EXHIBIT 1.1
2,000,000 SHARES
BRILLIANT DIGITAL ENTERTAINMENT, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
----------------------
November ____, 1996
CS First Boston Corporation, and
Cruttenden Xxxx Incorporated
As Representatives of the Several Underwriters,
c/o CS First Xxxxxx Xxxxxxxxxxx,
Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, X.X. 00000
Dear Sirs:
1. Introductory. Brilliant Digital Entertainment, Inc., a Delaware
corporation ("Company"), proposes to issue and sell 2,000,000 shares ("Firm
Securities") of its Common Stock, par value $.001 ("Securities") and also
proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 300,000 additional shares ("Optional
Securities") of its Securities as set forth below. The Firm Securities and the
Optional Securities are herein collectively called the "Offered Securities." The
Company and Brilliant Interactive Ideas, Pty. Ltd. ("BII Australia"), a company
incorporated in the State of New South Wales, Australia, and a wholly-owned
subsidiary of the Company, hereby agree with the several Underwriters named in
Schedule A hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company and BII Australia. The
Company and BII Australia represent and warrant to, and agree with, the several
Underwriters that:
(a) A registration statement (No. 333-_________) relating to the
Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933 ("Act") and is not proposed
to be amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement ("initial registration statement") has
been declared effective, either (i) an additional registration statement
("additional registration statement") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (ii) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing
pursuant to such Rule and upon such filing the Offered Securities will all have
been duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company does not
propose to amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose to amend
it, and if any post-effective amendment to either such registration statement
has been filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become effective
upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the
case of the additional registration statement, Rule 462(b). For purposes of this
Agreement, "Effective Time" with respect to the initial registration statement
or, if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration statement,
the date and time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c), or (ii) if the Company has
advised the Representatives that it proposes to file an amendment or post-
effective amendment to such registration statement, the date and time as of
which such registration statement, as amended by such amendment or post-
effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with respect to
such additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or the
additional registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration statement (if
any) and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement." The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "Additional Registration Statement." The Initial
Registration Statement and the Additional Registration Statement are herein
referred to collectively as the "Registration Statements" and individually as a
"Registration Statement." The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to as
the "Prospectus." No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement (i) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all respects to the requirements of the Act and the rules and
regulations of the Commission ("Rules and Regulations") and did not include any
untrue statement of
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a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (ii) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed, or will conform, in all respects to the requirements of the Act and
the Rules and Regulations and did not include, or will not include, any untrue
statement of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) on the date of this Agreement, the Initial
Registration Statement and, if the Effective Time of the Additional Registration
Statement is prior to the execution and delivery of this Agreement, the
Additional Registration Statement each conforms, and at the time of filing of
the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the
Effective Date of the Additional Registration Statement in which the Prospectus
is included, each Registration Statement and the Prospectus will conform, in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Effective Time
of the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will conform in
all respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will include any untrue statement of a material fact
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and no Additional Registration Statement
has been or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the Prospectus based
upon written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification.
(d) Other than BII Australia, the Company has no subsidiaries. All of
the capital stock of BII Australia is owned by the Company. BII Australia has
been duly incorporated and is an existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus; BII Australia is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock of BII Australia
has been duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of BII Australia is owned free from liens, encumbrances
and defects.
(e) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and,
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when the Offered Securities have been delivered and paid for in accordance
with this Agreement on each Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive or similar rights with respect to
the Offered Securities.
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company or BII Australia and any person
that would give rise to a valid claim against the Company or BII Australia or
any Underwriter for a brokerage commission, finder's fee or other like payment.
(g) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company or BII Australia and any person
granting such person the right to require the Company or BII Australia to file a
registration statement under the Act (or comparable Australian law) with respect
to any securities of the Company or BII Australia owned or to be owned by such
person or to require the Company or BII Australia to include such securities in
the securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company or BII Australia under the Act (or comparable Australian law).
(h) The Offered Securities have been approved for listing on the
Nasdaq Stock Market's National Market subject to notice of issuance.
(i) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection with the issuance
and sale of the Offered Securities by the Company, except such as have been
obtained and made under the Act and such as may be required under state
securities laws.
