Exhibit 10.17
18,750,000 Shares
TEMPUR-PEDIC INTERNATIONAL INC.
Common Stock
UNDERWRITING AGREEMENT
----------------------
December 17, 2003
Xxxxxx Brothers Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
Citigroup Global Markets Inc.
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Tempur-Pedic International Inc., a Delaware corporation (the
"Company"), and certain stockholders of the Company named in Schedule 2 hereto
(the "Selling Stockholders"), propose to sell an aggregate of 18,750,000 shares
(the "Firm Stock") of the Company's common stock par value $0.01 per share (the
"Common Stock"). Of the 18,750,000 shares of the Firm Stock, 6,250,000 are being
sold by the Company and 12,500,000 are being sold by the Selling Stockholders.
In addition, the Selling Stockholders propose to grant to the Underwriters named
in Schedule 1 hereto (the "Underwriters") an option to purchase up to an
aggregate of 2,812,500 additional shares of the Common Stock on the terms and
for the purposes set forth in Section 3 (the "Option Stock"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company and the Selling Stockholders by the Underwriters.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees that:
(a) A registration statement on Form S-1, and amendments
thereto, with respect to the Stock have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933, as amended (the "Securities Act") and the rules and regulations
(the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act. Copies
of such registration statement and each of the amendments thereto have
been delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such
registration statement, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such registration statement, or
amendments thereof, before it became effective under the Securities
Act and any prospectus filed with the Commission by the Company with
the consent of the Representatives pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such
registration statement, as amended at the Effective Time, including
all information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations and
deemed to be a part of the registration statement as of the Effective
Time pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations, and including any registration registering additional
shares of Common Stock filed with the Commission pursuant to Rule
462(b) of the Rules and Regulations; and "Prospectus" means such final
prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as of the
applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided that
no representation or warranty is made as to information contained in
or omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The Company and each of its subsidiaries (as defined in
Section 18) have been duly organized, are validly existing and are in
good standing under the laws of their respective jurisdictions of
organization and are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or
lease of property or the
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conduct of their respective businesses requires such qualification,
except where the failure to be so organized, existing in good standing
or duly qualified would not reasonably be expected to have a material
adverse effect on the general affairs, management, consolidated
financial position, stockholders' equity, results of operations or
business of the Company and its subsidiaries taken as a whole (a
"Material Adverse Effect"). The Company and each of its subsidiaries
have all corporate power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged. The subsidiaries of the Company listed on Schedule 3 hereto
are the only subsidiaries of the Company.
(d) The Company has an authorized capitalization as set forth
in the Prospectus; all of the issued shares of capital stock of the
Company and its subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable; and all of the issued
shares of capital stock of each subsidiary of the Company are owned
directly or indirectly by the Company (other than the directors'
qualifying shares for foreign subsidiaries), free and clear of all
liens, encumbrances, equities or claims, other than liens,
encumbrances, equities or claims contemplated under the amended and
restated senior credit facilities dated as of August 15, 2003, entered
into by and among Tempur-Pedic, Inc., Tempur Production USA, Inc.,
Tempur World Holding Company ApS and Xxx-Foam ApS, as the borrowers,
the guarantors named therein and the agents and lenders party thereto,
or such as are otherwise described in the Prospectus, and none of such
shares of capital stock were issued in violation in any material
respect of preemptive or other similar rights arising by operation of
law, under the charter and bylaws of the Company and each of its
subsidiaries or under any agreement to which the Company and each of
its subsidiaries is a party or otherwise.
(e) The shares of the Stock to be issued and sold by the Company
to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided
herein, will be validly issued, fully paid and non-assessable; the
shares of the Stock to be sold by the Selling Stockholders to the
Underwriters hereunder have been duly and validly authorized and, when
issued upon the automatic conversion of the existing shares of
preferred stock or common stock held by such Selling Stockholders or
the exercise or conversion of warrants or the exercise of options held
by such Selling Stockholders, will be validly issued and fully paid
and non-assessable; and the Stock will conform to the descriptions
thereof contained in the Prospectus.
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(f) The Company has all requisite corporate power and authority
to execute, deliver and perform its respective obligations under this
Agreement.
(g) This Agreement has been duly and validly authorized,
executed and delivered by the Company.
(h) The execution, delivery and performance of this Agreement by
the Company, and the consummation of the transactions contemplated
hereby will not (i) conflict with or result in a breach or violation
of any of the terms or provisions of, impose any lien, charge or
encumbrance upon any property or assets of the Company and its
subsidiaries, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement, license or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, (ii) result in any violation of the
provisions of the charter or bylaws of the Company or any of its
subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or (iii) assuming the accuracy of
the Underwriters' representations herein and compliance by the
Underwriters with their obligations hereunder, result in any violation
of any of their properties or assets; and, except for filings under
the Securities Act and applicable state or foreign securities laws in
connection with the purchase and sale of the Stock by the
Underwriters, no consent, approval, authorization or order of, or
filing or registration with, any such court or governmental agency or
body is required for the execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions
contemplated hereby.
(i) The historical financial statements (including the related
notes) included in the Prospectus comply as to form in all material
respects with the requirements of Regulation S-X under the Securities
Act and present fairly the financial condition, results of operations
and cash flows of the entities purported to be shown thereby, at the
dates and for the periods indicated, and have been prepared in
conformity with accounting principles generally accepted in the United
States applied on a consistent basis throughout the periods involved.
The other financial data, selected pro forma ratios and other pro
forma financial information, operating data and statistical
information and data included in the Prospectus is presented fairly
and has been prepared on a basis consistent in all material respects
(except for, with respect to the pro forma information, the pro forma
adjustments described in the Prospectus) with such financial
statements and the books and records of the Company.
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(j) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to the Company of any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any such subsidiary would reasonably be
expected to have a Material Adverse Effect, and to the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others.
(k) Except as set forth in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities to be
registered pursuant to the Registration Statement or in any securities
registered or to be registered pursuant to any other registration
statement filed by or required to be filed by the Company under the
Securities Act.
(l) Except as disclosed in the Prospectus, since the date of the
latest audited consolidated financial statements of the Company and
its subsidiaries included in the Prospectus, none of the Company nor
any of its subsidiaries has incurred any liability or obligation,
direct or contingent, or entered into any transaction, in each case
not in the ordinary course of business, that is material to the
Company and each of its subsidiaries taken as a whole, and there has
not occurred, to the knowledge of the Company, any development or
event involving or reasonably likely to result in a Material Adverse
Effect and, except as disclosed in or contemplated by the Prospectus,
there has been no (i) dividend or distribution of any kind declared,
paid or made by the Company or its affiliates on any class of their
respective capital stock, (ii) issuance of securities by the Company
or its affiliates (other than pursuant to an issuance by the Company
or its affiliates of options to purchase the capital stock of the
Company or its affiliates or exercise of any such options) or (iii)
material increase in short-term or long-term debt of the Company.
(m) The Company and its subsidiaries (i) make and keep accurate
books and records and (ii) maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (A)
transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of the Company's financial statements in conformity with
accounting principles generally accepted in the United States and to
maintain accountability for its assets, (C) access to the Company's
assets is permitted only in accordance with management's authorization
and (D) the recorded
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accountability for the Company's assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(n) (i) Each of the Company and its subsidiaries has established
and maintains disclosure controls and procedures (as such term is
defined in Rule 13a-14 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); (ii) such disclosure controls and
procedures are designed to ensure that information required to be
disclosed by the Company and each of its subsidiaries in the reports
they file or submit under the Exchange Act is accumulated and
communicated to the management of the Company and each of its
subsidiaries, including their respective principal executive officers
and principal financial officers, as appropriate, to allow timely
decisions regarding required disclosure; and (iii) such disclosure
controls and procedures are effective in all material respects to
perform the functions for which they were established.
(o) Since the date of the most recent balance sheet of the
Company and its consolidated subsidiaries reviewed or audited by,
Ernst & Young LLP and the audit committee of the board of directors of
the Company (or persons fulfilling the equivalent function), the
Company has not been advised of (i) any significant deficiencies in
the design or operation of internal controls which could adversely
affect the ability of the Company and each of its subsidiaries to
record, process, summarize and report financial data, or any material
weaknesses in internal controls; and (ii) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the internal controls of the Company and each of
its subsidiaries.
(p) Since the date of the most recent balance sheet of the
Company and its consolidated subsidiaries reviewed or audited by Ernst
& Young LLP, there have been no significant changes in internal
controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
(q) Ernst & Young LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries, whose
report appears in the Prospectus and who have delivered the initial
letter referred to in Section 10(j) hereof, are independent public
accountants as required by the Securities Act and the rules and
regulations promulgated thereunder.
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(r) The statistical and market-related data included in the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate in all material respects.
(s) Each of the Company and its subsidiaries has such permits,
licenses, patents, franchises, certificates of need and other
approvals or authorizations of governmental or regulatory authorities
("Permits") as are necessary under applicable law to own its
properties and to conduct its businesses in the manner described in
the Prospectus and except as disclosed in or specifically contemplated
by the Prospectus and except for any of the foregoing that would not
reasonably be expected to have a Material Adverse Effect; each of the
Company and its subsidiaries has fulfilled and performed in all
material respects, all of its material obligations with respect to the
Permits, and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder
of any such Permits, except as disclosed in the Prospectus; except for
any of the foregoing that would not reasonably be expected to have a
Material Adverse Effect.
(t) The Company and each of its subsidiaries carry, or are
covered by, insurance from insurers of recognized financial
responsibility in such amounts and covering such risks as is, in the
judgment of the Company, adequate for the conduct of their respective
businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries; all policies of insurance insuring the Company and each of
its subsidiaries or their respective businesses, assets, employees,
officers and directors are in full force and effect in all material
respects.
(u) The Company and each of its subsidiaries own or possess
adequate rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights and licenses necessary for the conduct of
their respective businesses, except where the failure to own or have
rights to use would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, and have not received
any notice of any claim of conflict with, any such rights of others,
and the Company is not aware of any pending or threatened claim to the
contrary or any pending or threatened challenge by any other person to
the rights of the Company and its subsidiaries with respect to the
foregoing which, if determined adversely to any of the Company or its
subsidiaries would have a Material Adverse Effect.
