------------------------------------------------------------------------------
------------------------------------------------------------------------------
Nu Skin Asia Pacific, Inc.
A Delaware Corporation
5,600,000 Shares of Class A Common Stock
U.S. PURCHASE AGREEMENT
Dated: _____ __, 1997
------------------------------------------------------------------------------
------------------------------------------------------------------------------
NU SKIN ASIA PACIFIC, INC.
A DELAWARE CORPORATION
5,600,000 SHARES OF CLASS A COMMON STOCK
(PAR VALUE $.001 PER SHARE)
U.S. PURCHASE AGREEMENT
_____ __, 1997
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxx Xxxxxxx Xxxx Xxxxxx
Nomura Securities International, Inc.
PaineWebber Incorporated
as U.S. Representatives of the several U.S. Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
The stockholders of Nu Skin Asia Pacific, Inc., a Delaware Corporation (the
"Company") named in Schedule B hereto (collectively, the "Selling
Stockholders"), propose to sell severally to the U.S. Underwriters named in
Schedule A hereto (collectively, the "U.S. Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Xxxxxx Xxxxxxx Xxxx Xxxxxx, Nomura
Securities International, Inc. and PaineWebber Incorporated are acting as
representatives (in such capacity, the "U.S. Representatives"), an aggregate of
5,600,000 shares of Class A Common Stock, par value $.001 per share, of the
Company (the "Common Stock") as set forth in the appropriate column of
Schedule B. Such shares of Common Stock are to be sold to each U.S. Underwriter
acting severally and not jointly, in such amounts as are set forth on Schedule A
opposite the name of such U.S. Underwriter. The Selling Stockholders also grant
to the U.S. Underwriters, acting severally and not jointly, the option described
in Section 2(b) hereof to purchase all or any part of 840,000 additional shares
of
1
Common Stock to cover over-allotments, if any. The aforesaid 5,600,000 shares
of Common Stock (the "Initial U.S. Securities") to be purchased by the U.S.
Underwriters and all or any part of the 840,000 shares of Common Stock subject
to the option described in Section 2(b) hereof (the "U.S. Option Securities")
are hereinafter called, collectively, the "U.S. Securities".
It is understood that the Company and the Selling Stockholders are
concurrently entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the sale by the Selling
Stockholders of an aggregate of 1,400,000 shares of Common Stock (the
"Initial International Securities") through arrangements with certain
underwriters outside the United States and Canada, (the "International
Managers") for whom Xxxxxxx Xxxxx International, Xxxxxx Xxxxxxx Xxxx Xxxxxx,
Nomura International plc and PaineWebber Incorporated are acting as lead
managers (the "Lead Managers") and the grant by the Selling Stockholders to
the International Managers, acting severally and not jointly, of an option to
purchase all or any part of the International Managers' pro rata portion of
up to 210,000 additional shares of Common Stock solely to cover
over-allotments, if any (the "International Option Securities" and, together
with the U.S. Option Securities the "Option Securities"). The Initial
International Securities and the International Option Securities are
hereinafter called the "International Securities." It is understood that the
Selling Stockholders are not obligated to sell, and the U.S. Underwriters are
not obligated to purchase, any Initial U.S. Securities unless all of the
Initial International Securities are contemporaneously purchased by the
International Managers or purchasers procured by them.
The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters," the Initial U.S. Securities and the
Initial International Securities are hereinafter collectively called the
"Initial Securities," and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of the Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
The Company and the Selling Stockholders understand that the U.S.
Underwriters propose to make a public offering of the U.S. Securities as soon as
the U.S. Representatives deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-_______) covering
the registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule
2
424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). Two forms of prospectus are to be used in connection with
the offering and sale of the Securities: one relating to the International
Securities (the "Form of International Prospectus"), and one relating to the
U.S. Securities (the "Form of U.S. Prospectus"). The information included in
the Form of U.S. Prospectus or in any Term Sheet relating thereto, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each Form of U.S. Prospectus used before
such registration statement became effective, and any Form of U.S. Prospectus
that omitted, as applicable, the Rule 430A Information or the Rule 434
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, and any International Prospectus of even date
relating to the International Securities, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits thereto and
schedules thereto at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein 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 final Form of U.S.
Prospectus and the final Form of International Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and, collectively, the "Prospectuses." If Rule 434
is relied on, the term "U.S. Prospectus" shall refer to the U.S. preliminary
prospectus dated ___________, 1997 together with the Term Sheet and all
references in this Agreement to the date of such Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any U.S. preliminary prospectus, the U.S. Prospectus or
any Term Sheet relating thereto 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").
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each U.S. 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 U.S. Underwriter,
as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no
3
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 Closing Time (and, if any U.S.
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 at these
times in all material respects with the requirements of the 1933 Act
and the 1933 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 of the Prospectuses nor any
amendments or supplements thereto, at the time the Prospectuses or any
amendments or supplements were issued and at the Closing Time (and, in
the case of the U.S. Prospectus, if any U.S. Option Securities are
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. If Rule 434 is used, the Company will comply with the
requirements of Rule 434 and the U.S. Prospectus shall not be
"materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it
became effective. The representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or U.S. Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
U.S. Underwriter through the U.S. Representatives expressly for use in
the Registration Statement or the U.S. Prospectus.
Each U.S. preliminary prospectus and the 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each U.S. preliminary prospectus and the U.S.
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) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The financial statements included in the
4
Registration Statement and the Prospectuses, together with the related
schedules and notes, present fairly the financial position of the Company
and Nu Skin Japan Limited, Nu Skin Korea, Inc., Nu Skin Taiwan, Inc., Nu
Skin Hong Kong, Inc. and Nu Skin Personal Care (Thailand) Limited
(collectively, the "Subsidiaries") Subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and the Subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules included
in the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectuses present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The pro forma financial statements and the related
notes thereto included in the Registration Statement and the Prospectuses
present fairly 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 the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, 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 the S Corporation Distribution, there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(v) 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
Prospectuses and to enter into and perform its obligations under this
Agreement and the International Purchase 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 would not result in a Material Adverse Effect.
5
(vi) GOOD STANDING OF SUBSIDIARIES. Each of the Subsidiaries has been
duly organized and is validly existing as a corporation in good standing
(or has such comparable corporate status as may be applicable in its
jurisdiction of incorporation) under the laws of the jurisdiction of its
incorporation (in the case of Nu Skin Japan Company, Limited being both the
state of Delaware and the country of Japan, in the case of Nu Skin Korea,
Inc. being both the state of Delaware and the country of South Korea and in
the case of Nu Skin Personal Care (Thailand) Limited being both the state
of Delaware and the country of Thailand), has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation 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 would not result
in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company directly, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The Subsidiaries are the only
subsidiaries of the Company and the Subsidiaries are the only subsidiaries
listed on Exhibit 21 to the Registration Statement.
