12,500,000 SHARES
XXXXXXX RIVER LABORATORIES INTERNATIONAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
June __, 2000
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
ING BARINGS LLC
XX XXXXX SECURITIES CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
DLJDIRECT INC.
As representatives of the several
Underwriters named in Schedule I hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxxxx River Laboratories International, Inc., a Delaware
corporation (the "COMPANY"), proposes to issue and sell 12,500,000 shares of its
common stock, par value $0.01 per share (the "FIRM SHARES") to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"). The Company also
proposes to issue and sell to the several Underwriters not more than an
additional 1,875,000 shares of its common stock, par value $0.01 per share (the
"ADDITIONAL SHARES"), if requested by the Underwriters as provided in Section 2
hereof. The Firm Shares and the Additional Shares are hereinafter referred to
collectively as the "SHARES". The shares of common stock of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "COMMON STOCK".
SECTION 1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "REGISTRATION STATEMENT";
and the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the "PROSPECTUS". If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
SECTION 2. AGREEMENTS TO SELL AND PURCHASE AND LOCK-UP AGREEMENTS. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
at a price per Share of $______ (the "PURCHASE PRICE") the number of Firm Shares
set forth opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 1,875,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice thereof to
the Company within 30 days after the date of this Agreement. You shall give any
such notice on behalf of the Underwriters and such notice shall specify the
aggregate number of Additional Shares to be purchased pursuant to such exercise
and the date for payment and delivery thereof, which date shall be a business
day (i) no earlier than two business days after such notice has been given (and,
in any event, no earlier than the Closing Date (as hereinafter defined)) and
(ii) no later than ten business days after such notice has been given. If any
Additional Shares are to be purchased, each Underwriter, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be
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purchased from the Company as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I bears to the total number of Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ").
Notwithstanding the foregoing, during such period (i) the Company may grant
stock awards pursuant to the Company's 1999 Management Incentive Plan, 2000
Incentive Plan and 2000 Directors Stock Option Plan and (ii) the Company may
issue shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof. The Company also agrees
not to file any registration statement (other than registration statements on
Form S-8 to register shares of Common Stock issuable in connection with awards
under the 1999 Management Incentive Plan), 2000 Incentive Plan and 2000
Directors Stock Option Plan with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 180 days after the date of the Prospectus without the prior written
consent of DLJ. The Company shall, prior to or concurrently with the execution
of this Agreement, deliver an agreement executed by each person listed on Annex
I hereto to the effect that such person will not, during the period commencing
on the date such person signs such agreement and ending 180 days after the date
of the Prospectus, without the prior written consent of DLJ, (i) engage in any
of the transactions described in the first sentence of this paragraph or (ii)
make any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.
As part of the offering contemplated by this Agreement, DLJ has
agreed to reserve, of the Shares set forth opposite its name on the Schedule I
to this Agreement, up to 625,000 shares, for sale to the Company's employees,
directors, customers, suppliers and other individuals associated with the
Company (collectively, "PARTICIPANTS"), as set forth in the Prospectus under the
heading "Underwriting" (the "DIRECTED SHARE PROGRAM"). The Shares to be sold by
DLJ pursuant to the Directed Share Program (the "DIRECTED SHARES") will be sold
by DLJ pursuant to this Agreement at the public offering price. Any Directed
Shares
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not orally confirmed for purchase by any Participants by 9:00 a.m., New York
City time, on the next business day after which this Agreement is executed will
be offered to the public by DLJ as set forth in the Prospectus.
The Company hereby confirms its engagement of Xxxxxx Brothers Inc.
("XXXXXX") as, and Xxxxxx hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter", within the meaning of
Section (b)(15) of Rule 2720 of the National Association of Securities Dealers,
Inc. with respect to the offering and sale of the Shares. Xxxxxx, solely in its
capacity as the qualified independent underwriter and not otherwise, is referred
to herein as the "QIU". The price at which the Shares will be sold to the public
shall not be higher than the maximum price recommended by the QIU.