(j) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company or BII
Australia or any of their properties, or any agreement or instrument to which
the Company or BII Australia is a party or by which the Company or BII Australia
is bound or to which any of the properties of the Company or BII Australia is
subject, or the charter or by-laws of the Company or BII Australia, and the
Company has full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) The transfer of assets contemplated by the SAND Acquisition (as
defined in the Prospectus) from Sega Ozisoft Pty., Limited ("Sega Ozisoft") to
the Company has been fully completed under all applicable laws, including the
laws of the United States and Australia. The documents giving
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legal effect to the SAND Acquisition were duly authorized by all necessary
action of the board of directors and stockholders of the Company and were duly
executed and delivered by all of the parties thereto, and constitute valid and
binding legal obligations of the parties thereto. The consummation of the SAND
Acquisition and the execution, delivery and performance of the documents giving
it legal effect did not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or BII Australia or any of their
properties, (ii) any agreement or instrument to which the Company or BII
Australia is or was at such time a party or by which the Company or BII
Australia is or was at such time bound or to which any of the properties of the
Company or BII Australia is or was at such time subject, or (iii) the charter or
by-laws of the Company or BII Australia. The Company had full power and
authority to enter into and perform the SAND Acquisition and the documents
giving it legal effect. No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court was required for the
consummation of the SAND Acquisition, except such as were obtained prior to the
SAND Acquisition.
(m) The Exchange (as defined in the Prospectus) has been fully
completed under all applicable laws, including the laws of the United States and
Australia. The documents giving legal effect to the Exchange were duly
authorized by all necessary board of directors and stockholder action and were
duly executed and delivered by all of the parties thereto, and constitute valid
and binding legal obligations of the parties thereto. The consummation of the
Exchange and the execution, delivery and performance of the documents giving it
legal effect did not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any statute, rule, regulation
or order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or BII Australia or any of their
properties, (ii) any agreement or instrument to which the Company or BII
Australia is or was at such time a party or by which the Company or BII
Australia is or was at such time bound or to which any of the properties of the
Company or BII Australia is or was at such time subject, or (iii) the charter or
by-laws of the Company or BII Australia. The Company had full power and
authority to enter into and perform the Exchange and the documents giving it
legal effect. No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court was required for the consummation
of the Exchange, except such as were obtained prior to the Exchange.
(n) Except as disclosed in the Prospectus, the Company and BII
Australia have good and marketable title to all real properties and all other
properties and assets owned by them, including the assets purchased in the SAND
Acquisition, in each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Prospectus, the
Company and BII Australia hold any leased real or personal property under valid
and enforceable leases with no exceptions that would materially interfere with
the use made or to be made thereof by them.
(o) The Company and BII Australia possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the Company
5
or BII Australia, would individually or in the aggregate have a material adverse
effect on, or on the prospects of, the Company and BII Australia taken as a
whole.
(p) No labor dispute with the employees of the Company or BII
Australia exists or, to the knowledge of the Company, is imminent that might
have a material adverse effect on, or on the prospects of, the Company and BII
Australia taken as a whole.
(q) The Company and BII Australia own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business in substantially the manner now operated by them, or
presently employed by them, and have not received any notice of infringement of
or conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or BII Australia,
would individually or in the aggregate have a material adverse effect on, or on
the prospects of, the Company and BII Australia taken as a whole. Except as
described in the Prospectus, the discoveries, inventions, products or processes
of the Company and BII Australia referred to in the Prospectus do not, to the
best knowledge of the Company and BII Australia, infringe or conflict with any
intellectual property right of any third party, where such infringement or
conflict could have a material adverse effect on the Company and BII Australia,
taken as a whole.
(r) Except as disclosed in the Prospectus, neither the Company nor BII
Australia is in violation of any statute, rule, regulation, decision or order of
any governmental agency or body or any court domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates any real
property which, to the knowledge of the Company, is contaminated with any
substance that is subject to any environmental laws, nor is the Company to its
knowledge liable for any off-site disposal or contamination pursuant to any
environmental laws or subject to any claim relating to any environmental laws,
which violation, contamination, liability or claim would individually or in the
aggregate have a material adverse effect on, or on the prospects of, the Company
and BII Australia taken as a whole; and neither the Company nor BII Australia is
aware of any pending investigation which might lead to such a claim.