(vii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company upon consummation of the Reorganization will be as set
forth in the U.S. and the International Prospectuses in the column entitled
"As Adjusted" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to this Agreement and the International
Purchase Agreement, pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectuses or pursuant to the exercise
of convertible securities or options referred to in the Prospectuses).
(viii) AUTHORIZATION OF AGREEMENT. This Agreement and the
International Purchase Agreement have been duly authorized, executed and
delivered by the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The shares of
issued and outstanding capital stock of the Company, including the
Securities to be purchased by the Underwriters from the Selling
Stockholders, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital stock,
including the Securities to be purchased by the Underwriters from the
Selling Stockholders, was issued in violation of the preemptive or other
similar rights of any securityholder of the Company; the Common Stock
conforms to all statements relating thereto contained in the Prospectuses
and such description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to personal
liability by reason of being such a holder.
6
(x) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its Subsidiaries is in violation of its charter or by-laws or comparable
governing documents 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 would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement and the International
Purchase Agreement and the consummation of the transactions contemplated in
this Agreement and the International Purchase Agreement and in the
Registration Statement and compliance by the Company with its obligations
under this Agreement and the International Purchase Agreement 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 such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or comparable governing documents of 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.
(xi) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees or
distributors of the Company or any of its affiliates 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, may reasonably be expected to result in
a Material Adverse Effect.
(xii) ABSENCE OF PROCEEDINGS. 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 would reasonably be expected by
the Company to result in a Material Adverse Effect, or which would
reasonably be expected by the Company to materially and adversely
7
affect the properties or assets thereof or the consummation of the
transactions contemplated in this Agreement and the International Purchase
Agreement or the performance by the Company of its obligations hereunder or
thereunder; the aggregate of all pending legal or governmental proceedings
to which the Company or any Subsidiary is a party or of which any of their
respective property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental to
the business, is not reasonably expected to result in a Material Adverse
Effect.
(xiii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) 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, 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, would result in a
Material Adverse Effect.
(xv) 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 sale of the Securities under
this Agreement and the International Purchase Agreement, or the
consummation of the transactions contemplated in the Prospectuses, this
Agreement and the International Purchase Agreement, except such as have
been already obtained or as may be required under the 1933 Act or the 1933
Act Regulations and foreign or state securities or blue sky laws obtained
or as may be required.
(xvi) 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 to possess such Governmental Licenses would not, singly or in the
aggregate, have 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 would not, singly or in
8
the aggregate, have 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 would not have 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, would result in a Material
Adverse Effect.
(xvii) 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 other properties 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 Prospectuses 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 Prospectuses, 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 any of the leases or subleases mentioned above, 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
lease or sublease.
(xviii) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, 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 (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 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
9
are no events or circumstances that might 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.
(xix) REGISTRATION RIGHTS. Except as described in the Prospectuses,
there are no persons with registration rights or other similar rights to
have any securities registered pursuant to the Registration Statement or
otherwise registered by the Company under the 1933 Act.
(xx) CERTAIN TRANSACTIONS. There are no business relationships or
related-party transactions of the nature described in Item 404 of
Regulation S-K involving the Company and any other persons referred to in
said Item 404 that are required to be disclosed in the U.S. Prospectus and
that have not been so disclosed.
(xxi) OPERATING AGREEMENTS. The Licensing and Sales Agreements, the
Regional Distribution Agreement, the Wholesale Distribution Agreements, the
Trademark/Tradename License Agreements and the Management Services
Agreements, each dated November 20, 1996 (as amended, modified or
supplemented from time to time, collectively, the "Operating Agreements"),
to which one or more of the Subsidiaries (other than Nu Skin Thailand) is a
party, and the Licensing and Sales Agreement, the Wholesale Distribution
Agreement, the Trademark/Tradename License Agreement and the Management
Services Agreement, each dated March 12, 1997, to which Nu Skin Thailand is
a party (all such agreements, in each case as amended, modified or
supplemented from time to time, being referred to collectively as the
"Operating Agreements") (i) have been duly authorized by all necessary
corporate action on the part of the Company and the Subsidiaries, (ii) do
not conflict with or result in a breach of or (with or without the giving
of notice, lapse of time or both) constitute a default under, the
certificate of incorporation of the Company or comparable governing
document of any Subsidiary or any material agreement to which the Company
or any Subsidiary is a party or by which any of their properties are bound
(except for such conflicts, breaches or defaults, that would not have a
Material Adverse Effect) and (iii) have been or by the Closing Time (as
hereinafter defined) will have been duly executed and delivered by one or
more of the Subsidiaries and constitute or will constitute legal, valid and
binding obligations of the Company and the Subsidiaries, enforceable
against them in accordance with their terms.
(b) REPRESENTATIONS AND WARRANTIES BY THE SELLING STOCKHOLDERS. Each
Selling Stockholder (or Back-Stopped Selling Stockholder (as defined in Section
6(a)), as the case may be) severally represents and warrants to each U.S.
Underwriter as of the date hereof, as of the Closing Time, and, if the Selling
Stockholder is selling U.S. Option Securities on a Date of Delivery, as of each
such Date of Delivery, and agrees with each U.S. Underwriter, as follows:
10
(i) ACCURATE DISCLOSURE. To the best knowledge of each Back-Stopped
Selling Stockholder, the representations and warranties of the Company
contained in Section 1(a) hereof are true and correct; such Back-Stopped
Selling Stockholder has reviewed and is familiar with the Registration
Statement and the Prospectuses and neither the Prospectuses nor any
amendments or supplements thereto (including any prospectus wrapper)
includes 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; each
Selling Stockholder is not prompted to sell the Securities to be sold by
such Selling Stockholder hereunder by any information concerning the
Company or any Subsidiary of the Company which is not set forth in the
Prospectuses.
(ii) AUTHORIZATION OF AGREEMENTS. Each Selling Stockholder has the
full right, power and authority to enter into this Agreement, the
International Purchase Agreement, and a Power of Attorney and Custody
Agreement (the "Power of Attorney and Custody Agreement") and to sell,
transfer and deliver the Securities to be sold by such Selling Stockholder
hereunder and under the International Purchase Agreement. The execution
and delivery of this Agreement, the International Purchase Agreement, and
the Power of Attorney and Custody Agreement and the sale and delivery of
the Securities to be sold by such Selling Stockholder and the consummation
of the transactions contemplated herein and therein and compliance by such
Selling Stockholder with its obligations hereunder and thereunder have been
duly authorized by such Selling Stockholder 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 under, or result in the
creation or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Stockholder or any property or assets
of such Selling Stockholder pursuant to any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder may be bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the charter or by-laws
or other organizational instrument of such Selling Stockholder, if
applicable, or any applicable treaty, law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Stockholder or any of its properties.