(v) There are no contracts which are required to be described in
the Prospectus or filed as exhibits to the Registration Statement that
have
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not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(w) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
which are required to be described in a prospectus included in a
registration statement on Form S-1 which is not so described in the
Prospectus.
(x) No labor disturbance by the employees of the Company or its
subsidiaries exists or, to the knowledge of the Company, is imminent,
that would reasonably be expected to have a Material Adverse Effect.
(y) Each of the Company and its subsidiaries is in compliance
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"), except for such
instances of non-compliance that would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect; no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company or any
of its subsidiaries would have any liability; the Company and its
subsidiaries have not incurred and do not expect to incur liability
under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of
the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code");
each "pension plan" for which the Company and each of its subsidiaries
would have any liability that is intended to be qualified under
Section 401(a) of the Code is to the Company's knowledge so qualified
in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such
qualification; and the Company and each of its subsidiaries have not
incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for payment of premiums in the ordinary course
of business).
(z) The Company and each of its subsidiaries have filed all
foreign, federal, state and local income and franchise tax returns
required to be filed through the date hereof, subject to any permitted
extensions (except where failure to file such returns would not be
expected to result in a Material Adverse Effect), and paid all taxes
shown as due thereon, and (x) no tax deficiency has been determined
adversely to the Company or any of its subsidiaries, nor (y) does the
Company have any knowledge of any tax deficiency, which, in case of
(x) or (y), if determined adversely to the Company or any of its
subsidiaries would reasonably be expected to have a Material Adverse
Effect.
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(aa) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter and bylaws (or similar organizational
documents), (ii) is in default, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject, except
for any of the foregoing that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
or (iii) is in violation of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may
be subject or has failed to obtain any material license, permit,
certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its
business, except for any of the foregoing that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(bb) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(cc) The Company and each of its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and
local laws, regulations, ordinance, rule, order, judgment, decree,
permit or other legal requirement relating to the protection of human
health and safety, the environment, natural resources or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), which compliance includes obtaining, maintaining and complying
with all permits and authorizations and approvals required by
Environmental Laws to conduct their respective businesses and (ii)
have not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous
or toxic substances or wastes, pollutants or contaminants, except in
the case of clause (i) or (ii) where such non-compliance with or
liability under Environmental Laws would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has been named as
a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, except with respect to any matters that, individually or in
the
9
aggregate, would not reasonably be expected to have a Material Adverse
Effect.
(dd) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case,
free and clear of all liens, encumbrances and defects except for
Permitted Liens (as defined in the Indenture dated August 15, 2003,
relating to the 10 1/4% Senior Subordinated Notes due 2010 issued by
certain subsidiaries of the Company) and such as do not materially
affect the value of the property and do not materially interfere with
the use made and proposed to be made of such property by the Company
and each of its subsidiaries taken as a whole and all assets held
under lease by the Company and each of its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such
exceptions as are not material and do not interfere in any material
respect with the use made and proposed to be made of such assets by
the Company and each of its subsidiaries.
(ee) Neither the Company nor any subsidiary is, or, as of any
Delivery Date (as defined in Section 6) after giving effect to the
offer and sale of the Stock and the application of the proceeds as
described herein, will be, an "investment company" within the meaning
of such term under the Investment Company Act of 1940, as amended (the
"Investment Company Act").
(ff) The Company has not distributed or, prior to the later to
occur of any Delivery Date and completion of the distribution of the
Stock, will distribute any offering material in connection with the
offering and sale of the Stock other than the Preliminary Prospectus
and the Prospectus and, in connection with the Directed Share Program
described in Section 5, the enrollment materials prepared by Xxxxxx
Brothers Inc.
(gg) The Company 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 in the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Stock.
(hh) The Stock has been approved for listing subject to notice of
issuance on the New York Stock Exchange.
(ii) The Company understands that the Underwriters and, for
purposes of the opinions to be delivered to the Underwriters pursuant
to Section 7 hereof, counsel to the Company and counsel to the
Underwriters will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
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2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally and not jointly represents,
warrants and agrees that:
(a) The Selling Stockholder has good and valid title to the
shares of the Stock to be sold by the Selling Stockholder hereunder or
good and valid title to the warrants or options pursuant to which the
shares of Stock to be sold by the Selling Stockholder hereunder will
be issued, and immediately prior to the applicable Delivery Date the
Selling Stockholder will have, good and valid title to the shares of
Stock to be sold by the Selling Stockholder hereunder on such date,
free and clear of all liens, encumbrances, equities or claims, except
for any liens, encumbrances, equities or claims arising under the
Custody Agreement (as hereinafter defined); and upon delivery of such
shares and payment therefor pursuant hereto, good and valid title to
such shares, free and clear of all liens, encumbrances, equities or
claims, will pass to the several Underwriters.
(b) The Selling Stockholder has placed in custody under a
custody agreement (the "Custody Agreement") with the other Selling
Stockholders and EquiServe LLC, as custodian (the "Custodian") and
Messrs. Xxxxxxxx, Xxxxxxxx and Xxxxxxx, as Attorneys-in-Fact (the
"Attorneys-in-Fact"), for delivery under this Agreement, (i)
certificates in negotiable form (with signature guaranteed by a
commercial bank or trust company having an office or correspondent in
the United States or a member firm of the New York Stock Exchange)
representing the shares of Stock to be sold by the Selling Stockholder
hereunder, (ii) if such Selling Stockholder is selling shares of Stock
issuable upon exercise or conversion of warrants, a warrant exercise
or conversion form and, in connection with warrants being exercised,
the original warrant and a check for the payment of the exercise
price, and (iii) if such Selling Stockholder is selling shares of
Stock issuable upon exercise of stock options, an option exercise form
and a check for the option exercise price.
(c) Pursuant to the Custody Agreement, the Selling Stockholder
has duly and irrevocably executed and delivered a power of attorney
appointing the Attorneys-in-Fact with full power of substitution, and
with full authority to execute and deliver this Agreement and to take
such other action as may be necessary or desirable to carry out the
provisions hereof on behalf of the Selling Stockholder.
(d) The Selling Stockholder has full right, power and authority
to enter into this Agreement and the Custody Agreement; the execution,
delivery and performance of this Agreement and the Custody Agreement
by the Selling Stockholder and the consummation by the Selling
Stockholder of the transactions contemplated hereby will not conflict
with
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or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling
Stockholder is subject, nor will such actions result in any violation
of the provisions of the constituent documents of the Selling
Stockholder (with respect to any Selling Stockholder that is not a
natural person) or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Selling Stockholder or the property or assets of the Selling
Stockholder; and, except for the registration of the Stock under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as will have been obtained prior to
the date hereof as may be required under the Exchange Act and
applicable state or foreign securities laws in connection with the
purchase and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
or the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby.
(e) The Registration Statement and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus, when they become effective or are filed with the
Commission, as the case may be, do not and will not, as of the
applicable effective date (as to the Registration Statement and any
amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with written
information furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion therein, and
provided further that this paragraph (e) shall apply to each Selling
Stockholder only to the extent that the statements or omissions from
the Registration Statement or the Prospectus were made in reliance
upon and in conformity with written information relating to such
Selling Stockholder provided by such Selling Stockholder specifically
for inclusion therein, it being understood and agreed that for
purposes of this Section 2 and the indemnification obligations in
Section 11, the only information provided by such Selling Stockholder
consists of information relating to such Selling Stockholder under the
caption "Principal and Selling Stockholders" in the Prospectus.
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(f) Except as provided in this Agreement and in the Lock Up
Agreement (as hereinafter defined), the Selling Stockholder 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 in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
shares of the Stock.
3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 6,250,000 shares of
the Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set opposite such Selling Stockholder's name in
Schedule 2 hereto, severally and not jointly, to the several Underwriters and
each of the Underwriters, severally and not jointly, agrees to purchase the
number of shares of the Firm Stock set opposite that Underwriter's name in
Schedule 1 hereto. Each Underwriter shall be obligated to purchase from the
Company and from each Selling Stockholder, that number of shares of the Firm
Stock which represents the same proportion of the number of shares of the Firm
Stock to be sold by the Company and by each Selling Stockholder, as the number
of shares of the Firm Stock set forth opposite the name of such Underwriter in
Schedule 1 represents of the total number of shares of the Firm Stock to be
purchased by all of the Underwriters pursuant to this Agreement. The respective
purchase obligations of the Underwriters with respect to the Firm Stock shall be
rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, each Selling Stockholder identified on Schedule 2 grants
to the Underwriters an option to purchase up to the number of shares of Option
Stock set opposite such Selling Stockholder's name in Schedule 2 hereto,
severally and not jointly, to the several Underwriters. Such option is
exercisable as provided in Section 6 hereof. Shares of Option Stock shall be
purchased severally for the account of the Underwriters in proportion to the
number of shares of Firm Stock set opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts. If less than all the shares of Option Stock are purchased by the
Underwriters pursuant to this Section 3, the shares of Option Stock so purchased
shall be sold first by those Selling Stockholders identified on Schedule 2 as
selling on a priority basis and thereafter by all the remaining Selling
Stockholders identified on Schedule 2 on a pro rata basis.
The price of both the Firm Stock and any Option Stock shall be $13.09
per share.
The Company and the Selling Stockholders shall not be obligated to
deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), as the case may be, except upon payment for all the Stock to be
purchased on such Delivery Date as provided herein.
13
4. Offering of Stock by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Stock, the several Underwriters
propose to offer the Firm Stock for sale upon the terms and conditions set forth
in the Prospectus.