(s) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, BII Australia or
any of their respective properties that, if determined adversely to the Company
or BII Australia, would individually or in the aggregate have a material adverse
effect on the condition (financial or other), business, properties or results of
operations, or on the prospects of any of the foregoing, of the Company and BII
Australia taken as a whole, or would materially and adversely affect the ability
of the Company to perform its obligations under this Agreement, or which are
otherwise material in the context of the sale of the Offered Securities; and to
the Company's or BII Australia's knowledge, no such actions, suits or
proceedings are threatened or contemplated.
(t) The financial statements included in each Registration Statement
and the Prospectus present fairly the financial position of the Company and BII
Australia on a consolidated basis
6
as of the dates shown and their results of operations and cash flows for the
periods shown, and such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States applied
on a consistent basis; the schedules, if any, included in each Registration
Statement present fairly the information required to be stated therein; and the
assumptions used in preparing the pro forma financial information included in
each Registration Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts.
(u) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
prospects, properties or results of operations of the Company and BII Australia
taken as a whole, and, except as disclosed in or contemplated by the Prospectus,
there has been no dividend or distribution of any kind declared, paid or made by
the Company or BII Australia on any class of their respective capital stock.
(v) Neither the Company nor BII Australia is and, after giving effect
to the offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, neither will be an "investment
company" as defined in the Investment Company Act of 1940.
(w) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes and the Company and BII
Australia agree to comply with such Section if prior to the completion of the
distribution of the Offered Securities the Company or any of its affiliates
commences doing such business.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $__________ per share, the respective
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, at the office of CS First Boston Corporation ("CS
First Boston"), Park Avenue Plaza, New York, New York, against payment of the
purchase price by official bank check or checks in Federal Reserve (same day)
funds drawn to the order of the Company at the office of Troop Xxxxxxxxx
Steuber& Pasich, LLP, 10940 Wilshire Boulevard, Los Angeles, California, or by
wire transfer to a bank acceptable to CS First Boston, at 10 A.M., New York
time, on November ____, 1996, or at such other time not later than seven full
business days thereafter as CS First Boston and the Company determine, such time
being herein referred to as the "First Closing Date". For purposes of Rule 15c6-
1 under the Securities Exchange Act of 1934, the First Closing Date (if later
than the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered
7
Securities sold pursuant to the offering. The certificates for the Firm
Securities so to be delivered will be in definitive form, in such denominations
and registered in such names as CS First Boston requests and will be made
available for checking and packaging at the above office of CS First Boston in
New York at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CS First Boston given to the Company
from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased for the account of each Underwriter in the same
proportion as the number of shares of Firm Securities set forth opposite such
Underwriter's name bears to the total number of shares of Firm Securities
(subject to adjustment by CS First Boston to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CS First Boston to the Company.
The delivery of and payment for the Optional Securities, being herein
referred to as the "Optional Closing Date," which may be the First Closing Date
(the First Closing Date and the Optional Closing Date, if any, being sometimes
referred to as a "Closing Date"), shall be determined by CS First Boston but
shall be not later than five full business days after written notice of election
to purchase Optional Securities is given. The Company will deliver the Optional
Securities being purchased on the Optional Closing Date to the Representatives
for the accounts of the several Underwriters, at the above office of CS First
Boston in New York against payment of the purchase price therefor by official
bank check or checks in Federal Reserve (same day) funds drawn to the order of
the Company, at the above office of Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP in Los
Angeles, or by wire transfer to a bank acceptable to CS First Boston. The
certificates for the Optional Securities being purchased on the Optional Closing
Date will be in definitive form, in such denominations and registered in such
names as CS First Boston requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of CS First Boston in New York at a reasonable time in advance of such
Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by CS First Boston,
8
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second
business day following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Date of the Initial Registration
Statement.
The Company will advise CS First Boston promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b) on or
prior to 10:00 P.M., New York time, on the date of this Agreement or, if
earlier, on or prior to the time the Prospectus is printed and distributed to
any Underwriter, or will make such filing at such later date as shall have been
consented to by CS First Boston.
