Draft of April 18, 1998
$150,000,000
LEXMARK INTERNATIONAL, INC.
% Senior Notes due 2008
Unconditionally
Guaranteed by
LEXMARK INTERNATIONAL GROUP, INC.
Underwriting Agreement
, 1998
X.X. Xxxxxx Securities Inc.
Salomon Brothers Inc
NationsBanc Xxxxxxxxxx Securities LLC
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Lexmark International, Inc., a Delaware corporation (the "Issuer"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), $150,000,000 principal amount of its __% Senior Notes due
2008 (the "Notes"). The Notes will be unconditionally guaranteed (the
"Guarantee" and, together with the Notes, the "Securities") as to payment of
principal, interest and all other amounts due in respect of the Notes by Lexmark
International Group, Inc., a Delaware corporation, as guarantor (the
"Guarantor"). The Securities will be issued pursuant to the provisions of an
Indenture to be dated as of __, 1998 among the Issuer, the Guarantor and The
Bank of New York, as Trustee (the "Trustee").
The Issuer and the Guarantor have prepared and filed with the Securities
and Exchange Commission (the "Commission") in accordance with the provisions of
the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement, including a prospectus, relating to the Securities. The registration
statement as amended at the time when it shall become effective, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in each
case information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "Registration Statement", and the
prospectus in the form first used to confirm sales of Securities is referred to
in this Agreement as the "Prospectus". If the Issuer and the Guarantor have
filed an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, any preliminary prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the effective date of the
Registration Statement or the date of such preliminary prospectus or the
Prospectus, as the case may be, and any reference to "amend", "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") that are deemed to be incorporated by
reference therein.
The Issuer and the Guarantor hereby agree with the Underwriters as follows:
1. The Issuer and Guarantor agree to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Issuer and the Guarantor the respective principal amount of Securities
set forth opposite such Underwriter's name in Schedule I hereto at a price equal
to o% of their principal amount plus accrued interest, if any, from o, 1998 to
the date of payment and delivery.
2. The Issuer and the Guarantor understand that the Underwriters intend (i)
to make a public offering of their respective portions of the Securities as soon
after (A) the Registration Statement has become effective and (B) the parties
hereto have executed and delivered this Agreement, as in the judgment of the
Representatives is advisable, and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
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3. Payment for the Securities shall be made by wire transfer in immediately
available funds to the account specified by the Issuer to the Representatives
not later than 2:00 p.m. on o, 1998, or at such other time on the same or such
other date, not later than the fifth Business Day thereafter, as the
Representatives and the Issuer may agree upon in writing. The time and date of
such payment is referred to herein as the "Closing Date". As used herein, the
term "Business Day" means any day other than a day on which banks are permitted
or required to be closed in New York City.
Payment for the Securities shall be made against delivery to the nominee of
The Depository Trust Company for the respective accounts of the several
Underwriters of the Securities of one or more global notes (collectively, the
"Global Note") representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Issuer and/or the Guarantor. The Global Note will be made available for
inspection by the Representatives at the office of the Trustee, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 not later than 1:00 P.M., New York City time,
on the Business Day prior to the Closing Date.
As compensation to the Underwriters for their commitments hereunder, the
Issuer will pay, or cause to be paid, to X.X. Xxxxxx Securities Inc., for the
accounts of the several Underwriters, an amount equal to __% of the principal
amount of the Securities to be delivered by the Issuer hereunder on the Closing
Date. On __, 1998, or on such other date, no later than the fifth Business Day
thereafter, as the Representatives and the Issuer may agree upon in writing, the
Issuer will pay or cause to be paid, by wire transfer, in immediately available
funds, such commission to the account specified by X.X. Xxxxxx Securities Inc.