5. Directed Share Program. It is understood that approximately
937,500 shares of the Firm Stock ("Directed Shares") will initially be reserved
by the several Underwriters for offer and sale to employees and persons having
business relationships with the Company and its subsidiaries ("Directed Share
Participants") upon the terms and conditions set forth in the Prospectus and in
accordance with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "Directed Share Program"). Under no circumstances
will Xxxxxx Brothers Inc. or any Underwriter be liable to the Company or to any
Directed Share Participant for any action taken or omitted to be taken in good
faith in connection with such Directed Share Program. To the extent that any
Directed Shares are not affirmatively reconfirmed for purchase by any Directed
Share Participant on or immediately after the date of this Agreement, such
Directed Shares may be offered to the public as part of the public offering
contemplated hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, and any stamp duties
or other taxes incurred by the Underwriters in connection with the Directed
Share Program.
6. Delivery of and Payment for the Stock. Delivery of and payment
for the Firm Stock shall be made at the offices of Xxxxxxx XxXxxxxxx LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York City time, on the
fourth full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the Firm Stock to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company and the Selling Stockholders
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the
14
names in which the shares of Option Stock are to be registered, the
denominations in which the shares of Option Stock are to be issued and the date
and time, as determined by the Representatives, when the shares of Option Stock
are to be delivered; provided, however, that this date and time shall not be
earlier than the First Delivery Date nor earlier than the second business day
after the date on which the option shall have been exercised nor later than the
fifth business day after the date on which the option shall have been exercised.
The date and time the shares of Option Stock are delivered are sometimes
referred to as a "Second Delivery Date" and the First Delivery Date and any
Second Delivery Date are sometimes each referred to as a "Delivery Date").
Delivery of and payment for the Option Stock shall be made at the
place specified in the first sentence of the first paragraph of this Section 6
(or at such other place as shall be determined by agreement between the
Representatives and the Custodian) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Custodian shall deliver
or cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Custodian of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Custodian
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
7. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than Commission's close of business
on the second business day following the execution and delivery of
this Agreement or, if applicable, such earlier time as may be required
by Rule 430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein; to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with
copies thereof; to advise the Representatives, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
15
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its commercially reasonable best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Representatives a signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Representatives such number of
the following documents as the Representatives shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case excluding exhibits other than this Agreement), and (ii) each
Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any
time after the Effective Time in connection with the offering or sale
of the Stock and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary to amend or supplement the Prospectus in order
to comply with the Securities Act, to notify the Representatives and,
upon their request, to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representatives, be required by the Securities Act or requested by the
Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any
Prospectus pursuant to Rule 424 of the Rules and Regulations, to
furnish a copy thereof to the Representatives and counsel for the
Underwriters and obtain the consent of the Representatives to the
filing, which consent may not be unreasonably withheld or delayed;
16
(f) As soon as practicable after the Effective Date, to make
generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the Rules and Regulations (including, at the
option of the Company, Rule 158) (it being understood that such
delivery requirements shall be deemed met by the Company's reporting
requirements pursuant to the Exchange Act and the Rules and
Regulations);
(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by
the Company to its shareholders and all public reports and all reports
and financial statements furnished by the Company to the principal
national securities exchange upon which the Common Stock may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of
the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Stock; provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any
action that would subject it to general consent to service of process
or taxation in any jurisdiction in which it is not now so subject;
(i) For a period of 180 days from the date of the Prospectus,
not to, directly or indirectly, (1) (A) offer for sale, sell, pledge
or otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition by
any person at any time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock (other
than the Stock and shares issued pursuant to employee benefit plans,
stock option plans or other employee compensation plans and employee
stock purchase plans existing on the date hereof or pursuant to
currently outstanding options, warrants or rights), or (B) sell or
grant options, rights or warrants with respect to any shares of Common
Stock or securities convertible into or exchangeable for Common Stock
(other than the grant of options pursuant to option plans existing on
the date hereof or subsequently adopted by the Board of Directors of
the Company), or (2) enter into any swap or other derivatives
transaction that transfers to
17
another, in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
without the prior written consent of Xxxxxx Brothers Inc. and Xxxxxxx,
Sachs & Co., on behalf of the Underwriters; and to cause each
executive officer and director of the Company to furnish to the
Representatives, prior to the First Delivery Date, a letter or
letters, substantially in the form of Exhibit A hereto (the "Lock Up
Agreement"), to which each such person shall agree not to, directly or
indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock or (2) enter into
any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of
ownership of such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in each case
for a period of 180 days from the date of the Prospectus (the "Lock-Up
Period"), without the prior written consent of Xxxxxx Brothers Inc.
and Xxxxxxx, Sachs & Co., on behalf of the Underwriters; provided,
however, that nothing in the Lock-Up Agreement is intended to, or
shall prevent, the executive officers or directors from (i)
transferring any shares, options or warrants to any family members or
affiliates or for estate planning purposes, provided that (A) the
transferee agrees in writing to be bound by the terms of the Lock-Up
Agreement, and (B) such transfer does not require the transferee to
make a filing under Section 16 of the Securities Exchange Act of 1934
reflecting such transfer with the Securities and Exchange Commission
during the Lock-Up Period, (ii) putting in place a so-called "10b-5-1
plan" or setting up a brokerage account, provided no sales shall be
made thereunder prior to the end of the Lock-Up Period, or (iii)
exercising any options or warrants held by the undersigned, provided
that any shares so issued shall be subject to the Lock-Up Agreement.
(j) Prior to the Effective Date, to apply for the listing of the
Stock on the New York Stock Exchange and to use its commercially
reasonable best efforts to complete that listing, subject only to
official notice of issuance and evidence of satisfactory distribution,
prior to the First Delivery Date;
(k) To apply the net proceeds from the sale of the Stock being
sold by the Company as set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any of its subsidiaries shall become an
18
"investment company" within the meaning of such term under the
Investment Company Act of 1940, as amended.
8. Further Agreements of the Selling Stockholders. Each Selling
Stockholder agrees:
(a) To execute and deliver to the Representatives, on or prior
to the date hereof, the Lock-up Agreement.
(b) To deliver to the Representatives prior to the First
Delivery Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a non-United States
person or Form W-9 (if the Selling Stockholder is a United States
person).
9. Expenses. The Company agrees, whether or not the transactions
contemplated by this Agreement are consummated or this Agreement becomes
effective or is terminated, to pay all costs, expenses, fees and taxes incident
to and in connection with (a) the authorization, issuance, sale and delivery of
the Stock and any stamp duties or other taxes payable in that connection; (b)
the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the
distribution of the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus, all as provided in this Agreement; (d) any
required review by the National Association of Securities Dealers, Inc. of the
terms of sale of the Stock; (e) the listing of the Stock on the New York Stock
Exchange and/or any other exchange; (f) the qualification of the Stock under the
securities laws of the several jurisdictions as provided in Section 7(h), (g)
the preparation, printing (including, without limitation, word processing and
duplication costs) and distribution of this Agreement, all Blue Sky Memoranda
and all other agreements, memoranda, correspondence and other documents printed
and delivered in connection herewith (excluding, however, legal fees and
expenses of counsel to the Underwriters incurred in connection with any of the
foregoing other than reasonable fees of such counsel plus reasonable
disbursements incurred in connection with the preparation, printing and
distribution of such Blue Sky Memoranda); (h) the offer and sale of shares of
the Stock by the Underwriters in connection with the Directed Share Program as
described in Section 5, including the reasonable fees and disbursements of
counsel for the Underwriters related thereto; (i) the costs and expenses
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the Stock, including the cost of any plane chartered for
this "road show" but excluding other travel expenses of the Underwriters, (j)
the fees and expenses of the Custodian (and any other attorney-in-fact) and (k)
the performance of all other obligations of the Company and the Selling
Stockholders under this Agreement; provided that, except as provided in this
Section 9 and in Section 14, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Stock which they may sell and the expenses of advertising any offering of
the Stock made by the Underwriters, and the Selling Stockholders shall pay
19
the fees and expenses of their counsel and any transfer taxes payable in
connection with their respective sales of Stock to the Underwriters.
10. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on each Delivery Date, of the representations and warranties of the Company
and the Selling Stockholders contained herein, to the performance by the Company
and the Selling Stockholders of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 7(a); no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied
with.
(b) The Prospectus shall have been printed and copies
distributed to you not later than 9:00 A.M., New York City time, on
December 22, 2003, or at such later date and time as you may approve
in writing, and no stop order suspending the qualification or
exemption from qualification of the Stock in any jurisdiction shall
have been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Prospectus or any
amendment or supplement thereto contains an untrue statement of a fact
which, in the reasonable opinion of Weil, Gotshal & Xxxxxx LLP,
counsel for the Underwriters, is material or omits to state a fact
which, in the reasonable opinion of such counsel, is material and is
required to be stated therein or is necessary to make the statements
therein not misleading.
(d) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, Custody
Agreements, the Powers of Attorney, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to
this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to the Underwriters,
and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(e) (i) Xxxxxxx XxXxxxxxx LLP shall have furnished to the
Representatives its written opinion, as counsel to the Company and the
Individual Selling Stockholders identified therein, addressed to the
20
Underwriters and dated such Delivery Date, substantially in the form
attached hereto as Exhibit B-1; and (ii) the Company shall have
requested and caused one or more special counsel for certain of the
subsidiaries listed on Schedule 3 hereto, as indicated on such
Schedule, to furnish to the Representatives its or their opinion,
dated such Delivery Date, in form and substance reasonably
satisfactory to the Underwriters and Xxxx Xxxxxxx & Xxxxxx LLP,
substantially in the form of Exhibit B-2.
(f) The counsel for each of the Selling Stockholders other than
those referred to in paragraph (e)(i) above shall have furnished to
the Representatives their written opinion, as counsel to each of the
Selling Stockholders for whom they are acting as counsel, addressed to
the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Underwriters and Xxxx Xxxxxxx & Xxxxxx
LLP, substantially in the form of Exhibit C.
(g) The Representatives shall have received from Weil, Gotshal &
Xxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of the
Stock, the Registration Statements, each Prospectus 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.
(h) At the time of execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP, a letter, in form and
substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities
Act and are in compliance with the applicable requirements relating to
the qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date hereof (or, with respect
to matters involving changes or developments since the respective
dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by
accountants' "comfort letters" to underwriters in connection with
registered public offerings.