(b) The Company will advise CS First Boston promptly of any proposal
to amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not effect
such amendment or supplementation without CS First Boston's consent; and the
Company will also advise CS First Boston promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the execution and
delivery of this Agreement) and of any amendment or supplementation of a
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of a Registration Statement
and will use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with sales by
any Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CS First Boston of such event and
will promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither CS First Boston's consent
to, nor the Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
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(e) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as delivery of a
prospectus relating to the Offered Securities is required to be delivered under
the Act in connection with sales by any Underwriter or dealer, the Prospectus
and all amendments and supplements to such documents, in each case in such
quantities as CS First Boston requests. The Prospectus shall be so furnished on
or prior to 3:00 P.M., New York time, on the business day following the later of
the execution and delivery of this Agreement or the Effective Time of the
Initial Registration Statement. All other documents shall be so furnished as
soon as available. The Company will pay the expenses of printing and
distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CS First Boston
designates and will continue such qualifications in effect so long as required
for the distribution.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a copy
of its annual report to stockholders for such year; and the Company will furnish
to the Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CS First Boston may
reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Underwriters (if and
to the extent incurred by them) for any filing fees and other expenses
(including fees and disbursements of counsel) incurred by them in connection
with qualification of the Offered Securities for sale under the laws of such
jurisdictions as CS First Boston designates and the printing of memoranda
relating thereto, for the filing fee of the National Association of Securities
Dealers, Inc. relating to the Offered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers of the
Offered Securities and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
(i) For a period of 180 days after the date of the initial public
offering of the Offered Securities, neither the Company nor BII Australia will
offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under the Act
relating to, any additional shares of its Securities or securities convertible
into or exchangeable or exercisable for any shares of its Securities, or any
securities of BII Australia or securities convertible into or exchangeable or
exercisable for any securities of BII Australia, or publicly disclose the
intention to make any such offer, sale, pledge, disposal or filing, without the
prior written consent of CS First Boston, except issuances of Securities
pursuant to the conversion or exchange of convertible or exchangeable securities
or the exercise of warrants or options, in each case outstanding on the date
hereof, grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof, and issuances of Securities pursuant to the exercise
of such options.
10
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and BII Australia herein, to the accuracy
of the statements of Company and BII Australia officers made pursuant to the
provisions hereof, to the performance by the Company and BII Australia of their
obligations hereunder and to the following additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of Ernst & Young LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules and
summary of earnings examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements, if any, included
in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements, if any, of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) such unaudited financial statements and summary of earnings
included in the Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published Rules and Regulations or any material modifications should be made to
such unaudited financial statements and summary of earnings for them to be in
conformity with generally accepted accounting principles;
(B) such unaudited consolidated net sales, net operating income, net
income and net income per share amounts for the ________-month periods ended
________________________ included in the Prospectus do not agree with the
amounts set forth in the unaudited consolidated financial statements for those
same periods or were not determined on a basis substantially consistent with
that of the corresponding amounts in the audited statements of income;
11
(C) at the date of the latest available balance sheet read by such
accountants, or at a subsequent specified date not more than three days prior to
the date of this Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available balance sheet
read by such accountants, there was any decrease in consolidated net current
assets or net assets, as compared with amounts shown on the latest balance sheet
included in the Prospectus; or
(D) for the period from the closing date of the latest income
statement included in the Prospectus to the closing date of the latest available
income statement read by such accountants there were any decreases, as compared
with the corresponding period of the previous year and with the period of
corresponding length ended the date of the latest income statement included in
the Prospectus, in consolidated net sales, net operating income, or in the total
or per share amounts of consolidated income before extraordinary items or net
income,
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained in
the Registration Statements (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such results, except as
otherwise specified in such letter.
(v) they have read the unaudited pro forma, if any, financial
statements and schedules and summary of earnings included in the Registration
Statements, have inquired of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for their
determination of the pro forma adjustments and whether such unaudited pro forma
financial statements, schedules and summary of earnings comply as to form in all
material respects with the applicable accounting requirements of rule 11-02 of
Regulation S-X, and have proved the arithmetic accuracy of the application of
the pro forma adjustments to the historical amounts in such unaudited pro forma
financial statements, schedules and summary of earnings; and, as a result of the
procedures specified in this subsection, nothing came to their attention that
caused them to believe that such unaudited pro forma financial statements,
schedules and summary of earnings do not comply as to form in all material
respects with the applicable accounting requirements of rule 11-02 of Regulation
S-X or that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements.
