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EXHIBIT 1.1
12,500,000 Shares
CROWN MEDIA HOLDINGS, INC.
Class A Common Stock
UNDERWRITING AGREEMENT
April , 2000
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX XXXXX XXXXXX INC.
DLJDIRECT INC.
As representatives of the several Underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXXXXXX, LUFKIN & XXXXXXXX INTERNATIONAL
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
SALOMON BROTHERS INTERNATIONAL LIMITED
MEESPIERSON N.V.
As representatives of the several International Managers
named in Schedule II hereto
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Crown Media Holdings, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell 12,500,000 shares of its Class A Common
Stock, par value $.01 per share (the "FIRM SHARES") to the several underwriters
(as defined below). It is understood that, subject to the conditions hereinafter
stated, 7,500,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. Underwriters and International Managers,
as defined below), and 5,000,000 Firm Shares (the "INTERNATIONAL SHARES") will
be sold to the several International Managers named in Schedule II hereto (the
"INTERNATIONAL MANAGERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United
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States and Canadian Persons. Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation, Xxxxxx Brothers Inc., Xxxxxxx Xxxxx Xxxxxx Inc. and DLJDirect Inc.
shall act as representatives (the "U.S. REPRESENTATIVES") of the several U.S.
Underwriters, and Xxxxxxxxx, Lufkin & Xxxxxxxx International, Xxxxxx Brothers
International (Europe), Salomon Brothers International Limited and MeesPierson
N.V. shall act as representatives (the "INTERNATIONAL REPRESENTATIVES") of the
several International Managers. The U.S. Representatives and the International
Representatives are hereinafter collectively referred to as the
"REPRESENTATIVES." The U.S. Underwriters and the International Managers are
hereinafter collectively referred to as the "UNDERWRITERS." Simultaneously with
this Agreement, the U.S. Underwriters and the International Managers are
entering into an agreement between the U.S. and international underwriting
syndicates (the "AGREEMENT BETWEEN U.S. UNDERWRITERS AND INTERNATIONAL
MANAGERS"), which provides for, among other things, the transfer of Shares
between the two syndicates.
The Company also proposes to issue and sell not more than an
additional 1,875,000 shares of its Class A Common Stock, par value $.01 per
share (the "ADDITIONAL SHARES") if requested by the U.S. Underwriters as
provided in Section 2 hereof. The Firm Shares and the Additional Shares are
hereinafter referred to collectively as the "SHARES;" the U.S. Firm Shares and
the Additional Shares are herein referred to collectively as the "U.S. SHARES."
The shares of all classes of common stock of the Company to be outstanding after
giving effect to the sales contemplated hereby are hereinafter referred to as
the "COMMON STOCK."
Section 1. Registration Statement and Prospectus. The Company
has prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. Two forms of prospectus are to be used in
connection with the offering and sale of the Shares: (a) the U.S. prospectus
(the "U.S. PROSPECTUS"), which is to be used in connection with the offering and
sale of the U.S. Shares in the United States and Canada and the resale of the
International Shares in the United States during the period subsequent to the
date hereof in which an Underwriter is required to deliver a prospectus under
the Act, and (b) the international prospectus (the "INTERNATIONAL PROSPECTUS"),
which is to be used in connection with the offering and sale of the
International Shares outside of the United States and Canada. It is understood
that the International Prospectus and U.S. Prospectus, whether in preliminary or
final form, shall be identical except for certain alternate pages, as specified
in the Registration Statement (as defined below).
The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "REGISTRATION STATEMENT," and the
U.S. Prospectus and the International Prospectus in the respective forms first
used to confirm sales of Shares are hereinafter collectively referred to as the
"PROSPECTUS." If the Company has filed or is required pursuant to the
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terms hereof to file a registration statement pursuant to Rule 462(b) under the
Act registering additional shares of Common Stock (a "RULE 462(b) REGISTRATION
STATEMENT"), then, unless otherwise specified, any reference herein to the term
"REGISTRATION STATEMENT" shall be deemed to include such Rule 462(b)
Registration Statement.
Section 2. Agreements to Sell and Purchase and Lock-Up
Agreements. On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a price per Share of $ (the "PURCHASE PRICE") the number
of Firm Shares (subject to such adjustments to eliminate fractional shares as
you may determine) set forth opposite the name of such Underwriter in Schedule I
hereto.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to issue and sell to the U.S. Underwriters the Additional Shares and the U.S.
Underwriters shall have the right to purchase, severally and not jointly, up to
1,875,000 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The U.S. Underwriters may
exercise their right to purchase Additional Shares in whole or in part from time
to time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. The U.S. Representatives shall give any such notice on
behalf of the U.S. Underwriters and such notice shall specify the aggregate
number of Additional Shares to be purchased pursuant to such exercise and the
date for payment and delivery thereof, which date shall be a business day (i) no
earlier than two business days after such notice has been given (and, in any
event, no earlier than the Closing Date (as hereinafter defined)) and (ii) no
later than ten business days after such notice has been given. If any Additional
Shares are to be purchased, each U.S. Underwriter, severally and not jointly,
agrees to purchase from the Company the number of Additional Shares (subject to
such adjustments to eliminate fractional shares as the U.S. Representatives may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of U.S. Firm Shares set
forth opposite the name of such U.S. Underwriter in Schedule I bears to the
total number of U.S. Firm Shares.