(i) With respect to the letter of Ernst & Young LLP, referred to
in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the Underwriters shall have received a letter (the
"bring-down letter") of such accountants, addressed to the
Underwriters and dated as of each Delivery Date (i) confirming that
they are independent public accountants
21
within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii)
stating, as of the date of the bring-down letter (or, with respect to
matters involving changes or developments since the respective dates
as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date of
the bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the
initial letter and (iii) confirming in all material respects the
conclusions and findings set forth in the initial letter.
(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, executed on behalf of the
Company by its Chief Executive Officer and Chief Financial Officer
stating that:
(A) The representations and warranties of the Company
contained herein are true and correct as if made on and as of
such Delivery Date (other than to the extent any such
representation or warranty is made expressly to a certain date),
and the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to such Delivery Date;
(B) At such Delivery Date, since the date hereof or since
the date of the most recent financial statements in the
Prospectus, except as described in the Prospectus to the
knowledge of such person after reasonable inquiry, no event or
events have occurred, nor has any information become known that,
individually or in the aggregate, would have a material adverse
effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the
Company and each of its subsidiaries;
(C) They have carefully examined the Preliminary Prospectus
and the Prospectus and, in their opinion, the Preliminary
Prospectus and Prospectus, as of their respective dates, did not,
and the Prospectus, as of such Delivery Date, does not include
any untrue statement of a material fact and did not omit to state
a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, and since the date of
the Prospectus, no event has occurred which should have been set
forth in a supplement to the Prospectus; and
(D) To the knowledge of such persons after due inquiry, the
issuance and sale of the Stock by the Company hereunder has
22
not been enjoined (temporarily or permanently) by any court or
governmental body or agency.
(k) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on such Delivery Date a certificate,
dated such Delivery Date, signed by, or on behalf of, the Selling
Stockholder (or the Custodian or one or more attorneys-in-fact)
stating that the representations, warranties and agreements of the
Selling Stockholder contained herein are true and correct as of such
Delivery Date and that the Selling Stockholder has complied with all
agreements contained herein to be performed by the Selling Stockholder
at or prior to such Delivery Date.
(l) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, executed on behalf of the
Company by its Chief Executive Officer stating that (a) the financial
statements as of and for the Company's predecessors the years ended
December 31, 2000 and 2001, as well as the financial data derived
therefrom, contained in the Prospectus were audited by Xxxxxx Xxxxxxxx
LLP, as set forth in the reports of such accountants with respect to
such periods, and (b) at all relevant times during such periods,
Xxxxxx Xxxxxxxx LLP were accountants independent from the Company's
predecessors within the meaning of the Securities Act and the Rules
and Regulations.
(m) (i) The Company and its subsidiaries shall not have
sustained since the date of the latest audited financial statements
included in the Prospectus (exclusive of any amendment or supplement
thereto after the date hereof) any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus and (ii) since such date there shall
not have been any change in the capital stock or long-term debt of the
Company and its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of
Xxxxxx Brothers Inc. and Xxxxxxx, Xxxxx & Co., so material and adverse
as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Stock being delivered on such Delivery
Date on the terms and in the manner contemplated herein and in the
Prospectus.
(n) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock
23
Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or the settlement of such trading
generally shall have been materially disrupted or minimum prices shall
have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) or there shall have occurred any
other calamity or crisis, including without limitation as a result of
terrorist activities after the date hereof, as to make it, in the
judgment of Xxxxxx Brothers Inc. and Xxxxxxx, Xxxxx & Co.,
impracticable or inadvisable to proceed with the offering or delivery
of the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(o) The New York Stock Exchange shall have approved the Stock
for listing, subject only to official notice of issuance and evidence
of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
11. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its directors, officers and employees and each person, if
any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Stock), to which that
Underwriter, director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or
supplement thereto or (B) in any Blue Sky application or other
document prepared or executed by the Company (or based upon any
written
24
information furnished by the Company for use therein) specifically for
the purpose of qualifying any or all of the Stock under the securities
laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky
Application") or (C) in any materials or information provided to
investors by, or with the written approval of, the Company in
connection with the marketing of the offering of the Stock ("Marketing
Materials"), including any road show or investor presentations made to
investors by the Company (whether in person or electronically), (ii)
the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or in any Blue Sky Application or
Marketing Materials, any material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances under which they were made not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to, the
Stock or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii)
above (provided that the Company shall not be liable under this clause
(iii) to the extent that it is determined in a final judgment by a
court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures
to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall reimburse each
Underwriter and each such director, officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter, director, officer, employee or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written
information concerning such Underwriters furnished to the Company
through the Underwriters by or on behalf of any Underwriters
specifically for inclusion therein which information consists solely
of the information specified in Section 11(g); and provided further
that with respect to any such untrue statement or omission made in the
Preliminary Prospectus, the foregoing indemnity shall not inure to the
benefit of any Underwriter (or any person who controls any Underwriter
or any officer or director thereof) from whom the person asserting
such loss, claim, damage, liability or action purchased the Stock, to
the extent that such sale was an initial resale by such Underwriter
and any such loss, claim,
25
damage, liability or action of such Underwriter is a result of the
fact that both (i) to the extent required by applicable law, a copy of
the Prospectus was not sent or given to such person at or prior to the
written confirmation of the sale of such Stock to such person and (ii)
the untrue statement or omission in the Preliminary Prospectus was
corrected in the Prospectus unless, in either case, such failure to
deliver the Prospectus was a result of noncompliance by the Company
with Section 7(c). The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Underwriter
or to any director, officer, employee or controlling person of that
Underwriter.
(b) The Company shall indemnify and hold harmless Xxxxxx
Brothers Inc. (including its directors, officers and employees) and
each person, if any, who controls Xxxxxx Brothers Inc. within the
meaning of the Securities Act ("Xxxxxx Brothers Entities"), from and
against any loss, claim, damage or liability or any action in respect
thereof to which any of the Xxxxxx Brothers Entities may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon the
failure of any Directed Share Participant to pay for and accept
delivery of the Directed Shares sold pursuant to the Directed Share
Program which, immediately following the effectiveness of the
Registration Statement, were subject to a properly confirmed agreement
to purchase or (ii) the Directed Share Program, provided that, the
Company shall not be responsible under this subparagraph (ii) for any
loss, claim, damage, liability or action that is finally judicially
determined to have resulted from the gross negligence or willful
misconduct of the Xxxxxx Brothers Entities. The Company shall
reimburse the Xxxxxx Brothers Entities promptly upon demand for any
reasonable legal or other expenses reasonably incurred by them in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Each of the Selling Stockholders, severally and not jointly
in proportion to the number of shares of Stock to be sold by them
hereunder, shall indemnify and hold harmless each Underwriter, its
directors, officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities Act,
from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases
and sales of Stock), to which that Underwriter, director, officer,
employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact
26
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall
reimburse each Underwriter, its directors, officers and employees and
each such controlling person for any legal or other expenses
reasonably incurred by that Underwriter, its directors, officers and
employees or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however,
that each Selling Stockholder shall be liable in any such case only to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the Prospectus
or in any such amendment or supplement in reliance upon and in
conformity with written information concerning such Selling
Stockholder furnished to the Company by such Selling Stockholder
specifically for inclusion therein; provided, further, that with
respect to any such untrue statement or omission made in the
Preliminary Prospectus, the foregoing indemnity shall not inure to the
benefit of the Underwriters (or any person who controls any
Underwriter or any officer or director thereof) from whom the person
asserting such loss, claim, damage, liability or action purchased the
Stock, to the extent that such sale was an initial resale by such
Underwriter and any such loss, claim, damage, liability or action of
such Underwriter is a result of the fact that both (i) to the extent
required by applicable law, a copy of the Prospectus was not sent or
given to such person at or prior to the written confirmation of the
sale of such Stock to such person and (ii) the untrue statement or
omission in the Preliminary Prospectus was corrected in the Prospectus
unless, in either case, such failure to deliver the Prospectus was a
result of noncompliance by the Company with Section 7(c); provided,
further, the aggregate amount of any Selling Stockholder's indemnity
and contribution obligations under this Section 11(c) and Section
11(f) shall not exceed the cash proceeds received by such Selling
Stockholder from its sale of Stock. The foregoing indemnity agreement
is in addition to any liability which the Selling Stockholders may
otherwise have to any Underwriter or any officer, employee or
controlling person of that Underwriter.
(d) Each Underwriter shall, severally and not jointly, indemnify
and hold harmless the Company, each Selling Stockholder, each of their
respective officers and employees, each of its directors, and each
person, if any, who controls the Company or such Selling Stockholder
within the meaning of the Securities Act, from and against
27
any loss, claim, damage or liability, joint or several, or any action
in respect thereof, to which the Company, such Selling Stockholder or
any such director, officer or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or
the Prospectus or in any amendment or supplement thereto, or in any
Blue Sky Application or (ii) the omission or alleged omission to state
in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon
and in conformity with written information concerning such Underwriter
furnished to the Company through Xxxxxx Brothers Inc. by or on behalf
of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to
the Company or any such director, officer or controlling person of the
Company.
(e) Promptly after receipt by an indemnified party under this
Section 11 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 11, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 11, except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to
notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this
Section 11. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and,
to the extent that it wishes, jointly with any other similarly
notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election
to assume the defense of such claim or action, the indemnifying party
shall not be liable to the
28
indemnified party under this Section 11 for any legal or other
expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that Xxxxxx Brothers shall have the right to employ
counsel to represent jointly Xxxxxx Brothers and those other
Underwriters and their respective directors, officers, employees and
controlling persons who may be subject to liability arising out of any
claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Stockholders under this Section 11
if, in the reasonable judgment of Xxxxxx Brothers, it is advisable for
Xxxxxx Brothers and those Underwriters, directors, officers, employees
and controlling persons to be jointly represented by separate counsel,
and in that event the fees and expenses of such separate counsel shall
be paid by the Company and the Selling Stockholders. Notwithstanding
anything contained herein to the contrary, if indemnity may be sought
pursuant to Section 11(b) hereof in respect of a claim or action
referred to in Section 11(b), then in addition to such separate firm
for the indemnified parties, the indemnifying party shall be liable
for the fees and expenses of not more than one separate firm (in
addition to any local counsel) for the Xxxxxx Brothers Entities for
the defense of any loss, claim, damage, liability or action arising
out of the Directed Share Program. No indemnifying party shall (i)
without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), 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 and
does not include any findings of fact or admissions of fault or
culpability as to the indemnified party or (ii) be liable for any
settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled
with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or
judgment.