4. Each of the Issuer and the Guarantor, jointly and severally, represents
and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any preliminary prospectus
has been issued by the Commission, and each preliminary prospectus filed as part
of the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act, complied when
so filed in all material respects with the Securities Act, and did not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information relating to any Underwriter
furnished to the Issuer and the Guarantor in writing by such Underwriter through
the Representatives expressly for use therein;
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(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Issuer or the Guarantor, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Issuer shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material respects
with the Securities Act and the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder (collectively, the "Trust
Indenture Act") and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the date of
the Prospectus and any amendment or supplement thereto, contain 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, and
the Prospectus, as amended or supplemented, if applicable, at the Closing Date
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act, and (ii)
statements or omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Issuer and the Guarantor in writing by such Underwriter through
the Representa tives expressly for use therein;
(c) the documents incorporated by reference in the Prospectus, when they
become effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities Act or
the Securities Exchange Act as applicable and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the requirements
of the Exchange Act, and will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(d) the financial statements, and the related notes thereto, included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Guarantor and its
consolidated
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subsidiaries as of the dates indicated and the results of their operations and
the changes in their consolidated cash flows for the periods specified; and said
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, and the supporting
schedules included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein;
(e) neither the Guarantor nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, which loss or interference has had a material adverse effect or would
reasonably be expected to have a material adverse effect on the general affairs,
financial position, stockholders' equity or consolidated results of operations
of the Guarantor and its subsidiaries taken as a whole, otherwise than as set
forth or contemplated in the Prospectus; since the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any change in the capital stock (other than pursuant to any employee
incentive or benefit plan in existence on the date of this Agreement) or
increase in the long-term debt of the Guarantor or any of its subsidiaries in
excess of $25,000,000 (other than working capital borrowings classified as long
term debt in an amount not exceeding $75,000,000), or any material adverse
change, or any prospective material adverse change, in or affecting the general
affairs, financial position, stockholders' equity or consolidated results of
operations of the Guarantor and its subsidiaries, taken as a whole, otherwise
than as set forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither the Guarantor nor any of its subsidiaries
has entered into any transaction or agreement (whether or not in the ordinary
course of business) material to the Guarantor and its subsidiaries taken as a
whole;
(f) each of the Guarantor, the Issuer and Lexmark International, S.N.C.
("Lexmark-France"), Lexmark International Technology S.A. ("LexTech" and,
together with the Issuer and Lexmark-France, the "Material Subsidiaries") has
been duly incorporated and is validly existing as a corporation, or with respect
to Lexmark- France, a societe en nom collectif, as the case may be, in good
standing under the laws of its jurisdiction incorporation, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure
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to be so qualified or in good standing would not have a material adverse effect
on the Guarantor and its subsidiaries, taken as a whole;
(g) the Guarantor has an authorized capitalization as described in the
Prospectus, and, except as otherwise described in the Prospectus, all of the
outstanding shares of capital stock of the Guarantor have been duly authorized
and validly issued and are fully paid and non-assessable; all of the outstanding
shares of capital stock of the Issuer and LexTech have been duly authorized and
validly issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Guarantor, free and
clear of all liens, encumbrances, security interests and claims; and all of the
equity interests of Lexmark-France have been duly authorized and validly issued
and are fully paid and (except for directors' qualifying shares and except as
set forth in the Prospectus) are owned directly or indirectly by the Guarantor,
free and clear of all liens, encumbrances, security interests and claims;
(h) this Agreement has been duly authorized, executed and delivered by each
of the Issuer and the Guarantor;
(i) the Notes have been duly authorized, and when issued and delivered
pursuant to this Agreement, will have been duly executed, authenticated, issued
and delivered and will constitute valid and binding obligations of the Issuer,
entitled to the benefits provided by the Indenture and enforceable in accordance
with their terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles (including,
without limitation, the availability of specific performance, injunctive relief
and other equitable remedies); the Guarantee has been duly authorized, and when
issued and delivered together with the Notes pursuant to this Agreement, will
have been duly executed, issued and delivered and will constitute a valid and
binding obligation of the Guarantor entitled to the benefits provided by the
Indenture and enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights and to
general equity principles (including, without limitation, the availability of
specific performance, injunctive relief and other equitable remedies); the
Indenture has been duly authorized and upon effectiveness of the Registration
Statement will have been duly qualified under the Trust Indenture Act and, when
executed and delivered by the Issuer, the Guarantor and the Trustee, the
Indenture will constitute a valid and binding instrument enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles
(including, without limitation, the availability of specific performance,
injunctive
6
relief and other equitable remedies); and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(j) neither the Guarantor nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, its Certificate of Incorporation or By-Laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Guarantor or any of its subsidiaries is a party or by which it or any
