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EXHIBIT 1.1
DECS TRUST III
5,000,000 DECS* SM
(Representing Beneficial Interests in Contracts Relating to Shares of Class
B Common Stock, $.01 par value, of Herbalife International, Inc.)
Underwriting Agreement
New York, New York
March [ ], 1998
Xxxxxxx Xxxxx Xxxxxx
Xxxxx Xxxxxx Inc.
Prudential Securities Incorporated
As Representatives of the several Underwriters,
[c/o Xxxxx Xxxxxx Inc.]
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
DECS Trust III, a statutory business trust organized under the
Delaware Business Trust Act, 12 Del.C. Section 3801 et seq. (the "Delaware
Act"), of the State of Delaware (such trust and the trustees thereof acting in
their capacities as such being referred to herein as the "Trust"), proposes to
issue and to sell to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, an aggregate of 5,000,000 DECS representing shares of
beneficial interest in the Trust (the "Underwritten DECS"). In addition, the
Underwriters will have an option to purchase up to [ ] DECS (the "Option DECS"
and, together with the Underwritten DECS, the "DECS") to cover over-allotments,
if any. The Option DECS and the Underwritten DECS, together with the [ ] DECS of
the Trust subscribed for by Xxxxx Xxxxxx Inc. ("Xxxxx Xxxxxx") pursuant to the
Subscription Agreement, dated March 3, 1998, between Xxxxx Xxxxxx and the Trust
(the "Subscription DECS"), are referred to herein as the "Securities." The
Securities are to be issued under an Amended and Restated Declaration of Trust,
dated as of March [ ], 1998 (the "Trust Agreement"), among the initial trustee
and initial sponsor of the Trust, trustees of the Trust (the "Trustees") and
Xxxxx Xxxxxx, as sponsor.
The Trust has entered into forward purchase contracts (the
"Contracts") with the persons listed on Schedule II hereto (each a "Seller" and
collectively, the "Sellers"), the related persons listed on Schedule II hereto
under "Corporate Seller Control Person" (each, a "Corporate Seller Control
Person" and collectively, the "Corporate Seller Control Persons"), Xxxx Xxxxxx
and the Xxxx Xxxxxx Family Trust, solely controlled by Xxxx Xxxxxx, pursuant to
which each Seller has agreed to sell, and the Trust has agreed to purchase, the
number of shares of Class B Common Stock, $.01 par value (the "Shares"), of
Herbalife International, Inc. (the "Company") specified therein on [ ]
[ ], 2001 (the "Exchange Date") (subject to the Sellers' right to deliver cash
with a value equivalent thereto, or other property, as provided in the
Contracts). Each Seller's obligations under his, her or its respective Contract
will be secured by a pledge of collateral under a collateral agreement (each a
"Collateral Agreement") among such Seller, the Trust and The Bank of New York
("BoNY"), as collateral agent (in such capacity, the "Collateral Agent").
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* Plus an option to purchase from DECS Trust up to [ ] additional DECS to
cover over-allotments.
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persons listed on Schedule II hereto under "Corporate Seller Control Person"
(each, a "Corporate Seller Control Person" and collectively, the "Corporate
Seller Control Persons"), Xxxx Xxxxxx and the Xxxx Xxxxxx Family Trust, solely
controlled by Xxxx Xxxxxx, pursuant to which each Seller has agreed to sell, and
the Trust has agreed to purchase, the number of shares of Class B Common Stock,
$.01 par value (the "Shares"), of Herbalife International, Inc. (the "Company")
specified therein on [ ] [ ], 2001 (the "Exchange Date") (subject to the
Sellers' right to deliver cash with a value equivalent thereto, or other
property, as provided in the Contracts). Each Seller's obligations under his,
her or its respective Contract will be secured by a pledge of collateral under a
collateral agreement (each a "Collateral Agreement") among such Seller, the
Trust and The Bank of New York ("BoNY"), as collateral agent (in such capacity,
the "Collateral Agent").
It is further understood by the parties hereto that the persons
listed on Schedule III hereto each a "Lender" and collectively, the "Lenders"
are concurrently entering into a securities loan agreement dated the date hereof
(the "Securities Loan Agreement") which provides that, subject to certain
restrictions and with the agreement of the Lenders, Xxxxx Xxxxxx may from time
to time borrow, return and reborrow from the Lenders certain of the Shares for
the purpose of facilitating market-making activity in the DECS by Xxxxx Xxxxxx.
In connection with the foregoing, the Company has filed with the
Commission a registration statement with respect to (i) 5,000,000 Shares in
respect of the Underwritten DECS, plus an additional [ ] Shares in respect of
the Option DECS and an additional [ ] Shares in respect of the Subscription
DECS, for delivery by the Sellers pursuant to the Securities and (ii) 1,000,000
Shares (the "Borrowed Shares") for borrowing and delivery pursuant to the
Securities Loan Agreement, which registration statement is referred to in
Section 2(a) of this Agreement.
To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Certain terms used herein are defined in Section 23 hereof.
1. Representations and Warranties of the Trust. The Trust
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 1.
(a) The Trust meets the requirements for use of Form N-2 under
the Act and has prepared and filed with the Commission (a) a notification on
Form N-8A (the "Notification") of registration of the Trust as an investment
company under the Investment Company Act and (b) a registration statement on
Form N-2 (file numbers 333-44807 and 811-08615), including a related preliminary
prospectus, for the registration of the offering and sale of the DECS under the
Act. The Trust may have filed one or more amendments thereto, including the
related preliminary prospectus, each of which has previously been furnished to
you. The Trust will next file with the Commission one of the following: either
(1) prior to the Trust Effective Date of such registration statement, a further
amendment to such registration statement (including the form of final
prospectus); or (2) after the Trust Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 497(h). In the
case of clause (2), the Trust has included in such registration
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statement, as amended at the Trust Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to be
included in such registration statement and the Trust Prospectus. As filed, such
amendment and form of final prospectus, or such final prospectus, shall contain
all Rule 430A Information, together with all other such required information,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Trust Prospectus) as the Trust
has advised you, prior to the Execution Time, will be included or made therein.
(b) On the Trust Effective Date, the Trust Registration Statement
and the Notification did or will, and when the Trust Prospectus is first filed
(if required) in accordance with Rule 497(h) and on the Closing Date (as defined
herein) and on any date on which Option DECS are purchased, if such date is not
the Closing Date (a "Settlement Date"), the Trust Prospectus (and any
supplements thereto) will comply in all material respects with the applicable
requirements of the Act, the Exchange Act and the Investment Company Act, and
the respective rules thereunder; on the Trust Effective Date and at the
Execution Time, the Trust Registration Statement did not or will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading; and, on the Trust Effective Date, the Trust Prospectus, if not filed
pursuant to Rule 497(h), did not or will not, and on the date of any filing
pursuant to Rule 497(h) and on the Closing Date and any settlement date, the
Trust Prospectus (together with any supplement thereto) will not, include 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.
(c) No stop order suspending the effectiveness of the Trust
Registration Statement is in effect, no order preventing or suspending the use
of any Preliminary Trust Prospectus has been issued by the Commission, no notice
or order under Section 8(e) of the Investment Company Act has been issued, and
no proceedings for any such purpose are pending before or threatened by the
Commission.
(d) The Trust has been duly created, is validly existing as a
business trust under the Delaware Act, has the power and authority to own or
lease, as the case may be, and to operate its properties and conduct its
business as described in the Trust Prospectus and to enter into and perform its
obligations under this Agreement, the Trust Agreement and each of the
Fundamental Documents (as defined below) and is duly qualified to do business
and is in good standing under the laws of each 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 would not have a material
adverse effect on the Trust or its assets. The Trust has no subsidiaries.
(e) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the Investment
Company Act and no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or, to the knowledge of the Trust,
threatened by the Commission. No person is serving or acting as an officer or
trustee of the Trust except in accordance with the provisions of the Investment
Company Act.
(f) This Agreement has been duly authorized, executed and
delivered by the Trust.
(g) Each of the Contracts, the Collateral Agreements, the
Administration Agreement between BoNY and the Trust (the "Administration
Agreement"), the Custodian Agreement between BoNY and the Trust (the "Custodian
Agreement"), the Paying Agent Agreement between BoNY and the Trust (the "Paying
Agent Agreement") and the Fund Indemnity Agreement between Xxxxx Xxxxxx and the
Trust (the "Fund Indemnity Agreement") (the Contracts, the Collateral
Agreements, the Administration Agreement, the Custodian Agreement, the Paying
Agent Agreement and the Fund Indemnity Agreement are referred to herein,
collectively, as the "Fundamental Agreements") has been duly authorized,
executed and delivered by the Trust and, assuming due authorization, execution
and delivery by the other parties thereto, is valid and binding agreement of
the Trust, enforceable against the Trust in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and by general equitable.
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(g) Each of the Contracts, the Collateral Agreements, the
Administration Agreement between BoNY and the Trust (the "Administration
Agreement"), the Custodian Agreement between BoNY and the Trust (the "Custodian
Agreement"), the Paying Agent Agreement between BoNY and the Trust (the "Paying
Agent Agreement") and the Fund Indemnity Agreement between Xxxxx Xxxxxx and the
Trust (the "Fund Indemnity Agreement") (the Contracts, the Collateral
Agreements, the Administration Agreement, the Custodian Agreement, the Paying
Agent Agreement and the Fund Indemnity Agreement are referred to herein,
collectively, as the "Fundamental Agreements") has been duly authorized,
executed and delivered by the Trust and, assuming due authorization, execution
and delivery by the other parties thereto, is a valid and binding agreement of
the Trust, enforceable against the Trust in accordance with its terms except as
such enforceability may be limited by applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and by general equitable
principles.
(h) The execution and delivery by the Trust of, and the
performance by the Trust of its obligations under, this Agreement and each
Fundamental Agreement (including the issue and sale by the Trust of the DECS as
contemplated by this Agreement) do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach or violation of, or default under, or give the holder of any indebtedness
of the Trust the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Trust
pursuant to, any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Trust is a
party or by which it may be bound, or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of the
provisions of the Trust Agreement or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Trust or any of its assets or properties; and no consent, approval,
authorization, order of, or qualification or filing with, any governmental body
or agency, self-regulatory organization or court or other tribunal, whether
foreign or domestic, is required for the execution and delivery by the Trust of
this Agreement or the Fundamental Agreements or the performance by the Trust of
its obligations hereunder and thereunder, except for the filing of a Certificate
of Trust and the filing of a Restated Certificate of Trust with the office of
the Secretary of State of the State of Delaware (which filings have been duly
made) and such as have been obtained and as may be required by the securities or
Blue Sky laws of the various states and foreign jurisdictions in connection with
the offer and sale of the DECS by the Underwriters.
(i) The DECS, the Trust Agreement and the Fundamental Agreements
conform in all material respects to the descriptions thereof contained in the
Trust Prospectus.
(j) The Trust Agreement and the Fundamental Agreements comply
with all applicable provisions of the Act, the Exchange Act and the Investment
Company Act, and all approvals of such documents required under the Investment
Company Act by the holders of the Securities and the Trustees have been obtained
and are in full force and effect.
(k) On the Closing Date, as defined below in Section 5, the
Fundamental Agreements will be in full force and effect and the Trust will not
be in default thereunder and, to the knowledge of the Trust, no event will have
occurred which with the passage of time or the giving of notice or both would
constitute a default thereunder. The Trust is not currently in breach of, or in
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default under, the Trust Agreement or any other written agreement or instrument
to which it or its property is bound or affected.