(f) If the indemnification provided for in this Section 11 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 11(a), 11(b), 11(c) or 11(d) in
respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to
the amount paid or payable by such indemnified party as a result of
such loss, claim, damage
29
or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if
the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Selling Stockholders, on the
one hand, and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the
Underwriters on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders, on the
one hand, and the total discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased under
this Agreement, on the other hand, bear to the total gross proceeds
from the offering of the shares of the Stock under this Agreement. The
relative fault shall be determined by reference to whether the untrue
or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by
the Company, the Selling Stockholders or the Underwriters, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company, the Selling Stockholders and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this
Section 11(f) were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this
Section 11(f) shall be deemed to include, for purposes of this Section
11(f), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the
provisions of this Section 11(f), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price
at which the Stock underwritten by it and distributed to the public
was offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission
and the contribution obligations of the Selling Stockholders shall be
subject to the aggregate limitation provided in Section 11(c). No
person guilty of fraudulent misrepresentation (within
30
the meaning of Section 10(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 11(f) are several in proportion to their
respective underwriting obligations and not joint.
(g) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering
of the Stock by the Underwriters set forth on the cover page of, the
concession and reallowance figures appearing under the caption
"Underwriting" in the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the
Company by or on behalf of the Underwriters specifically for inclusion
in the Registration Statement and the Prospectus.
12. Defaulting Underwriters. If, on any Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Firm Stock or Option Stock, as applicable, that the defaulting Underwriter
agreed but failed to purchase on such Delivery Date in the respective
proportions which the number of shares of the Firm Stock or Option Stock, as
applicable, set forth opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of shares of the Firm
Stock or Option Stock, as applicable, set opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Stock on such Delivery Date if the total number of shares of
the Stock which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 10% of the total number of shares of the Stock to
be purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of shares of the
Stock which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other Underwriters satisfactory to Xxxxxx Brothers who so
agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all of the Stock to be purchased on
such Delivery Date. If the remaining Underwriters or other Underwriters
satisfactory to Xxxxxx Brothers Inc. and Xxxxxxx, Xxxxx & Co. do not elect to
purchase the Stock which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such Delivery Date, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the Company of the
Selling Stockholders, except that the Company will continue to be liable to the
non-defaulting Underwriters for the payment of expenses to the extent set forth
in Sections 9 and 14. As used in this Agreement, the term "Underwriter"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 12, purchases Firm Stock which a defaulting Underwriter agreed but
failed to purchase.
31
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default, including liability of any defaulting Underwriter for the
expenses referred to in Section 14. If other underwriters are obligated or agree
to purchase the Stock of a defaulting or withdrawing Underwriter, either Xxxxxx
Brothers Inc. and Xxxxxxx, Xxxxx & Co. or the Company may postpone a Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any other document
or arrangement.
13. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 10(l) or 10(m),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.
14. Reimbursement of Underwriters' Expenses. If the Company or any
Selling Stockholder shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and upon demand the Company shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 12 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
15. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to the care of Xxxxxx Brothers Inc.,
000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Registration Group (Fax: (000) 000-0000), with a copy to
Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx Xxxxxxx, Esq. (Fax: 000-000-0000) and, in the
case of any notice pursuant to Section 11(e), to the Director of
Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (Fax: (000) 000-0000);
(b) if to the Company shall be delivered or sent by mail, telex
or facsimile transmission to the Company, 0000 Xxxxxx Xxx Xxx,
00
Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxx (Fax: (859)
514-4422), with a copy to Xxxxxxx XxXxxxxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: Xxxx Xxxxxxxxxxxx, Esq.
(Fax: (000) 000-0000);
(c) if to any Selling Stockholders, shall be delivered or sent
by mail, or facsimile transmission to such Selling Stockholder at the
address set forth on Schedule 2 hereto;
provided, however, that any notice to an Underwriter pursuant to Section 11(e)
shall be delivered or sent by mail, or facsimile transmission to such
Underwriter at its address set forth in its acceptance to the Representatives,
which address will be supplied to any other party hereto by the Representatives
upon request. Any such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Company and the Selling Stockholders
shall be entitled to act and rely upon any request, consent, notice or agreement
given or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of
the Representatives and the Company and the Underwriters shall be entitled to
act and rely upon any request, consent, notice or agreement given or made on
behalf of the Selling Stockholders by the Custodian.
16. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Selling Stockholders and their respective personal representatives and
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (a) the representations, warranties,
indemnities and agreements of the Company and the Selling Stockholders contained
in this Agreement shall also be deemed to be for the benefit of the directors,
officers, employees of the Underwriters and each person or persons, if any, who
control any Underwriter within the meaning of Section 15 of the Securities Act
and (b) the indemnity agreement of the Underwriters contained in Section 11(c)
of this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement and
any person controlling the Company within the meaning of Section 15 of the
Securities Act and any person controlling a Selling Stockholder within the
meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 16, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
17. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.
33
18. Definition of the Terms "Business Day" and "Subsidiary." For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
19. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of New York.
20. Counterparts. This Agreement may be executed in multiple
counterparts and, if executed in counterparts, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
21. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
34
If the foregoing correctly sets forth the agreement among the Company
the Selling Stockholders and the Underwriters, please indicate your acceptance
in the space provided for that purpose below.
Very truly yours,
TEMPUR-PEDIC INTERNATIONAL INC.
By /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Assistant Treasurer
The Selling Stockholders named in
Schedule 2 to this Agreement
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Attorney-in-Fact
Accepted:
Xxxxxx Brothers Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
Citigroup Global Markets Inc.
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By Xxxxxx Brothers Inc.
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Authorized Representative
By Xxxxxxx, Sachs & Co.
By: /s/ Xxxxxxx, Xxxxx & Co.
-----------------------------
(Xxxxxxx, Sachs & Co.)
SCHEDULE 1
----------
Number of
Underwriters Shares
------------ ----------
Xxxxxx Brothers Inc............................................... 5,626,500
Xxxxxxx, Sachs & Co............................................... 5,626,500
UBS Securities LLC................................................ 2,904,000
Citigroup Global Markets Inc...................................... 2,178,000
CIBC World Markets Corp........................................... 907,500
U.S. Bancorp Xxxxx Xxxxxxx Inc.................................... 907,500
Epoch Partners.................................................... 100,000
Fidelity Capital Markets, a division of National
Financial Services LLC............................................ 100,000
Xxxxx, Xxxxxxxx & Xxxx, Inc....................................... 50,000
Chatsworth Securities LLC......................................... 50,000
Xxxxxx Xxxxxx & Company, Inc...................................... 50,000
Wedbush Xxxxxx Securities Inc..................................... 50,000
Total 18,750,000
==========
SCHEDULE 2
----------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
TA IX L.P. 4,876,600 902,475
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA/Atlantic and Pacific IV, L.P. 1,219,152 225,619
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA/Advent VII, L.P. 1,210,348 223,990
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA/Strategic Partners Fund A, L.P. 99,845 18,477
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA/Strategic Partners Fund B, L.P. 17,922 3,317
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA Investors LLC 131,138 24,268
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
TA Subordinated Debt Fund, L.P. 470,252 87,026
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, X. Xxxxxx* 51,476
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx Xxxxx and Xxxx Xxxxxxxxx, 1,211 224
Tenants in Common
0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx Living Trust 25,203 4,664
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
Keansburg Investment Limited 13,659 2,528
Attn: Xxx Xxxxxxxx
Xxxxxxxxx 0X 0000 XX
Xxxxxxxxx, Xxx Xxxxxxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxx 20,173 3,734
00 Xxxxxxxxx xx x'Xxxxxxxxxx
Xxxx-Xxx-Xxx, Xxxxxx 00000
--------------------------------------------------------------------------------
Xxxxx X. Xxxx* 102,543
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, Xxxx* 13,583
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 2,102 389
On The Rocks Farm
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx X.* 21,000
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 7,221 1,337
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Gleacher Mezzanine Fund I, LP 329,836 61,040
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Gleacher Mezzanine Fund P, LP 117,798 21,800
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 3,228 598
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxxxxx* 23,204
Xxxxxx Xxxxx, 0 Xxxxxx Xxxxxxx Xxxxxx,
Xxxxxxxx Xxxxx Xxxx, Xxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx UB31BE
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx & Xxxx Capital Partners, LP 3,860,176 714,373
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
FFL Executive Partners, LP 69,830 12,923
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx & Xxxx Xxxxxxx, JTWROS 1,453 269
Xxxxxxx Xxxx & Xxxxxxxxxx LLP
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxxx 404 75
N22 W24226 B Xxxx Xxxxxxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx, Xxxx Xxxx 748 139
0000 X. Xxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Antares Capital Corporation 20,173 3,733
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx X. and Xxxxxx X. Xxxxxxxx, 125,000