The Company hereby agrees not to (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Common Stock (regardless of whether any of the transactions described in clause
(i) or (ii) is to be settled by the delivery of Common Stock, or such other
securities, in cash or otherwise), except to the Underwriters pursuant to this
Agreement, for a period of 180 days after the date of the Prospectus without the
prior written consent of Xxxxxxxxx,
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Lufkin & Xxxxxxxx Securities Corporation. Notwithstanding the foregoing, during
such period (i) the Company may grant stock options or restricted stock pursuant
to Company stock-based compensation plans and (ii) the Company may issue shares
of Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof. The Company also agrees not to file any
registration statement with respect to any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock for
a period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation except for a
registration statement on Form S-8. The Company shall, prior to or concurrently
with the execution of this Agreement, deliver an agreement executed by (i) each
of the directors and officers of the Company listed on Annex I and (ii) each
stockholder listed on Annex II hereto to the effect that such person will not,
during the period commencing on the date such person signs such agreement and
ending 180 days after the date of the Prospectus, without the prior written
consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, (A) engage in
any of the transactions described in the first sentence of this paragraph or (B)
make any demand for, or exercise any right with respect to, the registration of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, except that such agreement shall provide that
such individuals may nonetheless (i) transfer shares of Common Stock by way of
testate or intestate succession or by operation of law, (ii) transfer shares to
members of the individual's immediate family or to a trust, partnership, limited
liability company or other entity, all of the beneficial interests of which are
held by such individual or members of the individual's immediate family, and
(iii) transfer shares to charitable organizations; provided, however, that, in
the case of transfers pursuant to clauses (i), (ii) and (iii) of this sentence,
the transferee shall have agreed to be bound by the restrictions on transfer
contained in this paragraph and such transfer is not effective until the
agreement to be bound by the restrictions on transfer is executed by the
transferee and a copy of such agreement is received by Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation.
Section 3. Terms of Public Offering. The Company is advised by
you that the Underwriters propose (i) to make a public offering of their
respective portions of the Shares as soon after the execution and delivery of
this Agreement as in your judgment is advisable and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
Each U.S. Underwriter agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International Managers,
it will not offer or sell any Shares outside of the United States and Canada.
Section 4. Delivery and Payment. The Shares shall be
represented by definitive certificates and shall be issued in such authorized
denominations and registered in such names as Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation shall request no later than two business days prior to
the Closing Date or the applicable Option Closing Date (as defined below), as
the case may be. The Company shall deliver the Shares with any transfer taxes
thereon duly paid by the Company, to Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation through the facilities of The Depository Trust Company ("DTC"),
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for the respective accounts of the several Underwriters, against payment to the
Company of the Purchase Price therefore by wire transfer of Federal or other
funds immediately available in New York City. The certificates representing the
Shares shall be made available for inspection not later than 9:30 A.M., New York
City time, on the business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be, at the office of DTC or its designated
custodian (the "DESIGNATED OFFICE"). The time and date of delivery and payment
for the Firm Shares shall be 8:00 A.M., New York City time, on April , 2000 or
such other time on the same or such other date as Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and the Company shall agree in writing. The time and date
of delivery and payment for the Firm Shares are hereinafter referred to as the
"CLOSING DATE." The time and date of delivery and payment for any Additional
Shares to be purchased by the Underwriters shall be 9:00 A.M., New York City
time, on the date specified in the applicable exercise notice given by you
pursuant to Section 2 or such other time on the same or such other date as
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and the Company shall agree
in writing. The time and date of delivery and payment for any Additional Shares
are hereinafter referred to as the "OPTION CLOSING DATE."
The documents to be delivered on the Closing Date or any
Option Closing Date on behalf of the parties hereto pursuant to Section 8 of
this Agreement shall be delivered at the offices of Weil, Gotshal & Xxxxxx LLP,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, and the Shares shall be delivered at the
Designated Office, all on the Closing Date or such Option Closing Date, as the
case may be.
Section 5. Agreements of the Company. The Company agrees with
you:
(a) To advise you promptly and, if requested by you, to
confirm such advice in writing, (i) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information, (ii) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
of the suspension of qualification of the Shares for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purposes, (iii) when
any amendment to the Registration Statement becomes effective, (iv) if the
Company is required to file a Rule 462(b) Registration Statement after the
effectiveness of this Agreement, when the Rule 462(b) Registration Statement has
become effective and (v) of the happening of any event during the period
referred to in Section 5(d) below which makes any statement of a material fact
made in the Registration Statement or the Prospectus untrue or which requires
any additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish to you four signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and to furnish to you and each Underwriter designated by
you such number of conformed
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copies of the Registration Statement as so filed and of each amendment to it,
without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which
shall be reasonably satisfactory to you, and to file the Prospectus in such form
with the Commission within the applicable period specified in Rule 424(b) under
the Act; during the period specified in Section 5(d) below, not to file any
further amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection with the
distribution of the Shares by you, and to use its best efforts to cause any such
amendment to the Registration Statement to become promptly effective.
(d) (x) Prior to 10:00 A.M., New York City time, on the first
business day after the date of this Agreement, to furnish in New York City and
London, as applicable, to each Underwriter as many copies of the U.S. Prospectus
and the International Prospectus, as applicable, as the Underwriters may
reasonably request, and (y) to, from time to time after the date of this
Agreement, for such period as in the opinion of counsel for the Underwriters a
prospectus is required by law to be delivered in connection with sales by an
Underwriter or a dealer, to furnish in New York City or London, as applicable,
to each Underwriter and any dealer as many copies of the U.S. Prospectus and
International Prospectus , as applicable (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event
shall occur or condition shall exist as a result of which, in the opinion of
counsel for the Underwriters, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to prepare
and file with the Commission an appropriate amendment or supplement to the U.S.
