3,000,000 SHARES
BRILLIANT DIGITAL ENTERTAINMENT, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
_______________, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION, and
CRUTTENDEN XXXX INCORPORATED
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
1. INTRODUCTORY. Brilliant Digital Entertainment, Inc., a Delaware
corporation ("Company"), proposes to issue and sell 2,200,000 shares of its
Common Stock, par value $.001 ("Securities") and Xxxxxxxx Group, as manager
of the Reefknot Limited ("Selling Stockholder") proposes to sell 800,000
outstanding shares of the Securities (such 3,000,000 shares of Securities
being hereinafter referred to as the "Firm Securities"). The Company also
proposes to sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 350,000 additional shares of its Securities, and
the Selling Stockholder also proposes to sell to the Underwriters, at the
option of the Underwriters, not more than 100,000 additional outstanding
shares of the Company's Securities, as set forth below (such 450,000
additional shares being hereinafter referred to as the "Optional
Securities"). The Firm Securities and the Optional Securities are herein
collectively called the "Offered Securities". The Company, 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, and the Selling Stockholder hereby agree with the several
Underwriters named in Schedule A hereto ("Underwriters") as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, BII AUSTRALIA AND THE
SELLING STOCKHOLDER. (a) The Company and BII Australia represent and warrant
to, and agree with, the several Underwriters that:
(i) 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 (A) has
been declared effective under the Securities Act of 1933 ("Act") and is
not proposed to be amended or (B) is proposed to be amended by amendment
or post-effective amendment. If such registration statement (the "initial
registration statement") has been declared effective, either (A) an
additional registration statement (the "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 (B) 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 (A) 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 (B) 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 hereinafter 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.
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(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) 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 a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (B) 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 (C) 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 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 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(c) hereof.
(iii) 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.
(iv) 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.
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(v) 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 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.
(vi) 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 in connection with this offering.
(vii) 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).
(viii) The Offered Securities have been approved for listing on the
American Stock Exchange, subject to notice of issuance.
(ix) 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, except
such as have been obtained and made under the Act and such as may be
required under state securities laws.
(x) The execution, delivery and performance of this Agreement, and
the consummation of the transactions herein contemplated, 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. The
Company and the Selling Stockholder have full power and authority to
authorize, issue and sell the Offered Securities as contemplated by this
Agreement.
(xi) This Agreement has been duly authorized, executed and delivered
by the Company.
(xii) 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, in each case free from liens,
encumbrances and defects that would materially affect the value thereof
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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.
(xiii) 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 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.
(xiv) No labor dispute with the employees of the Company or BII
Australia exists or, to the knowledge of the Company or BII Australia, is
imminent that might have a material adverse effect on, or on the
prospects of, the Company and BII Australia taken as a whole.
(xv) 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 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 disclosed 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.
(xvi) 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 or BII Australia, is contaminated
with any substance that is subject to any environmental laws, nor is the
Company or BII Australia to their knowledge liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
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.
(xvii) 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
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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 no such actions, suits or
proceedings are threatened or, to the Company and BII Australia's
knowledge, contemplated.
(xviii) 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 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 statements
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.
(xix) 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.
(xx) 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.
(xxi) 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.
(b) The Selling Stockholder represents and warrants to, and agrees with,
the several Underwriters that:
(i) The Selling Stockholder has and on each Closing Date hereinafter
mentioned will have valid and unencumbered title to the Offered
Securities to be delivered by the Selling Stockholder on such Closing
Date and full right, power and authority to enter into this Agreement and
to sell, assign, transfer and deliver the Offered Securities to be
delivered by the Selling Stockholder on such Closing Date hereunder; and
upon the delivery of and payment for the Offered Securities on each
Closing Date hereunder the several Underwriters will acquire
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valid and unencumbered title to the Offered Securities to be delivered by
the Selling Stockholder on such Closing Date.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (A) 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 and did not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, (B) 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 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 (C) 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 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 not misleading. The two
preceding sentences apply only to the extent that any statements in or
omissions from a Registration Statement or the Prospectus are based on
written information furnished to the Company by the Selling Stockholder
specifically for use therein.
(iii)Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Selling Stockholder and any
person that would give rise to a valid claim against the Selling
Stockholder or any Underwriter for a brokerage commission, finder's fee
or other like payment in connection with this offering.
