xxxxx Research Corporation
Amot Controls Corporation
Amot/Metrix Investment Company
Antek Instruments L.P.
Compressor Controls Corporation
Cornell Pump Company
Cornell Pump Manufacturing Corporation
Cybor Corporation
Fluid Metering, Inc.
FTI Flow Technology, Inc.
Integrated Designs, L.P.
Media Cybernetics, Inc.
Metrix Instrument Co., L.P.
Molecular Imaging Corporation
Petroleum Analyzer Company L.P.
Redlake MASD, Inc.
Xxxxx Holdings, Inc.
Xxxxx Mex X.X.
Xxxxx Pump Company
Xxxxx Scientific, Inc.
Xxxxx Southeast Asia LLC
Ropintassco Holdings, L.P.
Ropintassco 1, LLC
Ropintassco 2, LLC
Ropintassco 3, LLC
Ropintassco 4, LLC
Ropintassco 5, LLC
Ropintassco 6, LLC
Ropintassco 7, LLC
Struers Inc.
Uson L.P.
Neptune Technology Group Holdings, Inc.
Neptune Technology Group Inc.
DAP Technologies Corp.
Exhibit X-0
Xxxxxxxx 00, 0000
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
MCDONALD INVESTMENTS INC., A KEYCORP COMPANY
SUNTRUST CAPITAL MARKETS, INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Xxxxx Industries, Inc.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of Xxxxx
Industries, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Banc One Capital Markets, Inc., Xxxxxx X. Xxxxx & Co.
Incorporated, McDonald Investments Inc., a KeyCorp Company and SunTrust Capital
Markets, Inc. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the public offering of $506.3 million
aggregate principal amount at maturity of the Company's Convertible Senior
Subordinated Secured Notes (the "Securities"). In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder and an
officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement
that, during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"), or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing (collectively, the "Lock-Up Securities") or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Lock-Up Securities or any securities convertible into or exchangeable for Common
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. This agreement shall not
prohibit (1) exercise of options to acquire shares of Common Stock, (2)
B-1
the disposition or sale of shares of Common Stock as necessary to pay the
exercise price for "cashless" option exercises and (3) the disposition or sale
of shares of Common Stock as necessary to fund taxes payable upon any such
exercise or cashless exercise.
Very truly yours,
Signature:
-------------------------
Print Name:
------------------------
B-2
Exhibit X-0
Xxxxxxxx 00, 0000
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
XXXXXX X. XXXXX & CO. INCORPORATED
MCDONALD INVESTMENTS INC., A KEYCORP COMPANY
SUNTRUST CAPITAL MARKETS, INC.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Xxxxx Industries, Inc.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of Xxxxx
Industries, Inc., a Delaware corporation (the "Company"), understands that
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("Xxxxxxx Xxxxx"), Banc One Capital Markets, Inc., Xxxxxx X. Xxxxx & Co.
Incorporated, McDonald Investments Inc., a KeyCorp Company and SunTrust Capital
Markets, Inc. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the public offering of $506.3 million
aggregate principal amount at maturity of the Company's Convertible Senior
Subordinated Secured Notes (the "Securities"). In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder and an
officer and/or director of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement
that, during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"), or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing (collectively, the "Lock-Up Securities") or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Lock-Up Securities or any securities convertible into or exchangeable for Common
Stock, whether any such swap or transaction is to be settled by delivery of
Common Stock or other securities, in cash or otherwise. This agreement shall not
prohibit (1) exercise of options to acquire shares of Common Stock, (2)
B-3
the disposition or sale of shares of Common Stock as necessary to pay the
exercise price for "cashless" option exercises, (3) the disposition or sale
of shares of Common Stock as necessary to fund taxes payable upon any such
exercise or cashless exercise and (4) sales or dispositions of Common Stock to
the Company.
Very truly yours,
Signature:
------------------------------
Print Name:
-----------------------------
B-4