Prospectus so that the statements in the Prospectus, as so amended or
supplemented, will not in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law, and to furnish to each Underwriter and to any dealer as many copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may reasonably request (or obtain exemptions from the application thereof),
to continue such registration or qualification in effect so long as required for
distribution of the Shares and to file such consents to
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service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Shares, in
any jurisdiction in which it is not now so subject.
(g) To make generally available to its stockholders as soon as
practicable an earnings statement (which need not be audited) covering the
twelve-month period ending [June 30], 2001 that shall satisfy the provisions of
Section 11(a) of the Act, and to advise you in writing when such statement has
been so made available.
(h) During the period of three years after the date of this
Agreement, to furnish to you as soon as practicable copies of all reports or
other communications furnished to the record holders of Common Stock or
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed and such other publicly
available information concerning the Company and its subsidiaries as you may
reasonably request.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses of the Company incident to the performance of the Company's
obligations under this Agreement, including: (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the registration and delivery of the Shares under the Act and all other
fees and expenses in connection with the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), any preliminary prospectus, the Prospectus and all amendments and
supplements to any of the foregoing, including the mailing and delivering of
copies thereof to the Underwriters and dealers in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Shares to the Underwriters, including any transfer or other taxes payable
thereon, (iii) all costs of printing or producing this Agreement and any other
agreements or documents in connection with the offering, purchase, sale or
delivery of the Shares, (iv) all expenses in connection with the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of the several states and any foreign jurisdiction in which the Shares are
to be offered and all costs of printing or producing any Preliminary and
Supplemental Blue Sky Memoranda in connection therewith (including the filing
fees and reasonable fees and disbursements of counsel for the Underwriters in
connection with such registration or qualification and memoranda relating
thereto), (v) the filing fees and reasonable disbursements of counsel for the
Underwriters in connection with the review and clearance of the offering of the
Shares by the National Association of Securities Dealers, Inc., (vi) all fees
and expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and expenses
incident to the listing of the Shares on the Nasdaq National Market and the
Amsterdam Exchanges' Official Market, (vii) the cost of printing certificates
representing
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the Shares, (viii) the costs and charges of any transfer agent, registrar and/or
depositary, and (ix) all other costs and expenses of the Company incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section 5(i), including all roadshow expenses. Except
as provided in this Section 5, the Underwriters shall pay their own costs and
expenses, including the fees and disbursements of their counsel.
(j) To use its best efforts to list for quotation the Shares
on the Nasdaq National Market and the Amsterdam Exchanges' Official Market and
use its reasonable best efforts to maintain the listing of the Shares on the
Nasdaq National Market and the Amsterdam Exchanges' Official Market for a period
of three years after the date of this Agreement.
(k) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date or any Option Closing Date, as the case
may be, and to satisfy all conditions precedent to the delivery of the Shares.
(l) If the Registration Statement at the time of the
effectiveness of this Agreement does not cover all of the Shares, to file a Rule
462(b) Registration Statement with the Commission registering the Shares not so
covered in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the
date of this Agreement and to pay to the Commission the filing fee for such Rule
462(b) Registration Statement at the time of the filing thereof or to give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b)
under the Act.
Section 6. Representations and Warranties of the Company. The
Company represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the best of the Company's
knowledge, threatened by the Commission.
(b) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply in all material
respects and, as amended or supplemented, if applicable, will comply in all
material respects with the Act, (iii) if the Company is required to file a Rule
462(b) Registration
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Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become effective
(A) will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (B) will comply in all material respects with the Act
and (iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus, or any
amendments or supplements thereto, based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any preliminary prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein.
(d) Each of the Company and its Significant Subsidiaries (as
defined in Regulation S-X promulgated by the Commission) has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, prospects, financial
condition or results of operations of the Company and its subsidiaries, taken as
a whole (a "MATERIAL ADVERSE EFFECT").
(e) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens granted or
issued by the Company or any of its subsidiaries relating to or entitling any
person to purchase or otherwise to acquire any shares of the capital stock of
the Company or any of its subsidiaries, except as otherwise disclosed in the
Registration Statement.
(f) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights; and the Shares to be issued
and sold by the Company have been duly authorized and, when issued and delivered
to the Underwriters against
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payment therefor as provided by this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights.
(g) All of the outstanding shares of capital stock, including
member interests, of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature, except as otherwise disclosed in the Registration
Statement.
(h) The authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof contained
in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is (A) in
violation of its respective charter or by-laws or (B) in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or their respective property is bound, except, with
respect to clause (B) only, such defaults as would not have a Material Adverse
Effect.
(j) The execution, delivery and performance of this Agreement
by the Company, the compliance by the Company with all the provisions hereof and
the consummation of the transactions contemplated hereby will not (i) require
any consent, approval, authorization or other order of, or qualification with,
any court or governmental body or agency (except such as have been obtained or
made by the Company or such as may be required under the securities or Blue Sky
laws of the various states, the Nasdaq National Market or the Amsterdam
Exchanges' Official Market), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries or their
respective property is bound, (iii) violate or conflict with any material law or
any rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, any of its subsidiaries or
their respective property, or (iv) result in the suspension, termination or
revocation of any Authorization (as defined below) of the Company or any of its
subsidiaries or any other impairment of the rights of the holder of any such
Authorization.