(iii) GOOD AND MARKETABLE TITLE. Such Selling Stockholder has and
will at the Closing Time and, if any Option Securities are purchased, on
the Date of Delivery have good and marketable title to the Securities to be
sold by such Selling Stockholder hereunder and under the International
Purchase Agreement, free and clear of any security interest, mortgage,
pledge, lien, charge, claim, equity or encumbrance of any kind, other than
pursuant to this Agreement and the International Purchase Agreement; and
upon delivery of such Securities and payment of the purchase price therefor
as herein and therein contemplated, assuming each such Underwriter has no
11
notice of any adverse claim, each of the Underwriters will receive good and
marketable title to the Securities purchased by it from such Selling
Stockholder, free and clear of any security interest, mortgage, pledge,
lien, charge, claim, equity or encumbrance of any kind.
(iv) DUE EXECUTION OF POWER OF ATTORNEY AND CUSTODY AGREEMENT. Such
Selling Stockholder has duly executed and delivered, in the form heretofore
furnished to the U.S. Representatives, the Power of Attorney and Custody
Agreement with Xxxxx X. Halls and M. Xxxxxx Xxxx, or either of them, as
attorneys-in-fact (the "Attorneys-in-Fact") and American Stock Transfer and
Trust Company, as custodian (the "Custodian"); the Custodian is authorized
to deliver the Securities to be sold by such Selling Stockholder hereunder
and to accept payment therefor; and each Attorney-in-Fact is authorized to
execute and deliver this Agreement and the International Purchase Agreement
and the certificate referred to in Section 5(l) or that may be required
pursuant to Sections 5(s) and 5(t) on behalf of such Selling Stockholder,
to sell, assign and transfer to the Underwriters the Securities to be sold
by such Selling Stockholder hereunder and thereunder, [to determine the
purchase price to be paid by the U.S. Underwriters to such Selling
Stockholder, as provided in Section 2(a) hereof,] to authorize the delivery
of the Securities to be sold by such Selling Stockholder hereunder and
thereunder, to accept payment therefor, and otherwise to act on behalf of
such Selling Stockholder in connection with this Agreement and the
International Purchase Agreement.
(v) ABSENCE OF MANIPULATION. Such Selling Stockholder has not taken,
and will not take, directly or indirectly, any action which is designed to
or which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(vi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or consent,
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling Stockholder of
its obligations under this Agreement or the International Purchase
Agreement or under the Power of Attorney and Custody Agreement, or in
connection with the sale and delivery of the Securities or the consummation
of the transactions contemplated by this Agreement and the International
Purchase Agreement, except such as may have previously been made or
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws.
(vii) RESTRICTION ON SALE OF SECURITIES. During a period of 365 days
from the date of the U.S. Prospectus, such Selling Stockholder, on its own
behalf and on behalf of all corporations, limited liability companies,
partnerships, trusts, foundations and similar entities for which such
Selling Stockholder has investment power, will not, without the prior
written consent of Xxxxxxx Xxxxx (i) offer, pledge, sell, contract to
12
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 share of
Common Stock or any securities convertible into or exercisable or
exchangeable for 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 agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply
to the Securities to be sold hereunder or under the International Purchase
Agreement.
(viii) CERTIFICATES SUITABLE FOR TRANSFER. Certificates for all of
the Securities to be sold by such Selling Stockholder pursuant to this
Agreement or the International Purchase Agreement in suitable form for
transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed, have been
placed in custody with the Custodian with irrevocable conditional
instructions to deliver such Securities to the Underwriters pursuant to
this Agreement or the International Purchase Agreement.
(ix) NO ASSOCIATION WITH NASD. Neither such Selling Stockholder nor
any of his or her affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, or has any other association with (within the meaning of Article I,
Section 1(m) of the By-laws of the National Association of Securities
Dealers, Inc.), any member firm of the National Association of Securities
Dealers, Inc.
(c) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its Subsidiaries delivered to Xxxxxxx Xxxxx, the U.S.
Representatives or to counsel for the U.S. Underwriters shall be deemed a
representation and warranty by the Company to each U.S. Underwriter as to the
matters covered thereby; and any certificate signed by or on behalf of the
Selling Stockholders as such and delivered to Xxxxxxx Xxxxx, the U.S.
Representatives or to counsel for the U.S. Underwriters pursuant to the terms of
this Agreement shall be deemed a representation and warranty by such Selling
Stockholder to each U.S. Underwriter as to the matters covered thereby.
13
SECTION 2 SALE AND DELIVERY TO THE U.S. 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, each Selling Stockholder agrees, severally and not jointly, to sell to
each U.S. Underwriter, and each U.S. Underwriter agrees, severally and not
jointly, to purchase from each Selling Stockholder, at the price per share set
forth in Schedule C, that proportion of the number of Initial U.S. Securities
set forth in Schedule B opposite the name of such Selling Stockholder, as the
case may be, which the number of Initial U.S. Securities set forth in Schedule A
opposite the name of such U.S. Underwriter, plus any additional number of
Initial U.S. Securities which such U.S. Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof, bears to the total
number of Initial U.S. Securities, subject, in each case, to such adjustments
among the U.S. Underwriters as Xxxxxxx Xxxxx in its sole discretion shall make
to eliminate any sales or purchases of fractional securities.
(b) U.S. 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 Selling Stockholders specified in Schedule B as
selling U.S. Option Securities acting severally and not jointly, hereby grant an
option to the U.S. Underwriters, severally and not jointly, to purchase up to an
aggregate of 840,000 additional shares of Common Stock, as set forth in Schedule
B, at the price per share set forth in Schedule C, less an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Initial Securities but not payable on the Option Securities. The option
hereby granted will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering over-
allotments which may be made in connection with the offering and distribution of
the Initial U.S. Securities upon notice by Xxxxxxx Xxxxx to the Selling
Stockholders, setting forth the number of U.S. Option Securities as to which the
several U.S. Underwriters are then exercising the option and the time and date
of payment and delivery for such U.S. Option Securities. Any such time and date
of delivery for the U.S. Option Securities (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 U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial U.S.
Securities set forth in Schedule A opposite the name of such U.S. Underwriter
bears to the total number of Initial U.S. Securities, subject in each case to
such adjustments as Xxxxxxx Xxxxx in its discretion shall make to eliminate any
sales or purchases of fractional shares.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial U.S. Securities shall be made at the offices of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, or at
such other place as shall be agreed upon by Xxxxxxx Xxxxx, the Company and the
Selling Stockholders, at 9:30 A.M. (New York Time) on the third (fourth, if the
pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day
after the date hereof (unless postponed in accordance with the provisions of
14
Section 10), or such other time not later than ten business days after such date
as shall be agreed upon by Xxxxxxx Xxxxx, the Company and the Selling
Stockholders (such time and date of payment and delivery being herein called
"Closing Time").