(l) All of the outstanding Securities have been duly authorized
and are validly issued, fully paid and nonassessable undivided beneficial
interests in the assets of the Trust, and the form of certificate used to
evidence the Securities is in due and proper form and complies with all
provisions of applicable law.
(m) The DECS have been duly authorized by the Trust for issuance
to the Underwriters pursuant to this Agreement and, when issued and delivered by
the Trust in accordance with the terms of this Agreement and the Trust Agreement
against payment of the purchase price therefor as provided herein, will be
validly issued, fully paid and nonassessable undivided beneficial interests in
the assets of the Trust, and the issuance of such DECS will not be subject to
any preemptive or similar rights. No person has rights to the registration of
any securities because of the filing of the Trust Registration Statement, and no
holder of the Securities will be subject to personal liability by reason of
being such a holder.
(n) The DECS have been approved for listing on the National
Market System of the National Association of Securities Dealers Automated
Quotation System (the "Nasdaq National Market System"), subject to official
notice of issuance. The Trust's Registration Statement on Form 8-A under the
Exchange Act is effective.
(o) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, of the Trust, or in the investment objectives,
investment policies, liabilities, business, prospects or operations of the Trust
from that set forth in the Trust Prospectus (exclusive of any supplements
thereto subsequent to the date of this Agreement) and there have been no
transactions entered into by the Trust which are material to the Trust other
than those in the ordinary course of its business or as described in the Trust
Prospectus (exclusive of any supplements thereto subsequent to the date of this
Agreement).
(p) There are no legal or governmental proceedings pending or, to
the knowledge of the Trust, threatened against or affecting the Trust that are
required to be described in the Trust Registration Statement or the Trust
Prospectus and are not so described or any statutes, regulations, contracts or
other documents that are required to be described in the Trust Registration
Statement or the Trust Prospectus or to be filed as exhibits to the Trust
Registration Statement that are not described or files as required.
(q) The Trust has all necessary consents, authorizations,
approvals, orders (including exemptive orders), certificates and permits of and
from, and has made all declarations and filings with, all governmental
authorities, self-regulatory organizations and courts and other tribunals,
whether foreign or domestic, to own and use its assets and to conduct its
business in the manner described in the Trust Prospectus, except to the extent
that the failure to obtain or file the foregoing would not have a material
adverse effect on the Trust and except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer and sale of
the DECS.
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(r) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its assets as
described in the Trust Prospectus, other than as described therein.
(s) The Trust has good title to all properties owned by it, in
each case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Trust Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Trust.
(t) There are no legal or governmental proceedings pending to
which the Trust is a party or of which any property of the Trust is the subject
which, if determined adversely to the Trust, would individually or in the
aggregate have a material adverse effect on the current or future financial
position or results of operations of the Trust; and, to the best of the Trust's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(u) The statement of assets, liabilities and capital included in
the Trust Registration Statement and the Trust Prospectus, together with the
notes thereto, present fairly the financial position of the Trust at the date
indicated, and such financial statement has been prepared in conformity with
generally accepted accounting principles.
(v) The accountants who certified the financial statements and
supporting schedules included in the Trust Registration Statement are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(w) The Trust has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the DECS or the Shares, and has not effected
any sales of the Company's common stock which, if effected by the Company, would
be required to be disclosed in response to Item 701 of Regulation S-K.
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each Underwriter as set forth below
in this Section 2.
(a) The Company meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission a registration statement
(file number 333-46201) on Form S-3, including a related preliminary prospectus,
for the registration under the Act of the offering and sale of the Shares in
connection with the offering and sale of the DECS and an alternate form of
related preliminary prospectus for registration of the use of the Borrowed
Shares in connection with the Securities Loan Agreement. The Company may have
filed one or more amendments thereto, including the related preliminary
prospectuses, each of which has previously been furnished to you. The Company
will next file with the Commission one of the following: either (1) prior to the
Company Effective Date of such registration statement, a further amendment to
such registration statement, (including the final forms of such prospectuses),
(2) after the Company Effective Date of such registration statement, such final
prospectuses in accordance with
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Rules 430A and 424(b), or (3) a final prospectus in accordance with Rules 415
and 424(b). In the case of clause (2), the Company has included in such
registration statement, as amended at the Company Effective Date, all
information (other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Company
Prospectus with respect to the Shares and the offering thereof and the Borrowed
Shares and the use thereof. As filed, such amendment and form of final
prospectuses, or such final prospectuses, shall contain all Rule 430A
Information, together with all other such required information with respect to
the Shares and the offering thereof and the Borrowed Shares and the use thereof
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other changes
(beyond that contained in the latest Preliminary Company Prospectus) as the
Company has advised you, prior to the Execution Time, will be included or made
therein. If the Company Registration Statement contains the undertaking
specified by Regulation S-K Item 512(a), the Company Registration Statement, at
the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x).
(b) On the Company Effective Date, the Company Registration
Statement did or will, and when the Company Prospectus is first filed (if
required) in accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any Settlement Date, and on each day when borrowings are made
under the Securities Loan Agreement, the Company Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable requirements
of the Act and the Exchange Act and the respective rules thereunder; on the
Company Effective Date and at the Execution Time, the Company Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the Company
Effective Date, the Company Prospectus, if not filed pursuant to Rule 424(b),
did not or will not, and on the date of any filing pursuant to Rule 424(b) and
on the Closing Date and any Settlement Date, and on each day when borrowings are
made under the Securities Loan Agreement, the Company Prospectus (together with
any supplement thereto) will not, include 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; provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the Company
Registration Statement, or the Company Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished herein or in writing
to the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Company Registration Statement or the Company
Prospectus (or any supplement thereto).
(c) No stop order suspending the effectiveness of the Company
Registration Statement is in effect, no order preventing or suspending the use
of any Preliminary Company Prospectus has been issued by the Commission, and no
proceedings for any such purpose are pending before or threatened by the
Commission. Each document incorporated by reference in the Company Registration
Statement or the Company Prospectus, when they were filed or are filed with the
Commission, conformed or will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained or will contain an untrue
statement of a material fact or omitted or will omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
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(d) The business of the Company and its subsidiaries, including
without limitation the recruitment of distributors and the distribution and
marketing of the Company's products, (a) is conducted in accordance with the
Company's multi-level marketing and distribution plan as described in the
Company Prospectus, (b) does not require the consent, approval, authorization,
filing, registration or qualification or order of or with any court or
governmental agency or body, except such as have been obtained or effected, and
(c) does not violate any statute, law, rule or regulation of any country, or any
political subdivision thereof, in which the Company or any of its subsidiaries
operates, and does not breach or violate any of the terms and provisions of, or
constitute a default under, any judgment, decree or order, applicable to the
Company or any of its subsidiaries, of any court, regulatory body,
administrative agency, governmental body, arbitrator or other governmental
authority having jurisdiction over the Company or its subsidiaries or any of its
or their property, except in each of (b) and (c) for any consent, approval,
authorization, filing, registration, qualification or order the failure of which
to obtain or effect, or any violation, breach or default which, would not have a
material adverse effect on the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business.
(e) The Company is not an "investment company" as defined in the
Investment Company Act.
(f) Neither the Company nor any of its subsidiaries has taken and
none of such entities will take, directly or indirectly, any action designed to
or which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
DECS or the Shares, it being understood that this sentence shall not apply to
any share repurchase program conducted by the Company in compliance with the
Exchange Act and other applicable law.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
(and not of such officer in his individual capacity) as to matters covered
thereby, to each Underwriter.
3. Representations and Warranties of the Sellers, the Corporate
Seller Control Persons, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx. Each of
the Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx Family Trust
and Xxxx Xxxxxx (each, a "Xxxx Xxxxxx Entity" and collectively, the "Xxxx Xxxxxx
Entities") severally and jointly, represents and warrants to, and agrees with,
each Underwriter, the Company and the Trust that:
(a) The Xxxx Xxxxxx Family Trust has been duly created, is
validly existing and has the power and authority to own its property.
(b) Each of the Sellers and the Corporate Seller Control Persons
has been duly organized, is validly existing as a limited liability company in
good standing under the laws of the State of Delaware, with full power and
authority to own its property, and, in the case of each Seller, does not conduct
any business in any jurisdiction, own any material property other than Shares or
have any subsidiaries.
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(c) Each of the Xxxx Xxxxxx Entities has full right, power and
authority to enter into and perform its obligations under this Agreement, each
Contract and Collateral Agreement to which such Xxxx Xxxxxx Entity is a party
and the letter agreement among each of the Xxxx Xxxxxx Entities and Xxxxx Xxxxxx
relating to expenses of the Trust (the "Reimbursement Agreement").
(d) This Agreement has been duly authorized by each of the Xxxx
Xxxxxx Entities (other than Xxxx Xxxxxx) and duly executed and delivered by each
of the Xxxx Xxxxxx Entities. Each Contract and Collateral Agreement to which
each Xxxx Xxxxxx Entity is a party and the Reimbursement Agreement have been
duly authorized by such Xxxx Xxxxxx Entity (other than Xxxx Xxxxxx), and
executed and delivered by such Xxxx Xxxxxx Entity and, assuming due
authorization, execution and delivery by the other parties thereto, is a valid
and binding agreement of such Xxxx Xxxxxx Entity, enforceable against such Xxxx
Xxxxxx Entity in accordance with its terms.
(e) The execution and delivery by each of the Xxxx Xxxxxx
Entities of this Agreement, each Contract and Collateral Agreement to which such
Xxxx Xxxxxx Entity is a party and the Reimbursement Agreement, the performance
by such Xxxx Xxxxxx Entity of its obligations hereunder and thereunder and the
consummation of the transactions herein and therein contemplated do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with, result in a breach or violation of or imposition of any lien
(other than pursuant to each Collateral Agreement to which such Xxxx Xxxxxx
Entity is a party), charge or encumbrance upon any property or assets of such
Xxxx Xxxxxx Entity or its subsidiaries pursuant to (i) the Organizational
Documents of such Xxxx Xxxxxx Entity or its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which such Xxxx Xxxxxx Entity or its subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to such Xxxx Xxxxxx Entity or
its subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over such
Xxxx Xxxxxx Entity or its subsidiaries or any of its or their properties.
Amounts received by each of the Xxxx Xxxxxx Entities, if any, at the Closing
Date and, if any Option DECS are purchased, at the time of delivery thereof
pursuant to Section 4(b), pursuant to such Xxxx Xxxxxx Entity's Contract will
not be used by such Xxxx Xxxxxx Entity for the purpose, whether immediate,
incidental or ultimate, of buying or carrying a margin stock, as such terms are
defined in Regulation G promulgated by the Board of Governors of the Federal
Reserve System.
(f) Each of the Sellers, the Corporate Seller Control Persons and
the Xxxx Xxxxxx Family Trust is not and, after giving effect to the transactions
contemplated in each Contract and Collateral Agreement and the offering and sale
of the DECS contemplated by this Agreement, will not be an "investment company"
or an entity "controlled" by an "investment company" as such terms are defined
in the Investment Company Act.
(g) Each of the Sellers is the sole registered owner of and has,
and on the Closing Date (and, if any Option DECS are purchased, at the time of
delivery thereof pursuant to Section 4(b)) will have, good and valid title to
the Shares to be pledged and assigned by it under its Collateral Agreement, free
and clear of any security interests, claims, liens, equities and other
encumbrances, except for those created pursuant to its Collateral Agreement; and
such Seller has the
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full right, power and authority, and all authorization and
approval required by law to pledge and assign the Shares to be pledged and
assigned by such Seller pursuant to its Collateral Agreement.