(k) There are no legal or governmental proceedings pending or,
to the best of the Company's knowledge, threatened to which the Company or any
of its subsidiaries is a party or to which any of their respective property is
subject that are required to be described in the Registration Statement or the
Prospectus and are not so described; nor are there any statutes, regulations,
contracts or other documents that are required to be
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described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(l) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any provisions of the Foreign Corrupt Practices Act or the rules and
regulations promulgated thereunder, except for such violations which, singly or
in the aggregate, would not have a Material Adverse Effect.
(m) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and the Company is not aware that any event
has occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
except where such failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any such
restriction would not, singly or in the aggregate, have a Material Adverse
Effect.
(n) To the best of the Company's knowledge, there are no costs
or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) with would, singly or in the aggregate, have a Material Adverse
Effect.
(o) Except with respect to obligations that may arise if the
Company is a member of a group of corporations or trades or businesses under
common control or treated as a single employer (the "CONTROL GROUP") with
respect to the Cash Balance Retirement Plan of Hallmark Cards, Incorporated, the
Binney & Xxxxx Employees' Retirement Plan and the Litho-Krome Company Retirement
Plan, neither the Company nor its subsidiaries has any obligation or liability,
contingent or otherwise, with respect to any pension plan subject to Section 412
of the Internal Revenue Code of 1986, as amended (the "CODE") or under Title IV
of ERISA. The Company has executed an
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indemnification agreement with Hallmark Cards, Incorporated, which agreement
provides that the Company will be indemnified by Hallmark Cards, Incorporated
for any amounts paid by the Company in respect of obligations under pension
plans of such other members of the Control Group that may arise under the Code
and ERISA.
(p) This Agreement has been duly authorized, executed and
delivered by the Company.
(q) Xxxxxx Xxxxxxxx LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(r) The historical and pro forma consolidated financial
statements included in the Registration Statement and the Prospectus (and any
amendment or supplement thereto), together with related schedules and notes,
present fairly in all material respects the consolidated financial position,
results of operations and changes in financial position of the Company and its
subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related schedules
and notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; the supporting schedules, if any, included in the
Registration Statement present fairly in all material respects in accordance
with generally accepted accounting principles the information required to be
stated therein; and the other financial and statistical information and data set
forth in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) present fairly, in all material respects the information set
forth therein and are prepared on a basis consistent with such financial
statements and the books and records of the Company. The pro forma financial
statements have been prepared on a basis consistent with such historical
statements of the Company, and give effect to assumptions made on a reasonable
basis and in good faith and present fairly in all material respects the
historical and proposed transactions contemplated by the Prospectus and this
Agreement. The other financial and statistical information and data included in
the Prospectus, historical and pro forma, have been derived from the financial
records of the Company (or its predecessors) and, in all material respects, have
been prepared on a basis consistent with such books and records of the Company
(or its predecessors).
(s) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
(t) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to any
securities of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration Statement, except as
disclosed in the Prospectus.
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(u) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there has not occurred any material adverse change or any development
involving a prospective material adverse change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(v) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
Section 7. Indemnification. (a) The Company agrees to
indemnify and hold harmless each Underwriter, its directors, its officers and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, any legal or other
expenses reasonably incurred in connection with investigating or defending any
matter, including any action, that could give rise to any such losses, claims,
damages, liabilities or judgments) (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in (A) the Registration Statement
(or any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus or (B) in any documents, materials or
other information provided to investors or potential investors by, or with the
approval of, the Company in connection with the marketing of the offering of the
Shares, including any roadshow or investor presentations made to investors by
the Company (whether in person or electronically), or (ii) caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by such Underwriter through you expressly for use therein;
provided, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter who
failed to deliver a Prospectus, as then amended or supplemented, (so long as the
Prospectus and any amendment or supplement thereto was provided by the Company
to the several Underwriters in the quantity requested and on a timely basis
following such request to permit proper delivery on or prior to the Closing
Date) to the person asserting any losses, claims, damages, liabilities or
judgments caused by any untrue statement or alleged untrue statement of a
material fact contained in such preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
such material misstatement or omission or alleged material misstatement or
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omission was cured in the Prospectus, as so amended or supplemented, and such
Prospectus was required by law to be delivered at or prior to the written
confirmation of sale to such person.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter
but only with reference to information relating to such Underwriter furnished in
writing to the Company by (i) in the case of the U.S. Underwriters, such U.S.
Underwriter through the U.S. Representatives expressly for use in the
Registration Statement (or any amendment thereto), the U.S. Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, and (ii) in the
case of the International Managers, such International Manager through the
International Representatives expressly for use in the Registration Statement
(or any amendment thereto), the International Prospectus (or any amendment or
supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 7(a) or 7(b)
(the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all reasonable fees and expenses of such counsel, as
incurred (except that in the case of any action in respect of which indemnity
may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not
be required to assume the defense of such action pursuant to this Section 7(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of such Underwriter). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed after notice to assume the defense of such
action or employ counsel reasonably satisfactory to the indemnified party or
(iii) the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by such counsel that there may be one
or more legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for (i) the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all Underwriters, their
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officers and directors and all persons, if any, who control any Underwriter
within the meaning of either Section 15 of the Act or Section 20 of the Exchange
Act and (ii) the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for the Company, its directors and officers
who sign the Registration Statement and all persons, if any, who control the
Company within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request unless the
indemnifying party is disputing in good faith the reasonableness of such fees
and expenses. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 7 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after
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deducting underwriting discounts and commissions, but before deducting expenses)
received by the Company, and the total underwriting discounts and commissions
received by the Underwriters, bear to the total price to the public of the
Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective number
of Shares purchased by each of the Underwriters hereunder and not joint.