SECTION 3. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. DELIVERY AND PAYMENT. The Shares shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as DLJ shall request not later than two business days
prior to the Closing Date or the applicable Option Closing Date (as defined
below), as the case may be. The Company shall deliver the Shares, with any
transfer taxes thereon duly paid by the Company, to DLJ through the facilities
of The Depository Trust Company ("DTC"), for the respective accounts of the
several Underwriters, against payment to the Company of the Purchase Price
therefor by wire transfer of Federal or other funds immediately available in New
York City. The certificates representing the Shares shall be made available for
inspection not later than 9:30 A.M., New York City time, on the business day
prior to the Closing Date or the applicable Option Closing Date, as the case may
be, at the office of DTC or its designated custodian (the "DESIGNATED OFFICE").
The time and date of delivery and payment for the Firm Shares shall be 9:00
A.M., New York City time, on __________ , 2000 or such other time on the same or
such other date as DLJ and the Company shall agree in writing. The time and date
of delivery and payment for the Firm Shares are hereinafter referred to as the
"CLOSING DATE." The time and date of delivery and payment for any Additional
Shares to be purchased by the Underwriters shall be 9:00 A.M., New York City
time, on the date specified in the applicable exercise notice given by you
pursuant to Section 2 or such other time on the same or such other date as DLJ
and the Company shall agree in writing. The time and date of delivery and
payment for any Additional Shares are hereinafter referred to as an "OPTION
CLOSING DATE."
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The documents to be delivered on the Closing Date or any Option
Closing Date on behalf of the parties hereto pursuant to Section 9 of this
Agreement shall be delivered at the offices of Xxxxx Xxxx & Xxxxxxxx and the
Shares shall be delivered at the Designated Office, all on the Closing Date or
such Option Closing Date, as the case may be.
SECTION 5. AGREEMENTS OF THE COMPANY. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of
the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding, to the extent known by the Company, for
such purposes, (iii) when any amendment to the Registration Statement
becomes effective, (iv) if the Company is required to file a Rule
462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become
effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a
material fact made in the Registration Statement or the Prospectus
untrue or which requires any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its reasonable best
efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish to you seven conformed copies of the Registration
Statement as first filed with the Commission and of each amendment to
it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be reasonably satisfactory to you, and to file the Prospectus in such
form with the Commission within the applicable period specified in
Rule 424(b) under the Act; during the period specified in Section
5(d) below, not to file any further amendment to the Registration
Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to
which you shall reasonably object
5
after being so advised; and, during such period, to prepare and file
with the Commission, promptly upon your reasonable request, any
amendment to the Registration Statement or amendment or supplement to
the Prospectus which may be necessary or advisable in connection with
the distribution of the Shares by you, and to use its reasonable best
efforts to cause any such amendment to the Registration Statement to
become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business
day after the date of this Agreement and from time to time thereafter
for such period as in the opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with
sales by an Underwriter or a dealer, to furnish in New York City to
each Underwriter and any dealer as many copies of the Prospectus (and
of any amendment or supplement to the Prospectus) as such Underwriter
or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion
of counsel for the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus
to comply with applicable law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to the Prospectus
so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is
so delivered, be misleading, or so that the Prospectus will comply
with applicable law, and to furnish to each Underwriter and to any
dealer as many copies thereof as such Underwriter or dealer may
reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with
you and counsel for the Underwriters in connection with the
registration or qualification of the Shares for offer and sale by the
several Underwriters and by dealers under the state securities or
Blue Sky laws of such U.S. jurisdictions as you may request, to
continue such registration or qualification in effect so long as
required for distribution of the Shares and to file such consents to
service of process or other documents as may be necessary in order to
effect such registration or qualification; PROVIDED, HOWEVER, that
the Company shall not be required in connection therewith to qualify
as a foreign corporation in any jurisdiction in which it is not now
so qualified or to take any action that would subject it to general
6
consent to service of process or taxation in any jurisdiction in
which it is not now so subject.
(g) To mail and make generally available to its stockholders as soon
as practicable an earnings statement covering the twelve-month
period ending June 23, 2001 that shall satisfy the provisions of
Section 11(a) of the Act.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to
be paid all expenses incident to the performance of its obligations
under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in
connection with the registration and delivery of the Shares under the
Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration
Statement (including financial statements and exhibits), any
preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and
delivering of copies thereof to the Underwriters and dealers in the
quantities specified herein, (ii) all costs and expenses related to
the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of
the several states and all costs of printing or producing any
Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto not to
exceed $5,000), (iv) the filing fees and reasonable fees and
disbursements of counsel for the Underwriters in connection with the
review and clearance of the offering of the Shares by the National
Association of Securities Dealers, Inc. (the "NASD"), (v) all fees
and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Common Stock and
all costs and expenses incident to the listing of the Shares on New
York Stock Exchange ("NYSE"), (vi) the cost of printing certificates
representing the Shares, (vii) the costs and charges of any transfer
agent, registrar and/or depositary, (viii) the fees and expenses of
the QIU (including the reasonable fees and disbursements of counsel
to the QIU not to exceed $5,000), and (ix) all other costs and
expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this
Section 5(h).
