Exhibit 1.1
20,125,000 SHARES
WEIGHT WATCHERS INTERNATIONAL, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
As Representatives of the Several Underwriters,
c/o CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. INTRODUCTORY. Artal Luxembourg S.A. ("ARTAL") and each of the
additional selling stockholders listed on Schedule A hereto (the
"NON-CONTROLLING SELLING STOCKHOLDERS", and together with Artal, the "SELLING
STOCKHOLDERS"), propose to sell (the "OFFERING") to the several underwriters
named in Schedule B hereto (the "UNDERWRITERS") an aggregate of 17,500,000
outstanding shares (the "FIRM SECURITIES") of the Common Stock, no par value
(the "SECURITIES") of Weight Watchers International, Inc., a Virginia
corporation (the "COMPANY"), and the Selling Stockholders (the "OPTIONAL SELLING
STOCKHOLDERS") also propose to sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 2,625,000 additional outstanding
shares (the "OPTIONAL SECURITIES") of the Company's Securities as set forth
below. The Firm Securities and the Optional Securities are herein collectively
called the "OFFERED SECURITIES". The Company and each Selling Stockholder hereby
agree with the several Underwriters as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
STOCKHOLDERS. (a) The Company represents and warrants to, and agrees with, the
several Underwriters that:
(i) A registration statement (No. 333-89444) 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, as
amended (the "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
Credit Suisse First Boston Corporation ("CSFBC") and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX"), as
representatives of the several Underwriters (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.
(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 material respects to
the requirements of the Act and the rules and regulations of the
Commission (the "RULES AND REGULATIONS") and did not 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, (B) on the Effective
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Date of the Additional Registration Statement (if any), each
Registration Statement conformed or will conform, in all material
respects to the requirements of the Act and the Rules and Regulations
and did not contain, or will not contain, 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, if any, 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 material respects, to the requirements of the Act and the Rules
and Regulations, and neither of such documents contains, or will
contain, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus
or any preliminary prospectus or any amendment or supplement thereto,
in light of the circumstances under which they were made) not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform, in all material
respects, to the requirements of the Act and the Rules and Regulations,
neither of such documents will contain any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein (in the case
of the Prospectus or any preliminary prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were
made) not misleading, and no Additional Registration Statement has been
or will be filed. The two preceding sentences do not apply to
statements in or omissions from a Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter through the Representatives specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(c) hereof.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
Commonwealth of Virginia, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus and 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, except where such failure to be so qualified, be in
good standing or have such power or authority would not individually or
in the aggregate have a material adverse affect on the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole ("Material Adverse
Effect").
(iv) Each subsidiary of the Company that is a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the Act
(the "Significant Subsidiaries") has been duly incorporated or
organized and is an existing corporation or other entity, as the case
may be, in good standing under the laws of the jurisdiction of its
incorporation or organization, if applicable, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus and is duly qualified to do business as a
foreign corporation, or other entity, as the case may be, in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except where the failure to be so qualified, be in good standing or
have such power or authority would not individually or in the aggregate
have a Material Adverse Effect; all of the issued and outstanding
capital stock or other ownership interests of each Significant
Subsidiary has been
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duly authorized and validly issued and is fully paid and nonassessable;
and, except for pledges in favor of The Bank of Nova Scotia as
administrative agent for the lenders under the Second Amended and
Restated Credit Agreement, dated as of December 21, 2001, among the
Company, WW Funding Corp., Credit Suisse First Boston, as syndication
agent, a lead arranger and a book manager, BHF (USA) Capital
Corporation and Fortis (USA) Finance LLC, as the documentation agents,
the Bank of Nova Scotia as the administrative agent, a lead arranger
and a book manager and the various financial institutions named
therein, the capital stock or other ownership interests of each
Significant Subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects. Annex
I attached hereto sets forth a true and complete list of all of the
Significant Subsidiaries.
(v) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; and the stockholders of the
Company have no preemptive rights with respect to the Securities.
(vi) Except as disclosed or incorporated by reference in the
Prospectus, there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid
claim against the Company or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering.
(vii) Except as disclosed or incorporated by reference in the
Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company 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 under the Act.
(viii) The Offered Securities have been approved for listing
on the New York Stock Exchange.