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 and the Selling
Stockholder agree, severally and not jointly, to sell to each Underwriter,
and each Underwriter agrees, severally and not jointly, to purchase from the
Company and the Selling Stockholder, at a purchase price of $ per
share, the number of Firm Securities set forth below the caption "Company" or
"Selling Stockholder", as the case may be, and opposite the name of such
Underwriter in Schedule A hereto.
Certificates in negotiable form for the Offered Securities to be sold by
the Selling Stockholder hereunder have been placed in custody, for delivery
under this Agreement, under a Custody Agreement
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made with U.S. Stock Transfer Corporation, as custodian ("Custodian"). The
Selling Stockholder agrees that the shares represented by the certificates
held in custody for the Selling Stockholder under such Custody Agreement are
subject to the interests of the Underwriters hereunder, that the arrangements
made by the Selling Stockholder for such custody are to that extent
irrevocable, and that the obligations of the Selling Stockholder hereunder
shall not be terminated by operation of law, whether by the death of the
Selling Stockholder or the occurrence of any other event, or in the case of a
trust, by the death of any trustee or trustees or the termination of such
trust. If the Selling Stockholder or any such trustee or trustees should
die, or if any other such event should occur, or if any of such trusts should
terminate, before the delivery of the Offered Securities hereunder,
certificates for such Offered Securities shall be delivered by the Custodian
in accordance with the terms and conditions of this Agreement as if such
death or other event or termination had not occurred, regardless of whether
or not the Custodian shall have received notice of such death or other event
or termination.
The Company and the Custodian will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, at the office of Credit
Suisse First Boston Corporation ("CSFBC"), Eleven Madison Avenue, New York,
New York, against payment of the purchase price in Federal (same day) funds
by official bank check or checks or wire transfer to an account at a bank
acceptable to CSFBC, drawn to the order of the Company in the case of
2,200,000 shares of Firm Securities and to the order of the Selling
Stockholder in the case of 800,000 shares of Firm Securities, at the office
of Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP, 00000 Xxxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx at A.M., New York time, on _____________, 1997, or
at such other time not later than seven full business days thereafter as
CSFBC 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 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 CSFBC requests and will be made available for checking and packaging
at the above office of CSFBC in New York at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from CSFBC given to the Company and the
Selling Stockholder 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 and the Selling Stockholder agree, severally
and not jointly, to sell to the Underwriters the respective numbers of
Optional Securities obtained by multiplying the number of shares specified in
such notice by a fraction the numerator of which is in the case
of the Company and in the case of the Selling Stockholder and the denominator
of which is the total number of Optional Securities (subject to adjustment by
CSFBC to eliminate fractions). Such Optional Securities shall be purchased
from the Company and the Selling Stockholder for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's name bears to the total number of Firm Securities
(subject to adjustment by CSFBC 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 CSFBC to the Company and the Selling Stockholder.
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Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the
First Closing Date (the First Closing Date and each Optional Closing Date, if
any, being sometimes referred to as a "Closing Date"), shall be determined by
CSFBC but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company and
the Custodian will deliver the Optional Securities being purchased on each
Optional Closing Date to the Representatives for the accounts of the several
Underwriters, at the above office of CSFBC in New York, against payment of
the purchase price therefor in Federal (same day) funds by official bank
check or checks or by wire transfer to a bank acceptable to CSFBC drawn to
the order of the Company in the case of 350,000 Option Securities and to the
order of the Selling Stockholder in the case of 100,000 Optional Securities
at the above office of Troop Xxxxxxxxx Xxxxxxx & Xxxxxx, LLP in Los Angeles.
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered
in such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the
above office of CSFBC 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 AND THE SELLING STOCKHOLDER. The
Company and the Selling Stockholder agree 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 CSFBC,
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 CSFBC 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 CSFBC.
(b) The Company will advise CSFBC 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 CSFBC's consent; and
the Company will also advise CSFBC 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
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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 CSFBC 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 CSFBC'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.
(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 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 CSFBC 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 such
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 CSFBC
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 CSFBC may reasonably request.
-10-
(h) For a period of 90 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, disposition or filing, without the prior
written consent of CSFBC, 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.