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(i) To use its best efforts to list the Shares on the NYSE and to
maintain the listing of the Shares on the NYSE for a period of three
years after the date of this Agreement.
(j) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Date or any Option Closing Date,
as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
(k) If the Registration Statement at the time of the effectiveness
of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the
Shares not so covered in compliance with Rule 462(b) by 10:00 P.M.,
New York City time, on the date of this Agreement and to pay to the
Commission the filing fee for such Rule 462(b) Registration Statement
at the time of the filing thereof or to give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
(l) That in connection with the Directed Share Program, the Company
will notify the transfer agent as to the Directed Shares that will be
restricted to the extent required by the NASD or the NASD rules from
sale, transfer, assignment, pledge or hypothecation for a period of
three months following the date of the effectiveness of the
Registration Statement. The Underwriters will notify the Company as
to which Participants will need to be so restricted. The Company will
direct the removal of such transfer restrictions upon the expiration
of such period of time.
(m) To pay all reasonable fees and disbursements of counsel incurred
by the Underwriters in connection with the Directed Share Program.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after
the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date
of this Agreement; and no stop order suspending the effectiveness of
the Registration Statement is in effect, and to the knowledge of the
Company,
8
no proceedings for such purpose are pending before or threatened by
the Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the
effectiveness of this Agreement), when it became effective, did not
contain and, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement) and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Act, (iii) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of
this Agreement, such Rule 462(b) Registration Statement and any
amendments thereto, when they become effective (A) will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (B) will comply in all material
respects with the Act and (iv) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Act, complied when so filed in
all material respects with the Act, and did not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through you expressly for use therein.
(d) Each of the Company and its subsidiaries has been duly
organized, is validly existing and in good standing under the laws of
its
9
jurisdiction of organization and has the requisite power and
authority to carry on its business as described in the Prospectus and
to own, lease and operate its properties, and each is duly qualified
and is in good standing as a foreign entity authorized to do business
in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except
where the failure to be so qualified would not have a material
adverse effect on the business, prospects, financial condition or
results of operations of the Company and its subsidiaries, taken as a
whole (each a "MATERIAL ADVERSE EFFECT").
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
granted or issued by the Company or any of its subsidiaries relating
to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of the Company or any of its
subsidiaries, except as otherwise disclosed in the Registration
Statement.
(f) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid,
non-assessable and were not issued in violation of any preemptive or
similar rights; and the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not violate any
preemptive or similar rights.
(g) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. Except as otherwise
set forth in the Prospectus, all of the outstanding equity interests
of each of the Company's subsidiaries have been duly authorized and
validly issued and are fully paid and non-assessable, as applicable,
and are owned by the Company, directly or indirectly through one or
more subsidiaries, free and clear of any security interest, claim,
lien, encumbrance or adverse interest of any nature (each, a "LIEN").
(h) The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof
contained in the Prospectus.
(i) This Agreement has been duly authorized, executed and delivered
by the Company.
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(j) Neither the Company nor any of its subsidiaries is in violation
of its respective organizational documents or in default in the
performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, except for such
violations or defaults as would not have a Material Adverse Effect.
(k) The execution, delivery and performance of this Agreement by the
Company, the compliance by the Company with all the provisions hereof
and the consummation of the transactions contemplated hereby will not
(i) require any consent, approval, authorization or other order of,
or qualification with, any court or governmental body or agency
(except such as may be required under Federal securities or Blue Sky
laws of the various states or from the NASD or have been or will be
obtained prior to the Closing Date), (ii) conflict with or constitute
a breach of any of the terms or provisions of, or a default under,
(A) the charter or by-laws of the Company or any of its subsidiaries
or (B) any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency
having jurisdiction over the Company, any of its subsidiaries or
their respective property, (iv) result in the imposition or creation
of (or the obligation to create or impose) a Lien under, any
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or (v) result in
the termination, suspension or revocation of any Authorization (as
defined below) of the Company or any of its subsidiaries or result in
any other impairment of the rights of the holder of any such
Authorization, in each case except for such as would not have a
Material Adverse Effect.