(ix) 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 Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale
of the Offered Securities, except such as (A) have been obtained and
made under the Act, (B) may be required under state securities laws and
(C) may be required by the securities laws of any jurisdiction outside
of the United States of America.
(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, (A) 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 any subsidiary of the
Company or any of their respective properties, or (B) any agreement or
instrument to which the Company or any such subsidiary is a party or by
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or (C)
the charter or by-laws of the Company or any such subsidiary, except in
the case of (A) or (B), where such breach, violation or default would
not individually or in the aggregate have a Material Adverse Effect.
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(xi) This Agreement has been duly authorized, executed and
delivered by the Company.
(xii) Except as disclosed or incorporated by reference in the
Prospectus, the Company and its subsidiaries 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 or materially interfere with
the use made or to be made thereof by them, except where such failure
would not individually or in the aggregate have a Material Adverse
Effect; and except as disclosed or incorporated by reference in the
Prospectus, the Company and its subsidiaries 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, except where such failure would not individually or in the
aggregate have a Material Adverse Effect.
(xiii) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them, in each case except to the extent where such failure to do so
would not individually or in the aggregate have a Material Adverse
Effect, and neither the Company nor any subsidiary of the Company has
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 any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xiv) No labor dispute with the employees of the Company or
any subsidiary exists or, to the knowledge of the Company, is
threatened that would have a Material Adverse Effect.
(xv) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, all material 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 any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xvi) Except as disclosed or incorporated by reference in the
Prospectus, neither the Company nor any of its subsidiaries is in
violation of any statute, any 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 contaminated with any substance that is subject to any
environmental laws, is 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 Material Adverse Effect; and the Company is not aware of
any pending investigation which might lead to such a claim.
(xvii) Except as disclosed or incorporated by reference in the
Prospectus, there are no pending actions, suits or proceedings against
or affecting the Company, any of its subsidiaries or any of their
respective properties that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would
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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's
knowledge, contemplated.
(xviii) The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, present
fairly in all material respects the financial position of the Company
and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and, except
as otherwise disclosed or incorporated by reference in the Prospectus,
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 included in the Registration
Statement present fairly the information required to be stated therein.
(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, properties or results of operations of
the Company and its subsidiaries 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 on any class of its capital stock.
(xx) 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,
as amended.
(b) Artal represents and warrants to, and agrees with, the several
Underwriters that:
(i) Artal is a SOCIETE ANONYME and validly existing and, to
the extent such concept exists in the relevant jurisdiction, in good
standing under the laws of the jurisdiction of its organization.
(ii) This Agreement has been duly authorized, executed and
delivered by Artal.
(iii) The execution and delivery by Artal of, and the
performance by Artal of its obligations under, this Agreement will not
contravene any provision of applicable law or the organizational
documents of Artal or any agreement or other instrument binding upon
Artal or any of its assets or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over Artal or
any of its assets, except where such contravention would not
individually or in the aggregate materially adversely affect the
ability of Artal to consummate the transactions contemplated hereby,
and 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 Artal for the performance by Artal of its obligations under
this Agreement, except (A) such as have been obtained or made, (B) such
as may be required under state securities laws and (C) such as may be
required by the securities laws of any jurisdiction outside the United
States of America.
(iv) Artal has, and on each Closing Date hereinafter mentioned
will have, full right, power and authority to enter into this Agreement
and to sell, assign, transfer and deliver the Offered Securities to be
delivered by Artal 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 a security entitlement
with respect to the Offered Securities to be
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delivered by Artal on such Closing Date and no action based on an
adverse claim may be asserted against the Underwriters with respect to
such Offered Securities.
(v) 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 material respects to
the requirements of the Act and the rules and regulations of the
Commission and did not 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, (B) on the
Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed or will conform, in all material
respects to the requirements of the Act and the Rules and Regulations
and did not contain, or will not contain, 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, if any, 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 material respects to the requirements of the Act and the Rules
and Regulations, and neither of such documents contains, or will
contain, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus
or any preliminary prospectus or any amendment or supplement thereto,
in light of the circumstances under which they were made) not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will contain any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein (in the case
of the Prospectus or any preliminary prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were
made) not misleading, and no Additional Registration Statement has been
or will be filed. The two preceding sentences apply only to the extent
statements in or omissions from a Registration Statement or the
Prospectus are based on written information furnished to the Company by
Artal specifically for use therein.