(e) The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
Section 8. Conditions of Underwriters' Obligations. The
several obligations of the Underwriters to purchase the Firm Shares under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b)
Registration Statement after the effectiveness of this Agreement, such Rule
462(b) Registration
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Statement shall have become effective by 10:00 P.M., New York City time, on the
date of this Agreement; and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before or contemplated by
the Commission.
(c) You shall have received on the Closing Date a certificate
dated the Closing Date, signed by Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx, in their
capacities as the President and Chief Executive Officer and Chief Financial
Officer of the Company, respectively, confirming the matters set forth in
Sections 6(u), 8(a) and 8(b) and that the Company has complied with all of the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied by the Company on or prior to the Closing Date.
(d) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this Agreement),
(i) there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(d)(i),
8(d)(ii) or 8(d)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(e) You shall have received on the Closing Date an opinion,
reasonably satisfactory to you and counsel for the Underwriters, dated the
Closing Date, of Wachtell, Lipton, Xxxxx & Xxxx, counsel for the Company, to the
effect that:
(i) the Company has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as
described in the Prospectus and to own, lease and operate its
properties;
(ii) the Company is duly qualified and is in good
standing as a foreign corporation authorized to do business in
each jurisdiction in the United States in which the nature of
its business or its ownership or leasing of property requires
such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(iii) all the outstanding shares of capital stock of
the Company have been duly authorized and validly issued and
are fully paid,
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non-assessable and, except as referenced in the Prospectus,
not subject to any preemptive or similar rights;
(iv) the Shares to be issued and sold by the
Company hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor as
provided by this Agreement, will be validly issued, fully paid
and non-assessable, and the issuance of such Shares will not
be subject to any preemptive or similar rights;
(v) this Agreement has been duly authorized,
executed and delivered by the Company;
(vi) the authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus under the
caption "Description of Capital Stock";
(vii) the Registration Statement has become
effective under the Act, no stop order suspending its
effectiveness has been issued and no proceedings for that
purpose are, to the best of such counsel's knowledge after due
inquiry, pending before the Commission;
(viii) the statements under the captions
"Reorganization Transactions Occurring Simultaneously with the
Closing of This Offering," "Material U.S. Federal Income Tax
Considerations for Non-U.S. Holders" and "Description of
Capital Stock" in the Prospectus and Items 14 and 15 of Part
II of the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or
proceedings referred to therein, accurately summarize the
matters referred to therein in all material respects;
(ix) the Company is not (A) in violation of its
charter or by-laws and (B) to the best of such counsel's
knowledge after due inquiry, the Company is not in default in
the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument listed as an
exhibit to the Registration Statement to which the Company is
bound, except, with respect to clause (B) only, such defaults
as would not have a Material Adverse Effect;
(x) the execution, delivery and performance of
this Agreement by the Company, the compliance by the Company
with all the provisions hereof and the consummation of the
transactions contemplated hereby will not, (A) require any
consent, approval, authorization or other order of, or
qualification with, any U.S. federal, New York or Delaware
(with respect to matters relating to the Company's
incorporation under the Delaware General Corporate Law (the
"DGCL")) court or governmental body or
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agency (except such as have been obtained or made by the
Company or such as may be required under the securities or
Blue Sky laws of the various states), (B) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or (C)
violate or conflict with any provision of the laws of the
State of New York (other than its securities or Blue Sky
laws), the DGCL or the federal laws of the United States, that
such counsel, in the case of clause (C), in such counsel's
experience are customarily applicable to transactions of the
type contemplated in, and companies of the type executing,
this Agreement;
(xi) the Company is not and, after giving effect to
the offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be,
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xii) (A) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for
the financial statements, financial statement schedules and
other financial and statistical data included therein as to
which no opinion need be expressed) comply as to form in all
material respects with the Act, (B) no facts have come to such
counsel's attention that lead them to believe that at the time
the Registration Statement became effective the Registration
Statement and the prospectus included therein (except for the
financial statements, financial statement schedules and other
financial and statistical data as to which such counsel need
not express any belief) contained any untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading and (C) no facts have come to such counsel's
attention that lead them to believe that the Prospectus, as
amended or supplemented, if applicable (except for the
financial statements, financial statement schedules and other
financial and statistical data, as aforesaid) contains any
untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In rendering this opinion, such counsel may state that such
opinion is limited to matters arising under the laws of the State of New York,
the DGCL and the federal laws of the United States.
The opinion of Wachtell, Lipton, Xxxxx & Xxxx described in
Section 8(e) above shall be rendered to you at the request of the Company and
shall so state therein.
(f) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxx X. Xxxxxxxxx, Vice President and General
Counsel of Hallmark Cards, Incorporated, to the effect that:
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(i) each of Crown Media, Inc. ("CROWN MEDIA") and
Odyssey Holdings L.L.C. ("ODYSSEY") has been duly incorporated
or formed, is validly existing as a corporation or other
entity in good standing under the laws of the State of
Delaware and has the power and authority to carry on its
business as described in the Prospectus and to own, lease and
operate its properties;
(ii) each of Crown Media and Odyssey is duly
qualified and is in good standing as a foreign corporation or
other entity authorized to do business in each jurisdiction in
the United States in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
Material Adverse Effect;
(iii) all of the outstanding shares of capital stock
or ownership interests of each of Crown Media and Odyssey have
been duly authorized and validly issued and are fully paid and
non-assessable, in accordance with the laws of the State of
Delaware and, except as otherwise disclosed in the Prospectus,
are owned by the Company, directly or indirectly through one
or more subsidiaries, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature.