(i) The Company and the Selling Stockholder agree with the several
Underwriters that the Company and the Selling Stockholder will pay all
expenses incident to the performance of the obligations of the Company
and the Selling Stockholder, as the case may be, under this Agreement,
for any filing fees and other expenses (including fees and disbursements
of counsel) in connection with qualification of the Offered Securities
for sale under the laws of such jurisdictions as CSFBC designates and the
printing of memoranda relating thereto, for the filing fee incident to,
and the reasonable fees and disbursements of counsel to the Underwriters
in connection with, the review by the National Association of Securities
Dealers, Inc. of 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, for any transfer taxes on the sale by the
Selling Stockholder of the Offered Securities to the Underwriters and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(j) The Selling Stockholder agrees to deliver to CSFBC, attention:
Transactions Advisory Group on or prior to the First Closing Date a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(k) The Selling Stockholder agrees, for a period of 90 days after
the date of the initial public offering of the Offered Securities, not to
offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any additional shares of the Securities of the Company or
securities convertible into or exchangeable or exercisable for any shares
of Securities, or publicly disclose the intention to make any such offer,
sale, pledge or disposition, without the prior written consent of CSFBC.
-11-
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, BII Australia and the Selling
Stockholder herein, to the accuracy of the statements of Company, BII
Australia and Selling Stockholder officers made pursuant to the provisions
hereof, to the performance by the Company, BII Australia and the Selling
Stockholder 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 in their opinion the financial
statements and schedules and summary of earnings examined by them and
included in the Registration Statements for the fiscal years ended June
30, 1995 and 1996 and the six months ended December 31, 1996 comply as to
form in all material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations;
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 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 Statement 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) 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 Price Waterhouse
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 for the three-month and nine-month periods
ended September 30, 1997 comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
-12-
(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 for the three-month and nine-month periods
ended September 30, 1997 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 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
three-month and nine-month periods ended September 30, 1997
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;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business 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
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(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 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
Statement 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.
(c) 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 CSFBC. 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 CSFBC. If
the Effective Time of the Initial
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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 Selling Stockholder, the Company or the Representatives,
shall be contemplated by the Commission.
(d) 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, American 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.
(e) 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 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
Delaware 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
-15-
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 to be obtained or made by the Company for the consummation
of the transactions contemplated by this Agreement or the Custody
Agreement in connection with the issuance or sale of the Offered
Securities, 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
or the Custody Agreement and the consummation of the transactions
herein or therein contemplated 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 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
-17-
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
(viii) This Agreement has been duly authorized, executed and
delivered by the Company.
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;
(f) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxx Xxxxxx Solicitors, 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;
-17-
(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);
(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
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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 the Company 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.
(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.
(g) The Representatives shall have received an opinion, dated such
Closing Date, of , counsel for the Selling Stockholder, to
the effect that:
(i) The Selling Stockholder had valid and unencumbered title
to the Offered Securities delivered by the Selling Stockholder on
such Closing Date and had full right, power and authority to sell,
assign, transfer and deliver the Offered Securities delivered by the
Selling Stockholder on such Closing Date hereunder; and the several
Underwriters have acquired valid and unencumbered title to the
Offered Securities purchased by them from the Selling Stockholder on
such Closing Date hereunder;
(ii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by the Selling Stockholder for the
consummation of the transactions contemplated by the Custody
Agreement on this Agreement in connection with the sale of the
Offered Securities sold by the Selling Stockholder, except such as
have been obtained and made under the Act and such as may be
required under state securities laws;
(iii) The execution, delivery and performance of the Custody
Agreement and this Agreement and the consummation of the
transactions therein and herein contemplated will not result in a
breach or violation of any of the terms and provisions
-19-
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 the Selling Stockholder or any of its properties
or any agreement or instrument to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound or to which any
of the properties of the Selling Stockholder is subject, or the
charter or by-laws of the Selling Stockholder;
(iv) The Power of Attorney and related Custody Agreement with
respect to the Selling Stockholder has been duly authorized,
executed and delivered by the Selling Stockholder and constitute
valid and legally binding obligations of the Selling Stockholder
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and
(v) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder.
(h) The Representatives shall have received from Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, Professional Corporation, 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, BII
Australia and the Selling Stockholder 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, Professional Corporation, 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 Xxxx Xxxxxx Solicitors referred to
above.
(i) 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.
-20-
(j) 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 business days
prior to such Closing Date for the purposes of this subsection.