In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by
Xxxxxxx Xxxxx, the Company and the Selling Stockholders, on each Date of
Delivery as specified in the notice from Xxxxxxx Xxxxx to the Company and the
Selling Stockholders.
Payment shall be made to the Selling Stockholders by wire transfer of
immediately available funds to bank accounts designated by the Custodian
pursuant to each Selling Stockholder's Power of Attorney and Custody Agreement,
against delivery to the U.S. Representatives for the respective accounts of the
U.S. Underwriters of certificates for the U.S. Securities to be purchased by
them. It is understood that each U.S. Underwriter has authorized the U.S.
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial U.S. Securities and the U.S.
Option Securities, if any, which it has agreed to purchase. Xxxxxxx Xxxxx,
individually and not as representative of the U.S. Underwriters, may (but shall
not be obligated to) make payment of the purchase price for the Initial U.S.
Securities or the U.S. Option Securities, if any, to be purchased by any U.S.
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 U.S. Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial U.S.
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the Initial
U.S. Securities and the U.S. Option Securities, if any, will be made available
for examination and packaging by the U.S. Representatives in The City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time or the relevant Date of Delivery, as the case may be.
SECTION 3 COVENANTS OF THE COMPANY. The Company covenants with each U.S.
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 or Rule 434, as applicable, and will notify Xxxxxxx Xxxxx
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the U.S. Prospectus or any amended U.S. Prospectus shall have
been filed, (ii) of the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the U.S.
Prospectus or for
15
additional information, 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 promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order in the United States and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give Xxxxxxx Xxxxx notice
of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the U.S. or
the International Prospectuses, will xxxxxxx Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx or counsel for the U.S. Underwriters shall
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or will deliver to the U.S. Representatives and counsel for the U.S.
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the U.S.
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the U.S. Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the U.S.
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 U.S.
Underwriter, without charge, as many copies of each preliminary prospectus
as such U.S. 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 U.S. Underwriter, without charge, during
the period when the U.S. Prospectus is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"), such
number of copies of the U.S. Prospectus (as amended or supplemented) as
such U.S. Underwriter may reasonably request. The U.S. Prospectus and any
amendments or supplements thereto furnished to the U.S. Underwriters will
be identical to the electronically transmitted copies thereof filed with
16
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 so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and the International Purchase Agreement and in the Prospectuses.
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 U.S. Underwriters or for the Company, to amend
the Registration Statement or amend or supplement any Prospectus in order
that such 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 any Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations,
the Company will (i) with respect to the U.S. Prospectus, 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 U.S. Prospectus comply with such
requirements, (ii) with respect to the International Prospectus, supplement
such prospectus to correct such statement or omission and (iii) furnish to
the Underwriters such number of copies of such amendments or supplements as
the Underwriters may reasonably request.
(f) 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.
(g) LISTING. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(h) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the U.S. 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 Common Stock
or any securities convertible into or exercisable or exchangeable for
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
agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii) above
is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not
17
apply to (A) the Securities to be sold hereunder or under the International
Purchase Agreement, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of any security
outstanding on the date hereof and referred to in the Prospectuses, or (C)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing employee benefit plans of the Company referred
to in the Prospectuses.
(i) REPORTING REQUIREMENTS. The Company, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the 1934
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 rules and regulations of the Commission thereunder.
SECTION 4 PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay
or cause to be paid all expenses incident to the performance of the
obligations of the Company and of the Selling Stockholders under this
Agreement, including (i) the preparation by the Company, printing and
filing in the United States of the Registration Statement (including
financial statements and exhibits) as originally filed and in the United
States of each amendment thereto, (ii) the preparation, printing and
delivery to the Underwriters of this Agreement, the Intersyndicate
Agreement, any Agreement among Underwriters and such other documents as
may be required in connection with the offering, purchase, sale or
delivery of the Securities, (iii) the preparation, issuance and delivery
of the certificates for the Securities to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable
upon the sale or delivery of the Securities to the Underwriters and the
transfer of the Securities between the U.S. Underwriters and the
International Managers (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors and the Selling Stockholders'
counsel, accountants and other advisors, (v) the qualification of the
Securities 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 U.S. 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, any Term Sheets
and of the Prospectuses and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the U.S. Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the
fees and expenses of any transfer agent or registrar for the Securities,
(ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the U.S. 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 (x) the fees and
expenses incurred in connection with the listing of the Securities on
the New York Stock Exchange.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Selling Stockholders shall reimburse the U.S.
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the U.S. Underwriters. Except as provided
in this Section 4 and in Sections 6 and 7 hereof, the
18
Company shall not be responsible for paying the out-of-pocket expenses of the
U.S. Underwriters.
(c) ALLOCATION OF EXPENSES. The provisions of this Section shall not
affect any agreement that the Company and the Selling Stockholders may make for
the sharing of such costs and expenses.
SECTION 5 CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The obligations of
the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Stockholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any Subsidiary of the Company or by or on behalf of any Selling Stockholder
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, has become
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 for the U.S.
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR THE COMPANY. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of
Closing Time, of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel for the U.S. Underwriters may
reasonably request.
(c) OPINION OF GENERAL COUNSEL TO THE COMPANY. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of the General Counsel of the Company, in form and substance
satisfactory to counsel for the U.S. Underwriters, together with signed or
reproduced copies of such letter for each of the other U.S. Underwriters to
the effect set forth in Exhibit B hereto and to such further effect as
counsel for the U.S. Underwriters may reasonably request.
(d) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. At Closing
Time, the
19
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., counsel for the
Selling Stockholders, in form and substance satisfactory to counsel for the
U.S. Underwriters, together with signed or reproduced copies of such letter
for each of the other U.S. Underwriters to the effect set forth in Exhibit
C hereto and to such further effect as counsel for the U.S. Underwriters
may reasonably request.
(e) OPINION OF JAPANESE COUNSEL FOR THE COMPANY. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Tokyo Aoyama Law Office, Japanese counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters to the effect set forth in Exhibit D
hereto and to such further effect as counsel for the U.S. Underwriters may
reasonably request.
(f) OPINION OF HONG KONG COUNSEL FOR THE COMPANY. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Xxxxx & XxXxxxxx, Hong Kong counsel for the Company,
in form and substance satisfactory to counsel for the U.S. Underwriters,
together with signed or reproduced copies of such letter for each of the
other U.S. Underwriters to the effect set forth in Exhibit E hereto and to
such further effect as counsel for the U.S. Underwriters may reasonably
request.