(l) Except as disclosed in the Prospectus, there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of its subsidiaries is or has
been threatened to be made a party or to which any of their
respective property is or has been threatened to be made subject,
which would reasonably be expected to result, singly or in the
aggregate, in a Material Adverse Effect.
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(m) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries has violated any foreign, Federal, state or
local law or regulation relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or any provisions of the Foreign Corrupt Practices
Act or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, would not have a
Material Adverse Effect.
(n) Except as otherwise set forth in the Prospectus, there are no
costs or liabilities associated with Environmental Laws (including,
without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other
approvals (each, an "AUTHORIZATION") of, and has made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals,
including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the
failure to have any such Authorization or to make any such filing or
notice would not, singly or in the aggregate, have a Material Adverse
Effect. Except as disclosed in the Prospectus, each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance, in all material
respects, with all the terms and conditions thereof and with the
rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination
of any such Authorization or results or, after notice or lapse of
time or both, would result in any other impairment of the rights of
the holder of any such Authorization; and such Authorizations contain
no restrictions that are burdensome to the Company or any of its
subsidiaries; except, in each case, where such failure to be valid
and in full force and effect or to be in compliance, the occurrence
of any such event
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or the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect.
(p) The accountants, PricewaterhouseCoopers LLP, that have certified
the financial statements included in the Prospectus, are independent
public accountants with respect to the Company and its subsidiaries
as required by the Act and the Securities Exchange Act of 0000 (xxx
"XXXXXXXX XXX").
(q) The historical financial statements, together with the related
notes forming part of the Prospectus (and any amendment or supplement
thereto), present fairly in all material respects the consolidated
financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in
the Prospectus at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved,
except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in all material
respects in accordance with generally accepted accounting principles
the information required to be stated therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with such financial
statements and the books and records of the Company.
(r) The PRO FORMA financial statements included in the Prospectus
(and any supplement or amendment thereto) have been prepared in all
material respects on a basis consistent with the historical financial
statements of the Company and its subsidiaries and give effect to
assumptions used in the preparation thereof on a reasonable basis and
in good faith and present fairly in all material respects the
historical and proposed transactions contemplated by the Prospectus;
and such PRO FORMA financial statements comply as to form in all
material respects with the requirements applicable to PRO FORMA
financial statements included in registration statements on Form S-1
under the Act. The other PRO FORMA financial and statistical
information and data included in the Prospectus are, in all material
respects, accurately presented and prepared on a basis consistent
with the PRO FORMA financial statements.
(s) The Company is not, and after giving effect to the offering and
sale of the Shares and the application of the net proceeds thereof as
13
described in the Prospectus, will not be an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended.
(t) Except as otherwise described in the Prospectus, there are no
contracts, agreements or understandings that will remain in effect
after the issuance of the Shares between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities
of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement.
(u) No "nationally recognized statistical rating organization" (as
such term is defined for purposes of Rule 436(g)(2) under the Act)
(i) has imposed (or has informed the Company or its subsidiaries that
it is considering imposing) any condition (financial or otherwise) on
the Company or its subsidiaries' retaining any rating assigned to the
Company or its subsidiaries or any securities of the Company or its
subsidiaries or (ii) has indicated to the Company or its subsidiaries
that it is considering (A) the downgrading, suspension, or withdrawal
of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (B)
any change in the outlook for any rating of the Company or its
subsidiaries or any securities of the Company or its subsidiaries.
(v) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there has not occurred any material adverse
change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material
adverse change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor
any of its subsidiaries has incurred, outside the ordinary course of
business, any material liability or obligation, direct or contingent.
(w) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters in
connection with the consummation of the transactions contemplated
hereby and dated the date hereof, the Closing Date or any Option
Closing
14
Date, shall be deemed to be a representation and warranty by the
Company to the Underwriters as to the matters covered thereby.