of them or any of their respective properties is bound, except (other than, in
the case of each of the Issuer and the Guarantor, with respect to its
Certificate of Incorporation and By-laws) for violations and defaults which
individually and in the aggregate are not material to the Guarantor and its
subsidiaries taken as a whole; the issue and sale by the Issuer of the Notes and
the issuance by the Guarantor of the Guarantee and the performance by each of
the Issuer and the Guarantor of all its obligations under the Securities, the
Indenture and this Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Guarantor or any of its subsidiaries is a party or by which the Guarantor or any
of its subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject except for any such breach,
conflict or default which is not material to the Guarantor and its subsidiaries
taken as a whole; nor will any such action result in any violation of the
provisions of the Certificate of Incorporation or the By-Laws of the Issuer or
the Guarantor or any applicable law or statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over the
Guarantor, its subsidiaries or any of their respective properties except such
violations of law, statute, or any order, rule or regulation which are not
material to the Guarantor and its subsidiaries taken as a whole; and no consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Issuer or the Guarantor of the
transactions contemplated by this Agreement or the Indenture, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act and the Trust
Indenture Act or state securities or Blue Sky laws;
(k) other than as set forth or contemplated in the Prospectus, there are no
legal or governmental investigations, actions, suits or proceedings pending or,
to the knowledge of the Issuer or the Guarantor, threatened against or affecting
the Guarantor or any of its subsidiaries or any of their respective properties
or to which the Guarantor or any of its subsidiaries is or may be a party or to
which any property of the Guarantor or any of its subsidiaries is or may be the
subject which, if determined adversely to the Guarantor or any of its
subsidiaries, could individually or in the aggregate have, or reasonably be
expected to have, a material adverse effect on the general affairs, financial
position,
7
stockholders' equity or consolidated results of operations of the Guarantor and
its subsidiaries, taken as a whole, and, to the best of the Issuer's and the
Guarantor's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and there are no statutes,
regulations, contracts or other documents that are required to be filed as an
exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(l) to the best knowledge of the Guarantor, Xxxxxxx & Xxxxxxx L.L.P., who
have certified certain financial statements of the Guarantor and its
subsidiaries, are independent public accountants as required by the Securities
Act;
(m) the Guarantor and its Material Subsidiaries have good and marketable
title in fee simple to all items of real property (including, without
limitation, all such properties described as owned under the caption "Item 2:
Properties" in the Guarantor's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "10-K") incorporated by reference in the
Prospectus) and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances and defects except
such as are described or referred to in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the use
made or proposed to be made of such property by the Guarantor and its Material
Subsidiaries, and any real property and buildings held under lease by the
Guarantor and its Material Subsidiaries (including, without limitation, all such
properties and buildings described as leased under the caption "Item 2:
Properties" in the 10-K incorporated by reference in the Prospectus) are held by
them under valid, existing and enforceable leases with such exceptions as are
not material and do not interfere with the use made or proposed to be made of
such property and buildings by the Guarantor and its Material Subsidiaries;
(n) no relationship, direct or indirect, exists between or among the
Guarantor or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Guarantor or any of its
subsidiaries on the other hand, which is required by the Securities Act to be
described in the Registration Statement and the Prospectus which is not so
described;
(o) neither the Issuer nor the Guarantor is and, after giving effect to the
offering and sale of the Securities, will be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(p) except as disclosed in the Prospectus, the Guarantor and its
subsidiaries own or possess or are licensed to use the patents, patent licenses,
trademarks, trade
8
names, service marks, service names, copyrights and other intellectual property
rights (collectively, the "Intellectual Property") necessary to carry on their
business as presently conducted and as proposed to be conducted, without any
conflict with or infringement of the rights of others except for any such
conflicts or infringements that, individually or in the aggregate, do not or
would not reasonably be expected to have a material adverse effect on the
general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole;
to the best knowledge of the Guarantor and the Issuer, none of the technology
employed by the Guarantor or its subsidiaries has been obtained or is being used
by the Guarantor or its subsidiaries in violation of any contractual or
fiduciary obligation binding on the Guarantor, its subsidiaries or any of their
respective directors, employees or consultants or otherwise in violation of the
rights of any person except for any such violations that, individually or in the
aggregate, do not or would not reasonably be expected to have a material adverse
effect on the general affairs, financial position, stockholders' equity or
consolidated results of operations of the Guarantor and its subsidiaries, taken
as a whole; except as disclosed in the Prospectus, neither the Guarantor nor any
of its subsidiaries has received any notice of infringement or violation of or
conflict with (and knows of no such infringement or conflict with) asserted
rights of others with respect to any Intellectual Property or any trade secrets,
proprietary information, inventions, know-how, processes and procedures owned,
used by or licensed to the Guarantor or any such subsidiary which, individually
or in the aggregate, if the subject of any unfavorable decision, ruling or
finding, would reasonably be expected to have a material adverse effect on the
general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole;
(q) Neither the Guarantor nor its subsidiaries have experienced an ERISA
Event (as defined below) which individually, or taken together with all other
ERISA Events, could reasonably be expected to have a material adverse effect on
the general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole.