(h) Title to any Shares to be delivered by a Seller pursuant to
such Seller's Contract on the Exchange Date, assuming payment of the
consideration due pursuant to such Seller's Contract on the Closing Date, will
pass to the Trust free and clear of any security interests, claims, liens,
equities and other encumbrances. The sale, transfer and delivery of any Shares
to be delivered by a Seller pursuant to such Seller's Contract is not, and at
the time of delivery of such Shares will not be, subject to any right of first
refusal or similar rights of any person pursuant to any contract to which such
Seller or any shareholder of such Seller is a party or by which any of them is
bound.
(i) Each of the Xxxx Xxxxxx Entities hereby repeats and confirms
as if set forth in full herein each of the representations, warranties,
guarantees and agreements made by such Xxxx Xxxxxx Entity in each Contract and
Collateral Agreement to which such Xxxx Xxxxxx Entity is a party and agrees that
the representations, warranties, guarantees and agreements therein and herein
are made hereby for the benefit of, and may be relied upon by, (i) the
Underwriters and Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel to the Underwriters
and (ii) the Company and Irell & Xxxxxxx LLP, counsel to the Company and to the
Xxxx Xxxxxx Entities.
(j) None of the Xxxx Xxxxxx Entities has taken or will take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares or the DECS, it being
understood that this sentence shall not apply to any share repurchase
program conducted by the Company in compliance with the Exchange Act and all
other applicable law.
(k) Each of the Xxxx Xxxxxx Entities is familiar with the Company
Registration Statement and the Company Prospectus and verifies that the
information set forth therein respecting him or it is true and complete.
(l) No consent, approval, license, authorization, order or
validation of, and no filing, recording, or registration with, any court or
governmental authority, agency or body is required for the compliance by each
Xxxx Xxxxxx Entity with all of the provisions of this Agreement, each Contract
and Collateral Agreement to which such Xxxx Xxxxxx Entity is a party and the
Reimbursement Agreement, except such as have been obtained under the Act and
such as may be required under the blue sky laws in connection with the purchase
and distribution of the DECS by the Underwriters and the distribution of the
Shares pursuant to the terms of the DECS in the manner contemplated in this
Agreement and in the Trust Prospectus and the Company Prospectus.
(m) Certificates in negotiable form for each Seller's Shares have
been placed in custody, for delivery pursuant to the terms of such Seller's
Contract and Collateral Agreement, under a Custody Agreement and Power of
Attorney duly authorized, executed and delivered by such Seller, in the form
heretofore furnished to you (the "Custody Agreement") with the Bank of New York,
as Custodian (the "Custodian"); the Shares represented by the certificates so
held in custody for each Seller are subject to the interests of the Trust
pursuant to such Seller's Contract and Collateral Agreement; the arrangements
for custody and delivery of such certificates, made by such Seller
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pursuant to such Seller's Contract and Collateral Agreement and the Custody
Agreement, are not subject to termination by any acts of such Seller, or by
operation of law, whether by the death or incapacity of such Seller or the
occurrence of any other event; and if any such death, incapacity or any other
such event shall occur before the delivery of such Shares pursuant to such
Seller's Contract and Collateral Agreement, certificates for the Shares will be
delivered by the Custodian in accordance with the terms and conditions of such
Seller's Contract and Collateral Agreement and the Custody Agreement as if such
death, incapacity or other event had not occurred, regardless of whether or not
the Custodian shall have received notice of such death, incapacity or other
event.
Any certificate signed by any Xxxx Xxxxxx Entity or any officer
thereof, as the case may be, and delivered to the Representatives or counsel for
the Underwriters in connection with the offering of the Securities shall be
deemed a representation and warranty by such Xxxx Xxxxxx Entity (and not, except
in the case of certificates of Xxxx Xxxxxx, of such officer in his individual
capacity), as to matters covered thereby, to each Underwriter.
4. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Trust agrees to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $[ ] per DECS, the amount of the
Underwritten DECS set forth opposite such Underwriter's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Trust hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
[ ] Option DECS at the same purchase price per DECS as the Underwriters shall
pay for the Underwritten DECS. The option may be exercised only to cover
over-allotments in the sale of the Underwritten DECS by the Underwriters. The
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Trust Prospectus upon written or
facsimile notice by the Representatives to the Trust setting forth the number of
shares of the Option DECS as to which the several Underwriters are exercising
the option and the Settlement Date. Delivery of certificates for the Option DECS
by the Trust, and payment therefor to the Trust, shall be made as provided in
Section 5 hereof. The number of shares of the Option DECS to be purchased by
each Underwriter shall be the same percentage of the total number of Option DECS
to be purchased by the several Underwriters as such Underwriter is purchasing of
the Underwritten DECS, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional DECS.
(c) As compensation to the Underwriters for their commitment
hereunder, and in view of the fact that the proceeds of the sale of the DECS
will be used by the Trust as specified in the Contracts, the Xxxx Xxxxxx
Entities agree, severally and jointly, to pay to Xxxxx Xxxxxx, at the time of
each delivery of DECS pursuant to Section 5, an amount equal to $[ ] per DECS
being delivered at such time, plus $[ ] per DECS for each Subscription DECS
owned by Xxxxx Xxxxxx after giving effect to the subdivision of the Subscription
DECS provided for in the Subscription Agreement.
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5. Delivery and Payment. Delivery of and payment for the
Underwritten DECS and the Option DECS (if the option provided for in Section
4(b) hereof shall have been exercised on or before the first Business Day prior
to the Closing Date) shall be made at 10:00 A.M., New York City time, on March
[ ], 1998, or at such time on such later date not later than five Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Trust and the
Xxxx Xxxxxx or as provided in Section 13 hereof (such date and time of delivery
and payment for the DECS being herein called the "Closing Date"). Delivery of
the DECS shall be made to the Representatives for the respective accounts of the
several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Trust
by wire transfer payable in immediately available same-day funds to an account
specified by the Trust in writing at least two Business Days in advance of the
Closing Date. Delivery of the DECS shall be made through the facilities of the
Depository Trust Company unless the Representatives shall otherwise instruct.
The Trust agrees to have the DECS available for inspection and
checking by the Representatives in New York, New York, not later than 1:00 P.M.
on the Business Day prior to the Closing Date.
If the option provided for in Section 4(b) hereof is exercised
after the first Business Day prior to the Closing Date, the Trust will deliver
the Option DECS (at the expense of the Trust) to the Representatives on the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Trust
by wire transfer payable in immediately available same-day funds to an account
specified by the Trust in writing at least two Business Days in advance of such
Settlement Date. If settlement for the Option DECS occurs after the Closing
Date, the Trust, the Company and the Sellers will deliver to the Representatives
on the Settlement Date for the Option DECS, and the obligation of the
Underwriters to purchase the Option DECS shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 10 hereof.
6. Offering by the Underwriters. It is understood that the
several Underwriters propose to offer the DECS for sale to the public as set
forth in the Trust Prospectus.
7. Agreements of the Trust. The Trust agrees with the several
Underwriters that:
(a) The Trust will use its best efforts to cause the Trust
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Trust will not file any amendment of the Trust
Registration Statement or supplement to the Trust Prospectus or any Rule
462(b) Trust Registration Statement unless the Trust has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you object. Subject to the foregoing
sentence, if the Trust Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Trust Prospectus is
otherwise required under Rule 424(b), the Trust will cause the Trust
Prospectus, properly completed,
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and any supplement thereto to be filed with the Commission pursuant to
the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives
of such timely filing. The Trust will promptly advise the
Representatives (1) when the Trust Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Trust Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Trust Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the DECS,
any amendment to the Trust Registration Statement or any Rule 462(b)
Trust Registration Statement, shall have been filed or become effective,
(4) of any request by the Commission or its staff for any amendment of
the Trust Registration Statement, or any Rule 462(b) Trust Registration
Statement, or for any supplement to the Trust Prospectus or for any
additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Trust Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by the Trust of any notification with
respect to the suspension of the qualification of the DECS for sale in
any jurisdiction or the institution or threatening of any proceeding for
such purpose. The Trust will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the DECS is
required to be delivered under the Act, any event occurs as a result of
which the Trust Prospectus as then supplemented would include any 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 shall
be necessary to amend the Trust Registration Statement or supplement the
Trust Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Trust promptly will (1) notify the
Representatives of any such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this
Section 7, an amendment or supplement which will correct such statement
or omission or effect such compliance and (3) supply any supplemental
Trust Prospectus to you in such quantities as you may reasonably
request.
(c) The Trust will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Trust
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Trust Registration Statement (without exhibits
thereto). The Trust will furnish to the Representatives and counsel for
the Underwriters, without charge, copies of the Trust Registration
Statement (including exhibits thereto). The Trust will furnish to the
Underwriters not later than (i) 6:00 P.M., New York City time, on the
date of determination of the public offering price of the DECS, if such
determination occurred at or prior to 12:00 noon, New York City time, on
such date or (ii) 6:00 P.M., New York City time, on the Business Day
following the date on which the public offering price was determined, if
such determination occurred after 12:00 noon, New York City time, on
such date, as many copies of each Preliminary Trust Prospectus, the
Trust Prospectus and any supplement thereto as the Representatives may
reasonably request; further, so long as delivery of a prospectus by an
Underwriter or any dealer may be required by the Act, as many copies of
each Preliminary Trust Prospectus and the Trust Prospectus and any
supplement thereto as the Representatives may reasonably request.
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(d) The Trust will arrange, if necessary, for the qualification
of the DECS and the Shares for sale under the laws of such jurisdictions
as the Representatives may designate, will maintain such qualifications
in effect so long as required for the distribution of the DECS and will
pay any fee of the National Association of Securities Dealers, Inc. (the
"NASD"), in connection with its review, if any, of the Trust
Registration Statement and the offering of the DECS.
8. Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the Company
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, the Company will not file any amendment of the
Company Registration Statement or supplement to the Company Prospectus
or any Rule 462(b) Company Registration Statement unless the Company has
furnished to you a copy for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, if the Company Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Company Prospectus is otherwise required under Rule
424(b), the Company will cause the Company Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise
the Representatives (1) when the Company Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the Company Prospectus, and any supplement thereto, shall have been
filed (if required) with the Commission pursuant to Rule 424(b) or when
any Rule 462(b) Company Registration Statement shall have been filed
with the Commission, (3) when, prior to termination of the offering of
the DECS, any amendment to the Company Registration Statement shall have
been filed or become effective, (4) of any request by the Commission or
its staff for any amendment of the Company Registration Statement, or
any Rule 462(b) Company Registration Statement, or for any supplement to
the Company Prospectus or for any additional information, (5) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Company Registration Statement or the institution
or threatening of any proceeding for that purpose and (6) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act (including in respect of the
offering and sale of the DECS or the use of the Borrowed Shares), any
event occurs as a result of which the Company Prospectus as then
supplemented would include any 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 shall be necessary to amend the Company
Registration Statement or supplement the Company Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder,
the Company promptly will (1) notify the Representatives of such event,
(2) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 8, an amendment or supplement
which will correct such statement or omission or effect such compliance
and (3) supply any supplemented Company Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
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Exchange Act or the respective rules thereunder, the Company promptly
will (1) notify the Representatives of such event, (2) prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 8, an amendment or supplement which will correct such
statement or omission or effect such compliance and (3) supply any
supplemented Company Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under
the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, signed copies of the Company
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Company Registration Statement (without
exhibits thereto). The Company will furnish to the Underwriters not
later than (A) 6:00 P.M., New York City time, on the date of
determination of the public offering price of the DECS, if such
determination occurred at or prior to 12:00 noon, New York City time, on
such date or (B) 6:00 P.M., New York City time, on the Business Day
following the date on which the public offering price of the DECS was
determined, if such determination occurred after 12:00 noon, New York
City time, on such date, as many copies of each Preliminary Company
Prospectus, the Company Prospectus and any supplement thereto as the
Representatives may reasonably request; further, so long as delivery of
a prospectus by any Underwriter or any dealer may be required by the Act
(including in respect of the offering and sale of the DECS or the
borrowing of the Borrowed Shares), as many copies of each Preliminary
Company Prospectus and the Company Prospectus and any supplement thereto
as the Representatives may reasonably request. The Company will pay the
expenses of printing or other production of the Company Registration
Statement, each Preliminary Company Prospectus and the Company
Prospectus.