(g) OPINION OF TAIWANESE COUNSEL FOR THE COMPANY. At Closing Time,
the U.S. Representatives shall have received the favorable opinion, dated
as of Closing Time, of Xxx & Li, Taiwanese counsel for the Company, in form
and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit F hereto and to such
further effect as counsel for the U.S. Underwriters may reasonably request.
(h) OPINION OF SOUTH KOREAN COUNSEL FOR THE COMPANY. At Closing
Time, the U.S. Representatives shall have received the favorable opinion,
dated as of Closing Time, of Xxx & Xxxxx, South Korean counsel for the
Company, in form and substance satisfactory to counsel for the U.S.
Underwriters, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters to the effect set forth in Exhibit G
hereto and to such further effect as counsel for the U.S. Underwriters may
reasonably request.
(i) OPINION OF THAI COUNSEL FOR THE COMPANY. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Anek & Associates, Thai counsel for the company, in form
and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit H hereto and to such
further effect as counsel for the U.S. Underwriters may
20
reasonably request.
(j) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. At Closing Time, the
U.S. Representatives shall have received the favorable opinion, dated as of
Closing Time, of Shearman & Sterling, counsel for the U.S. 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),
(iii), (vi), (vii) (solely as to preemptive or other similar rights arising
by operation of law or under the charter or by-laws of the Company), (viii)
through (x), inclusive, (xii), (xiii) (solely as to the information in the
Prospectus under "Description of Capital Stock--Common Stock") and 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 U.S. 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.
(k) 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 Prospectuses, 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, and
the U.S. Representatives shall have received a certificate of the President
or a Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of the 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 are contemplated by the
Commission.
(l) CERTIFICATE OF SELLING STOCKHOLDERS. At Closing Time, the U.S.
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Stockholder, dated as of Closing Time, to the
effect that (i) the representations and warranties of each Selling
Stockholder contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as
of Closing Time and (ii) each Selling Stockholder has complied in all
material respects with all agreements and all conditions on its part to be
performed under this Agreement and the International Purchase Agreement at
or prior to Closing Time.
(m) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
this
21
Agreement, the U.S. Representatives shall have received from Price
Waterhouse L.L.P. a letter dated such date, in form and substance
satisfactory to the U.S. Representatives, together with signed or
reproduced copies of such letter for each of the other U.S. 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 Prospectuses.
(n) BRING-DOWN COMFORT LETTER. At Closing Time, the U.S.
Representatives shall have received from Price Waterhouse L.L.P. a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (m) of this Section,
except that the specified date referred to shall be a date not more than
three business days prior to Closing Time.
(o) APPROVAL OF LISTING. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(p) 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.
(q) LOCK-UP AGREEMENTS. At the date of this Agreement, the U.S.
Representatives shall have received an agreement substantially in the form
of Exhibit I hereto signed by the persons listed on Schedule D hereto.
(r) PURCHASE OF INITIAL INTERNATIONAL SECURITIES. Contemporaneously
with the purchase by the U.S. Underwriters of the Initial U.S. Securities
under this Agreement, the International Managers shall have purchased the
Initial International Securities under the International Purchase
Agreement.
(s) CONDITIONS TO PURCHASE OF THE U.S. OPTION SECURITIES. In the
event that the U.S. Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the U.S. Option
Securities, the representations and warranties of the Company and the
Selling Stockholders contained herein and the statements in any
certificates furnished by the Company, any Subsidiary of the Company and
the Selling Stockholders hereunder shall be true and correct as of each
Date of Delivery and, at the relevant Date of Delivery, the U.S.
Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date
of Delivery, of the 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(k) hereof remains true and correct as of such Date of
Delivery.
22
(ii) CERTIFICATE OF SELLING STOCKHOLDERS. A certificate,
dated such Date of Delivery, of an Attorney-in-Fact on behalf of each
Selling Stockholder confirming that the certificate delivered at
Closing Time pursuant to Section 5(l) remains true and correct as of
such Date of Delivery.
(iii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion
of counsel for the Company, in form and substance satisfactory to
counsel for the U.S. 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(b) hereof.
(iv) OPINION OF GENERAL COUNSEL FOR THE COMPANY. The
favorable opinion of the Company's General Counsel, in form and
substance satisfactory to counsel for the U.S. 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.
(v) OPINION OF COUNSEL FOR THE SELLING STOCKHOLDERS. The
favorable opinion of LeBoeuf, Lamb, Xxxxxx & Xxxxxx, L.L.P., counsel
for the Selling Stockholders, in form and substance satisfactory to
counsel for the U.S. 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(d) hereof.
(vi) OPINION OF JAPANESE COUNSEL FOR COMPANY. The favorable
opinion of Japanese counsel for the Company, in form and substance
satisfactory to counsel for the U.S. 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(e) hereof.
(vii) OPINION OF HONG KONG COUNSEL FOR THE COMPANY. The
favorable opinion of Hong Kong counsel for the Company, in form and
substance satisfactory to counsel for the U.S. 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(f) hereof.
(viii) OPINION OF TAIWANESE COUNSEL FOR THE COMPANY. The
favorable opinion of Taiwanese counsel for the Company, in form and
substance satisfactory to counsel for the U.S. 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(g) hereof.
(ix) OPINION OF SOUTH KOREAN COUNSEL FOR THE COMPANY. The
favorable opinion of South Korean counsel for the Company, in form and
23
substance satisfactory to counsel for the U.S. 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(h) hereof.
(x) OPINION OF THAI COUNSEL FOR THE COMPANY. The favorable
opinion of Thai counsel for the Company, in form and substance
satisfactory to counsel for the U.S. 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(i) hereof.
(xi) OPINION OF COUNSEL FOR THE U.S. UNDERWRITERS. The
favorable opinion of Shearman & Sterling, counsel for the U.S.
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(j) hereof.
(xii) BRING-DOWN COMFORT LETTER. A letter from Price
Waterhouse L.L.P., in form and substance satisfactory to the U.S.
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the U.S.
Representatives pursuant to Section 5(n) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of
Delivery.
(t) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery counsel for the U.S. Underwriters shall have been furnished with such
documents and opinions as they may reasonably 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 and the Selling Stockholders in
connection with the sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the U.S. Representatives and
counsel for the U.S. Underwriters.
(u) 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 U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant Option
Securities, may be terminated by the U.S. 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.
24
SECTION 6 INDEMNIFICATION.