Tenants in Common*
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, Xxxxx 1,528 283
00000 Xxxx Xxxx Xxxx
Xxxxx, XX 00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
Xxxxxx, Xxxx* 11,916
Xxxxxxxxx 00
Xxxxx, 0000
Xxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx X.* 526
5 Caxton Trading Estate
Xxxxxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxxxx, XX0 0XX
Xxxxxx Xxxxxxx
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx X.* 5,391
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X.* 4,987
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx, Xxxxxx* 3,151
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Lucy, Beat* 2,626
Xxxxxxxxxxxxxxxx 0
Xxxxxxxxxx, 0000
Xxxxxxxxxxx
--------------------------------------------------------------------------------
Siljedahl, Xxxx Xxxxxx* 11,860
Xxxxxxx 00 Xxxx, Xxxxx-xxx
Xxxx-xx
Xxxx, 000-0000
Xxxxx
--------------------------------------------------------------------------------
Key, Xxxx* 5,250
Tempur Production
0000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
Xxxxxxxxxx, Xxxxxxx* 9,590
Xxxxxxxx xxx 00
Xxxxxxxxxxx, 000 00
Xxxxxx
--------------------------------------------------------------------------------
Xxxxx, Xxxxx* 2,101
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx* 9,079
Tempur Production
0000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx, Xxxxxxx* 2,101
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxx, Xxxx* 3,806
0000 XX 000 Xx.
Xxxxxxx Xxx, XX 00000
--------------------------------------------------------------------------------
Peak, Xxxx* 6,242
Tempur Production
0000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx, Xxxxxx Xxxxxxx* 8,569
Xxxx Xxx 0, 0 Xxxxx
Xxxxxx, 00000
Xxxxx
--------------------------------------------------------------------------------
Xxxxx, Xxxxxxx X.* 2,626
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Dam Xxxxxxxxx, Xxx * 5,391
Xxxxxxxxx 00
Xxxxx, 0000
Xxxxxxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Number of Number of
Name and address of Selling Stockholder Firm Stock Option Stock*
--------------------------------------- ---------- -------------
--------------------------------------------------------------------------------
Xxxxxx, Xxxx Xxxx* 526
Maxwellstraat 47
BX Ede, 6716
The Netherlands
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxx X.* 4,725
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxx, Xxxxx* 4,725
000 Xxxxxx Xxxx, #00-00, XX Xxxxxxxx
Xxxxxxxxx, 000000
Singapore
--------------------------------------------------------------------------------
Xxxxxxxxxx, Xxxxxx* 4,725
Xxxxxxxxx 00
Xxxxx, 0000
Xxxxxxx
--------------------------------------------------------------------------------
Xxxxx, Xxxx* 26,250
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Xxxxxxxx, Xxxx X.* 26,250
c/o Tempur-Pedic International Inc.,
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx, XX 00000
--------------------------------------------------------------------------------
Total 12,500,000 2,812,500
--------------------------------------------------------------------------------
* In the event that the over-allotment option is not exercised in full, those
Selling Stockholders with an asterisk next to their name in this column will
sell their Option Shares on a pro rata basis. After these Selling Stockholders
have sold their Option Shares, all other Selling Stockholders with Option Shares
shall sell Option Shares on a pro rata basis.
SCHEDULE 3
----------
Subsidiaries
Entity State or Country of Organization
Tempur World, Inc. Delaware
Tempur World Holdings, Inc. Delaware
Tempur-Pedic, Inc.* Kentucky
Tempur Production USA, Inc.* Virginia
Tempur-Medical, Inc.* Kentucky
Tempur-Pedic, Direct Response, Inc.* Kentucky
Xxxx Sleep Technologies, Inc. Delaware
Tempur World Holdings S.L.* Spain
Tempur World Holding Company ApS* Denmark
Tempur World Holding Sweden AB Sweden
Xxx-Foam ApS* Denmark
Tempur UK, Ltd.* United Kingdom
Tempur Japan Yugen Kaisha* Japan
Tempur International Limited* United Kingdom
Tempur Danmark A/S* Denmark
Tempur Suomi OY Finland
Tempur Norge AS Norway
Tempur Sverige AB Sweden
Tempur Italia Srl Italy
Tempur France SARL France
Tempur Holding GmbH* Germany
Xxxxx System GmbH* Germany
Tempur Deutschland GmbH* Germany
Tempur Schweiz AG Switzerland
Tempur Pedic Espana SA* Spain
Tempur Singapore Pte Ltd. Singapore
Tempur Benelux B.V. Netherlands
Tempur South Africa p.t.y. South Africa
*Local counsel opinion to be provided.
Exhibit A
LOCK-UP LETTER AGREEMENT
Xxxxxx Brothers Inc.
Xxxxxxx, Sachs & Co.
UBS Securities LLC
Citigroup Global Markets Inc.
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
As Representatives of the several Underwriters,
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you and certain other firms propose
to enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by you and such other firms (the "Underwriters") of shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Tempur-Pedic International Inc., a Delaware corporation (the "Company"), and
that the Underwriters propose to reoffer the Shares to the public (the
"Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers Inc. and Xxxxxxx, Sachs & Co., on behalf of the Underwriters, the
undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge,
or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in the disposition by any person at
any time in the future of) any shares of Common Stock (including, without
limitation, shares of Common Stock that may be deemed to be beneficially owned
by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and shares of Common Stock that may be issued
upon exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock (other than the Shares) owned by the undersigned
on the date of execution of this Lock-Up Letter Agreement or on the date of the
completion of the Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, for a period of 180 days
after the date of the final Prospectus relating to the Offering (the "Lock-Up
Period"). However, nothing in this Lock-Up Letter Agreement
A-1
is intended to, or shall prevent, the undersigned from (i) transferring any
shares, options or warrants to any family members or affiliates or for estate
planning purposes, provided that (A) the transferee agrees in writing to be
bound by the terms of this Lock-Up Letter Agreement, and (B) such transfer does
not require the transferee to make a filing under Section 16 of the Securities
Exchange Act of 1934 reflecting such transfer with the Securities and Exchange
Commission during the Lock-Up Period, (ii) putting in place a so-called "10b-5-1
plan" or setting up a brokerage account, provided no sales shall be made
thereunder prior to the end of the Lock-Up Period, or (iii) exercising any
options or warrants held by the undersigned, provided that any shares so issued
shall be subject to this Lock-Up Letter Agreement.
In furtherance of the foregoing, the Company and its Transfer Agent
are hereby authorized to decline to make any transfer of securities if such
transfer would constitute a violation or breach of this Lock-Up Letter
Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective on or before February 15, 2004, or if the Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares, we
will be released from our obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary in connection with the enforcement hereof. Any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
Very truly yours,
By:
-------------------------------------
Name:
Title:
Dated:
------------------------------
X-0
Xxxxxxx X-0
Form of Xxxxxxx XxXxxxxxx LLP Opinion
[Subject to Review and Approval
-------------------------------
of Xxxxxxx XxXxxxxxx Opinion
----------------------------
Clearance Committee]
--------------------
December __, 2003
Xxxxxx Brothers Inc.
Xxxxxxx, Xxxxx & Co.
UBS Warburg LLC
Citigroup Global Markets Inc.
CIBC World Markets Corp.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
c/x Xxxxxx Brothers Inc.
000 0/xx/ Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Re: Tempur-Pedic International Inc.
-------------------------------
Ladies and Gentlemen:
We have acted as counsel to Tempur-Pedic International Inc., a
Delaware corporation (the "Company"), in connection with the issuance
and sale by the Company of 6,250,000 shares of Common Stock, $.01 par
value per share, of the Company (the "Common Stock") and the sale by
certain selling stockholders (the "Selling Stockholders") of
12,500,000 shares of Common Stock, pursuant to the Underwriting
Agreement, dated December 17, 2003 (the "Underwriting Agreement") by
and among the Company, the Selling Stockholders and you, as
representatives of the several underwriters named therein (the
"Underwriters"). This opinion is furnished to you pursuant to Section
10(e) of the Underwriting Agreement. Capitalized terms used and not
otherwise defined herein have the respective meanings ascribed thereto
in the Underwriting Agreement.
We do not act as general counsel to the Company, and our
representation is limited to matters individually referred to us by
the Company, which generally have been in the areas of securities,
finance and general
B-1
corporate matters, and have acted as the Company's primary outside
counsel in these areas since November 2002. Accordingly, there may be
matters affecting the Company as to which we have not been consulted.
We are also delivering this opinion with respect to the selling
stockholders listed on Annex A hereto (the "Designated
Selling Stockholders").
We have examined such documents as we have considered necessary for
purposes of rendering our opinions set forth in this letter, including
the following:
(i) The registration statement on Form S-1 (Registration No.
333-109798), filed with the Securities and Exchange Commission (the
"Commission") on October 17, 2003, pursuant to the Securities Act of
1933, as amended (the "Securities Act"), as amended by Amendment No. 1
thereto filed with the Commission on November 20, 2003, and Amendment
No. 2 thereto filed with the Commission on December 4, 2003, and
Amendment No. 3 thereto filed with the Commission on December 12,
2003, and Amendment No. 4 thereto filed with the Commission on
December 17, 2003 (such registration statement, as so amended by such
amendments and the information deemed by virtue of Rule 430A(b) of the
Rules and Regulations to be part of such registration statement at the
time it was declared effective, the "Registration Statement");
(ii) the final Prospectus of the Company dated December 17,
2003, with respect to the Shares (the "Prospectus");
(iii) the Underwriting Agreement;
(iv) the Custody Agreement, dated as of December 15, 2003, by
and among the Selling Stockholders, the Company and EquiServe, Inc.
and EquiServe Trust Company, N.A., as custodian;
(v) the Certificate of Incorporation of the Company as in
effect up to the date hereof as certified by the Secretary of the
Company;
(vi) the By-Laws of the Company as in effect up to the date
hereof as certified by the Secretary of the Company;
(vii) the Amended and Restated Certificate of Incorporation of
the Company, as filed today with the Secretary of State of the State
of Delaware, as certified by the Secretary of the Company (the
"Amended and Restated Certificate of Incorporation");
B-2
(viii) the Amended and Restated By-laws of the Company, as in
effect on the date hereof as certified by the Secretary of the Company
(the "Amended and Restated By-Laws," and together with the documents
referred to in (v)-(vii) collectively referred to as the "Governing
Documents");
(ix) copies certified by the Secretary of the Company of
certain resolutions adopted by each of the Board of Directors and the
stockholders of the Company;
(x) Officers' certificates from certain officers of Xxxxxxxx
Xxxxxxxxx & Xxxx XX, LLC, the General Partner of Xxxxxxxx Xxxxxxxxx &
Xxxx Capital Partners, L.P., a Delaware limited partnership, and FFL
Executive Partners, LP, a Delaware limited partnership (collectively,
the FFL Funds");
(xi) the Consent, Amendment and Waiver, dated as of December
2003, by and among the Company and the stockholder parties thereto and
the Second Consent and Amendment dated as of December 9, 2003 by and
among the Company and the stockholder parties thereto;
(xii) the certificates of public officials attached hereto as
Exhibit 1; and
(xii) the certificate of the Company, attached hereto as Exhibit
2.