(e) The Company will cooperate with the Trust for purposes of the
qualification of the DECS and the Shares for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of the
DECS, the Shares or the use of the Borrowed Shares and will pay any fee
of the NASD in connection with its review, if any, of the Company
Registration Statement and the offering of the Shares in connection with
the offering of the DECS or the use of the Borrowed Shares; provided
that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to (A) taxes or (B) service of process
in suits, in each case, other than those arising out of the offering or
sale of the DECS, the offering and sale of the Shares in connection with
the offering of the DECS or the use of the Borrowed Shares, in any
jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written consent of
Xxxxx Xxxxxx, during the period of 90 days following the Execution Time,
(i) offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, or announce the offering of any shares of any
class of common stock of the Company or any
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securities convertible into or exercisable or exchangeable for shares of
any class of common stock of the Company (whether such shares or any
such securities are now owned or hereafter acquired) or (ii) enter into
any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any class of the
common stock of the Company, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of any class of
common stock of the Company or such other securities, in cash or
otherwise; provided, however, that the Company may issue, or grant
options for, any class of common stock of the Company pursuant to any
stock plan for employees or directors, or any employee benefit plan, of
the Company in effect at the Execution Time, or pursuant to any stock
options outstanding at the Execution Time.
(g) The Company will furnish the Trust in sufficient quantities
for transmission to holders of the DECS the Company's annual report to
shareholders and reports on Forms 10-K and 10-Q as soon as practicable
after such reports are required to be filed with the Commission.
(h) The Company will take such actions as may be reasonably
necessary to comply with the rules and regulations of the Nasdaq
National Market System in respect of the offering of the Shares
contemplated hereby.
(i) The Company will not become an "investment company" as
defined in the Investment Company Act.
(j) Neither the Company nor any of its subsidiaries has taken and
none of such entities will take, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in destabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the DECS or the Shares, it being understood that this
sentence shall not apply to any share repurchase program conducted by
the Company in compliance with the Exchange Act and all other applicable
law.
(k) The Company will, promptly following each time the Company
Registration Statement or the Company Prospectus is amended or
supplemented, notify Xxxxx Xxxxxx of such amendment or supplement. The
Company will, promptly following (A) filing by the Company of any Annual
Report on Form 10-K or Quarterly Report on Form 10-Q under the Exchange
Act (or any successor forms) and (B) receipt of a written request by
Xxxxx Xxxxxx (the date and time as of which any such filing is made or
request is received is referred to herein as a "Bringdown Date"),
deliver or cause to be delivered promptly to Xxxxx Xxxxxx a certificate
of the Company signed by the chief executive officer and the principal
financial or accounting officer of the Company, dated the Bringdown
Date, in form satisfactory to Xxxxx Xxxxxx, of the same tenor as the
certificate referred to in Section 10(m) but modified to relate to the
Bringdown Date in lieu of the Closing Date, to the last day of the
fiscal quarter for which financial statements of the Company were last
filed with the Commission and to the Company Registration Statement and
the Company Prospectus as amended and supplemented to the Bringdown
Date.
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(l) The Company will, promptly following each Bringdown Date,
furnish or cause to be furnished promptly to Xxxxx Xxxxxx written
opinions of counsel for the Company satisfactory to Xxxxx Xxxxxx, of the
same tenor as the opinions referred to in Sections 10(c) through (j) but
modified to relate to the Company Registration Statement and the Company
Prospectus as amended and supplemented to the Bringdown Date or, in lieu
of such opinions, counsel last furnishing such opinions to Xxxxx Xxxxxx
may furnish Xxxxx Xxxxxx with a letter to the effect that it may rely on
such last opinions to the same extent as though they were dated the date
of such letter authorizing reliance (except that statements in such last
opinion will be deemed to relate to the Company Registration Statement
and the Company Prospectus as amended and supplemented to the Bringdown
Date).
(m) The Company will, promptly following each Bringdown Date
which occurs on or following the date of a filing that results in the
inclusion or incorporation in the Company Registration Statement or the
Company Prospectus of amended or supplemental financial information that
has not previously been addressed by a letter of the type described
below, cause its independent public accountants promptly to furnish to
Xxxxx Xxxxxx a letter, dated the Bringdown Date, in form satisfactory to
Xxxxx Xxxxxx, of the same tenor as the letter referred to in Section
10(o) with such changes as may be necessary to reflect such amended or
supplemental financial information included or incorporated by reference
in the Company Registration Statement and the Company Prospectus, as
amended or supplemented to the Bringdown Date; provided, however, that
if the Company Registration Statement or the Company Prospectus is
amended or supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, such independent
public accountants may limit the scope of such letter, which shall be
satisfactory in form to Xxxxx Xxxxxx, to the unaudited financial
statements, the related "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in such
amendment or supplement, unless, in the judgment of Xxxxx Xxxxxx, such
letter should cover other information or changes in specified financial
statement line items.
9. Agreements of the Xxxx Xxxxxx Entities. Each of the Xxxx
Xxxxxx Entities agrees with each of the Underwriters that:
(a) Each Xxxx Xxxxxx Entity will not, without the prior written
consent of Xxxxx Xxxxxx, during the period of 90 days following the
Execution Time, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, or announce the offering of any
shares of any class of common stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of any class
of common stock of the Company (whether such shares or any such
securities are now owned or hereafter acquired) or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any class of the
common stock of the Company, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of any class of
common stock of the Company or such other securities, in cash or
otherwise; provided, however, that the Xxxx Xxxxxx Entities may engage
in any of the transactions described in clause (i) or (ii) above in
connection with (a) the offering by the Trust of the DECS or any
delivery of Shares pursuant to the terms of the DECS, (b) the loaning of
Shares pursuant to the Securities Loan
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Agreement, or (c) sales by the Herbalife Family Foundation, a charitable
trust of which Xxxx Xxxxxx is a director but with respect to which Xxxx
Xxxxxx has no pecuniary interest.
(b) No Xxxx Xxxxxx Entity will take any action designed to or
which has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the DECS or the Shares, it being understood that
this sentence shall not apply to any share repurchase program conducted
by the Company in compliance with the Exchange Act and all other
applicable law.
(c) Each Xxxx Xxxxxx Entity will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Shares (including with respect
to the offering and sale of the DECS or the use of Borrowed Shares) by
an underwriter or dealer may be required under the Act, of any change in
the information in the Company Registration Statement or the Company
Prospectus relating to such Xxxx Xxxxxx Entity.
10. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten DECS and the Option
DECS, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Trust, the Company, the
Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx Family Trust and
Xxxx Xxxxxx contained herein as of the Execution Time, the Closing Date and any
Settlement Date pursuant to Section 4(b) hereof, to the accuracy of the
statements of the Trust, the Company, the Sellers, the Corporate Seller Control
Persons, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx made in any certificates
pursuant to the provisions hereof, to the performance by each of the Trust, the
Company, the Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx
Family Trust and Xxxx Xxxxxx of their respective obligations hereunder and to
the following additional conditions:
(a) If the Trust Registration Statement or the Company
Registration Statement has not become effective prior to the Execution
Time, unless the Representatives agree in writing to a later time, such
Trust Registration Statement or Company Registration Statement will
become effective not later than (i) 6:00 P.M. New York City time on the
date of determination of the public offering price of the DECS, if such
determination occurred at or prior to 3:00 P.M. New York City time on
such date or (ii) 9:30 A.M. New York City time on the Business Day
following the day on which the public offering price of the DECS was
determined, if such determination occurred after 3:00 P.M. New York City
time on such date; if filing of the Trust Prospectus or the Company
Prospectus, or any supplement thereto, is required pursuant to Rule
497(h) or Rule 424(b), such Trust Prospectus or Company Prospectus, and
any such supplement, will be filed in the manner and within the time
period required by such Rule; and no stop order suspending the
effectiveness of the Trust Registration Statement or the Company
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Representatives shall have received the opinion of
Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel for the Trust, dated
the Closing Date and addressed to the Representatives, with respect to
such matters as the Representatives may reasonably request.
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(c) The Company shall instruct Irell & Xxxxxxx LLP, counsel for
the Company, to furnish, and such counsel shall have furnished, an
opinion to the Representatives dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) each of the Company and Herbalife International of
America, Inc. (the "Subsidiary") has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its
business as described in the Company Prospectus, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or
conducts material business and where the failure to be so
qualified would, individually or in the aggregate, have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Company Prospectus;
notwithstanding the foregoing, the Company is duly qualified to
do business as a foreign corporation and is in good standing
under the laws of California;
(ii) all the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and
are fully paid and nonassessable, and, except as otherwise set
forth in the Company Prospectus, all outstanding shares of
capital stock of the Subsidiary are directly owned by the Company
free and clear of any perfected security interest and, to the
knowledge of such counsel, after due inquiry, any other security
interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as
set forth in the Company Prospectus; the capital stock of the
Company conforms to the description thereof contained in the
Company Prospectus; all outstanding Shares have been duly and
validly authorized and issued and are fully paid and
nonassessable; the Shares are duly approved for quotation through
the Nasdaq National Market System; the certificates for the
Shares are in valid and sufficient form; and the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Shares under the Company's Amended and Restated Articles of
Incorporation, Restated Bylaws or applicable law, or, to the
knowledge of such counsel, after due inquiry, any indenture,
agreement, instrument or order by which the Company is subject;
(iv) to the knowledge of such counsel, after due inquiry,
there is no pending or threatened action, suit or proceeding by
or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries
or its or their property of a character required to be disclosed
in the Company Registration Statement which is not adequately
disclosed in the Company Prospectus, and there is no franchise,
contract or other document of a character required to be
described in the Company Registration Statement or Company
Prospectus, or to be filed as an exhibit thereto, which is not
described or
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filed as required; and the statements in the Company Prospectus
under the heading "Description of Capital Stock" fairly summarize
the matters therein described insofar as such statements relate
to laws, regulations, judgments, decrees or orders of the United
States or the State of California;
(v) the Company Registration Statement has become
effective under the Act; any required filing of the Company
Prospectus, and any supplements thereto, pursuant to Rule 424(b)
has been made in the manner and within the time period required
by Rule 424(b); to the knowledge of such counsel, after due
inquiry, no stop order suspending the effectiveness of the
Company Registration Statement has been issued, no proceedings
for that purpose have been instituted or threatened and the
Company Registration Statement and the Company Prospectus (other
than the financial statements and other financial and statistical
information contained therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the applicable requirements of the Act and the rules
thereunder; and such counsel has no reason to believe that on the
Company Effective Date or at the Execution Time the Company
Registration Statement contains or contained any untrue statement
of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Company Prospectus as of its
date and on the Closing Date includes any untrue statement of a
material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (in each
case, other than the financial statements and other financial and
statistical statements and other financial information contained
therein, as to which such counsel need express no opinion) (which
conclusions may be expressed in a separate letter);
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not an "investment company" as
defined in the Investment Company Act;
(viii) to the knowledge of such counsel, after due
inquiry, there is no action, proceeding or investigation pending
or threatened against the Company, any of its subsidiaries or any
Xxxx Xxxxxx Entity which questions the validity of the issuance
of the DECS or the offering thereof by the Underwriters;
(ix) no consent, approval, authorization, filing with or
order of any court or governmental agency or body is required in
connection with the performance by the Company of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the purchase and
distribution of the DECS or the distribution of Shares pursuant
to the terms of the DECS by the Underwriters in the
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manner contemplated in this Agreement and in the Trust Prospectus
or the Company Prospectus;
(x) neither the performance of this Agreement by the
Company, the distribution of the Shares, nor the consummation of
any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or the
Subsidiary pursuant to (i) the charter or by-laws of the Company
or the Subsidiary, (ii) the terms of any indenture or material
agreement or instrument, known to such counsel, after due
inquiry, to which the Company or any of its subsidiaries is a
party or bound, (iii) any judgment, order or decree, known to
such counsel, after due inquiry, to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any of its
subsidiaries or (iv) any law; and
(xi) to the knowledge of such counsel, after due inquiry,
no holders of securities of the Company other than the Sellers
have rights to the registration of such securities under the
Company Registration Statement.