(a) INDEMNIFICATION OF U.S. UNDERWRITERS. The Company and the Selling
Stockholders, jointly (except as provided in clause (2) below) and severally,
agree to indemnify and hold harmless each U.S. Underwriter and each person, if
any, who controls any U.S. Underwriter within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:
(1) 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), including the Rule 430A Information and the
Rule 434 Information, if applicable, 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 Prospectuses (or any amendment or supplement
thereto), or the omission or alleged 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;
(2) 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 any such settlement is
effected with the written consent of (A) the Company, to the extent
indemnification pursuant to this Section 6(a)(2) is sought from the
Company, and (B) each Selling Stockholder, to the extent indemnification
pursuant to this Section 6(a)(2) is sought from such Selling Stockholder;
and
(3) 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
hereof, to the extent that any such expense is not paid under clauses (1)
or (2) above;
PROVIDED, HOWEVER, that (x) 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 U.S. Underwriter through Xxxxxxx Xxxxx or expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any U.S. preliminary
prospectus or the U.S. Prospectus (or any amendment or supplement thereto); (y)
the
25
aggregate liability of each Selling Stockholder under this Section 6 (together
with any liability of such Selling Stockholder under Section 6 of the
International Purchase Agreement shall be limited to an amount equal to the net
proceeds (after deducting the aggregate Underwriters' discount, but before
deducting expenses) received by such Selling Stockholder from the sale of his or
her Securities pursuant to this Agreement and the International Purchase
Agreement and (z) each Selling Stockholder other than the Back-Stopped Selling
Stockholders (such other Selling Stockholders being referred to herein as the
"Limited Selling Stockholders") will be liable in any case only to the extent
that any such loss, liability, claim, damage or expense arises out of or is
based upon statements in or omissions from the Registration Statement (or any
amendment thereto) based upon information furnished to the Company by such
Limited Selling Stockholder expressly for use therein; and PROVIDED, FURTHER,
that the Company and the Selling Stockholders shall not be liable to any U.S.
Underwriter under this subsection (a) with respect to any U.S. preliminary
prospectus to the extent that any loss, claim, damage or liability of such U.S.
Underwriter results from the fact that such U.S. Underwriter sold U.S.
Securities to a person to whom there was not given or sent, at or prior to the
written confirmation of such sale, a copy of the U.S. Prospectus or of the U.S.
Prospectus as then amended or supplemented in any case where such delivery is
required by the Securities Act if the Company has previously furnished copies
thereof to such U.S. Underwriter and the loss, claim, damage or liability of
such U.S. Underwriter results from an untrue statement or omission of a material
fact contained in the U.S. preliminary prospectus which was corrected in the
U.S. Prospectus (as amended or supplemented).
In making a claim for indemnification under this Section 6 (other than
pursuant to clause (a)(4) of this Section 6) or contribution under Section 7
hereof by the Company or the Selling Stockholders, the indemnified parties
may proceed against either (1) the Company and the Selling Stockholders
jointly, (2) the Selling Stockholders only or (3) the Company only, but may
not proceed solely against Xxxxx X. Xxxxx, Xxxxxx X. Xxxx and Xxxxx X. Halls
and the trusts, partnerships, foundations, corporations, limited liability
companies and similar Selling Stockholder entities for which these
individuals have investment power (the "Back-Stopped Selling Stockholders"),
except as set forth below. In the event that the indemnified parties are
entitled to seek indemnity or contribution hereunder against any loss,
liability, claim, damage and expense to which this paragraph applies then, as
a precondition to any indemnified party obtaining indemnification or
contribution from any Back-Stopped Selling Stockholder, the indemnified
parties shall first obtain a final judgment from a trial court that such
indemnified parties are entitled to indemnity or contribution under this
Agreement from the Company and the Selling Stockholders with respect to such
loss, liability, claim, damage or expense (the "Final Judgment") and shall
seek to satisfy such Final Judgment in full from the Company by making a
written demand upon the Company for such satisfaction. Only in the event
such Final Judgment shall remain unsatisfied in whole or in part 45 days
following the date of receipt by the Company of such demand shall any
indemnified party have the right to take action to satisfy such Final
Judgment by making demand directly on the Back-Stopped Selling Stockholders
(but only if and to the extent the Company has not already satisfied such
Final Judgment, whether by settlement, release or otherwise). The
indemnified parties may exercise this right to first seek to obtain payment
from the Company and thereafter obtain payment from the Back-Stopped Selling
Stockholders without regard to the pursuit by any
26
party of its rights to the appeal of such Final Judgment. The indemnified
parties shall, however, be relieved of their obligation to first obtain a Final
Judgment against the Company to seek to obtain payment from the Company with
respect to such Final Judgment or, having sought such payment, to wait such 45
days after failure by the Company to immediately satisfy any such Final Judgment
if (A) the Company files a petition for relief under the United States
Bankruptcy Code (the "Bankruptcy Code"), (B) an order for relief is entered
against the Company in an involuntary case under the Bankruptcy Code, (C) the
Company makes an assignment for the benefit of its creditors, (D) any court
orders or approves the appointment of a receiver or custodian for the Company or
a substantial portion of its assets, or (E) the loss, liability, claim, damage
or expense arises out of or is based upon statements in or omissions from the
Registration Statement (or any amendment thereto) based upon information
furnished to the Company by a Back-Stopped Selling Stockholder for use therein.
The foregoing provisions of this paragraph are not intended to require any
indemnified party to obtain a Final Judgment against the Company, or the Selling
Stockholders before obtaining reimbursement of expenses pursuant to clause
(a)(3) of this Section 6. However, the indemnified parties shall first seek to
obtain such reimbursement in full from the Company by making a written demand
upon the Company for such reimbursement. Only in the event such expenses shall
remain unreimbursed in whole or in part 45 days following the date of receipt by
the Company of such demand shall any indemnified party have the right to receive
reimbursement of such expenses from the Back-Stopped Selling Stockholders by
making written demand directly on the Back-Stopped Selling Stockholders (but
only if and to the extent the Company has not already satisfied the demand for
reimbursement, whether by settlement, release or otherwise). The indemnified
parties shall, however, be relieved of their obligation to first seek to obtain
such reimbursement in full from the Company or, having made written demand
therefor, to wait such 45 days after failure by the Company to immediately
reimburse such expenses if (I) the Company files a petition for relief under
the Bankruptcy Code, (II) an order for relief is entered against the Company in
an involuntary case under the Bankruptcy Code, (III) the Company makes an
assignment for the benefit of its creditors, (IV) any court orders or approves
the appointment of a receiver or custodian for the Company or a substantial
portion of its assets, or (V) the loss, liability, claim, damage or expense
arises out of or is based upon statements in or omissions from the Registration
Statement (or any amendment thereto) based upon information furnished to the
Company by a Back-Stopped Selling Stockholder for use therein. Notwithstanding
anything to the contrary contained herein, the provisions of this paragraph
shall not apply to any claim for indemnity pursuant to clause (a)(2) of this
Section 6 if the indemnified parties are entitled to seek indemnity under such
clause (a)(2) from any Selling Stockholder with respect to a settlement that has
not been effected with the written consent of the Company.