(x) There is no (i) material unfair labor practice complaint,
grievance or arbitration proceeding pending or threatened against the
Company before the National Labor Relations Board or any state or
local labor relations board or (ii) strike, labor dispute, slowdown
or stoppage pending or threatened against the Company, except for
such actions specified in clause (i) or (ii) above, which, singly or
in the aggregate, would not have a Material Adverse Effect. To the
best of the Company's knowledge, no collective bargaining organizing
activities are taking place with respect to the Company, which,
singly or in the aggregate, would have a Material Adverse Effect.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(z) Except as otherwise set forth in the Prospectus, the Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names ("INTELLECTUAL
PROPERTY") currently employed by them in connection with the business
now operated by them, except where the failure to own or possess or
otherwise be able to acquire such intellectual property would not,
singly or in the aggregate, have a Material Adverse Effect; and, to
the best of the Company's knowledge, neither the Company nor any of
its subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any of such
intellectual property which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect.
(aa) There are no statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement
15
or the Prospectus or to be filed as exhibits to the Registration
Statement that are not so described or filed as required.
Furthermore, the Company represents and warrants to DLJ that (i) the
Registration Statement, the Prospectus and any preliminary prospectus comply,
and any further amendments or supplements thereto will comply, with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
or any preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the Directed Share Program, and that (ii) no
authorization, approval, consent, license, order, registration or qualification
of or with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Shares are offered
outside the United States, except where the failure to obtain any such
authorization, approval, consent, license, order or to make any such
registration, qualification, filing or notice would not, singly or in the
aggregate, result in a material liability to or obligation of DLJ.
The Company acknowledge that the Underwriters and, for purposes of
the opinions to be delivered to the Underwriters pursuant to Section 9 hereof,
counsel to the Company and counsel to the Underwriters will rely upon the
accuracy and truth of the foregoing representations and hereby consent to such
reliance.
SECTION 7. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any legal or
other expenses incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement thereto)
or any preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein; PROVIDED, HOWEVER, that the foregoing
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter if the Underwriter fails to deliver a
Prospectus (as then amended or supplemented, provided by the Company to the
several Underwriters
16
in the requisite quantity and on a timely basis to permit proper delivery on or
prior to the Closing Date) to the person asserting any losses, claims, damages,
liabilities or judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in such preliminary prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) The Company agrees to indemnify and hold harmless DLJ and each
person, if any, who controls DLJ within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act ("DLJ ENTITIES"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (i) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
prospectus wrapper material prepared by or with the consent of the Company for
distribution in foreign jurisdictions in connection with the Directed Share
Program attached to the Prospectus or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable preliminary prospectus, not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of the shares which immediately following the effective of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Share Program, provided that, the Company shall not be responsible
under this subparagraph (iii) for any losses, claim, damages or liabilities (or
expenses relating thereto) that are finally judicially determined to have
resulted from the bad faith or gross negligence of DLJ Entities.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to such Underwriter but
only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
17
(d) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(c)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such
action, including the employment of counsel reasonably satisfactory to the
indemnified party and the payment of all fees and expenses of such counsel,
as incurred (except that in the case of any action in respect of which
indemnity may be sought pursuant to both Sections 7(a) and 7(c), the
Underwriter shall not be required to assume the defense of such action
pursuant to this Section 7(d), but may employ separate counsel and
participate in the defense thereof, but the fees and expenses of such
counsel, except as provided below, shall be at the expense of such
Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties
to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party shall
have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of
the indemnified party). In any such case, the indemnifying party shall not,
in connection with any one action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by DLJ, in the
case of parties indemnified pursuant to Section 7(a), and by the Company, in
the case of parties indemnified pursuant to Section 7(c). Notwithstanding
anything contained herein to the contrary, if indemnity may be sought
pursuant to Section 7(b) hereof in respect of such action or proceeding, then
in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for DLJ
for the defense of any losses, claims, damages and liabilities arising out of
the Directed Share Program, and all persons, if any, who control DLJ within
the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act. The indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities and
judgments by reason of any settlement of any action (i) effected with its
written consent or (ii) effected
18
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or has been threatened to be made a party and indemnity or contribution may
be sought hereunder by the indemnified party, unless such settlement, compromise
or judgment (i) includes an unconditional release of the indemnified party from
all liability on claims that are or have been threatened to be made the subject
matter of such action 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 the
indemnified party.