For the purposes of this paragraph (q), "ERISA Event" means (a) any "reportable
event" as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to any employee pension benefit plan (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA ("Multiemployer Plan")) subject
to the provisions of Title IV of ERISA or Section 412 of the Internal Revenue
Code of 1986, as amended (the "Code") or Section 302 of ERISA, and in respect of
which the Guarantor or any of its subsidiaries is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA (collectively, a "Plan"), (other than an event
for which the 30-day notice period is waived); (b) the existence with respect to
any Plan of an "accumulated funding deficiency" (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section
9
412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of
the minium funding standard with respect to any Plan; (d) the incurrence by the
Guarantor or any of its subsidiaries of any liability under Title IV of ERISA
with respect to the termination of any Plan; (e) the receipt by the Guarantor or
any of its subsidiaries from the PBGC or a plan administrator of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Guarantor or any of its
subsidiaries of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Guarantor or any of its subsidiaries of any notice, or the receipt by any
Multiemployer Plan from the Guarantor or any of its subsidiaries of any notice,
concerning the imposition of any liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
5. Each of the Issuer and the Guarantor covenants and agrees with each of
the several Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to become
effective at the earliest possible time and, if required, to file the final
Prospectus with the Commission within the time periods specified by Rule 424(b)
and Rule 430A under the Securities Act; and to file promptly all reports and any
definitive proxy or information statements required to be filed by the Issuer
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Securities; and to furnish copies of the Prospectus to the Underwriters in
New York City prior to 10:00 a.m., New York City time, on the Business Day next
succeeding the date of this Agreement in such quantities as the Representatives
may reasonably request;
(b) to deliver, at the expense of the Issuer, to the Representatives, four
signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and documents incorporated by
reference therein, and to each other Underwriter a conformed copy of the
Registration Statement (as originally filed) and each amendment thereto, in each
case without exhibits but including the documents incorporated by reference
therein and, during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representatives may reasonably request;
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(c) before filing any amendment or supplement to the Registration Statement
or the Prospectus, whether before or after the time the Registration Statement
becomes effective, to furnish to the Representatives a copy of the proposed
amendment or supplement for review and not to file any such proposed amendment
or supplement to which the Representatives reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice in
writing, (i) when the Registration Statement has become effective, (ii) when any
amendment to the Registration Statement has been filed or becomes effective,
(iii) when any supplement to the Prospectus or any amendment to the Prospectus
has been filed and to furnish the Representatives with copies thereof, (iv) of
any request by the Commission for any amendment to the Registration Statement or
any amendment or supplement to the Prospectus or for any additional information,
(v) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose, (vi) of the
occurrence of any event, within the period referenced in paragraph (e) below, 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 in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
and (vii) of the receipt by the Issuer or the Guarantor of any notification with
respect to any suspension of the qualification of the Securities for offer and
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of any such
stop order, or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any order suspending any such qualification
of the Securities, or notification of any such order thereof and, if issued, to
obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Securities as in the opinion of counsel for the Underwriters a
prospectus relating to the Securities is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to prepare and
furnish, at the expense of the Issuer, to the Underwriters and to the dealers
(whose names and addresses the Representatives will furnish to the Issuer and
the Guarantor) to which Securities may have been sold by the
11
Representatives on behalf of the Underwriters and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be necessary so
that the statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
be misleading or so that the Prospectus will comply with law;
(f) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall
reasonably request and to continue such qualification in effect so long as
reasonably required for distribution of the Securities; provided that neither
the Issuer nor the Guarantor shall be required to file a general consent to
service of process in any jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable, an earnings statement which will satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of the
Commission promulgated thereunder covering a period of at least twelve months
beginning with the first fiscal quarter of the Issuer commencing after the
"effective date" (as defined in Rule 158) of the Registration Statement;
(h) for three years following the Closing Date, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange;
(i) during the period beginning on the date hereof and continuing to and
including the Business Day following the Closing Date, not to offer, sell,
contract to sell, or otherwise dispose of any debt securities of or guaranteed
by the Issuer or the Guarantor which are substantially similar to the
Securities;
(j) to use the net proceeds received by the Issuer from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Securities, includ ing any expenses of the Trustee, (ii)
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any prelimi-
12
nary prospectus (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Underwriters may designate (including fees of
counsel for the Underwriters and their disbursements), (iv) related to any
filing with the National Association of Securities Dealers, Inc., (v) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Indenture, the Preliminary and Supplemental
Blue Sky Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided, and (vi) payable
to rating agencies in connection with the rating of the Securities.