(vi) There are no material agreements or arrangements relating
to the Company or its subsidiaries to which Artal or, to Artal's
knowledge, any direct or indirect stockholder of Artal is a party,
which are required to be described in the Registration Statements or
the Prospectus or to be filed as exhibits thereto that are not so
described or filed.
(vii) Except as disclosed or incorporated by reference in the
Prospectus, there are no contracts, agreements or understandings
between Artal and any person that would give rise to a valid claim
against Artal or any Underwriter for a brokerage commission, finder's
fee or other like payment in connection with this offering.
(c) Each Non-Controlling Selling Stockholder severally and not jointly
represents and warrants to, and agrees with, the several Underwriters that:
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(i) Such Non-Controlling Selling Stockholder, if a corporate
entity, is validly existing and, to the extent such concept exists in
the relevant jurisdiction, in good standing under the laws of the
jurisdiction of its incorporation or organization, as applicable.
(ii) Upon execution and delivery of this Agreement by one of
the Attorneys (as defined in the Power of Attorney) on behalf of such
Non-Controlling Selling Stockholder, this Agreement will have been duly
authorized, executed and, to the extent such concept exists in the
relevant jurisdiction, delivered by such Non-Controlling Selling
Stockholder.
(iii) The execution and delivery by such Non-Controlling
Selling Stockholder of, and the performance by such Non-Controlling
Selling Stockholder of its obligations under, this Agreement will not
contravene any provision of applicable law, or, if a corporate entity,
the organization documents of such Non-Controlling Selling Stockholder
or any agreement or other instrument binding upon such Non-Controlling
Selling Stockholder or any of its assets or any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over such Non-Controlling Selling Stockholder or any of its assets,
except where such contravention would not individually or in the
aggregate materially adversely affect the ability of such
NonControlling Selling Stockholder to consummate the transactions
contemplated hereby, and 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 such Non-Controlling Selling
Stockholder for the performance by such Non-Controlling Selling
Stockholder of its obligations under this Agreement, except (A) such as
have been obtained or made and (B) such as may be required under state
securities laws and (C) such as may be required by the securities laws
of any jurisdiction outside the United States of America.
(iv) Such Non-Controlling Selling Stockholder has, and on each
Closing Date hereinafter mentioned will have, full right, power and
authority to enter into this Agreement and to sell, assign, transfer
and deliver the Offered Securities to be delivered by such
Non-Controlling 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 a security
entitlement with respect to the Offered Securities to be delivered by
such NonControlling Selling Stockholder on such Closing Date and no
action based on an adverse claim may be asserted against the
Underwriters with respect to such Offered Securities.
(v) 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 material respects to
the requirements of the Act and the Rules and Regulations and did not
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, (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration Statement
conformed or will conform, in all material respects to the requirements
of the Act and the Rules and Regulations and did not contain, or will
not contain, 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, if
any, 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 material respects to
the requirements of the Act
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and the Rules and Regulations, and neither of such documents contains,
or will contain, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus
or any preliminary prospectus or any amendment or supplement thereto,
in light of the circumstances under which they were made) not
misleading. If the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
neither of such documents will contain any untrue statement of a
material fact or will omit to state any material fact required to be
stated therein or necessary to make the statements therein (in the case
of the Prospectus or any preliminary prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were
made) not misleading, and no Additional Registration Statement has been
or will be filed. The two preceding sentences 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 such Non-Controlling Selling Stockholder specifically for
use therein.
(vi) Except as disclosed or incorporated by reference in the
Prospectus, there are no contracts, agreements or understandings
between such Non-Controlling Selling Stockholder and any person that
would give rise to a valid claim against such Non-Controlling 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, each Selling Stockholder agrees,
severally and not jointly, to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from each Selling Stockholder, at
a purchase price of $[ ] per share, that number of Firm Securities (rounded up
or down, as determined by CSFBC in its discretion, in order to avoid fractions)
obtained by multiplying the number of Firm Securities set forth opposite the
name of such Selling Stockholder in Schedule A hereto, in each case by a
fraction the numerator of which is the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule B hereto and the denominator
of which is the total number of Firm Securities.