(e) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (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 Shares or (ii) if the allocation provided by clause 7(e)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(e)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, 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 shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Shares, in each
case as set forth in the table on the cover page 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 the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
19
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(e) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(f) The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
SECTION 8. INDEMNIFICATION OF QIU.
(a) The Company agrees to indemnify and hold harmless the QIU, its
directors, its officers and each person, if any, who controls the QIU within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action,
that could give rise to any such losses, claims, damages, liabilities or
judgments) related to, based upon or arising out of (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), the Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) the QIU's
activities as QIU under its
20
engagement pursuant to Section 2 hereof, except in the case of this clause (ii)
insofar as any such losses, claims, damages, liabilities or judgments are found
in a final judgment by a court of competent jurisdiction, not subject to further
appeal, to have resulted solely from the willful misconduct or gross negligence
of the QIU.
(b) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) (the "QIU
INDEMNIFIED PARTY"), the QIU Indemnified Party shall promptly notify the Company
in writing and the Company shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the QIU Indemnified Party
and the payment of all fees and expenses of such counsel, as incurred. Any QIU
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the QIU Indemnified Party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the Company, (ii) the Company shall have failed to assume the defense of such
action or employ counsel reasonably satisfactory to the QIU Indemnified Party or
(iii) the named parties to any such action (including any impleaded parties)
include both the QIU Indemnified Party and the Company, and the QIU Indemnified
Party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Company (in which case the Company shall not have the right to
assume the defense of such action on behalf of the QIU Indemnified Party). In
any such case, the Company shall not, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for all QIU Indemnified Parties, which firm shall be
designated by the QIU, and all such fees and expenses shall be reimbursed as
they are incurred. The Company shall indemnify and hold harmless the QIU
Indemnified Party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the Company
shall have received a request from the QIU Indemnified Party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the Company) and, prior to the date of such settlement,
the Company shall have failed to comply with such reimbursement request. The
Company shall not, without the prior written consent of the QIU Indemnified
Party,
21
effect any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the QIU
Indemnified Party is or has been threatened to made a party and indemnity or
contribution may be sought hereunder by the QIU Indemnified Party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
QIU Indemnified Party from all liability on claims that are or have been
threatened to be made the subject matter of such action 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 the QIU Indemnified Party.
(c) To the extent the indemnification provided for in this Section 8
is unavailable to a QIU Indemnified Party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein, then the
Company, in lieu of indemnifying such QIU Indemnified Party, shall contribute to
the amount paid or payable by such QIU Indemnified Party as a result of such
losses, claims, damages, liabilities and judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the QIU on the other hand from the offering of the Shares or (ii) if
the allocation provided by clause 8(c)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(c)(i) above but also the relative fault of the
Company on the one hand and the QIU on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the QIU on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Company as set forth in the table on the cover page of the Prospectus, and
the fee received by the QIU pursuant to Section 2 hereof, bear to the sum of
such total net proceeds and such fee. The relative fault of the Company on the
one hand and the QIU on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the QIU and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission and whether the QIU's activities as QIU under its
engagement pursuant to Section 2 hereof involved any willful misconduct or gross
negligence on the part of the QIU.
22
The Company and the QIU agree that it would not be just and equitable
if contribution pursuant to this Section 8(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by a QIU Indemnified Party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such QIU Indemnified Party
in connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(d) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
QIU Indemnified Party at law or in equity.
SECTION 9. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New
York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
commenced or shall be pending before or contemplated by the
Commission.
(c) On or after the date hereof, (i) there shall not have occurred
any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension
or withdrawal of, or of any review (or of any potential or intended
review) for a possible change that does not indicate the direction of
the possible change in, any rating of the Company or its subsidiaries
or any securities of the Company or its subsidiaries (including,
without limitation, the placing of any of the foregoing ratings on
credit watch with negative or
23
developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" (as
such term is defined for purposes of Rule 436(g)(2) under the Act)
and (ii) there shall not have occurred any change, nor shall any
notice have been given of any potential or intended change, in the
outlook for any rating of the Company or its subsidiaries or any
securities of the Company or its subsidiaries by any such rating
organization.