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS AND SELLING
STOCKHOLDERS. Each U.S. 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, and
each Selling Stockholder 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
27
statements or omissions, made in the Registration Statement (or any amendment
thereto), including the Rule 430A Information and the Rule 434 Information, if
applicable, or any U.S. preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such U.S. Underwriter through the U.S.
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the U.S. Prospectus (or any
amendment or supplement thereto).
(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 for the indemnified parties shall be selected by Xxxxxxx Xxxxx, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel for the
indemnified parties shall be selected by the Company; PROVIDED, HOWEVER, that in
each such case, such counsel shall be reasonably satisfactory to the
indemnifying party. An indemnifying party may participate at its own expense in
the defense of any such action; provided, however, that counsel for the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel for the indemnified 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)(2) or Section 6(a)(3) 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.
28
(e) OTHER AGREEMENTS WITH RESPECT TO INDEMNIFICATION. The provisions of
this Section shall not affect any agreement between the Company and the Selling
Stockholders with respect to indemnification.
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 and the Selling Stockholders on the one hand and the U.S. 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 and the Selling Stockholders on the one hand and of the U.S.
Underwriters on the other hand in 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 and the Selling Stockholders
on the one hand and the U.S. Underwriters on the other hand in connection with
the offering of the U.S. 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 U.S. Securities pursuant to this Agreement (before deducting
expenses) received by the Selling Stockholders and the total underwriting
discount received by the U.S. Underwriters, in each case as set forth on the
cover of the U.S. Prospectus, or, if Rule 434 is used, the corresponding
location on the Term Sheet, bear to the aggregate initial public offering price
of the U.S. Securities as set forth on such cover.
The relative fault of the Company and the Selling Stockholders on the one
hand and the U.S. 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 the Selling Stockholders
or by the U.S. Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholders and the U.S. 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 U.S. 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,
29
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 U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. 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 a U.S.
Underwriter 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 such U.S.
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 or any Selling Stockholder 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 or such Selling Stockholder, as the case may be. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial U.S. Securities set forth
opposite their respective names in Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement between the
Company and the Selling Stockholders with respect to contribution.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
Subsidiaries or the Selling Stockholders submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any U.S. Underwriter or controlling person, or by or on behalf
of the Company or the Selling Stockholders, and shall survive delivery of the
Securities to the U.S. Underwriters.
30
SECTION 9. TERMINATION OF AGREEMENT
(a) TERMINATION; GENERAL. The U.S. Representatives may terminate this
Agreement, by notice to the Company and the Selling Stockholders, 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 U.S. 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
other 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 U.S. Representatives, impracticable 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
American Stock Exchange or 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) if a banking moratorium has been declared by either U.S.
Federal or New York State 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 U.S. UNDERWRITERS. If one or
more of the U.S. 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 U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting U.S. 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 U.S.
Representatives shall not have completed such arrangements within such 24-hour
period, then:
a. if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. 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 U.S. Underwriters, or
31
b. if the number of Defaulted Securities exceeds 10% of the number
of U.S. 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 U.S. 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 U.S.
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting U.S.
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 U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the (i) U.S. Representatives or (ii) the
Company and any Selling Stockholder shall have the right to postpone the 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 "U.S. Underwriter" includes any person substituted for a U.S.
Underwriter under this Section 10.
SECTION 11. DEFAULT BY ONE OR MORE OF THE SELLING STOCKHOLDERS. If one or
more Selling Stockholders shall fail at Closing Time or at a Date of Delivery to
sell and deliver the number of Securities which such Selling Stockholder or
Selling Stockholders are obligated to sell hereunder, and the remaining Selling
Stockholders do not exercise the right hereby granted to increase, pro rata or
otherwise, the number of Securities to be sold by them hereunder to the total
number to be sold by all Selling Stockholders as set forth in Schedule B hereto,
then the U.S. Underwriters may, at the option of the U.S. Representatives, by
notice from the U.S. Representatives to the Company and the non-defaulting
Selling Stockholders, either (a) terminate this Agreement without any liability
on the fault of any non-defaulting party except that the provisions of Sections
1, 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to purchase
the Securities which the non-defaulting Selling Stockholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any
Selling Stockholder so defaulting from liability, if any, in respect of such
default.
In the event of a default by one or more Selling Stockholders as referred
to in this Section 11, each of the U.S. Representatives, the Company and the
non-defaulting Selling Stockholders shall have the right to postpone the Closing
Time or the relevant Date of Delivery for a period not exceeding seven days in
order to effect any required change in the Registration Statement or U.S.
Prospectus or in any other documents or arrangements.
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 U.S.
Underwriters shall be directed to the U.S. Representatives at North Tower, World
Financial Center, New York, New York 10281-1201,
32
attention of Xx. Xxxxx Xxxxxxx; notices to the Company shall be directed to it
at 00 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxx 00000, attention of Mr. M. Xxxxxx Xxxx;
and notices to the Selling Stockholders shall be directed to 00 Xxxx Xxxxxx
Xxxxxx, Xxxxx, Xxxx 00000, attention of Xx. Xxxxx X. Halls.
SECTION 13. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the U.S. Underwriters, the Company, and the Selling Stockholders
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 U.S. Underwriters, the Company, and the Selling
Stockholders 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 U.S. Underwriters, the Company, and the Selling
Stockholders 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 U.S. Underwriter shall be deemed to be a successor by reason merely of
such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -- EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
33
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Stockholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the U.S. Underwriters, the
Company and the Selling Stockholders in accordance with its terms.
Very truly yours,
NU SKIN ASIA PACIFIC, INC.
By
----------------------------------------
Title:
SELLING STOCKHOLDERS
By
----------------------------------------
As Attorney-in-Fact acting on behalf
of the Selling Stockholders named in
Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
XXXXXX XXXXXXX XXXX XXXXXX
NOMURA SECURITIES INTERNATIONAL, INC.
PAINEWEBBER INCORPORATED
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
--------------------------------
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.