In rendering this opinion, except as noted above, such counsel
may state that such opinion is limited to matters arising under the laws of the
State of Missouri and that such counsel does not opine as to matters arising
under the laws of any other state or foreign jurisdiction.
The opinion of Xxxxxx X. Xxxxxxxxx described in Section 8(f)
above shall be rendered to you at the request of the Company and shall so state
therein.
(g) You shall have received on the Closing Date an opinion,
dated as of the Closing Date, of Xxxxxxx Xxxxxxxx, Senior Vice President - Legal
and Business Affairs of Crown Media, to the effect that:
(i) Crown Media is not (A) in violation of its
charter or by-laws and (B) is not in default in the
performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument listed as an
exhibit to the Registration Statement to which Crown Media is
bound, except, with respect to clause (B) only, such defaults
as would not have a Material Adverse Effect;
(ii) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with
all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) conflict with or
constitute a breach of any of the terms or
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provisions of the charter or by-laws of Crown Media, (B)
conflict with or constitute a breach of any of the terms of
provisions of, or a default under, any indenture, loan
agreement, mortgage, lease or other agreement or instrument
listed as an exhibit to the Registration Statement, to which
Crown Media is a party or by which the Company or Crown Media
or their respective property is bound, (C) violate or conflict
with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or
agency having jurisdiction over the Company or Crown Media or
their respective property or (D) based on a review of
materials prepared by, discussions with and advice of counsel
practicing in foreign jurisdictions in which Crown Media
operates, result in the suspension, termination or revocation
of any authorization, approval, consent, license, order,
qualification or decree under any foreign broadcasting or
similar law or of any governmental entity responsible for
enforcing such laws (a "FOREIGN AUTHORIZATION") of the Company
or Crown Media or any impairment of the rights of the holder
of any such Foreign Authorization in those jurisdictions,
except, with respect to clauses (B) through (D), as would not
have a Material Adverse Effect;
(iii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or Crown Media is or could be a party or
to which any of their respective property is or could be
subject, that are required to be described in the Registration
Statement or the Prospectus and are not so described; and
(iv) to the best of such counsel's knowledge after
due inquiry, except as otherwise disclosed in the Registration
Statement or the Prospectus, there are no contracts,
agreements or understandings between the Company and any
person granting such person the right to require the Company
to file a registration statement under the Act with respect to
any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to
the Registration Statement, except as disclosed in the
Prospectus; and
(v) based on a review of materials prepared by,
discussions with and advice of counsel practicing in foreign
jurisdictions in which Crown Media operates, each of the
Company and Crown Media has Foreign Authorizations of, and has
made all filings with and notices to, all governmental or
regulatory authorities and self-regulatory organizations and
all courts and other tribunals under any applicable laws
relating to broadcasting, as are necessary to own, lease,
license and operate its respective properties and to conduct
its business, except where the failure to have any such
Foreign Authorizations or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse
Effect. Based on a review of materials prepared by,
discussions with and advice of counsel practicing in foreign
jurisdictions in which Crown
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Media operates, and based on my understanding of the
operations of the business of the Company and Crown Media,
each such Foreign Authorization is valid and in full force and
effect and each of the Company and Crown Media is in
compliance with all the terms and conditions thereof and with
the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of
any notice from any authority or governing body) which allows
or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Foreign
Authorizations or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Foreign Authorizations; and such
Foreign Authorizations contain no restrictions that are
burdensome to the Company or Crown Media, except where such
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence
of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
In rendering this opinion, such counsel may state that such
opinion is limited to matters arising under the laws of the States of
Massachusetts and New York and, with respect to the charter and bylaws of the
Company and Crown Media, under the DGCL and that such counsel does not opine as
to matters arising under the laws of any other state or foreign jurisdiction.
The opinion of Xxxxxxx Xxxxxxxx described in Section 8(g)
above shall be rendered to you at the request of the Company and shall so state
therein.
(h) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Xxxxxxx Xxxx, counsel for Odyssey, to the effect
that:
(i) Odyssey is not (A) in violation of its
organizational agreement and (B) Odyssey is not in default in
the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument listed as an
exhibit to the Registration Statement to which Odyssey is a
party or by which Odyssey or its property is bound, except for
such as would not have a Material Adverse Effect;
(ii) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with
all the provisions hereof and the consummation of the
transactions contemplated hereby will not (A) conflict with or
constitute a breach of any of the terms or provisions of, or a
default under, the organizational documents of Odyssey or any
indenture, loan agreement, mortgage, lease or other agreement
or instrument listed as an exhibit to the Registration
Statement, to which Odyssey is a party or by which Odyssey or
its property is bound or (B)
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violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over Odyssey
or their respective property.
(iii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which Odyssey is or could be a party or to which any of its
property is or could be subject, that are required to be
described in the Registration Statement or the Prospectus and
are not so described;
In rendering this opinion, such counsel may state that such
opinion is limited to matters arising under the laws of the State of California
and, with respect to the organizational agreement of Odyssey, under the DGCL and
that such counsel does not opine as to matters arising under the laws of any
other state or foreign jurisdiction.