(d) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of
this Agreement), (i) there shall not have occurred any change or any
development in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective change in the
capital stock or in the long-term debt of the Company or any of its
subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct
or contingent, the effect of which, in any such case described in
clause 9(d)(i), 9(d)(ii) or 9(d)(iii), in the judgment of the
Underwriters, is material and adverse and, in the judgment of the
Underwriters, makes it impracticable to market the Shares on the
terms and in the manner contemplated in the Prospectus.
(e) The Underwriters shall have received on the Closing Date a
certificate dated the Closing Date, signed by the Chief Executive
Officer, Chairman of the Board, President or a Vice President and the
chief financial officer, principal accounting officer or equivalent
financial officer responsible for the financial statements, of the
Company, confirming the matters set forth in Sections 9(a), 9(c) and
9(d) and stating that the Company has complied with all of the
material agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied on or prior
to the Closing Date.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of Ropes & Xxxx, counsel for the Company, to the effect
that:
(i) each of the Company and Xxxxxxx River
Laboratories, Inc. (the "OPERATING COMPANY") has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation and has the corporate power to
24
own, lease and operate its properties and conduct its
business as described in the Prospectus;
(ii) each of the Company and the Operating Company is
duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction
listed on Exhibit B;
(iii) all the outstanding shares of capital stock of
the Company have been duly authorized and validly issued
and are fully paid, non-assessable and were not issued in
violation of any statutory, or, to such counsel's
knowledge, contractual preemptive or similar rights;
(iv) the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be validly
issued, fully paid and non-assessable, and the issuance of
such Shares will not violate any statutory or, to such
counsel's knowledge, contractual preemptive or similar
rights;
(v) this Agreement has been duly authorized, executed
and delivered by the Company;
(vi) the authorized capital stock of the Company
conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus;
(vii) based solely upon the oral advice of the staff of
the Commission, the Registration Statement has become
effective under the Act, no stop order suspending its
effectiveness has been issued and no proceedings for that
purpose are, to such counsel's knowledge, pending before or
contemplated by the Commission;
(viii) the statements under the captions "Certain
Relationships and Related Party Transactions", "Description
of Capital Stock" and the description of the underwriting
agreement in "Underwriting" in the Prospectus and Items 14
and 15 of Part II of the Registration Statement, insofar as
such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly
present in all material respects the information called for
with respect to such legal matters, documents and
proceedings;
25
(ix) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company
with all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) require any
consent, approval, authorization or other order of, or
qualification with, any court or governmental body or
agency (except such as may be required under the Federal or
state securities or Blue Sky laws of the various states),
(B) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its domestic subsidiaries
or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is filed as an exhibit to the
Registration Statement, to which the Company or any of its
domestic subsidiaries is a party or by which the Company or
any of its domestic subsidiaries or their respective
property is bound, (C) violate or conflict with any
applicable Massachusetts, Federal or Delaware Corporate law
or, to such counsel's knowledge, any rule, regulation,
judgment, order or decree of any Massachusetts or Federal
court or any Massachusetts, or Federal governmental body or
agency having jurisdiction over the Company, any of its
domestic subsidiaries or their respective property (in each
case except where such violation or default would not have
a Material Adverse Effect and except such counsel need not
express an opinion as to state securities or Blue Sky laws
of the various states or as to compliance with anti-fraud
provisions of Federal and state securities laws);
(x) the Company is not, and after giving effect to
the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus will
not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended;
(xi) except as described in the Prospectus, to such
counsel's knowledge, there are no contracts, agreements or
understandings between the Company and any person granting
such person the right to require the Company to file a
registration statement under the Act with respect to any
securities of the Company or to require the Company to
include such securities with the Shares registered pursuant
to the Registration Statement; and
(xii) (A) the Registration Statement and the Prospectus
and any supplement or amendment thereto (except for the
financial
26
statements and other financial data included therein as to
which no opinion need be expressed) comply as to form in
all material respect with the Act, (B) such counsel has no
reason to believe that at the time the Registration
Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus
included therein (except for the financial statements and
other financial data as to which such counsel need not
express any belief) contained any untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading and (C) such counsel has no reason
to believe that the Prospectus, as amended or supplemented,
if applicable (except for the financial statements and
other financial data, as aforesaid) contains any untrue
statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading.