We have examined the documents listed in the preceding paragraph and
such other corporate and public records and agreements, instruments,
certificates and other documents as we have deemed necessary or
appropriate for purposes of this opinion. In all such examinations, we
have assumed the genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the authenticity
and completeness of all original documents reviewed by us in original
or copy form and the legal capacity and competence of each individual
executing any document.
As to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other
state of mind), we have relied entirely upon: (i) the representations
of the Company set forth in Sections 1(d), (j), (k), (l), (o), (p),
(v) and (w) of the Underwriting Agreement, and (ii) certificates
contemporaneously delivered to us by officers of the Company, and we
have assumed, without independent inquiry, the accuracy of those
representations, certificates and other documents referred to in
clauses (i) and (ii) above.
B-3
As to any opinion below relating to the existence, qualification or
standing in any jurisdiction of the Company, Tempur World Holdings,
Inc., a Delaware corporation and Tempur World, Inc., a Delaware
corporation (collectively, the "Delaware Subsidiaries") and the FFL
Funds, our opinion relies entirely upon and is limited by those
certificates of public officials attached hereto as Exhibit 1.
When an opinion or statement set forth below is given to the best of
our knowledge, or to our knowledge, or with reference to matters of
which we are aware or which are known to us, or with another similar
qualification, the relevant knowledge or awareness is limited to the
actual knowledge or awareness of the individual lawyers in the firm
who have participated directly in the specific transactions to which
this opinion relates after consultation with such other lawyers in our
firm as such lawyers deemed appropriate.
For purposes of our opinion set forth in paragraphs 5 and 18 below
with respect to the issued and outstanding capital stock of the
Company, we have relied upon our review of the stock records and
minutes of the meetings and actions of the Board of Directors and
stockholders of the Company, and we have further relied on the
presumption of regularity and continuity to the extent necessary to
enable us to render such opinions.
As used in this opinion, the "UCC" means the Uniform Commercial Code
as adopted and in effect in the State of New York, or another
relevant, specified jurisdiction, as the case may be, and the "New
York UCC" means the UCC of the State of New York.
Subject to the limitations set forth below, we have made such
examination of law as we have deemed necessary for the purposes of
expressing the opinions set forth in this letter. Such opinions are
limited solely to the laws of the Commonwealth of Massachusetts as
applied by courts located in Massachusetts, the laws of the State of
New York as applied by courts located in New York ("New York Law"),
the General Corporation Law of the State of Delaware as applied by
courts located in Delaware (the "DGCL"), the Delaware Limited
Liability Company Act as applied by courts located in Delaware, the
Delaware Revised Uniform Limited Partnership Act as applied by courts
located in Delaware, and the federal laws of the United States of
America (except for tax, antitrust, Blue Sky and securities laws, as
to which we express no opinion except as expressly set forth in
paragraph 12 below with respect to Federal income tax laws and in
paragraphs 7, 8, 10, 11 and 13 with respect to Federal securities laws
("Federal Law")), in each case to the extent that the same may apply
to or govern such transactions. No opinion is given herein with
respect to
B-4
the choice of law or the internal substantive rules of law that any
tribunal may apply to the transactions referred to herein or as to the
applicability of, compliance with, or the effect of, the securities or
"Blue Sky" laws of any state.
Our opinion in paragraphs 17 and 19 below is subject to the following
general qualifications:
(a) We have assumed without any independent investigation (i)
that the Designated Selling Stockholders have received the agreed
to and stated consideration for the incurrence of the obligations
applicable to them under the terms of the Custody Agreement, (ii)
that the Custody Agreement is a valid and binding obligation of
each party thereto other than the Company and the Designated
Selling Stockholders and (iii) that the Custody Agreement is a
valid and binding obligation of the Company and the Designated
Selling Stockholders to the extent that laws other than New York
Law are relevant thereto.
(b) The enforceability of any obligation of, or transfer of any
property by, the Designated Selling Stockholders may be subject
to, affected by or limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, marshaling or
other laws, rules of law or regulations affecting the enforcement
generally of creditors' rights and remedies (including such as
may deny giving effect to waivers of debtors' rights) and we
express no opinion as to the status under any fraudulent
conveyance laws or fraudulent transfer laws of any of the
obligations of, or transfer of any property by, the Designated
Selling Stockholders or any other person, whether under the
Custody Agreement or Underwriting Agreement or otherwise.
(c) No opinion is given herein as to the availability of any
specific or equitable relief of any kind.
(d) The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and to general
principles of equity, including, without limitation, concepts of
materiality and reasonableness (whether such enforcement is
considered in a proceeding at law or in equity).
(e) No opinion is given herein as to the enforceability of any
particular provision of the Custody Agreement relating to or
constituting (i) waivers of rights to object to jurisdiction or
venue, consents to jurisdiction or venue, or waivers of rights to
(or
B-5
methods of) service of process, (ii) waivers or variations of
provisions which are not capable of waiver or variation under
Sections 1-102 or other applicable provisions of the applicable
UCC, (iii) provisions in the Custody Agreement rendered
ineffective or unenforceable by Part 4 of Article 9 of the
applicable UCC or (iv) exculpation clauses, clauses relating to
releases or waivers of unmatured claims or rights, or any
indemnification or contribution obligations or obligations in
lieu of indemnification, to the extent that such obligations may
be considered by a court having jurisdiction thereover to violate
any laws or matters of public policy.
(f) We note that, under the laws of the State of New York, the
remedies available in the State of New York for the enforcement
of the Custody Agreement could be affected by any failure of any
party seeking enforcement not organized in New York to become
authorized, under Article 13 of the New York Business Corporation
Law, to do business in the New York.
(g) Except as provided in paragraph 18 below, we have made no
examination of, and no opinion is given herein as to, any Selling
Stockholder's title to or other ownership rights in, the accuracy
or sufficiency of the descriptions of, or the existence of any
liens, charges, encumbrances, restrictions or limitations on, or
adverse claims against, any of the property or assets of any
Selling Stockholder. Except as provided in paragraph 18 below, we
have assumed without any independent investigation that each
Selling Stockholder has rights in the Stock which purports to
transfer under the Underwriting Agreement.
(h) We call to your attention that under Section 8-303 of the
applicable UCC, a "protected purchaser" (as defined in such
Section 8-303) of a security, or of an interest therein, may
acquire its interest in such security free of any adverse claim
thereto; we point out that, under Section 8-110(c) of the
applicable UCC, the local law of the jurisdiction in which the
security certificates evidencing the Stock are delivered to the
securities intermediary governs whether an adverse claim with
respect thereto may be asserted against the securities
intermediary; and we point out that under Section 8-110(b)(4) of
the applicable UCC, the law of the securities intermediary's
jurisdiction governs whether an adverse claim with respect to the
Stock may be asserted against a person acquiring a securities
entitlement from the securities intermediary with respect
thereto;
B-6
(i) We assume that the "securities intermediary's jurisdiction"
(as determined pursuant to Section 8-110(e) of the applicable
UCC) is within the State of New York;
(j) We assume that delivery (within the meaning given such term
in the applicable UCC) of stock certificates representing the
Stock, indorsed to Depositary Trust Company ("DTC") or in blank
by an effective indorsement, will be made to DTC (or its nominee)
within the State of New York;
(k) We assume that the Stock constitute "certificated
securities" (within the meaning given such terms in the
applicable UCC); and
(l) We assume that none of the restrictions referred to in any
legend set forth on the stock certificates representing the Stock
constitutes an adverse claim nor will a violation of any of such
restrictions give rise to an adverse claim.
Our opinion in paragraph 12 below is limited solely to the federal
income tax laws of the United States, does not cover matters arising
under the laws of any other jurisdiction, and is based on our analysis
of the current provisions of the Internal Revenue Code of 1986, as
amended, existing case law, existing Treasury Regulations, and
existing published revenue rulings and procedures of the Internal
Revenue Service that are in effect as of the date hereof, all of which
are subject to change and new interpretation, both prospectively and
retroactively. Any such changes or new interpretations, as well as
changes in the facts as they have been represented to us, could affect
our analysis and conclusions.
We understand that all of the foregoing assumptions, limitations and
qualifications are acceptable to you.
Based upon the foregoing, we are of the opinion that:
(1) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware, and has the
corporate power and authority to own its property and to conduct the
business as described in the Prospectus, and to execute, deliver and
perform the Underwriting Agreement.
(2) Each of the Delaware Subsidiaries is validly existing and in
good standing under the laws of its jurisdiction of organization, and
has the corporate or other power and authority to own its property and
to conduct its business as described in the Prospectus.
B-7
(3) The Company has the requisite corporate power and authority
to execute, deliver and perform the Underwriting Agreement.
(4) The Underwriting Agreement has been duly authorized,
executed and delivered by the Company.
(5) Prior to the effectiveness of the Amended and Restated
Certificate of Incorporation, the authorized capital stock of the
Company consists of (a) 25,000 shares of Class A common stock, par
value $ 0.01 per share, (b) 300,000 shares of Class B-1 voting common
stock, par value $ 0.01 per share, (c) 25,000 shares of Class B-2
non-voting common stock, par value $ 0.01 per share, and (d) 250,000
shares of preferred stock, par value $ 0.01 per share, of which
180,000 shares are further designated as Series A convertible
preferred stock. Prior to the effectiveness of the Amended and
Restated Certificate of Incorporation, as of the date hereof, there
are (a) 14,006.00 shares of Class A common stock, (b) 4,403.14 shares
of Class B-1 voting common stock, (c) no shares of Class B-2
non-voting common stock, and (d) 146,463.65 shares of Series A
convertible preferred stock which are issued and outstanding of
record. All of such outstanding shares of the Company capital stock
are duly authorized, validly issued, fully paid and nonassessable.