The Selling Stockholders will deliver or shall cause to be delivered
security entitlements with respect to the Firm Securities to the Representatives
for the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by wire transfer to an account at a bank acceptable to
CSFBC drawn to the order of each of the Selling Stockholders at the office of
Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, at 10 a.m., New
York time, on [ ], 2002, or at such other time not later than seven full
business days thereafter as CSFBC and the Selling Stockholders 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, as amended (the "EXCHANGE
ACT"), 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 Firm Securities sold pursuant to the offering. The
certificates for the Firm Securities so to be delivered will be in the form of
one or more global securities, in such denominations and registered in such
names as CSFBC requests and will be made available for checking at the office of
Cravath, Swaine & Xxxxx at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC (after consultation with
Xxxxxxx Xxxxx) given to the Selling Stockholders 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
9
to be paid for the Firm Securities. Each Optional Selling Stockholder agrees,
severally and not jointly, to sell to the Underwriters the respective numbers of
Optional Securities obtained by multiplying the number of Optional Securities
specified in such notice by a fraction the numerator of which is the number of
shares set forth opposite the name of such Optional Selling Stockholder in
Schedule A hereto under the caption "Number of Optional Securities to be Sold"
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 each Optional 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 not more than twice and to
the extent not previously exercised may be surrendered and terminated at any
time upon notice by CSFBC to the Optional Selling Stockholders.
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 earlier than two full business days and not later than five
full business days after written notice of election to purchase Optional
Securities is given. The Optional Selling Stockholders will deliver or shall
cause to be delivered a security entitlement with respect to the Optional
Securities being purchased on each Optional Closing Date to the Representatives
for the accounts of the several Underwriters, against payment of the purchase
price therefor 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
each of the Optional Selling Stockholders at the office of Cravath, Swaine &
Xxxxx. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in the form of one or more global securities, 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 at the office of Cravath, Swaine & Xxxxx 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 STOCKHOLDERS. (a)
The Company agrees with the several Underwriters and the Selling Stockholders
that:
(i) 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 the Representatives, which consent shall not be unreasonably
withheld, 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 the Representatives 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
10
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 the Representatives.
(ii) The Company will advise the Representatives 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
supplement without the Representatives' consent, which consent shall
not be unreasonably withheld; and the Company will also advise the
Representatives 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 supplement of a
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of a Registration
Statement and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if
issued.
(iii) 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 the Representatives 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
the Representatives' 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.
(iv) 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.
(v) 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 the Representatives
reasonably request. 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 and the Selling
Stockholders will pay the expenses of printing and distributing to the
Underwriters all such documents.
11
(vi) The Company will use its reasonable efforts to arrange
for the qualification of the Offered Securities for sale under the laws
of such jurisdictions as the Representatives designate and will
continue such qualifications in effect so long as required for the
distribution, provided that the Company will not be required to qualify
to do business in any jurisdiction where it is not now qualified or
take any action which would subject it or to a general or unlimited
service of process in any jurisdiction where it is not now subject.
(vii) During the period of 3 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 Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Company as the Representatives may reasonably request;
except, in the case of (ii), insofar as providing such information to
the Representatives would violate Regulation FD under the Exchange Act.
(viii) For a period of 90 days after the date that the Offered
Securities are initially offered to the public (the "LOCK-UP PERIOD"),
the Company will not 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 publicly disclose the
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of the Representatives, except (A)
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, (B) grants of
employee stock options pursuant to the terms of a plan in effect on the
date hereof , (C) issuances of Securities pursuant to the exercise of
such options or issuances of Securities pursuant to the Company's
dividend reinvestment plan, (D) issuances of Securities pursuant to the
Company's employee benefit plans which are described in the Prospectus
or the Company's dividend reinvestment plan, if any; (E) the filing of
a registration statement on Form S-8 or a resale shelf registration
statement relating to such grants, issuances, exercises or conversions;
or (F) issuances in connection with the merger with or acquisition of
another corporation or entity or the acquisition of the assets or
properties of any such corporation or entity and the related entry into
a merger or acquisition agreement with respect to such merger or
acquisition; provided that any party acquiring Securities from the
Company under the provisions of subsection (F) herein agrees in writing
not to offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any such Securities of the Company or
securities convertible into or exchangeable or exercisable for any
shares of Securities, enter into a transaction which would have the
same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such
other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or enter
into any such transaction, swap, hedge or other arrangement, without,
in each case, the prior written consent of the Representatives.