The opinion of Ropes & Xxxx described in Section 9(f) above shall be
rendered to you at the request of the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of the Company's General Counsel, to the effect that:
(i) to such counsel's knowledge, neither the Company
nor any of its domestic subsidiaries is in violation of its
respective charter or by-laws and, to the best of such
counsel's knowledge after due inquiry, neither the Company
nor any of its domestic subsidiaries is in default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument to which
the Company or any of its domestic subsidiaries is a party
or by which the Company or any of its domestic subsidiaries
or their respective property is bound that is filed as an
exhibit to the Registration Statement, except where such
violation or default would not have a Material Adverse
Effect; and
(ii) to such counsel's knowledge, such counsel does
not know of any legal or governmental proceedings pending
or threatened to which the Company or any of its domestic
subsidiaries is or has been threatened to be made a party
or to which any of their respective property is or has been
threatened to be made subject that are required to be
described in the
27
Registration Statement or the Prospectus and are not so
described, or of any statutes, regulations, contracts or
other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so
described or filed as required.
(h) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Xxxxx Xxxx & Xxxxxxxx, counsel for the
Underwriters, as to the matters referred to in Sections 9(f)(iv),
9(f)(v), 9(f)(viii) (but only with respect to the statements under
the caption "Description of Capital Stock" and "Underwriting") and
9(f)(xii).
In giving such opinions with respect to the matters covered
by Section 9(f)(xii) Ropes & Xxxx and Xxxxx Xxxx & Xxxxxxxx may state
that their opinion and belief are based upon their participation in
the preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified.
(i) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as
the case may be, in form and substance satisfactory to you, from
PricewaterhouseCoopers, LLP, independent public accountants,
containing the information and statements 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.
(j) The Company shall have delivered to you the agreements specified
in Section 2 hereof which agreements shall be in full force and
effect on the Closing Date.
(k) The Shares shall have been duly approved for listing on the
NYSE.
(l) The Company shall not have failed on or prior to the Closing
Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company on or
prior to the Closing Date.
The several obligations of the Underwriters to purchase any
Additional Shares hereunder are subject to the delivery to you on the applicable
Option
28
Closing Date of such documents described in this Section 9 as they may
reasonably request with respect to the good standing of the Company, the due
authorization and issuance of such Additional Shares and other matters related
to the issuance of such Additional Shares.
SECTION 10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any Federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either Federal or New York State authorities or (vi) the taking of any action by
any Federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it has or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the total number of Firm Shares or Additional Shares, as the
case may be, to be purchased on such date by all Underwriters, each
non-defaulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedule I bears to the
total number of Firm Shares which all the non-defaulting Underwriters have
agreed to purchase, or in such
29
other proportion as you may specify, to purchase the Firm Shares or Additional
Shares, as the case may be, which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; PROVIDED that in no event
shall the number of Shares which any Underwriter has agreed to purchase pursuant
to Section 2 hereof be increased pursuant to this Section 10 by an amount in
excess of one-ninth of such number of Shares without the written consent of such
Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. If, on an Option Closing Date, any Underwriter or Underwriters
shall fail or refuse to purchase Additional Shares and the aggregate number of
Additional Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Additional Shares to be purchased on such
date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase such Additional Shares or (ii) purchase
not less than the number of Additional Shares that such non-defaulting
Underwriters would have been obligated to purchase on such date in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Xxxxxxx
River Laboratories International, Inc., 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 and (ii) if to any Underwriter or to you, to you c/x
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, any QIU
Indemnified Party,
30
the Company, the officers or directors of the Company or any person controlling
the Company, (ii) acceptance of the Shares and payment for them hereunder and
(iii) termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(h) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters and the QIU Indemnified Parties for any and all
reasonable fees and expenses (including, without limitation, the reasonable fees
and disbursements of counsel) incurred by them in connection with enforcing
their rights hereunder (including, without limitation, pursuant to Section 7
hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the QIU Indemnified Parties the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
31
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
XXXXXXX RIVER LABORATORIES
INTERNATIONAL, INC.
By: ___________________________________
Title:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
ING BARINGS LLC
XX XXXXX SECURITIES CORPORATION
U.S. BANCORP XXXXX XXXXXXX INC.
DLJDIRECT INC.
Acting severally on behalf of themselves and the
several Underwriters named in Schedule I
hereto
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: ___________________________________________
Title:
32