6. The several obligations of the Underwriters hereunder to purchase the
Securities on the Closing Date are subject to the performance by the Issuer and
the Guarantor of their obligations hereunder and to the following additional
conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act, such
post-effective amendment shall have become effective) not later than 5:00 P.M.,
New York City time, on the date hereof; and no stop order suspending the
effectiveness of the Regis tration Statement or any post-affective amendment
shall be in effect, and no proceedings for such purpose shall be pending before
or threatened by the Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Securities Act and in
accordance with Section 5(a) hereof; and all requests for additional information
shall have been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Issuer and the Guarantor
contained herein are true and correct on and as of the Closing Date as if made
on and as of the Closing Date and the Issuer and the Guarantor shall have
complied with all agreements and all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(c) subsequent to the execution and delivery of this Agreement and prior to
the Closing Date, there shall not have occurred any downgrading, nor shall any
notice have been given of (i) any downgrading, (ii) any intended or potential
downgrading, or (iii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or guaranteed by the
Issuer or the Guarantor by any
13
"nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(d) since the respective dates as of which information is given in the
Prospectus, there shall not have been any change in the capital stock (other
than pursuant to any employee benefit or incentive plan in existence on the date
of this Agreement) or increase in the long-term debt of the Guarantor or any of
its subsidiaries in excess of $25,000,000 (other than working capital borrowings
classified as long-term debt in an amount not exceeding $75,000,000), or any
material adverse change, or prospective material adverse change, in or affecting
the general affairs, financial position, stockholders' equity or consolidated
results of operations of the Guarantor and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus, the effect of
which in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the Closing Date on the terms and in the manner contemplated in
the Prospectus; and neither the Guarantor nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, in excess of
any applicable insurance, or from any labor dispute or court or governmental
action, order to decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representatives shall have received on and as of the Closing Date a
certificate of an executive officer of the Issuer and the Guarantor, with
specific knowledge about the Issuer's financial matters, satisfactory to the
Representatives to the effect set forth in subsections (a) through (c) (with
respect to the respective representations, warranties, agreements and conditions
of the Issuer and the Guarantor) of this Section and to the further effect that
there has not occurred any material adverse change, or prospective material
adverse change, in or affecting the general affairs, financial position,
stockholders' equity or consolidated results of operations of the Guarantor and
its subsidiaries taken as a whole from that set forth or contemplated in the
Registration Statement;
(f) Xxxxxxx X. Xxxx, General Counsel for the Guarantor and the Issuer,
shall have furnished to the Representatives his written opinion, dated the
Closing Date, in form and substance satisfactory to the Representatives, to the
effect that:
(i) each of the Issuer and the Guarantor has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, with power and authority (corporate and
other) to
14
own its properties and conduct its business as described in the Prospectus
or the 10-K incorporated by reference therein;
(ii) each of the Issuer and the Guarantor has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
other than where the failure to be so qualified or in good standing would
not have a material adverse effect on the Guarantor and its subsidiaries
taken as a whole;
(iii) the Guarantor has an authorized capitalization as described in
the Prospectus, and, except as otherwise described in the Prospectus, all
of the outstanding shares of capital stock of the Guarantor have been duly
authorized and validly issued and are fully paid and non-assessable; all of
the outstanding shares of capital stock of the Issuer and LexTech have been
duly authorized and validly issued, are fully paid and non-assessable and
(except for directors' qualifying shares are owned directly or indirectly
by the Guarantor, free and clear of all liens, encumbrances, security
interests and claims; and all of the equity interests of Lexmark-France
have been duly authorized and validly issued and are fully paid and (except
for directors' qualifying shares and except as set forth in the Prospectus)
are owned directly or indirectly by the Guarantor, free and clear of all
liens, encumbrances, security interests and claims;
(iv) to the best of such counsel's knowledge and other than as set
forth or contemplated in the Prospectus or the 10-K incorporated by
reference therein, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the best of such counsel's
knowledge, threatened against the Guarantor or any of its subsidiaries or
any of their respective properties or to which the Guarantor or any of its
subsidiaries is or may be a party or to which any property of the Guarantor
or its subsidiaries is or may be the subject which, if determined adversely
to the Guarantor or any of its subsidiaries, could individually or in the
aggregate have, or reasonably be expected to have, a material adverse
effect on the general affairs, financial position, stockholders' equity or