Notwithstanding the foregoing, each such party may transfer Securities
to an affiliate or family member, heir or trust, provided that the
transferee agrees to be bound in writing by the provisions of this
Section.
(ix) The Company agrees with the several Underwriters that the
Company will pay all expenses incident to the performance of the
obligations of the Company and the Selling
12
Stockholders, as the case may be, under this Agreement, for any filing
fees and other expenses (including reasonable fees and disbursements of
counsel to the Underwriters) incurred in connection with qualification
of the Offered Securities for sale under the laws of such jurisdictions
as the Representatives designate pursuant to Section 5(a)(vi) and the
printing of memoranda relating thereto, for the filing fee incident to
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 Stockholders 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. Except as otherwise provided
in this Section 5(a)(ix) and Section 9, the Underwriters shall pay
their own costs and expenses in connection with the transactions
contemplated hereby, including, without limitation, the fees and
expenses of their counsel and the expenses of advertising the offering
of the Offered Securities made by the Underwriters.
(b) Each Selling Stockholder agrees with the several
Underwriters that, during the Lock-up Period, 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, enter into a transaction which would have the
same effect, or enter into any swap, hedge or other arrangement that
transfers, in whole or in part, any of the economic consequences of
ownership of the Securities, whether any such aforementioned
transaction is to be settled by delivery of the Securities or such
other securities, in cash or otherwise, or publicly disclose the
intention to make any such offer, sale, pledge or disposition, or enter
into any such transaction, swap, hedge or other arrangement, without,
in each case, the prior written consent of the Representatives.
Notwithstanding the foregoing, each Selling Stockholder may transfer
Securities to an affiliate or family member, heir or trust, provided
that the transferee agrees to be bound in writing by the provisions of
this Section 5(b). In addition, this agreement shall not prohibit the
exercise of any stock option or warrant, or rights relating to the
conversion of convertible debt, except that the shares of the
Securities of the Company obtained upon any such exercise shall be
subject to the limitations on disposition described herein.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company and each Selling Stockholder herein, to
the accuracy of the statements of Company officers made in any certificates
pursuant to the provisions hereof, to the performance by the Company and each
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 PricewaterhouseCoopers LLP, confirming that they are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and substantially in the form of
Exhibit A hereto.
13
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 p.m., New York time, on the date of this
Agreement or such later date as shall have been consented to by the
Representatives. 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 the Representatives. If the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this Agreement.
Prior to such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or, to the knowledge of each Selling
Stockholder, the Company or the Representatives, shall be threatened by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as a whole
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 downgrading in the rating of any
debt securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S. Federal or
New York authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or any
other substantial national or international calamity or emergency if, in the
judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Offered
Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of Hunton & Xxxxxxxx, special Virginia counsel for the Company, in
the form attached hereto as Exhibit B.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Company and special
New York counsel to Artal, in the form attached hereto as Exhibit C.
(f) The Representatives shall have received an opinion, dated the
Closing Date, of Xxxxxx X. Xxxxxxx, counsel to the Company, in the form attached
hereto as Exhibit D:
(g) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxx & Xxxxxxxxx, Luxembourg counsel for Artal, in the form
attached hereto as Exhibit E.
(h) The Representatives shall have received an opinion, dated such
Closing Date, of Barkers, British Virgin Islands counsel for Longisland
International Limited, in the form attached hereto as Exhibit F.
14
(i) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx Procter LLP, New York counsel for Longisland
International Limited, in the form attached hereto as Exhibit G.
(j) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx Procter LLP, counsel for Scotiabanc, Inc., in the form
attached hereto as Exhibit H.
(k) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx Procter LLP, counsel for Merchant Capital, Inc., in the
form attached hereto as Exhibit I.
(l) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxxx Procter LLP, New York counsel for Xxxxxxx and Xxxxxxx
Xxxx, in the form attached hereto as Exhibit J.
(m) The Representatives shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the validity of
the Offered Securities delivered on such Closing Date, the Registration
Statements, the Prospectus and other related matters as the Representatives may
require, and each of the Selling Stockholders and the Company shall have
furnished to such counsel such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters. In rendering such opinion,
Cravath, Swaine & Xxxxx may rely as to the incorporation of the Company and all
other matters governed by Virginia law upon the opinion of Hunton & Xxxxxxxx
referred to above.