In rendering such opinion, such counsel may include customary
qualifications and exceptions and rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of
California, the State of Delaware or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the Underwriters (B)
as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. References
to the Company Prospectus in this paragraph (c) include any supplements
thereto at the Closing Date.
(d) The Company shall instruct non-U.S. counsel to the Company's
subsidiaries in Brazil, Germany, France, Italy, Japan, Taiwan and the
United Kingdom and non-U.S. counsel to the Company with respect to its
operations in Russia, to furnish, and each such counsel shall have
furnished, an opinion to the Representatives dated the Closing Date and
addressed to the Representatives, in the form attached hereto as Exhibit
B.
(e) The Xxxx Xxxxxx Entities (other than the Xxxx Xxxxxx Family
Trust) shall instruct Irell & Xxxxxxx LLP or Xxx, Xxxxxxx & Xxxxx LLP,
counsel for such Xxxx Xxxxxx Entities, to furnish, and such counsel
shall have furnished, an opinion to the Representatives dated the
Closing Date and addressed to the Representatives, to the effect that:
(i) each of the Sellers and Corporate Seller Control
Persons has been duly organized and is validly existing as a
limited liability corporation in good standing under the laws of
the State of Delaware with full power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business, and is duly qualified to do business and is
in good standing under the laws of each jurisdiction which
requires such qualification;
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(ii) the Custody Agreement and Power of Attorney have been
duly authorized, executed and delivered by the Sellers, the
Custody Agreement is valid and binding on the Sellers and each
Seller has full legal right and authority to sell, pledge,
transfer and deliver in the manner provided in the Contracts and
Collateral Agreements and the Custody Agreement, the Shares to be
sold, pledged, transferred and delivered thereunder;
(iii) this Agreement has been duly authorized by each of
the Xxxx Xxxxxx Entities (other than Xxxx Xxxxxx and the Xxxx
Xxxxxx Family Trust) and duly executed and delivered by each of
the Xxxx Xxxxxx Entities (other than the Xxxx Xxxxxx Family
Trust); each Contract and Collateral Agreement to which each Xxxx
Xxxxxx Entity is a party and the Reimbursement Agreement has been
duly authorized by such Xxxx Xxxxxx Entity (other than Xxxx
Xxxxxx and the Xxxx Xxxxxx Family Trust) and duly executed and
delivered by such Xxxx Xxxxxx Entity (other than the Xxxx Xxxxxx
Family Trust) and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a valid and
legally binding agreement of such Xxxx Xxxxxx Entity (other than
the Xxxx Xxxxxx Family Trust), enforceable against such Xxxx
Xxxxxx Entity (other than the Xxxx Xxxxxx Family Trust) in
accordance with its terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency and other similar laws
affecting creditors' rights generally, and to general equitable
principles; and the execution and delivery by each of the Xxxx
Xxxxxx Entities (other than the Xxxx Xxxxxx Family Trust) of this
Agreement, each Contract and Collateral Agreement to which such
Xxxx Xxxxxx Entity is a party and the Reimbursement Agreement,
the performance by such Xxxx Xxxxxx Entity of its obligations
hereunder and thereunder and the consummation of the transactions
herein and therein contemplated do not and will not, whether with
or without the giving of notice or passage of time or both,
conflict with, result in a breach or violation of or imposition
of any lien (other than pursuant to the Collateral Agreement to
which such Xxxx Xxxxxx Entity is a party), charge or encumbrance
upon any property or assets of such Xxxx Xxxxxx Entity or its
subsidiaries pursuant to (i) the Organizational Documents of such
Xxxx Xxxxxx Entity or any of its subsidiaries, (ii) the terms of
any indenture or material agreement or instrument, known to such
counsel, after due inquiry, to which such Xxxx Xxxxxx Entity or
any of its subsidiaries is a party or bound, (iii) judgment,
order or decree applicable to such Xxxx Xxxxxx Entity or any of
its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over such Xxxx Xxxxxx Entity or its subsidiaries or
(iv) any law;
(iv) no consent, approval, license, authorization, order
or validation of, and no filing, recording, or registration with,
any court or governmental authority, agency or body is required
for the compliance by each Xxxx Xxxxxx Entity (other than the
Xxxx Xxxxxx Family Trust) with all of the provisions of this
Agreement, each Contract and Collateral Agreement to which such
Xxxx Xxxxxx Entity is a party and the Reimbursement Agreement,
except such as have been obtained under the Act and such as may
be required under the blue sky laws in connection with the
purchase and distribution of the DECS by the Underwriters and the
distribution of the Shares
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pursuant to the terms of the DECS in the manner contemplated in
this Agreement and in the Trust Prospectus and the Company
Prospectus;
(v) this Agreement, the Reimbursement Agreement and each
Contract and Collateral Agreement will be (A) binding on and
legally enforceable against the estate of Xxxx Xxxxxx should he
become deceased or the legal representative, attorney, or
guardian of Xxxx Xxxxxx should he lack legal capacity and (B)
binding on and legally enforceable against the Xxxx Xxxxxx Family
Trust despite the death or legal incapacity of any settlor or
beneficiary of such trust;
(vi) none of the Sellers, the Corporate Seller Control
Persons or the Xxxx Xxxxxx Family Trust is and, after giving
effect to the transactions contemplated in each Contract and
Collateral Agreement and the offering and sale of the DECS as
contemplated by this Agreement, will be an "investment company"
or an entity "controlled" by an "investment company" as such
terms are defined in the Investment Company Act;
(vii) the Collateral Agreements create a valid security
interest in favor of the Collateral Agent (as defined therein)
for the benefit of the Trust in the Shares pledged thereunder as
security for the performance by the applicable Seller of its
obligations under the Contract to which such Seller is a party
and to secure the observance and performance of the covenants and
agreements of the applicable Seller contained in the Contract and
the Collateral Agreement to which such Seller is a party;
(viii) pursuant to Section 9-103(6) of the California UCC
as currently in effect, the perfection and the effect of
perfection or non-perfection of the security interest of the
Trust in the Shares pledged pursuant to the Contracts and the
Collateral Agreements will be governed by the laws of the State
of New York, assuming the Share certificates are located in New
York at all times.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of California, the State of Delaware, or the Federal laws of the
United States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and
public officials. References to the Company Prospectus in this paragraph
(e) include any supplements thereto at the Closing Date. The opinion of
such counsel shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(f) The Company shall instruct Xxxxxx Xxx Xxxxx, Esq. to furnish,
and such counsel shall have furnished, a letter to the Representatives
dated the Closing Date and addressed to the Representatives, in form and
substance substantially similar to the opinion delivered by such counsel
to Salomon Brothers Inc on October 18, 1993 and satisfactory to the
Representatives, confirming as of such date the opinion given in the
letters to the Company, dated June 8 and July 14, 1993, with respect to
the Company's compliance with
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the Final Judgment and Permanent Injunction, dated October 15, 1986, in
California v. Herbalife International, Inc.
(g) The Company shall instruct Xxxxx & Xxxxxxx LLP, special
regulatory counsel for the Company, to furnish, and such counsel shall
have furnished, an opinion to the Representatives dated the Closing Date
and addressed to the Representatives, to the effect that:
(i) the statements in the Company Prospectus under the
Captions "Risk Factors - Regulation " and "Business -
Regulation," insofar as such statements purport to summarize
applicable provisions of the FDA Act, the regulations promulgated
thereunder and the FDA's June 4, 1997 proposed regulation for
dietary supplements containing ephedrine alkaloids, are accurate
summaries in all material respects of the provisions purposed to
be summarized under such captions in the Company Prospectus.
Such counsel shall state that no facts have come to their attention
which causes them to believe that the statements in the Company
Prospectus under the caption "Risk Factors -- Regulation" and "Business
-- Regulation," insofar as such statements relate the FDA regulatory
matters, at the time the Company Registration Statement became
effective, contained 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, as of the date of the
Company Prospectus or as of the date thereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
References to the Company Prospectus in this paragraph (g) include any
supplements thereto at the Closing Date.
(h) The Company shall instruct Xxxxxxxx & Xxxxxxxx LLP, special
counsel to the Company and Xxxx Xxxxxx, to furnish, and such counsel
shall have furnished:
(i) an advisory letter to the Representatives dated the
Closing Date and addressed to the Representatives, with respect
to the legality of that the Company's multi-level marketing and
distribution plan under any U.S. or California statute, law, rule
or regulation.
(ii) an opinion to the Representatives dated the Closing
Date and addressed to the Representatives, to the effect there is
no prohibition or restriction on the ability of Xxxx Xxxxxx to,
directly or indirectly through one or more intermediary entities,
transfer, encumber, hypothecate, conceal, pledge or in any way
dispose of any Shares (including without limitation as
contemplated in the Forward Purchase Contracts and Collateral
Agreements) that arises from the proceeding for the dissolution
of the marriage of Xxxx and Xxxxx Xxxxxx or under California
marital property or family law; and
(iii) Xxxxx Xxxxxx has no claims with respect to the
Collateral, as defined in each Collateral Agreement, pledged
pursuant to such Collateral Agreement that
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may be superior to the rights of the Trust in such Collateral in
the event of any change in the marital status of Xxxx Xxxxxx.
(i) The Company shall instruct Xxxxxx X. Xxxxxxx, Esq. to
furnish, and such counsel shall have furnished, a letter to the
Representatives dated the Closing Date and addressed to the
Representatives, in form and substance satisfactory to the
Representatives.
(j) The Company shall instruct Xxxxxx X. Xxxxxxxx, Esq. or other
counsel satisfactory to the Representatives, to furnish, and such
counsel shall have furnished, an opinion to the Representatives dated
the Closing Date and addressed to the Representatives, in form and
substance satisfactory to the Representatives.
(k) The Representatives shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters and the Trust,
such opinion or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the DECS, the
Trust Registration Statement, the Trust Prospectus (together with any
supplement thereto), the Fundamental Documents, the Company Registration
Statement, the Company Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require,
and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon
such matters.
(l) The Trust shall have furnished to the Representatives a
certificate of the Trust, signed by the Managing Trustee and dated the
Closing Date, to the effect that:
(i) the representations and warranties of the Trust in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Trust has complied in all material respects
with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date; and
(ii) no stop order suspending the effectiveness of the
Trust Registration Statement or the use of the Trust Prospectus
has been issued and no proceedings for that purpose have been
instituted or, to the Trust's knowledge, threatened.
(m) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Company Registration Statement,
the Company Prospectus, any supplements to the Company Prospectus and
this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
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(ii) no stop order suspending the effectiveness of the
Company Registration Statement or the use of the Company
Prospectus has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent financial
statements included in the Company Prospectus (exclusive of any
supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries, taken
as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Company Prospectus (exclusive of any
supplement thereto).