The opinion of Xxxxxxx Xxxx described in Section 8(h) above
shall be rendered to you at the request of the Company and shall so state
therein.
(i) The Underwriters shall have received on the Closing Date
an opinion (satisfactory to the Underwriters and counsel for the Underwriters),
dated the Closing Date, of Xxxxx & Overy, special Dutch counsel to the Company,
to the effect that the information under the caption "Material Netherlands Tax
Consequences" and "Description of Capital Stock - Amsterdam Exchange Listing" in
the Prospectus, to the extent that such information is relevant to the Company
and constitutes a summary of legal matters, has been reviewed by such counsel
and is accurate in all material respects.
The opinion of Xxxxx & Xxxxx described in Section 8(i) above
shall be rendered to you at the request of the Company and shall so state
therein.
(j) The Underwriters shall have received on the Closing Date
an opinion, dated the Closing Date, of Wiley, Rein & Fielding, special counsel
to the Company, to the effect that:
(i) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with
all the provisions hereof and the consummation of the
transactions contemplated hereby will not result in the
suspension, termination or revocation of any authorization,
approval, consent, license, order, qualification or decree of
the Federal Communications Commission (the "FCC") or require
any filing or registration with, or authorization, approval,
consent, license, order, qualification or decree of the FCC
under the Communications Act of 1934, as amended, and the
rules, regulations and administrative orders promulgated
thereunder (collectively, the "FEDERAL COMMUNICATIONS LAWS").
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(ii) to our knowledge after due inquiry, each of the
Company, Crown Media and Odyssey has obtained all
authorizations, approvals, consents, licenses, orders,
qualifications or decrees of the FCC under the Federal
Communications Laws ("FCC AUTHORIZATIONS"), and has made all
filings with and notices to, the FCC, as are necessary to own,
lease, license and operate its respective properties and to
conduct its business, except where the failure to have any
such FCC Authorization or to make any such filing or notice
would not, singly or in the aggregate, have a Material Adverse
Effect; each such FCC Authorization is valid and in full force
and effect and each of the Company, Crown Media and Odyssey is
in compliance with all the terms and conditions thereof and
with the rules and regulations of the FCC; and no event has
occurred (including, without limitation, the receipt of any
notice from the FCC) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or
termination of any such FCC Authorization or results or, after
notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such FCC
Authorization; and such FCC Authorizations contain no
restrictions that are burdensome to the Company, Crown Media
or Odyssey, except where such failure to be valid and in full
force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not,
singly or in the aggregate, have a Material Adverse Effect.
The opinion of Wiley, Rein & Fielding described in Section
8(j) above shall be rendered to you at the request of the Company and shall so
state therein.
(k) You shall have received on the Closing Date an opinion,
dated the Closing Date, of Weil, Gotshal & Xxxxxx LLP, counsel for the
Underwriters, as to the matters referred to in Sections 8(e)(iv), 8(e)(v) (but
only with respect to the Company), 8(e)(viii) (but only with respect to the
statements under the caption "Description of Capital Stock" and "Underwriting")
and 8(e)(xii).
In giving such opinions with respect to the matters covered by
Section 8(e)(xii), counsel for the Company and counsel for the Underwriters may
state that their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto and review and discussion of the contents thereof, but are
without independent check or verification except as specified.
(l) You shall have received, on each of the date hereof and
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance reasonably satisfactory to you, from Xxxxxx
Xxxxxxxx LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
Underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
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(m) The Company shall have delivered to you the agreements
specified in Section 2 hereof which agreements shall be in full force and effect
on the Closing Date.
(n) The Shares shall have been duly listed for quotation on
the Nasdaq National Market, subject to official notice of issuance.
(o) The Company shall not have failed on or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company on or prior to the
Closing Date.
The several obligations of the U.S. Underwriters to purchase
any Additional Shares hereunder are subject to the delivery to you on the
applicable Option Closing Date of such documents prepared, provided or executed
by the Company as you may reasonably request with respect to the good standing
of the Company, the due authorization and issuance of such Additional Shares and
other matters related to the issuance of such Additional Shares.
Section 9. Effectiveness of Agreement and Termination. This
Agreement shall become effective upon the execution and delivery of this
Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to
the Closing Date by you by written notice to the Company if any of the following
has occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Shares on the terms and in the manner contemplated in the Prospectus, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of
Trade, the Nasdaq National Market or the Amsterdam Exchanges' Official Market or
limitation on prices for securities or other instruments on any such exchange or
the Nasdaq National Market, (iii) the suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market, (iv) the
enactment, publication, decree or other promulgation of any federal or state
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.
If on the Closing Date or on an Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the Firm Shares or Additional Shares, as the case may be, which it has
or they have agreed to purchase
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hereunder on such date and the aggregate number of Firm Shares or Additional
Shares, as the case may be, which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the total
number of Firm Shares or Additional Shares, as the case may be, to be purchased
on such date by all Underwriters, each non-defaulting Underwriter shall be
obligated severally, in the proportion which the number of Firm Shares set forth
opposite its name in Schedule I bears to the total number of Firm Shares which
all the non-defaulting Underwriters have agreed to purchase, or in such other
proportion as you may specify, to purchase the Firm Shares or Additional Shares,
as the case may be, which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided, however, that in no event
shall the number of Firm Shares or Additional Shares, as the case may be, which
any Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Firm Shares or Additional Shares, as the case may be, without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased by all
Underwriters and arrangements satisfactory to you and the Company for purchase
of such Firm Shares are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case which does not result in
termination of this Agreement, either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
Section 10. Directed Share Program. It is understood that
approximately of the Firm Shares ("DIRECTED SHARES") will initially be reserved
by the U.S. Underwriters for offer and sale to employees and persons having
business relationships with the Company and its subsidiaries or affiliates
("DIRECTED SHARE PARTICIPANTS") upon the terms and conditions set forth in the
Prospectus and in accordance with the rules and regulations of the Securities
and Exchange Commission and the National Association of Securities Dealers, Inc.