(n) 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 the Company in which such officers, to their knowledge
after reasonable investigation, shall state that: the representations and
warranties of the Company 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 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, properties or
results of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Prospectus or as described in such
certificate.
(o) The Representatives shall have received a letter, dated such
Closing Date, of PricewaterhouseCoopers LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
(p) On or prior to the date of this Agreement, the Representatives
shall have received a letter, substantially in the form of Exhibit K hereto and
addressed to the Representatives, from each of the executive officers and
directors of the Company.
(q) Each Selling Shareholder shall deliver to the Representatives a
properly completed and executed United States Treasury Form W-8 or W-9 (or other
applicable form of statement specified by Treasury Department regulations in
lieu thereof).
15
Each 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. The Representatives may in their 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 will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, 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 or
any amendment or supplement thereto, 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 (in
the case of the Prospectus or any preliminary prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were made),
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 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; and provided, further, that with respect to any untrue statement or
omission of material fact made in any preliminary prospectus, the indemnity
agreement contained in this Section 7(a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the Offered Securities concerned, to the extent that any
such loss, claim, damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of competent
jurisdiction that (w) the Company had previously furnished copies of the
Prospectus to the Representatives, (x) delivery of the Prospectus was required
by the Act to be made to such person, (y) the untrue statement or omission of a
material fact contained in the preliminary prospectus was corrected in the
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such securities to such person, a copy
of the Prospectus.
(b) Each Selling Stockholder will severally and not jointly indemnify
and hold harmless each Underwriter, its partners, directors and officers and
each person, if any, who controls such Underwriter within the meaning of Section
15 of the Act, 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 or
any amendment or supplement thereto, 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 (in
the case of the Prospectus or any preliminary prospectus or any amendment or
supplement thereto, in light of the circumstances under which they were made)
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 about such
Selling Stockholder (or any direct or indirect stockholders of such Selling
Stockholder) furnished to the Company by such Selling
16
Stockholder specifically for use therein, 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
Selling Stockholders 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 an 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; provided, further, that
with respect to any untrue statement or omission of material fact made in any
preliminary prospectus, the indemnity agreement contained in this Section 7(b)
shall not inure to the benefit of any Underwriter from whom the person asserting
any such loss, claim, damage or liability purchased the Offered Securities
concerned, to the extent that any such loss, claim, damage or liability of such
Underwriter occurs under the circumstance where it shall have been determined by
a court of competent jurisdiction that (w) the Company had previously furnished
copies of the Prospectus to the Representatives, (x) delivery of the Prospectus
was required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the preliminary prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus; and provided, further, that the liability
under this subsection of each Selling Stockholder shall be limited to an amount
equal to the aggregate gross proceeds net of underwriting discounts and
commissions but before deducting expenses to such Selling Stockholder from the
sale of Securities sold by such Selling Stockholder hereunder.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, and each of
the Selling Stockholders, its directors and officers and each person, if any,
who controls such Selling Stockholder within the meaning of Section 15 of the
Act, against any losses, claims, damages or liabilities to which the Company or
any 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 or any amendment or
supplement thereto, 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 (in the case of the
Prospectus or any preliminary prospectus or any amendment or supplement thereto,
in light of the circumstances under which they were made), 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
each 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 the following information in the Prospectus furnished on
behalf of each Underwriter: (i) the concession and reallowance figures appearing
in the fourth paragraph under the caption "Underwriting"; (ii) the information
regarding stabilizing transactions in the tenth paragraph under the caption
"Underwriting"; (iii) the information regarding material relationships furnished
on behalf of CSFBC in the thirteenth, fourteenth and fifteenth paragraphs and
regarding Xxxxxxx Xxxxx, Xxxxxxx Xxxxx Xxxxxx Inc. and UBS Warburg LLC in the
fifteenth paragraph under the caption "Underwriting"; and (iv) the information
contained in the eleventh, twelfth, and sixteenth paragraphs under the caption
"Underwriting".
17
(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 reasonably 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. No
indemnifying party shall, (i) without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), 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 (A) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (B) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party or (ii) be liable for any settlement of any
such action effected without its written consent (which shall not be
unreasonably withheld).