(n) Each of the Sellers, the Corporate Seller Control Persons,
the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx shall have furnished to the
Representatives a certificate, signed by Xxxx Xxxxxx and two appropriate
officers of such Seller or Corporate Seller Control Person or one other
appropriate officer of the Xxxx Xxxxxx Family Trust, as the case may be,
dated the Closing Date, to the effect that each signer of such
certificate has carefully examined the Company Registration Statement,
the Company Prospectus, any supplements to the Company Prospectus and
this Agreement and that:
(i) the representations and warranties of such Xxxx Xxxxxx
Entity in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if
made on the Closing Date and such Xxxx Xxxxxx Entity has complied
with all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date.
(o) At the Execution Time and at the Closing Date, Deloitte &
Touche shall have furnished to the Representatives letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Company Registration Statement and the Company Prospectus and
reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not
an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders, directors and committees of the Company and its
subsidiaries; and inquiries of certain officials of the Company
who have responsibility for financial
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and accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1997, nothing
came to their attention which caused them to believe that:
(A) with respect to the period subsequent to
December 31, 1997, there were any material changes, at a
specified date not more than three business days prior to
the date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the
Company or decreases in the shareholders' equity of the
Company or the working capital of the Company and its
subsidiaries as compared with the amounts shown on the
December 31, 1997, consolidated balance sheet included or
incorporated in the Company Registration Statement and the
Company Prospectus, or for the period from January 1, 1998
to such specified date there were any decreases, as
compared with the corresponding period in the preceding
[quarter], in net sales, operating margin or net income of
the Company and its subsidiaries, except in all instances
for changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; or
(B) the information included or incorporated in the
Company Registration Statement and Company Prospectus in
response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information),
Item 402 (Executive Compensation) and Item 503(d) (Ratio
of Earnings to Fixed Charges) is not in conformity with
the applicable disclosure requirements of Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Company
Registration Statement and the Company Prospectus, including the
information set forth under the captions "Prospectus Summary,"
"Risk Factors," "Selected Consolidated Financial and Operating
Data," "Capitalization," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business,"
"Principal and Selling Stockholders," "Certain Transactions" and
"Description of Capital Stock" in the Company Prospectus and the
information included or incorporated in Items 1, 2, 6, 7, 8 and
11 of the Company's Annual Report on Form 10-K, incorporated in
the Company Registration Statement and the Company Prospectus,
agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Company Prospectus in this paragraph (m) include any
supplement thereto to the date of the letter.
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(p) The Shares shall have been duly approved for quotation
through the Nasdaq National Market System, and satisfactory evidence of
such action shall have been provided to the Representatives.
(q) The DECS shall have been approved for listing on the Nasdaq
National Market System, subject only to official notice of issuance.
(r) The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and
arrangements.
(s) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto, and each Seller shall have delivered
to the Collateral Agent the number of Shares required by the Collateral
Agreement to which such Seller is a party to be initially pledged and
assigned by such Seller thereunder in accordance with the requirements
of such Collateral Agreement.
(t) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each executive officer and director of the Company addressed
to the Representatives relating to sales and certain other dispositions
of shares of common stock of the Company or certain other securities,
and such letter agreements shall be in full force and effect on the
Closing Date.
(u) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Company Registration Statement
(exclusive of any amendment thereof) and the Company Prospectus
(exclusive of any supplement thereto), there shall not have been (i) any
change or decrease specified in the letter or letters referred to in
paragraph (m) of this Section 10 or (ii) any change, or any development
involving a prospective change, in or affecting the condition (financial
or otherwise), earnings, business or properties of the Company and its
direct and indirect subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Company Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the DECS as contemplated by the Trust
Registration Statement and the Company Registration Statement (in either
case, exclusive of any amendment thereof) and the Trust Prospectus and
the Company Prospectus (in either case, exclusive of any supplement
thereto).
(v) Prior to the Closing Date, the Company, the Trust, and each
of the Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx
Family Trust and Xxxx Xxxxxx shall have furnished to the Representatives
such further information, certificates and documents as the
Representatives may reasonably request.
If any of the conditions specified in this Section 10 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this
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Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Trust and the Company in writing or by
telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 10 shall
be delivered at the office of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for
the Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
11. Expenses.
(a) Each of the Sellers, the Corporate Seller Control Persons,
the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx and the Company, severally and
jointly, will pay all expenses incident to the performance by the Trust and each
Seller of their respective obligations under this Agreement and their Contracts
and Collateral Agreements, including (i) the preparation, printing and filing of
the Notification and the Trust Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation, printing and delivery of this Agreement, the Trust Agreement,
each of the Fundamental Agreements and such other documents as may be required
in connection with the offering, purchase, sale, issuance or delivery of the
DECS, (iii) the preparation, issuance and delivery of the certificates for the
DECS to the Representatives, (iv) the fees and disbursements of the Trust's
counsel, accountants and other advisors, (v) the fees and disbursements of the
Sellers' counsel and other advisors, (vi) the qualification of the DECS under
state securities laws in accordance with the provisions of Section 7(d) hereof,
including filing fees and the reasonable fees and disbursements of the counsel
for the Underwriters in connection therewith and in connection with the
preparation of the related blue sky survey and any supplement thereto, (vii) the
printing and delivery to the Representatives of copies of each Preliminary Trust
Prospectus, the Trust Prospectus and any amendments or supplements thereto,
(viii) the fees and expenses of any transfer agent or registrar for the DECS,
(ix) the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters in connection with, securing any required review by
the NASD of the Trust Registration Statement and the offering of the DECS in
accordance with the provisions of Section 7(d) hereof, (x) the fees and expenses
incurred in connection with the listing of the DECS on the Nasdaq National
Market System and (xi) the fees and expenses incurred in connection with the
preparation and filing of a registration statement under the Exchange Act
relating to the DECS. Each of the Sellers, the Corporate Seller Control Persons,
the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx and the Company, severally and
jointly, will reimburse the Underwriters through Xxxxx Xxxxxx on the Closing
Date in immediately available funds for the Up-Front Fee Amount and the Up-Front
Expense Amount (each as defined in the Fund Expense Agreement dated as of the
Closing Date between Xxxxx Xxxxxx and BoNY) and for the up-front fees of the
trustees of the Trust paid by Xxxxx Xxxxxx. The Xxxx Xxxxxx Entities shall not
be obligated pursuant to this Section 11(a) to pay any fees or disbursements of
counsel to the Underwriters other than in connection with clauses (vi) and (ix)
of this Section 11(a).
(b) Each of the Sellers, the Corporate Seller Control Persons,
the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx and the Company, severally and
jointly, will pay all expenses incident to the performance by the Company of its
obligations under this Agreement, including (i) the preparation, printing and
filing of the Company Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificates for the Shares to the
Trust, (iii) the fees and disbursements
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of the Company's counsel, accountants and other advisors, (iv) the qualification
of the Shares under state securities laws in accordance with the provisions of
Section 8(e) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any related blue sky survey and any
supplement thereto, (v) the printing and delivery to the Representatives of
copies of each Preliminary Company Prospectus, the Company Prospectus and any
amendments or supplements thereto, (vi) the fees and expenses of any transfer
agent or registrar for the Shares, (vii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, securing any required review by the NASD of the Company Registration
Statement and the offering of the Shares in accordance with the provisions of
Section 8(e) hereof and (viii) the fees and expenses incurred in connection with
the approval of the Shares for quotation through the Nasdaq National Market
System.
(c) If the sale of the DECS provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 10 hereof is not satisfied, because of any termination pursuant
to Section 15 hereof or because of any refusal, inability or failure on the part
of the Company, Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, any Seller or any
Corporate Seller Control Person to perform any agreement herein or comply with
any provision hereof other than by reason of a default by the Underwriters, each
of the Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx Family
Trust, Xxxx Xxxxxx and the Company, jointly and severally, will reimburse the
Underwriters through Xxxxx Xxxxxx upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by the Underwriters in connection with the proposed purchase and sale
of the DECS.
(d) The provisions of this Section 11 shall not supersede or
otherwise affect any agreement that the Company, the Sellers, the Corporate
Seller Control Persons, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx may
otherwise have for the allocation of such expenses among themselves.
12. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Xxxx
Xxxxxx Entity, the Trust, each of the Trustees, each Underwriter, the directors,
officers, employees and agents of each Underwriter, and each person who controls
the Trust or any Underwriter within the meaning of the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Company Registration
Statement as originally filed or in any amendment thereof, or in any Preliminary
Company Prospectus or the Company Prospectus, or in any amendment thereof or
supplement thereto (each such document, a "Company Registration Document"), or
the omission or alleged omission to state in any Company Registration Document a
material fact required to be stated therein or necessary to make the statements
therein not misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in the Trust Registration Statement as originally
filed or in any amendment thereof, or in any Preliminary Trust Prospectus or the
Trust Prospectus, or in any amendment thereto or supplement thereto (each such
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document, a "Trust Registration Document") or the omission or alleged omission
to state in any Trust Registration Document a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
in each such case agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company in any such case will not be liable to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in any Company Registration Document or Trust Registration
Document in reliance upon and in conformity with written information furnished
to the Company or the Trust by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, its directors, each of its officers who
signs the Registration Statement, the Sellers, the Corporate Seller Control
Persons, the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx and each person who controls
the Company within the meaning of the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, to the same
extent as the foregoing indemnity to each Underwriter, but only with reference
to written information relating to such Underwriter furnished to the Company or
the Trust by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the Company Registration Documents or the Trust
Registration Documents, as the case may be. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have. Each of the
Company, the Sellers, the Corporate Seller Control Persons, the Xxxx Xxxxxx
Family Trust and Xxxx Xxxxxx acknowledges that the statements set forth in the
legend in block capital letters on page 2 related to stabilization and syndicate
covering transactions and in the third, sixth and ninth paragraphs under the
heading "Plan of Distribution" related to concessions and reallowances, related
to listing the DECS and related to stabilization, syndicate covering
transactions and penalty bids, respectively, in any Preliminary Company
Prospectus, the Company Prospectus, any Preliminary Trust Prospectus or the
Trust Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in any Company Registration
Document or any Trust Registration Document.
(c) Promptly after receipt by an indemnified party under this
Section 12 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 12, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from any liability under paragraph (a) or (b) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint
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counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded upon the advice of its counsel
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action (provided that,
with respect to the matters set forth in clauses (i), (ii) and (iii), in no
event shall the indemnifying party be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from its own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions arising out of the same general allegations or
circumstances) or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. An indemnifying party
will not be liable to an indemnified party for any amount paid by the
indemnified party to settle or compromise any pending or threatened claim,
action, suit or proceeding if such settlement or compromise is entered into
without the consent of the indemnifying party, which consent may not be withheld
unless such settlement or compromise is unreasonable in light of the pending or
threatened claim, action, suit or proceeding against, and defenses available to,
the indemnified party.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 12 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, each Seller, each Corporate
Seller Control Person, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx, jointly and
severally, and the Underwriters severally agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company, each Seller, each Corporate Seller
Control Person, the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Sellers, the Corporate Seller
Control Persons, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx on the one hand
and the Underwriters on the other from the offering of the DECS; provided,
however, that in no case shall any Underwriter (except as may be provided in any
agreement among the underwriters relating to the offering of the DECS) be
responsible for any amount in excess of the underwriting discount applicable to
the DECS purchased by such Underwriter hereunder. If the allocation provided by
the immediately preceding sentence is unavailable for any reason, the Company,
each Seller, each Corporate Seller Control Person, the Xxxx Xxxxxx Family Trust
and Xxxx Xxxxxx, jointly and severally, and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company, such Seller, such
Corporate Seller Control Person, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx on
one hand and of the
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Underwriters on the other in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
The benefits received by the Company, the Sellers, the Corporate Seller Control
Persons, the Xxxx Xxxxxx Family Trust and Xxxx Xxxxxx shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by the Trust, and the benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Trust Prospectus and, as between the
Company and the Underwriters, the Company shall be deemed for this purpose to
have received such total net proceeds as are received by the Trust. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company, a Seller, a Corporate Seller Control Person, the Xxxx Xxxxxx Family
Trust or Xxxx Xxxxxx on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
Company, each Seller, each Corporate Seller Control Person, the Xxxx Xxxxxx
Family Trust, Xxxx Xxxxxx and the Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), 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. For purposes of
this Section 12, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter; each person who controls the Company within the meaning of either
the Act or the Exchange Act, each officer of the Company who shall have signed
the Company Registration Statement and each director of the Company shall have
the same rights to contribution as the Company; each person who controls a
Seller, a Corporate Seller Control Person or the Xxxx Xxxxxx Family Trust within
the meaning of the Act or the Exchange Act shall have the same rights to
contribution as such Seller, Corporate Seller Control Person or Xxxx Xxxxxx
Family Trust, as the case may be, subject in each case to the applicable terms
and conditions of this paragraph (d).