(a) Under no circumstances will any Underwriter be liable to
the Company or to any Directed Share Participant for any action taken or omitted
to be taken in good faith in connection with such Directed Share Program. To the
extent that any
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Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share Participant on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
(b) The Company agrees to pay all reasonable fees and
disbursements incurred by the Underwriters in connection with the Directed Share
Program, including counsel fees, filing expenses and any stamp duties or other
taxes incurred by the Underwriters in connection with the Directed Share
Program.
(c) In connection with the offer and sale of the Directed
Shares, the Company agrees, promptly upon a request in writing, to indemnify and
hold harmless each Underwriter from and against any loss, claim, damage,
expense, liability or action which (i) arises out of, or is based upon, any
untrue statement or alleged untrue statement of a material fact contained in any
material prepared by or with the approval of the Company for distribution to
Directed Share Participants in connection with the Directed Share Program or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii)
arises out of the failure of any Directed Share Participant to pay for and
accept delivery of Directed Shares that such Participant agreed to purchase, or
(iii) is otherwise related to the Directed Share Program, other than losses,
claims, damages or liabilities (or expenses relating thereto) that are finally
judicially determined to have resulted directly from the gross negligence or
willful misconduct of any Underwriter, except insofar as such loss, claim,
damage, expense, liability or action is caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein.
Section 11. Offering Restrictions Applicable to the
International Managers. Each of the International Managers represents and agrees
for itself that it has not offered or sold and will not offer or sell any
International Shares as part of its initial distribution within the United
States or to, or for the account of, a U.S. person (it being understood that the
International Shares being offered outside of the United States and Canada have
been registered under the Act for resale from time to time in the United
States). Terms used in this Section 11 have the respective meanings assigned
thereto by Regulation S under the Act.
Section 12. Miscellaneous. Notices given pursuant to any
provision of this Agreement shall be addressed as follows: (i) if to the
Company, to Crown Media Holdings, Inc., Department 339, 2501 XxXxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, Attention Xxxxxx X. Xxxxxxxxx, Esq., with copies to Crown Media
Holdings, Inc., 0000 X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and to
Wachtell, Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention Xxxx X. Xxxxxxxx, Esq. and (ii) if to any Underwriter or to you, to
you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Department, with a copy to Weil,
Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
00
00
Xxx Xxxx 00000, Attention Xxxxx X. Xxxxxxxxx, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Shares, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, or any person controlling the
Company, (ii) acceptance of the Shares and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Shares are not delivered by or on behalf
of the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Company agrees to reimburse the
several Underwriters for all out-of-pocket expenses (including the reasonable
fees and disbursements of counsel) incurred by them in connection with the
proposed offering. Notwithstanding any termination of this Agreement, the
Company shall be liable for all expenses which it has agreed to pay pursuant to
Section 5(i) hereof. The Company also agrees to reimburse the several
Underwriters, their directors and officers and any persons controlling any of
the Underwriters for any and all fees and expenses (including, without
limitation, the reasonable fees and disbursements of counsel) incurred by them
in connection with enforcing their rights hereunder (including, without
limitation, pursuant to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is
made solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement, and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Shares from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
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Please confirm that the foregoing correctly sets forth the
agreement between the Company and the several Underwriters.
Very truly yours,
CROWN MEDIA HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
XXXXXXX XXXXX XXXXXX INC.
DLJDIRECT INC.
Acting severally on behalf of
themselves and the several
U.S. Underwriters named in
Schedule I hereto
By XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By
----------------------------
DLJ INTERNATIONAL SECURITIES
XXXXXX BROTHERS INTERNATIONAL (EUROPE)
SALOMON BROTHERS INTERNATIONAL LIMITED
MEESPIERSON N.V.
Acting severally on behalf of
themselves and the several
International Managers named in
Schedule II hereto
By DLJ INTERNATIONAL SECURITIES
By
S-1
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SCHEDULE I
U.S. Underwriters Number of Firm Shares to be
Purchased
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
Total
International Managers Number of Firm Shares to be
Purchased
Xxxxxxxxx, Lufkin & Xxxxxxxx International
Xxxxxx Brothers International (Europe)
Salomon Brothers International Limited
MeesPierson N.V.
Total
31
Annex I
Xxxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx, Xx.
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxx, Xx.
Irvine X. Xxxxxxxx, Xx.
Xxxxx X. Xxxx
Xxxxx X. Xxxx
Xxxx X. Mascotte
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Brilliant
Xxxx X. Grenside
Xxxxxxxx X. Xxxxxx
Xxxx X. Xxxxx
Xxxxx X. X. Xxxxx
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Annex II
Liberty Media Corporation
LMC Capital LLC
Vision Group Incorporated
VISN Management Corp.
National Interfaith Cable Coalition, Inc.
Chase Equity Associates, XX
xx