(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 Stockholders on the one hand and the Underwriters on the
other from the offering of the Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Selling Stockholders 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 Stockholders 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
Selling Stockholders 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 and the Selling Stockholders on
the one hand or the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such 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 misrepresentation. The
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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 Stockholders under
this Section shall be in addition to any liability which the Company and the
Selling Stockholders 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, to each person, if any, who controls the Company within
the meaning of the Act, to each Selling Stockholder and to each person, if any,
who controls any Selling Stockholder within the meaning of the Act.
(g) Notwithstanding any other provision of this Section 7, the
aggregate liability of each of the Selling Stockholders under this Section 7
shall be limited to the aggregate gross proceeds net of underwriting discounts
and commissions but before deducting expenses received by each such Selling
Stockholder from the offering of Offered Securities under this Agreement.
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, the
Representatives may make arrangements satisfactory to the Selling Stockholders
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
the Representatives and the Selling Stockholders 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 Stockholders, 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 Stockholders, of the Company or its 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, any 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 shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company, the Selling Stockholders, and the Underwriters
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and
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warranties in Section 2 and all obligations under Section 5 shall also remain in
effect. If the purchase of the Offered Securities by the Underwriters is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or the occurrence of any event specified in
clause (iii), (iv) or (v) of Section 6(c), the Company will reimburse the
Underwriters for all substantiated 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
Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory
Group and c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Four Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx xx Xxxxxx, or, if sent to
the Company, will be mailed, delivered or telegraphed and confirmed to it at 000
Xxxxxxxxx Xxxx Xxxx, Xxxxxxxx, XX 00000-0000, Attention: General Counsel, or, if
sent to Artal, will be mailed, delivered or telegraphed and confirmed to Artal
Luxembourg S.A., at 000, Xxxxx-Xxx, X-0000 Xxxxxxxxxx, Xxxxx-Xxxxx of Luxembourg
with a copy to The Invus Group Ltd., 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
X.X. 10022, Attention: Xxxxxxx Xxxxxxx, or if sent to the Non-Controlling
Selling Stockholders, will be mailed, delivered or telegraphed and confirmed to
it at the address listed underneath such Non-Controlling Selling Stockholder's
name on Schedule A hereto; provided, however, that any notice to an Underwriter
pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to
such Underwriter.
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 will be
binding upon all the Underwriters.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Selling Stockholders 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. Artal
irrevocably appoints Xxxxx Xxx Xxxx, Northwestern School of Law, Xxxx Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, as its authorized agent upon which process may
be served in any such suit or proceeding, and agrees that service of process
upon such agent, and written notice of said service to Artal by the person
serving the same to the address provided in Section 10, shall be deemed in every
respect effective service of process upon Artal in any such suit or proceeding.
Artal further agrees to take any and all action as may be necessary to maintain
such designation and appointment of such agent in full force and effect for a
period of seven years from the date of this Agreement.
The obligation of Artal in respect of any sum due to any Underwriter
shall, notwithstanding any judgment in a currency other than United States
dollars, not be discharged until the first business day, following receipt by
such Underwriter of any sum adjudged to be so due in such other currency, on
which
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(and only to the extent that) such Underwriter may in accordance with normal
banking procedures purchase United States dollars with such other currency; if
the United States dollars so purchased are less than the sum originally due to
such Underwriter hereunder, Artal agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Underwriter against such
loss. If the United States dollars so purchased are greater than the sum
originally due to such Underwriter hereunder, such Underwriter agrees to pay to
Artal an amount equal to the excess of the dollars so purchased over the sum
originally due to such Underwriter hereunder.
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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 Stockholders, the Company and the several Underwriters in accordance
with its terms.
Very truly yours,
WEIGHT WATCHERS INTERNATIONAL, INC.
BY:
---------------------------------------------
ARTAL LUXEMBOURG S.A.
BY:
---------------------------------------------
XXXXXXX AND XXXXXXX XXXX
BY:
---------------------------------------------
Attorney-in-Fact
MERCHANT CAPITAL, INC.
BY:
---------------------------------------------
Attorney-in-Fact
SCOTIABANC, INC.
BY:
---------------------------------------------
Attorney-in-Fact
LONGISLAND INTERNATIONAL LIMITED
BY:
---------------------------------------------
Attorney-in-Fact
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX 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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By XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
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