TABLE OF CONTENTS
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . 3
(a) Representations and Warranties by the Company . . . . . . . . . . . . . . 3
(i) Compliance with Registration Requirements. . . . . . . . . . . . . . 3
(ii) Independent Accountants . . . . . . . . . . . . . . . . . . . . . . 4
(iii) Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 4
(iv) No Material Adverse Change in Business. . . . . . . . . . . . . . . 5
(v) Good Standing of the Company . . . . . . . . . . . . . . . . . . . . 5
(vi) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . . . 6
(vii) Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(viii) Authorization of Agreement. . . . . . . . . . . . . . . . . . . . 6
(ix) Authorization and Description of Securities . . . . . . . . . . . . 6
(x) Absence of Defaults and Conflicts. . . . . . . . . . . . . . . . . . 7
(xi) Absence of Labor Dispute. . . . . . . . . . . . . . . . . . . . . . 7
(xii) Absence of Proceedings . . . . . . . . . . . . . . . . . . . . . . 7
(xiii) Accuracy of Exhibits. . . . . . . . . . . . . . . . . . . . . . . 8
(xiv) Possession of Intellectual Property. . . . . . . . . . . . . . . . 8
(xv) Absence of Further Requirements . . . . . . . . . . . . . . . . . . 8
(xvi) Possession of Licenses and Permits . . . . . . . . . . . . . . . . 8
(xvii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . . 9
(xviii) Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . 9
(xix) Registration Rights. . . . . . . . . . . . . . . . . . . . . . . .10
(xx) Certain Transactions. . . . . . . . . . . . . . . . . . . . . . . .10
(xxi) Operating Agreements . . . . . . . . . . . . . . . . . . . . . . .10
(b) Representations and Warranties by the Selling Stockholders. . . . . . . .10
(i) Accurate Disclosure. . . . . . . . . . . . . . . . . . . . . . . . .11
(ii) Authorization of Agreements . . . . . . . . . . . . . . . . . . . .11
(iii) Good and Marketable Title. . . . . . . . . . . . . . . . . . . . .11
(iv) Due Execution of Power of Attorney and Custody Agreement. . . . . .11
(v) Absence of Manipulation. . . . . . . . . . . . . . . . . . . . . . .12
(vi) Absence of Further Requirements . . . . . . . . . . . . . . . . . .12
(vii) Restriction on Sale of Securities. . . . . . . . . . . . . . . . .12
(viii) Certificates Suitable for Transfer. . . . . . . . . . . . . . . .13
(ix) No Association with NASD. . . . . . . . . . . . . . . . . . . . . .13
(c) Officer's Certificates. . . . . . . . . . . . . . . . . . . . . . . . . .13
SECTION 2 Sale and Delivery to the U.S. Underwriters; Closing. . . . . . . . .14
(a) Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . .14
(b) U.S. Option Securities . . . . . . . . . . . . . . . . . . . . . . .17
i
(c) Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
(d) Denominations; Registration. . . . . . . . . . . . . . . . . . . . .15
SECTION 3 Covenants of the Company . . . . . . . . . . . . . . . . . . . . . .15
(a) Compliance with Securities Regulations and Commission Requests . . .15
(b) Filing of Amendments.. . . . . . . . . . . . . . . . . . . . . . . .16
(c) Delivery of Registration Statements. . . . . . . . . . . . . . . . .16
(d) Delivery of Prospectuses . . . . . . . . . . . . . . . . . . . . . .16
(e) Continued Compliance with Securities Laws. . . . . . . . . . . . . .17
(f) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
(g) Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
(h) Restriction on Sale of Securities. . . . . . . . . . . . . . . . . .17
(i) Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 4 Payment of Expenses. . . . . . . . . . . . . . . . . . . . . . . . .18
(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
(b) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . .18
(c) Allocation of Expenses . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 5 Conditions of U.S. Underwriters' Obligations . . . . . . . . . . . .19
(a) Effectiveness of Registration Statement. . . . . . . . . . . . . . .19
(b) Opinion of Counsel for Company . . . . . . . . . . . . . . . . . . .19
(c) Opinion of General Counsel to the Company. . . . . . . . . . . . . .19
(d) Opinion of Counsel for the Selling Stockholders. . . . . . . . . . .19
(e) Opinion of Japanese Counsel for the Company. . . . . . . . . . . . .20
(f) Opinion of Hong Kong Counsel for the Company . . . . . . . . . . . .20
(g) Opinion of Taiwanese Counsel for the Company . . . . . . . . . . . .20
(h) Opinion of South Korean Counsel for the Company. . . . . . . . . . .20
(i) Opinion of Thai Counsel for the Company . . . . . . . . . . . . . .20
(j) Opinion of Counsel for U.S. Underwriters . . . . . . . . . . . . . .21
(k) Officers' Certificate. . . . . . . . . . . . . . . . . . . . . . . .21
(l) Certificate of Selling Stockholders. . . . . . . . . . . . . . . . .21
(m) Accountant's Comfort Letter. . . . . . . . . . . . . . . . . . . . .21
(n) Bring-down Comfort Letter. . . . . . . . . . . . . . . . . . . . . .22
(o) Approval of Listing. . . . . . . . . . . . . . . . . . . . . . . . .22
(p) No Objection . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
(q) Lock-up Agreements . . . . . . . . . . . . . . . . . . . . . . . . .22
(r) Purchase of Initial International Securities.. . . . . . . . . . . .22
ii
(s) Conditions to Purchase of the U.S. Option Securities . . . . . . . .22
(i) Officers' Certificate . . . . . . . . . . . . . . . . . . . .22
(ii) Certificate of Selling Stockholders . . . . . . . . . . . . .23
(iii) Opinion of Counsel for Company. . . . . . . . . . . . . . . .23
(iv) Opinion of General Counsel for the Company. . . . . . . . . .23
(v) Opinion of Counsel for the Selling Stockholders . . . . . . .23
(vi) Opinion of Japanese Counsel for Company . . . . . . . . . . .23
(vii) Opinion of Hong Kong Counsel for the Company. . . . . . . . .23
(viii) Opinion of Taiwanese Counsel for the Company. . . . . . . . .23
(ix) Opinion of South Korean Counsel for the Company . . . . . . .23
(x) Opinion of Thai Counsel for the Company. . . . . . . . . . . 24
(xi) Opinion of Counsel for the U.S. Underwriters. . . . . . . . .24
(xii) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . .24
(t) Additional Documents . . . . . . . . . . . . . . . . . . . . . . . .24
(u) Termination of Agreement . . . . . . . . . . . . . . . . . . . . . .24
SECTION 6 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .25
(a) Indemnification of U.S. Underwriters . . . . . . . . . . . . . . . .25
(b) Indemnification of Company, Directors and Officers and Selling
Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
(c) Actions against Parties; Notification. . . . . . . . . . . . . . . .28
(d) Settlement without Consent if Failure to Reimburse . . . . . . . . .28
(e) Other Agreements with Respect to Indemnification . . . . . . . . . .29
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 8. Representations, Warranties and Agreements to Survive Delivery . .30
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . . . . . .31
(a) Termination; General . . . . . . . . . . . . . . . . . . . . . . .31
(b) Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 10. Default by One or More of the U.S. Underwriters. . . . . . . . . .31
SECTION 11. Default by one or more of the Selling Stockholders or the
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 12. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
SECTION 13. Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
iii
SECTION 14. GOVERNING LAW AND TIME. . . . . . . . . . . . . . . . . . . . . .33
SECTION 15. Effect of Headings. . . . . . . . . . . . . . . . . . . . . . . .33
iv