13. Subordination
(a) The Company agrees, and each Xxxx Xxxxxx Entity agrees,
that the obligations of the Company to indemnify and hold harmless each
Xxxx Xxxxxx Entity against any Losses as provided in paragraph (a) of
Section 12 (the "Subordinated Indemnification Obligations") are
subordinated in right of payment, to the extent and in the manner
provided in this Section 13, to the prior payment of all obligations of
the Company to indemnify and hold harmless the Trust, each
Underwriter, the directors, officers, employees and agents of each
person who controls the Trust or any Underwriter within the meaning of
the Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise (each a "Senior Indemnified
Party" and collectively the "Senior Indemnified Parties") against any
Losses as provided in paragraph (a) of Section 12 (the "Senior
Indemnification Obligations") and that the subordination is for the
benefit of and enforceable by the Senior Indemnified Parties.
(b) Upon any payment or distribution of the assets of the
Company to creditors upon a total or partial liquidation or a total or
partial dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company
or its property: (i) the Senior Indemnified Parties shall be entitled
to receive payment in full of all Senior Indemnification Obligations in
cash before any Xxxx Xxxxxx Entity shall be entitled to receive any
payment of Subordinated Indemnification Obligations; and (ii) until
such Senior Indemnification Obligations are paid in full in cash, any
payment to which any Xxxx Xxxxxx Entity would be entitled but for this
Section 13 shall be made to the Senior Indemnified Parties as their
interests may appear.
(c) The Company may not pay any Subordinated Indemnification
Obligations if the Company has failed to pay to the Senior Indemnified
Parties any Senior Indemnification Obligations that are then payable.
(d) If any payment in respect of Subordinated Indemnification
Obligations are made to any Xxxx Xxxxxx Entity that because of this
Section 13 should not have been made to it, the Xxxx Xxxxxx Entity who
received the payment shall hold it in trust for the Senior Indemnified
Parties and pay it over to them as their interests may appear.
(e) After all Senior Indemnification Obligations of the Company
are paid in full in cash and until the Subordinated Indemnification
Obligations are paid in full, the Xxxx Xxxxxx Entities shall be
subrogated to the rights of the Senior Indemnified Parties to receive
payments applicable to such Senior Indemnification Obligations. A
payment made under this Section 13 to a Senior Indemnified Party which
otherwise would have been made to a Xxxx Xxxxxx Entity is not, as
between the Company and the Xxxx Xxxxxx Entities, a payment by the
Company on such Senior Indemnification Obligations.
(f) Each Xxxx Xxxxxx Entity acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each Senior Indemnified Party to enter
into this Agreement.
14. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the DECS agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of DECS set forth
opposite their names in Schedule I hereto bears to the aggregate amount of DECS
set forth opposite the names of all the remaining Underwriters) the DECS which
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate amount of DECS which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of DECS set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the DECS, and if such nondefaulting
Underwriters do not purchase all the DECS, this Agreement will terminate without
liability to any nondefaulting Underwriter, the Company, the Sellers, the
Corporate Seller Control Persons, the Xxxx Xxxxxx Family Trust or Xxxx Xxxxxx.
In the event of a default by any Underwriter as set forth in this Section 14,
the Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Company Registration Statement, the Company Prospectus, the Trust
Registration
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Statement and the Trust Prospectus or in any other documents or arrangements may
be effected. Nothing contained in this Agreement shall relieve any defaulting
Underwriter of its liability, if any, to the Company, the Sellers, the Corporate
Seller Control Persons, the Xxxx Xxxxxx Family Trust or Xxxx Xxxxxx and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
15. Termination. This Agreement shall be subject to termination
in the absolute discretion of the Representatives, by notice given to the Trust
and the Company prior to delivery of and payment for the DECS, if at any time
prior to such time (i) trading in any class of the Company's Common Stock shall
have been suspended by the Commission or the Nasdaq National Market or trading
in securities generally on the New York Stock Exchange or the Nasdaq National
Market shall have been suspended or limited or minimum prices shall have been
established on such Exchange or National Market, (ii) a banking moratorium shall
have been declared by either Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis,
the effect of which on financial markets of the United States is such as to make
it, in the sole judgment of the Representatives, impractical or inadvisable to
proceed with the offering or delivery of the DECS as contemplated by the Trust
Prospectus (exclusive of any supplement thereto).
16. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Trust, the Company, each Seller, each Corporate Seller Control Person, the Xxxx
Xxxxxx Family Trust, Xxxx Xxxxxx, or their respective officers, if applicable,
and of the Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Trust, the Company, any Seller, any Corporate
Seller Control Person, the Xxxx Xxxxxx Family Trust, Xxxx Xxxxxx, or any of the
officers, directors or controlling persons referred to in Section 12 hereof, and
will survive delivery of and payment for the DECS. The provisions of Sections
11, 12 and 18 hereof shall survive the termination or cancellation of this
Agreement.
17. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Xxxxx Xxxxxx, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Barney General Counsel (fax no.:
(212) 816-6[ ]) and confirmed to the General Counsel, care of Xxxxxxx Xxxxx
Xxxxxx, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, attention: General
Counsel; if sent to the Trust, will be mailed, delivered or telefaxed and
confirmed to it at c/o Puglisi & Associates, 000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx; if sent to the Company,
will be mailed, delivered, telefaxed and confirmed to it at Herbalife
International, Inc., 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (fax
no.: [ ]), Attention: Xxxxxx X. Xxxxxxx; if sent to Xxxx Xxxxxx or the Xxxx
Xxxxxx Family Trust, will be mailed, delivered, telegraphed and confirmed to him
or it care of Herbalife International, Inc., 0000 Xxxxxxx Xxxx Xxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, attention of [ ]; if sent to the Sellers or the
Corporate Seller Control Persons, will be mailed, delivered, telegraphed and
confirmed to it care of Herbalife International, Inc., attention of [ ].
18. Guaranty. (a) In order to induce the Underwriters to enter
into this Agreement and for other valuable consideration, each of Xxxx Xxxxxx,
the Xxxx Xxxxxx Family Trust, the Sellers and the Corporate Seller Control
Persons, jointly and severally, hereby irrevocably guarantees (as primary
obligor and not merely as surety) to the Trust, each of the Trustees, each
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Underwriter, the directors, officers, employees and agents of each Underwriter,
and each person who controls the Trust or any Underwriter within the meaning of
the Act, the Exchange Act or other Federal or state statutory law or regulation,
at common law or otherwise (each of such persons, a "Beneficiary") (i) the
accuracy of the representations and warranties of the Company contained in
Section 2 hereof, (ii) the performance by the Company of the agreements
contained in Section 8 hereof and (iii) the performance by the Company of its
indemnification obligations contained in Sections 12(a) and 12(d) hereof and of
its obligation to pay expenses contained in Section 11 hereof.
(b) The obligations of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust,
each Seller and each Corporate Seller Control Person under this Section 18 shall
be unconditional, irrespective of the validity or enforceability of any other
provision of this Agreement.
(c) The obligations of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust,
each Seller and each Corporate Seller Control Person under this Section 18
constitute guarantees of performance and of payment, and not merely guarantees
of collection, and shall remain in full force and effect until all amounts
payable by the Company in respect of the matters (the "Guaranteed Matters") that
are the subject of the obligations of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust,
each Seller and each Corporate Seller Control Person under this Section 18(a) of
this Agreement have been validly, finally and irrevocably paid in full, and
shall not be affected in any way by the absence of any action to obtain such
amounts from the Company or by any variation, extension, waiver, compromise or
release of any or all of the obligations of the Company hereunder or of any
security from time to time therefor. Each of Xxxx Xxxxxx, the Xxxx Xxxxxx Family
Trust, the Sellers and the Corporate Seller Control Persons hereby waives all
requirements as to promptness, diligence, presentment, demand for payment,
protest and notice of any kind with respect to his obligations under this
Section 18. Each of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, the Sellers and
the Corporate Seller Control Persons hereby agrees, jointly and severally, that
action may be taken directly against such person under this Section 18 without
any action being taken against the Company.
(d) The obligations of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust,
each Seller and each Corporate Seller Control Person under this Section 18 shall
not be affected by any change in applicable laws, rules or regulations or by any
present or future action of any governmental authority or court amending,
varying, reducing or otherwise affecting or purporting to amend, vary, reduce or
otherwise affect any of the obligations of the Company under this Agreement or
by any other circumstance (other than by complete, irrevocable performance or
payment) that might otherwise constitute a legal or equitable discharge or
defense of a surety or a guarantor. If the Company merges or consolidates with
or into another entity, loses its separate legal identity or ceases to exist,
Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, each Seller and each Corporate Seller
Control Person shall nonetheless continue to be liable for the payment of all
amounts that would have been payable by the Company in respect of the Guaranteed
Matters.
(e) The obligations of Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust,
each Seller and each Corporate Seller Control Person under this Section 18 shall
remain in full force and effect or shall be reinstated (as the case may be) if
at any time any payment of the Company in respect of the Guaranteed Matters, in
whole or in part, is rescinded or must otherwise be returned by a Beneficiary
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
all as though such payment had not been made.
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(f) If at any time when any amount payable by the Company in
respect of the Guaranteed Matters is overdue and unpaid Xxxx Xxxxxx, the Xxxx
Xxxxxx Family Trust, any Seller or any Corporate Seller Control Person receives
any amount as a result of any action against the Company or any of its property
or assets or otherwise for or on account of any payment made by Xxxx Xxxxxx, the
Xxxx Xxxxxx Family Trust, any Seller or any Corporate Seller Control Person
pursuant to this Section 18, Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, such
Seller or such Corporate Seller Control Person, as the case may be, shall
forthwith pay such amount received by it to Xxxxx Xxxxxx, on behalf of the
Beneficiaries, without demand, to be credited and applied toward any such amount
payable by the Company.