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery of
this Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment
12
or post-effective amendment to be filed shortly prior to its Effective Time,
(ii) if the Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration is subsequent to such execution and delivery,
"Registration Statements" shall mean the Initial Registration Statement and the
additional registration statement as proposed to be filed or as proposed to be
amended by the post-effective amendment to be filed shortly prior to its
Effective Time, and (iii) "Prospectus" shall mean the prospectus included in the
Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CS First Boston.
If the Effective Time of the Additional Registration Statement (if any) is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, the time the Prospectus is printed and distributed to
any Underwriter, or shall have occurred at such later date as shall have been
consented to by CS First Boston. If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this Agreement,
the Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, prospects,
properties or results of operations of the Company or BII Australia which, in
the judgment of a majority in interest of the Underwriters including the
Representatives, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and payment for
the Offered Securities; (ii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock Market,
or any setting of minimum prices for trading on such exchange or stock market;
(iii) any banking moratorium declared by U.S. Federal, New York or Australian
authorities; or (iv) any outbreak or escalation of major hostilities in which
the United States or Australia is involved, any declaration of war by Congress
or the Australian parliament, or any other substantial national (U.S. or
Australian) or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including the Representatives, the
effect of any such outbreak, escalation, declaration, calamity or emergency
makes it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP, counsel for the Company,
to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus; and the Company is duly qualified
13
to do business as a foreign corporation in good standing in all other
jurisdictions in which the Company owns or leases real property, maintains
offices or has employees, except where the failure to be so qualified would not
have a material adverse effect on the Company and BII Australia, taken as a
whole.
(ii) The Offered Securities delivered on such Closing Date, and all
other outstanding shares of the Common Stock of the Company, and any other
outstanding securities of the Company, have been duly authorized and validly
issued, are fully paid and nonassessable and conform to the description thereof
contained in the Prospectus; and the stockholders of the Company have no
preemptive rights under the Delware General Corporation Law with respect to the
Securities;
(iii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings known to such counsel between the Company or BII
Australia and any person granting such person the right to require the Company
or BII Australia to file a registration statement under the Act with respect to
any securities of the Company or BII Australia owned or to be owned by such
person or to require the Company or BII Australia to include such securities in
the securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company or BII Australia under the Act;
(iv) The Company is not, and after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940;
(v) No consent, approval, authorization or order of, or filing with,
any United States governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and such as may be required under
state securities laws;
(vi) The execution, delivery and performance of this Agreement and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, rule, regulation or to such counsel's knowledge, order of any
governmental agency or body or any court having jurisdiction over the Company or
any of its properties, or any agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the properties of the
Company is subject, or the charter or by-laws of the Company, and the Company
has full power and authority to authorize, issue and sell the Offered Securities
as contemplated by this Agreement;
(vii) The documents giving legal effect to the SAND Acquisition were
duly authorized by all necessary action of the board of directors and
stockholders of the Company. The execution and delivery of the documents giving
legal effect to the SAND Acquisition did not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any statute,
rule, regulation or to such counsel's knowledge, order of any United States
governmental agency or body or any court having jurisdiction over the Company or
any of its properties, or any material agreement or instrument to which the
Company is or was at such time a party or by which the Company
14
is or was at such time bound or to which any of the properties of the Company is
or was at such time subject, or the charter or by-laws of the Company, and the
Company had full power and authority to enter into and perform the SAND
Acquisition and the documents giving it legal effect. No consent, approval,
authorization, or order of, or filing with, any United States governmental
agency or body or any court was required for the consummation of the SAND
Acquisition, except such as were obtained prior to the SAND Acquisition;
(viii) The documents giving legal effect to the Exchange were duly
authorized by all necessary corporate action on the part of the Company. The
execution and delivery of the documents giving legal effect to the Exchange did
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or to such counsel's
knowledge, order of any governmental agency or body or any court having
jurisdiction over the Company or any of its properties, or any material
agreement or instrument to which the Company is or was at such time a party or
by which the Company is or was at such time bound or to which any of the
properties of the Company is or was at such time subject, or the charter or by-
laws of the Company, and the Company had full power and authority to enter into
and perform the Exchange and the documents giving it legal effect. No consent,
approval, authorization, or order of, or filing with, any United States
governmental agency or body or any court was required for the consummation of
the Exchange, except such as were obtained prior to the Exchange;
(ix) The Initial Registration Statement was declared effective under
the Act as of the date and time specified in such opinion, the Additional
Registration Statement (if any) was filed and became effective under the Act as
of the date and time (if determinable) specified in such opinion, the Prospectus
either was filed with the Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration Statement (as the
case may be), and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or any part thereof has
been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations; the descriptions in the
Registration Statements and Prospectus of United States statutes, legal and
governmental proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such counsel do not
know of any legal or governmental proceedings required to be described in a
Registration Statement or the Prospectus which are not described as required or
of any contracts or documents of a character required to be described in a
Registration Statement or the Prospectus or to be filed as exhibits to a
Registration Statement which are not described and filed as required; it being
understood that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration Statements or
the Prospectus; and
(x) This Agreement has been duly authorized, executed and delivered by
the Company.