consolidated results of operations of the Guarantor and its subsidiaries
taken as a whole; to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others; and such counsel does not know of any statutes,
regulations, contracts or other documents required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required;
15
(v) this Agreement has been duly authorized, executed and delivered by
each of the Issuer and the Guarantor;
(vi) the Notes have been duly authorized, executed and delivered by
the Issuer and, when they have been duly authenticated in accordance with
the terms of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will
constitute valid and binding obligations of the Issuer entitled to the
benefits provided by the Indenture and the Guarantee and enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles (including, without limitation, the availability of
specific performance, injunctive relief and other equitable remedies); the
Guarantee has been duly authorized, executed and delivered by the
Guarantor, and when the Notes have been duly authenticated in accordance
with the terms of the Indenture and the Securities have been delivered to
and paid for by the Underwriters in accordance with the terms of this
Agreement, the Guarantee will constitute a valid and binding obligation of
the Guarantor entitled to the benefits provided by the Indenture and
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (including, without limitation, the availability
of specific performance, injunctive relief and other equitable remedies);
and the Securities and the Indenture conform to the descriptions thereof in
the Prospectus;
(vii) the Indenture has been duly authorized, executed and delivered
by each of the Issuer and the Guarantor and (assuming the due
authorization, execution and delivery thereof by the Trustee pursuant
thereto) constitutes a valid and binding instrument of each of the Issuer
and the Guarantor enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act; (including, without limitation,
the availability of specific performance, injunctive relief and other
equitable remedies);
(viii) neither the Guarantor nor any of its subsidiaries is, in
violation of or in default under, its Certificate of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or other
agreement or
16
instrument known to such counsel to which the Guarantor or any of its
subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except (other than, in the case of each of
the Issuer and the Guarantor, with respect to its Certificate of
Incorporation and By-Laws) for violations and defaults which individually
and in the aggregate are not material to the Guarantor and its subsidiaries
taken as a whole; the issue and sale by the Issuer of the Notes and the
issuance by the Guarantor of the Guarantee and the performance by each of
the Issuer and the Guarantor of all of its obligations under the
Securities, the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the Guarantor
or any of its subsidiaries is a party or by which the Guarantor or any of
its subsidiaries is bound or to which any of the property or assets of the
Guarantor or any of its subsidiaries is subject, except for violations or
defaults which individually or in the aggregate are not material to the
Guarantor and its subsidiaries taken as a whole) nor will any such action
result in any violation of the provisions of the Certificate of
Incorporation, or the By-Laws of the Issuer or the Guarantor or any
applicable law or statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Guarantor, its
subsidiaries or any of their respective properties;
(ix) no consent, approval, authorization, order, license, registration
or qualification of or with any court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Issuer and the Guarantor of the other transactions contemplated by this
Agreement or the Indenture, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as have
been obtained under the Securities Act and the Trust Indenture Act or state
securities or Blue Sky laws;
(x) the statements in the Prospectus under "Description of Notes" and
"Underwriting", in the Prospectus incorporated by reference from Item 3 of
Part 1 of the 10-K and in the Registration Statement in Item 15, insofar as
such statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents or proceedings;
(xi) neither the Issuer nor the Guarantor is and, after giving effect
to the offering and sale of the Securities, will be an "investment company"
or an
17
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xii) such counsel is of the opinion that the Registration Statement
and the Prospectus and any amendments and supplements thereto (other than
the financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Trust Indenture Act and
believes that (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion and other than
that part of the Registration Statement which constitutes the Form T-1 of
the Trustee under the Trust Indenture Act) the Registration Statement and
the prospectus included therein at the time the Registration Statement
became effective did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that the Prospectus, as
amended or supplemented, if applicable, at the time it was filed pursuant
to Rule 424(b) under the Securities Act did not, and as of the closing date
does not, does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(xiii) the Guarantor and its Material Subsidiaries have good and
marketable title in fee simple to all items of real property (including,
without limitation, all such properties described as owned under the
caption "Item 2: Properties" in the Guarantor's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 (the "10-K") incorporated by
reference in the Prospectus) and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described or referred to in the
Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Guarantor and its Material Subsidiaries, and any real
property and buildings held under lease by the Guarantor and its Material
Subsidiaries (including, without limitation, all such properties and
buildings described as leased under the caption "Item 2: Properties" in the
10-K incorporated by reference in the Prospectus) are held by them under
valid, existing and enforceable leases with such exceptions as are not
material and do not interfere with the use made or proposed to be made of
such property and buildings by the Guarantor and its Material Subsidiaries;
18
(xiv) the documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Issuer or the Guarantor
prior to the Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion), when
they became effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and they have no reason to
believe that any of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of a registration
statement which became effective under the Securities Act, an 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, in the case of other documents which were filed under the
Exchange with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such documents were so filed, not misleading; and
(xv) to the best of such counsel's knowledge, other than as set forth
in the Prospectus or in the 10-K: (a) neither the Issuer nor the Guarantor
has received notice of any claim of infringement or violation of or
conflict with rights or claims of others with respect to any patents,
patent rights or other Intellectual Property owned, licensed or used by the
Issuer or the Guarantor except for any such conflicts or infringements
that, individually or in the aggregate, do not or would not reasonably be
expected to have a material adverse effect on the Guarantor and its
subsidiaries, taken as a whole; (b) and such counsel is not aware of any
research or licensing agreements, royalty arrangements, patents, patent
rights or other Intellectual Property of others which are infringed by the
Guarantor's or the Issuer's products or processes in such a manner which
would, individually or in the aggregate, reasonably be expected to result
in a material adverse effect on the Guarantor and its subsidiaries, taken
as a whole.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the States of Delaware and New York, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or opinions
(in form and substance reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar with
the applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible
19
officers of the Issuer and the Guarantor and certificates or other written
statements of officials of jurisdictions having custody of documents respecting
the corporate existence or good standing of the Issuer and the Guarantor. The
opinion of such counsel for the Issuer and the Guarantor shall state that the
opinion of any such other counsel upon which they relied is in form satisfactory
to such counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraph (xiii) above counsel may state their opinion and belief is based
upon their participation in the preparation of the Registration Statement and
the Prospectus and any amendment or supplement thereto but is without
independent check or verification except as specified.
The opinion of Xxxxxxx X. Xxxx described above shall be rendered to the
Underwriters at the request of the Issuer and shall so state therein;
(g) on the effective date of the Registration Statement and the effective
date of the most recently filed post-effective amendment to the Registration
Statement and also on the Closing Date, Xxxxxxx & Xxxxxxx L.L.P. shall have
furnished to you letters, dated the respective dates of delivery thereof, in
form and substance satisfactory to you, containing statements and information of
the type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus;
(h) the Representatives shall have received on and as of the Closing Date
an opinion of Xxxxxxxx & Xxxxxxxx, counsel to the Underwriters, with respect to
the validity of the Indenture and the Securities, the Registration Statement,
the Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters; and
(i) on or prior to the Closing Date the Issuer and the Guarantor shall have
furnished to the Representatives such further certificates and documents as the
Representatives shall reasonably request.
7. The Issuer and the Guarantor, jointly and severally, agree to indemnify
and hold harmless each Underwriter, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Securities and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation, the
legal fees and other expenses incurred
20
in connection with any suit, action or proceeding or any claim asserted) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or the Prospectus (as amended or supplemented if
the Issuer and the Guarantor shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Issuer
and the Guarantor in writing by such Underwriter through the Representatives
expressly for use therein and provided, further, that neither the Issuer nor the
Guarantor shall be liable to any Underwriter under the indemnity agreement in
this subsection with respect to any preliminary prospectus to the extent that
any such loss, claim, damage or liability of such Underwriter results from the
fact that such Underwriter sold Securities to a person to whom there was not
sent by commercially reasonable means, at or prior to the written confirmation
of such sale, a copy of the Prospectus, where such delivery is required by the
Securities Act, if the Issuer or the Guarantor has previously furnished
sufficient copies thereof to such Underwriter and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission of a
material fact contained in a preliminary prospectus and corrected in the
Prospectus.
Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Issuer, the Guarantor, their directors, its officers who sign the
Registration Statement and each person who controls the Issuer or the Guarantor
within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Issuer and
the Guarantor to each Underwriter, furnished to the Issuer and the Guarantor in
writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus, any amendment or supplement thereto, or
any preliminary prospectus.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such
21
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Securities and such control persons of Underwriters shall be
designated in writing by X.X. Xxxxxx Securities Inc. and any such separate firm
for the Issuer, the Guarantor, their directors, its officers who sign the
Registration Statement and such control persons of the Issuer or the Guarantor
shall be designated in writing by the Guarantor. The Indemnifying Person shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person
22
under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuer and the Guarantor on the one hand and the Underwriters on the other hand
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 Issuer and the Guarantor on the one
hand and the Underwriters on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Issuer and the Guarantor on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total net
proceeds from the offering (before deducting expenses) received by the Issuer
and the Guarantor and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Securities. The relative fault of the Issuer and the Guarantor on the one hand
and the Underwriters on the other 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 Issuer and the Guarantor or by the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Issuer, the Guarantor and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considera tions referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter 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 that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Under-
23
writers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Securities set forth opposite
their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any indemnified
party at law of in equity.
The indemnity and contribution agreements contained in this Section 7 and
the representations and warranties of the Issuer and the Guarantor set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Issuer, the Guarantor, their officers or directors or any other
person controlling the Issuer or the Guarantor, and (iii) acceptance of and
payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Issuer and the Guarantor, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Issuer or the Guarantor shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in the judgment of the Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x) execution
and delivery hereof by the parties hereto and (y) release of notification of the
effectiveness of the Registration Statement (or, if applicable, any
post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters shall fail or
refuse to purchase Securities which it or they have agreed to purchase hereunder
on such date,
24
and the aggregate principal amount of Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not more
than one-tenth of the aggregate principal amount of the Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as the Representatives may specify, to purchase the
Securities which such defaulting Underwriter or Underwriters agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-tenth of such principal amount of Securities without the written
consent of such Underwriter. If on the Closing Date any Underwriter or
Underwriters shall fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate principal amount of
Securities with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Representatives and the Issuer for the purchase
of such Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Issuer. In any such case either you or the Issuer shall have
the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
10. If this Agreement shall be terminated by the Underwriters except for
any termination pursuant to Section 8(i), (iii) or (iv), or any of
them, because of any failure or refusal on the part of the Issuer or the
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Issuer or the Guarantor shall be unable to
perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Issuer and/or the Guarantor
agrees to reimburse the Underwriters or such Underwriters as have so terminated
this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
11. This Agreement shall inure to the benefit of and be binding upon the
Issuer, the Guarantor, the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Securities, any controlling
persons referred
25
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by X.X. Xxxxxx Securities Inc. alone on behalf of the
Underwriters, and any such action taken by the Representatives jointly or by
X.X. Xxxxxx Securities Inc. alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be given to the
Representatives c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000 (telefax: [212-648- 5151]); Attention: Syndicate Department.
Notices to the Issuer shall be given to it at Xxx Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, (telefax: 606 232-3128); Attention: Xxxxxxx X. Xxxx,
Esq.
13. This Agreement may be signed in counterparts, each of which shall be an
original and all of which together shall constitute one and the same instrument.
26
14. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the conflicts of
laws provisions thereof.
If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
LEXMARK INTERNATIONAL, INC.
By:
------------------------
Title:
LEXMARK INTERNATIONAL GROUP,
INC.
By:
------------------------
Title:
Accepted: , 1998
------------------
X.X. Xxxxxx Securities Inc.
Salomon Brothers Inc
NationsBanc Xxxxxxxxxx Securities LLC
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: X.X. Xxxxxx Securities Inc.
By:
------------------------
Title:
27
SCHEDULE I
Principal Amount
of Securities to be
Underwriter Purchased
----------- ---------
X.X. Xxxxxx Securities Inc......................................................... $
Salomon Brothers Inc............................................................... $
NationsBanc Xxxxxxxxxx Securities LLC.............................................. $
======================
Total........................................ $ 150,000,000
28