(g) Notwithstanding the foregoing, Xxxx Xxxxxx, the Xxxx Xxxxxx
Family Trust, each Seller and each Corporate Seller Control Person shall be
liable for any representation or warranty referred to in Section 18(a)(i) or for
any agreement referred to in Section 18(a)(ii) only if the circumstances
underlying the breach of representation or violation of the agreement are a
basis on which action is taken against any Beneficiary by a third party or are a
reason for a diminution in the value of any Shares or any DECS beneficially
owned by the Trust or an Underwriter, in each case, as principal (including for
this purpose any such Shares or DECS the Trust or such Underwriter, as the case
may be, may have sold following such diminution in value). Moreover, none of
Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, the Sellers or the Corporate Seller
Control Persons shall have any such liability unless written notice of a
Beneficiary's claim under this Section 18(a) and this Section 18(g) is asserted
against Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, any Seller or any Corporate
Seller Control Person, before the Company shall have made generally available to
its security holders and to the Representatives an earning statement or
statements of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 148 under the Act.
(h) The indemnity, contribution and guarantee agreements set
forth in this Agreement, including the limitations on the liabilities of Xxxx
Xxxxxx, the Xxxx Xxxxxx Family Trust, each Seller and each Corporate Seller
Control Person set forth in paragraph (g) above, shall be in addition to any
liability which the Company, Xxxx Xxxxxx, the Xxxx Xxxxxx Family Trust, each
Seller or each Corporate Seller Control Person may otherwise have.
19. 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 12 hereof,
and no other person will have any right or obligation hereunder. This Agreement
will be (A) binding on and legally enforceable against the estate of Xxxx Xxxxxx
should he become deceased or the legal representative, attorney, or guardian of
Xxxx Xxxxxx should he lack legal capacity and (B) binding on and legally
enforceable against the Xxxx Xxxxxx Family Trust despite the death or legal
incapacity of any settlor or beneficiary of such trust.
20. Applicable Law. This agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
21. Counterparts. This Agreement may be executed by any one or
more of the parties 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.
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22. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
23. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Company Borrowings Prospectus" shall mean the prospectus
relating to the Borrowed Shares that is used in connection with the use
of Borrowed Shares and that is first filed pursuant to Rule 424(b) after
the Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of such final prospectus relating to the Borrowed
Shares included in the Company Registration Statement at the Company
Effective Date.
"Company DECS Prospectus" shall mean the prospectus relating to
the Shares that is used in connection with the offering and sale of the
DECS and that is first filed pursuant to Rule 424(b) after the Execution
Time or, if no filing pursuant to Rule 424(b) is required, shall mean
the form of final prospectus relating to the Shares that is used in
connection with such offering and sale and that is included in the
Company Registration Statement at the Company Effective Date.
"Company Effective Date" shall mean each date and time that the
Company Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Company Registration Statement
became or become effective.
"Company Prospectus" shall mean the Company Borrowings Prospectus
and the Company DECS Prospectus.
"Company Registration Statement" shall mean the registration
statement referred to in Section 2(a) above including incorporated
documents, exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time, in the form
in which it shall become effective) and, in the event any post-effective
amendment thereto or any Rule 462(b) Company Registration Statement
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Company
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Company
Effective Date as provided by Rule 430A.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
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"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Organizational Documents" shall mean, in respect of any company,
corporation, partnership, limited liability company, governmental agency
or other enterprise, as applicable, its founding act, charter, articles
of incorporation and by-laws, memorandum and articles of association,
statute, certificate of partnership, partnership agreement, limited
liability company agreement, or similar instrument.
"Preliminary Company Prospectus" shall mean any preliminary
prospectus referred to in Section 2(a) and any preliminary prospectus
included in the Company Registration Statement at the Company Effective
Date that omits Rule 430A Information.
"Preliminary Trust Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a) above and any preliminary
prospectus included in the Trust Registration Statement at the Trust
Effective Date that omits Rule 430A Information.
"Rule 415," "Rule 424," "Rule 430A," "Rule 462," "Rule 497(h)",
"Regulation S-K" and "Regulation S-X" refer to such rules and
regulations under the Act.
"Rule 430A Information" shall mean information with respect to
the DECS, the Shares and the offering thereof permitted to be omitted
from the Trust Registration Statement (or, as used in Section 2 above,
the Company Registration Statement) when it becomes effective pursuant
to Rule 430A.
"Rule 462(b) Company Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to Rule
462(b) relating to the offering covered by the initial registration
statement referred to in Section 2(a) above.
"Rule 462(b) Trust Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to Rule
462(b) relating to the offering covered by the initial registration
statement referred to in Section 1(a) above.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxx Xxxxxx Inc. or Salomon
Brothers Inc, to the extent that either such party is a signatory to
this Agreement.
"Trust Effective Date" shall mean each date and time that the
Trust Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Trust Registration Statement became or
become effective.
"Trust Prospectus" shall mean the prospectus relating to the DECS
that is first filed pursuant to Rule 497(h) after the Execution Time or,
if no filing pursuant to Rule 497(h) is required, shall mean the form of
final prospectus relating to the DECS included in the Trust Registration
Statement at the Trust Effective Date.
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"Trust Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including exhibits and
financial statements, as amended at the Trust Execution Time (or, if not
effective at the Trust Execution Time, in the form in which it shall
become effective) and, in the event any post-effective amendment thereto
or any Rule 462(b) Trust Registration Statement becomes effective prior
to the Closing Date, shall also mean such registration statement as so
amended or such Rule 462(b) Trust Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be
included therein at the Trust Effective Date as provided by Rule 430A.
As used herein, the terms "Trust Registration Statement,"
"Preliminary Trust Prospectus" and "Trust Prospectus" shall not include the
Company Prospectus attached thereto.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Trust, the Company, the Sellers, the Corporate Seller Control Persons, the Xxxx
Xxxxxx Family Trust, Xxxx Xxxxxx and the several Underwriters.
Very truly yours,
DECS Trust III
By: ____________________________
Name: Xxxxxx X. Xxxxxxx
Title: Managing Trustee
Herbalife International, Inc.
By:_____________________________
Name: Xxxx Xxxxxx
Title: Chairman of the Board, Chief
Executive Officer and President
Xxxx Xxxxxx Family Trust
By:_____________________________
Name: Xxxx Xxxxxx
Title: Trustee
Xxxx Xxxxxx
By:_____________________________
Xxxxxxx
XX Holdings III N, LLC
By:_____________________________
Name:
Title:
MH Holdings III O, LLC
By:_____________________________
Name:
Title:
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MH Holdings III P, LLC
By:_____________________________
Name:
Title:
MH Holdings III Q, LLC
By:_____________________________
Name:
Title:
Corporate Seller
Control Persons
Xxxx Xxxxxx Holdings I, LLC
By:_____________________________
Name:
Title:
Xxxx Xxxxxx Holdings II, LLC
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Xxxxx Xxxxxx Inc.
By:___________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement
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SCHEDULE I
NUMBER OF UNDERWRITTEN
DECS TO BE
UNDERWRITERS PURCHASED
------------ ---------
Xxxxx Xxxxxx Inc.
Prudential Securities Incorporated
---------
Total................................... 5,000,000
=========
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SCHEDULE II
List of Sellers
Underwritten Option Total
Seller Corporate Seller Control Person Shares Shares Shares
------ ------------------------------- ------------ ------ ------
MH Holdings III N MH Holdings I and MH Holdings II [ ] [ ] [ ]
MH Holdings III O MH Holdings I and MH Holdings II [ ] [ ] [ ]
MH Holdings III P MH Holdings I and MH Holdings II [ ] [ ] [ ]
MH Holdings III Q MH Holdings I and MH Holdings II [ ] [ ] [ ]
Total 5,000,000 [ ] [ ]
========= ===== ====
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SCHEDULE III
List of Lenders
MH Holdings F
MH Holdings G
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[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF EXECUTIVE OFFICER OR DIRECTOR OF HERBALIFE INTERNATIONAL, INC.]
Corporation
Public Offering of Common Stock
,19
Xxxxx Xxxxxx Inc.
Prudential Securities Incorporated
As Representatives of the several Underwriters,
[c/o Xxxxx Xxxxxx Inc.]
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among the Xxxx
Xxxxxx Entities (as defined therein) Herbalife International, Inc., a Nevada
corporation (the "Company"), DECS Trust III (the "Trust"), a Delaware business
trust, and each of you as representatives of a group of Underwriters named
therein, relating to an underwritten public offering of DECS representing shares
of beneficial interest in the Trust.
In order to induce you and the other Underwriters to enter into
the Underwriting Agreement, the undersigned will not, without the prior written
consent of Xxxxx Xxxxxx Inc., for a period of 90 days after the date of this
Agreement, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, or announce the offering of any shares of any class of common stock
of the Company or any securities convertible into or exercisable or exchangeable
for shares of any class of common stock of the Company (whether such shares or
any such securities are now owned or hereafter acquired) or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of any class of the common stock of the
Company, whether any such transaction described in clause (i) or (ii) above is
to be settled by delivery of any class of common stock of the Company or such
other securities, in cash or otherwise, provided, however, that the Company
may issue, or grant options for, the common stock of the Company pursuant to any
stock plan for employees or directors, or any employee benefit plan, of the
Company in effect at the Execution Time, or pursuant to any stock options
outstanding at the Execution Time.
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement), the
agreement set forth above shall likewise be terminated.
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Yours very truly,
[SIGNATURE OF EXECUTIVE OFFICER OR
DIRECTOR]
[NAME AND ADDRESS OF EXECUTIVE OFFICER
OR DIRECTOR]
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EXHIBIT B
Form of Opinion to Be Delivered by Counsel to Material Foreign Subsidiaries
1. The Company is validly existing as a corporation in good standing under
the laws of [insert Country in which the Subsidiary Operates] and has
corporate power to own its properties and conduct its business as
currently conducted.
2. The Company's authorized and issued equity capitalization is [ ], and
all the outstanding shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
nonassessable.
3. The business of the Company in [insert Country in which the Subsidiary
Operates], including without limitation the recruitment of distributors
and the distribution and marketing of the products listed on Annex A
hereto (the "Products"), which we have been advised by the Company are
all the products currently being distributed or marketed by the Company
in [insert the Country in which the Subsidiary operates], to the extent
conducted in accordance with the Company's multi-level marketing and
distribution plan (the "Marketing Plan"), (a) does not require the
consent, approval, authorization, filing, registration, qualification or
order of or with any court or governmental agency or body [except for
the (insert any requisite consent, approval, authorization, filing,
registration, qualification or order), which have been obtained or
supplied for________________] and (b) does not violate any statute, law,
rule or regulation of [insert the Country in which the Subsidiary
operates] or any political subdivision thereof, and does not breach or
violate any of the terms and provisions of or constitute a default
under, any judgment, decree or order, known to us, applicable to the
Company, of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties.
4. Based on inquiry of appropriate officers of the Company, and on our past
and continuing representation of the Company, we know of no legal or
governmental proceedings pending to which the Company is a party, or
threatened against the Company, that could (a) have a material adverse
effect on the business or financial condition of the Company, (b) result
in the discontinuance or reformulation of any Product or (c) result in
any change to the Marketing Plan; provided that for this purpose we have
not regarded any legal or governmental proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested
to the management of the Company or to us a present intention to
initiate such proceedings.
5. Based on inquiry of appropriate officers and independent auditors of the
Company, and on our past and continuing representation of the Company,
the Company has paid and discharged all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or
profits, or upon any property pertaining to it, and has filed all tax
returns required to be filed, in each case in a timely manner and prior
to the date on which penalties attach.
6. Based on inquiry of appropriate officers of the Company, and on our past
and continuing representation of the Company, we are not aware of any
liabilities of the Company (contingent or otherwise) that are required
to be reported but are not reported in the most recent audited financial
statements of the Company (insert year of most recent audited financial
statements) or the unaudited interim financial statements of the Company
dated (insert dates of all unaudited interim financial statements
subsequent to the most recent audited financial statements).
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We express no opinion other than as to the law of [insert Country in which the
Subsidiary operates].
7