15
In addition, such counsel shall state that such counsel has participated in
conferences with officials and other representatives of the Company, the
Representatives, Underwriters' counsel and the independent public accountants of
the Company, at which conferences the contents of the Registration Statement and
the Prospectus and related matters were discussed, and although they have not
independently checked or verified the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, nothing
has come to the attention of such counsel that caused them to believe that, at
the time the Registration Statement became effective, the Registration Statement
(except as to financial statements, pro forma financial data, financial data and
supporting schedules contained therein, as to which such counsel need express no
opinion) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or at the Closing Date or any later date on which the
Option Securities are to be purchased, as the case may be, the Prospectus
(except as aforesaid) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of fact
upon representations or certificates of officers of the Company, and of
government officials, in which case their opinion is explicitly to state that
they are so relying thereon and that they have no knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Representatives of the Underwriters, and to Underwriters'
Counsel;
(e) The Representatives shall have received an opinion, dated such
Closing Date, of ___________________________, counsel for BII Australia, to the
effect that:
(i) BII Australia has been duly incorporated and is an existing
corporation in good standing under the laws of Australia, with corporate power
and authority to own its properties and conduct its business as described in the
Prospectus; and BII Australia is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification;
(ii) All outstanding securities of BII Australia have been duly
authorized and validly issued, are fully paid and nonassessable and conform to
the description thereof contained in the Prospectus;
(iii) There are no contracts, agreements or understandings known to
such counsel between BII Australia and any person granting such person the right
to require BII Australia to file a registration statement under the Act (or
comparable Australian law) with respect to any securities of BII Australia owned
or to be owned by such person or to require BII Australia to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by BII Australia under the Act (or comparable Australian law);
16
(iv) No consent, approval, authorization or order of, or filing with,
any Australian governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance or sale of the Offered Securities by the Company, except such
as have been obtained and made under the Act and such as may be required under
United States state securities laws;
(v) The execution, delivery and performance of this Agreement and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
any statute, any rule, regulation or order of any governmental agency or body or
any court having jurisdiction over BII Australia or any of its properties, or
any agreement or instrument to which BII Australia is a party or by which BII
Australia is bound or to which any of the properties of BII Australia is
subject, or the charter or by-laws of BII Australia;
(vi) Such counsel have no reason to believe that any part of a
Registration Statement or any amendment thereto, as of its effective date or as
of such Closing Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of such Closing
Date, contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; the descriptions
in the Registration Statements and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are, to the knowledge
of such counsel, accurate and fairly present the information required to be
shown; and such counsel do not know of any legal or governmental proceedings
required to be described in a Registration Statement or the Prospectus which are
not described as required or of any contracts or documents of a character
required to be described in a Registration Statement or the Prospectus or to be
filed as exhibits to a Registration Statement which are not described and filed
as required; it being understood that such counsel need express no opinion as to
the financial statements or other financial data contained in the Registration
Statements or the Prospectus; and
(vii) Except as disclosed in the Prospectus, no stamp or other issue
taxes or duties are payable to Australia or any political subdivision or taxing
authority thereof or therein in connection with the issuance of the Offered
Securities by the Company or the delivery by or on behalf of the Company of the
Offered Securities to or for the respective accounts of the Underwriters or the
sale and delivery by the Underwriters of the Offered Securities to the initial
purchasers thereof.