(k) The Representatives shall have received a letter, dated such
Closing Date, of Price Waterhouse LLP which meets the requirements of
subsection (b) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to such Closing Date for the purposes of this subsection.
The Selling Stockholder and the Company will furnish the
Representatives with such conformed copies of such opinions,
certificates, letters and documents as the Representatives reasonably
request. CSFBC 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 (c) below.
(b) The Selling Stockholder will 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
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such expenses are incurred; provided, however, that the Selling
Stockholder 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
(c) below.
(c) Each Underwriter will severally and not jointly indemnify and
hold harmless the Company and the Selling Stockholder against any losses,
claims, damages or liabilities to which the Company or the Selling
Stockholder 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 and the
Selling Stockholder 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 paragraphs under the caption "Underwriting".
(d) 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 an
indemnifying party under subsection (a), (b) or (c) above, notify the
indemnifying party of the 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 otherwise than under
subsection (a), (b) or (c) above. In case any such action is brought
against any indemnified party and it notifies an 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 (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying 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; PROVIDED, HOWEVER, that (i) if the
indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and
of the indemnified party or parties in conducting the defense of such
action, suit, investigation, inquiry or proceeding or that there
-22-
may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying
party or parties, then separate counsel chosen by the indemnified party
or parties shall be entitled to conduct the defense to the extent
reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by
such indemnified party or parties to participate in, but not conduct, the
defense, however, in no event shall the indemnifying parties be obligated
to pay for more than one firm of attorneys and one local counsel in each
appropriate jurisdiction for all of the indemnified parties. 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.
(e) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) 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), (b) or (c) above (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Selling
Stockholder 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, BII
Australia and the Selling Stockholder 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 and the Selling Stockholder 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 and the Selling Stockholder 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, BII Australia or by
the Selling Stockholder or 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 (e)
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
(e). Notwithstanding the provisions of this subsection (e), 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
-23-
misrepresentation. The Underwriters' obligations in this subsection (e)
to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder
under this Section shall be in addition to any liability which the
Company, BII Australia or the Selling Stockholder 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, CSFBC may make arrangements satisfactory to the Company and the
Selling Stockholder 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 CSFBC, the
Company and the Selling Stockholder 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, the Company or the Selling Stockholder, 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 Selling Stockholder, 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 Selling Stockholder, 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, BII Australia and the Selling Stockholder shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Company, BII Australia, the
Selling Stockholder 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
-24-
of this Agreement pursuant to Section 8 or the occurrence of any event
specified in clause (ii), (iii) or (iv) of Section 6(d), the Company, BII
Australia and the Selling Stockholder will, jointly and severally, reimburse
the Underwriters for all out-of-pocket 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 Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, 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, or, if sent to the
Selling Stockholder, will be mailed, delivered or telegraphed and confirmed
to Xxxxxxxx Group, as manager of the Reefknot Limited, at Xxx Xxxxxx Xxxxx,
Xx. Xxxxxxxx Xxxxx, Xxxxxx 0, Republic of Ireland; 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. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this
Agreement, and any action under this Agreement taken by the Representatives
jointly or by CSFBC will be binding upon all the Underwriters. U.S. Stock
Transfer Corporation will act for the Selling Stockholder in connection with
such transactions, and any action under or in respect of this Agreement taken
by U.S. Stock Transfer Corporation will be binding upon the Selling
Stockholder.
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, BII Australia and the Selling Stockholder 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.
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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 among the
Selling Stockholder, 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: ______________________________
Xxxxxxxx Group, as manager of the
Reefknot Limited
By: _________________________________
Name: _______________________________
Title: ______________________________
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION, and
CRUTTENDEN XXXX INCORPORATED
Acting on behalf of themselves and as the
Representatives of the several
Underwriters.
By Credit Suisse First Boston Corporation
By: _________________________________
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Name: _______________________________
Title: ______________________________
-27-
SCHEDULE A
NUMBER OF FIRM TOTAL
SECURITIES NUMBER OF
TO BE SOLD BY FIRM
--------------------- SECURITIES
SELLING TO BE
UNDERWRITER COMPANY STOCKHOLDER PURCHASED
----------- ------- ----------- ---------
Credit Suisse First Boston Corporation.....
Cruttenden Xxxx Incorporated...............
------- ----------- ---------
Total........................
------- ----------- ---------
------- ----------- ---------