(viii) BII Australia has the power, and has taken all necessary
corporate action, to submit to the jurisdiction of any state or U.S. Federal
court in the borough of Manhattan in the State of New York and to appoint
_______________ as the authorized agent of BII Australia as agent for service of
process by any such court. On the assumption that the consent-to-jurisdiction
clause at the end of this Agreement is valid and binding under the laws of the
State of New York, by which this Agreement is expressly governed, Australian
courts would normally give effect to BII Australia's consent to jurisdiction in
New York in connection with disputes arising under this Agreement.
17
(ix) Under Australian law, the choice of laws of the State of New York
is a valid choice of the governing law of this Agreement, and the validity and
binding nature of the obligations contained in this Agreement are governed by
the law of the State of New York.
(x) A final and conclusive judgment against BII Australia for a
definitive sum of money entered by any state or U.S. Federal court in the
borough of Manhattan in the State of New York in any action arising out of or in
connection with or with respect to any transaction contemplated by this
Agreement would be enforced by Australian courts without reexamination or
relitigation of the matters adjudicated upon.
(xi) This Agreement has been duly authorized, executed and delivered
by BII Australia.
(f) The Representatives shall have received from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, P.C., counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the Registration Statements, the
Prospectus and other related matters as the Representatives may require, and the
Company and BII Australia shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such matters. In
rendering such opinion, Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, P.C. may rely as to
the incorporation of the Company and BII Australia and all other matters
governed by Delaware or Australian law upon the opinions of Troop Xxxxxxxxx
Xxxxxxx & Xxxxxx, LLP and ___________________________ referred to above.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal financial
or accounting officer of both the Company and BII Australia in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that: the representations and warranties of the Company and BII Australia
in this Agreement are true and correct; the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission; the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule 111(a) or
(b) under the Act, prior to the time the Prospectus was printed and distributed
to any Underwriter; and, subsequent to the date(s) of the most recent financial
statements in the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the
condition (financial or other), business, prospects, properties or results of
operations of the Company and BII Australia taken as a whole except as set forth
in or contemplated by the Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Ernst & Young LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to such Closing Date
for the purposes of this subsection.
18
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. CS First Boston may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company and BII Australia
will jointly and severally indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and BII
Australia will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished by any
Underwriter consists of (i) the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom of the
cover page concerning the terms of the offering by the Underwriters, the legend
concerning over-allotments and stabilizing on the inside front cover page, and
the first, fourth and fifth full paragraphs under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the
19
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and BII Australia on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or BII Australia or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
20
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company or BII Australia may otherwise have
and shall extend, upon the same terms and conditions, to each person, if any,
who controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each director of the Company, to each officer of
the Company who has signed a Registration Statement and to each person, if any,
who controls the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CS First
Boston may make arrangements satisfactory to the Company for the purchase of
such Offered Securities by other persons, including any of the Underwriters, but
if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CS First Boston and the Company for the purchase of such Offered Securities by
other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 9 (provided that if such default
occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination). As used in this Agreement, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and BII Australia or their respective officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Company or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered Securities. If
this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company, BII
Australia and the Underwriters pursuant to Section 7 shall remain in effect, and
if any Offered Securities have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain in
effect. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (ii), (iii), or (iv) of Section 6(c), the Company or BII Australia will
reimburse the Underwriters for all out-of-pocket
21
expenses (including fees and disbursements of counsel) reasonably incurred by
them in connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o CS First Xxxxxx Xxxxxxxxxxx, Xxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Investment Banking Department-Transactions
Advisory Group, or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at Brilliant Digital Entertainment, Inc., 0000
Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx Xxxx; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter. Notice to the Company shall constitute notice to BII
Australia for all purposes under this Agreement.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CS First Boston will
be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company and BII Australia hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
22
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
Brilliant Digital Entertainment, Inc.
By: ________________________________
Xxxx Xxxx,
Chairman of the Board and
Chief Executive Officer
Brilliant Interactive Ideas, Pty. Ltd.
By: ________________________________
Name: ________________________________
Title: ________________________________
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first
above written.
CS First Boston Corporation, and
Cruttenden Xxxx Incorporated
By: CS First Boston Corporation
By: ________________________________
Name: ________________________________
Title: ________________________________
SCHEDULE A
NUMBER OF
UNDERWRITER FIRM SECURITIES
----------- ---------------
CS First Boston Corporation............................... $
Cruttenden Xxxx Incorporated.............................. $
----------------
Total......................................... $
================