(6) Upon the effectiveness of the Amended and Restated
Certificate of Incorporation, the authorized capital stock of the
Company will consist of 300,000,000 shares of Common Stock and
10,000,000 shares of Preferred Stock, par value $.01 per share ("New
Preferred Stock"). Upon the effectiveness of the Amended and Restated
Certificate of Incorporation, there will be ______ shares of Common
Stock outstanding of record and no shares of Preferred Stock issued
and outstanding. All of such outstanding shares of Common Stock are
duly authorized and upon the effectiveness of the Amended and Restated
Certificate of Incorporation will have been validly issued and will be
fully paid and non-assessable. The shares of Common Stock to be issued
and sold by the Company pursuant to the Underwriting Agreement have
been duly authorized, and when delivered to the Underwriters and paid
for pursuant to the Underwriting Agreement will have been validly
issued and will be fully paid and non-assessable.
(7) No consent, approval, authorization or order of, or filing
with, any governmental agency, public body or any court of the State
of New York or of the United States of America is required under New
York Law or Federal Law for the execution, delivery or performance of
the Underwriting Agreement by the Company, except (A) such as may be
required under state securities laws, (B) for the filing of the
Registration Statement with the Commission and the receipt of the
order of the Commission declaring such Registration Statement
effective (as noted in
B-8
paragraph 13 below, we have been informed orally by the Commission
that it has declared the Registration Statement effective, or (C) any
consent, approval, authorization, filing, notification or other action
that has been obtained or made or which, if not obtained or made,
would not individually or in the aggregate be reasonably likely to
have a Material Adverse Effect.
(8) To our knowledge and except as disclosed in the Prospectus,
but without having investigated any governmental records or court
dockets, and without having made any other independent investigation,
there is no action, suit or proceeding pending or overtly threatened
in writing against the Company before any court or arbitrator or any
governmental body, agency or official, which if determined adversely
to the Company, would be reasonably likely to have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under the Underwriting Agreement.
(9) The execution, delivery and performance by the Company of
the Underwriting Agreement and compliance by the Company with the
provisions thereof and the issuance and sale of the Stock pursuant to
and in accordance with the provisions of the Underwriting Agreement
will not (i) to our knowledge result in a breach or default (or give
rise to any right of termination, cancellation or acceleration) under
any material agreement or instrument to which the Company is a party,
and (ii) will not violate any of the provisions of the Governing
Documents of the Company or any Federal Law or New York Law, or, to
our knowledge, any judgment, order, writ, injunction or decree of any
court or other tribunal located in the State of New York of which we
are aware and that is applicable to the Company.
(10) The Company is not and, immediately after giving effect to
the offering and sale of the Stock and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
(11) The Registration Statement, as of its effective date, and
the Prospectus, as of its date (other than the financial statements,
the notes thereto and the related schedules and other financial and
accounting information included therein or omitted therefrom, as to
which we express no opinion) complied as to form in all material
respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(12) The statements in the Prospectus under the caption "Material
U.S. Federal Income Tax Considerations for Non-U.S. Holders
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of our Common Stock", insofar as such statements constitute a summary
of the United States federal income tax laws referred to therein, are
accurate summaries in all material respects of the United States
federal income tax laws referred to therein.
(13) We have been informed that the Registration Statement was
declared effective under the Securities Act as of 4:00 p.m. on
December 17, 2003, the Prospectus was filed with the Commission
pursuant to subparagraph (1) of Rule 424(b) under the Securities Act,
on December 18, 2003 and to our knowledge no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(14) The statements in the Prospectus under the captions
"Description of Capital Stock," "Business Legal Proceedings," "Certain
Relationships and Related Party Transactions, "Shares Eligible for
Future Sale" and "Underwriting," insofar as such statements constitute
summaries of the legal matters or documents referred to therein, are
accurate descriptions or summaries in all material respects.
(15) The Underwriting Agreement has been duly authorized,
executed and delivered by or on behalf of the FFL Funds.
(16) The use of facsimile signatures affixed in the name and on
behalf of EquiServe Trust Company, N.A. as transfer agent and
registrar, as applicable, on the certificates evidencing the shares of
Common Stock to be issued and sold by the Company pursuant to the
Underwriting Agreement and to be sold by the Selling Stockholders is
permitted under the DGCL. Such use of facsimile signatures is not
inconsistent with any provision of the Amended and Restated
Certificate of Incorporation or the Amended and Restated By-Laws.
(17) The Custody Agreement constitutes the valid and legally
binding obligation of the Designated Selling Stockholders enforceable
against each Designated Selling Stockholder in accordance with its
terms.
(18) Each Selling Stockholder is the owner of record of the
securities of the Company listed on Annex A.
(19) Our opinions in this paragraph 19 are limited to Article 8
of the New York UCC. Upon (i) receipt, in the State of New York, by
DTC or a nominee (other than a securities intermediary) acting on its
behalf, of each of the stock certificates representing the Stock,
indorsed in blank by an effective indorsement of the Designated
Selling Stockholder or together with properly completed and effective
stock powers endorsing the Stock and duly executed by the Designated
Selling Stockholder in blank, (ii) the
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crediting by DTC of such Stock to "securities accounts" (as that term
is defined in Section 8-501(a) of the New York UCC) of each of the
Underwriters by making appropriate book entries with respect to the
account of each Underwriter, and (iii) payment for the Stock by each
of the Underwriters pursuant to the Underwriting Agreement, and
assuming that (x) neither DTC nor any of the Underwriters, at any
relevant time, has notice (within the meaning of Section 8-105 of the
New York UCC) of any "adverse claim" (within the meaning of Section
8-102(a)(1) of the New York UCC) to the Stock and (y) DTC is a
"clearing corporation" (as that term is defined in Section 8-102 of
the New York UCC), then (A) DTC will be a "protected purchaser" of
such Stock (as that term is defined in Section 8-303 of the New York
UCC), (B) each Underwriter will acquire a valid "security entitlement"
(within the meaning of subsection (b) of Section 8-501 of the New York
UCC) in respect of such Stock credited to its securities account,
except as otherwise provided in (and subject to the provisions of)
subsections (d) and (e) of Section 8-501 of the New York UCC, and (C)
no action based on an adverse claim (within the meaning of Section
8-102(a)(1) of the New York UCC) to a share of Stock credited to its
account may be asserted against such Underwriter with respect to such
securities entitlement.
----------
In addition, we have participated in conferences with officers and
representatives of the Company and with representatives of its
independent accountants at which conferences the contents of the
Registration Statement and the Prospectus and any amendment and
supplement thereto and related matters were discussed and, although we
are not passing upon and do not assume any responsibility for, nor
have we independently verified, the accuracy, completeness or fairness
of the Registration Statement, the Prospectus and any amendment or
supplement thereto (except as expressly provided above in paragraphs
11, 12 and 14), on the basis of the foregoing we hereby confirm that
no facts have come to our attention that have caused us to believe
that the Registration Statement, at the time of its effective date,
including the information, if any, deemed pursuant to Rule 430A to be
part of the Registration Statement at the time of effectiveness
(except with respect to the financial statements, the notes thereto
and the related schedules and other financial and accounting
information included therein or omitted therefrom, as to which we
express no belief), contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus (except with respect to the financial statements, the notes
thereto and the related schedules and other financial and accounting
information included therein or omitted therefrom, as to which we
express no belief) as of its date and as of the Closing Date contains
any untrue
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statement of a material fact 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.
This letter speaks as of the date hereof and we assume no obligation
to update this letter or inform you in the future of any facts or
circumstances that occur after the date hereof and that may affect our
opinion in any way.
This letter has been delivered solely for your use in connection with
the transactions contemplated by the Underwriting Agreement and may
not be referred to or used for any other purpose or relied upon by any
other person other than the Underwriters, except with our prior
consent, except that EquiServe, Inc. and EquiServe Trust Company,
N.A., in their capacity as transfer agent and registrar may rely on
this opinion as if they were an addressee hereof..
Very truly yours,
XXXXXXX XxXXXXXXX LLP
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ANNEX A
-------
List of Individual Selling Shareholders
Name of Shareholder Record Ownership
------------------- ----------------
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxxxxxx
Xxxxx Xxxxx and Xxxx Xxxxxxxxx, Tenants in Common
Xxxxx Xxxxxx
Xxxx Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxxx X. and Xxxx X. Xxxxxxx, JTWROS
Xxxxxx X. and Xxxxxx X. Xxxxxxxx, Tenants in Common
H. Xxxxxx Xxxxxx
Xxxxx X. Xxxx
Xxxx X. Xxxxxxxx
Xxxx Xxxxxx
Xxxxxxxxx Xxxxxxxxx
Xxxx Xxxxx
Xxxx Xxxxxx
Xxxx Xxxxxx Siljedahl
Xxxx Xxx
Xxxxxxx Xxxxxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx Xxxxx
Xxxx Peak
Xxxx Xxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
Xxx Dam Xxxxxxxxx
Xxxx Xxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxxxxxxx
Xxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxx Xxxxx
Beat Xxxx
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Exhibit B-2
Form of Local Counsel Opinion
1. [Subsidiary] is validly existing and in good standing under the laws of its
jurisdiction of organization[, and has the corporate or other power and
authority to own its property and to conduct its business as described in
the Prospectus.]/1/
2. All outstanding shares of [Subsidiary's] stock are duly authorized, validly
issued, fully paid and nonassessable, and are of record by ___________ and
are beneficially owned, directly or indirectly, by the Company./2/
3. To our knowledge and except as disclosed in the Prospectus, but without
having investigated any governmental records or court dockets, and without
having made any other independent investigation, there is no action, suit
or proceeding pending or overtly threatened in writing against [Subsidiary]
before any court or arbitrator or any governmental body, agency or official
located in the State of New York, which if determined adversely to
[Subsidiary], would be reasonably likely to have a Material Adverse
Effect./3/
----------
/1/ Opinion to be delivered with respect to Virginia and Kentucky subsidiaries
only.
/2/ Opinion to be delivered with respect to Virginia and Kentucky subsidiaries
only.
/3/ Opinion to be delivered with respect to Virginia and Kentucky subsidiaries
only.
B-14
Exhibit C
Form of Selling Stockholder Opinion
1. The Underwriting Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder;
2. The Power-of-Attorney and a Custody Agreement have been duly authorized,
executed and delivered by the Selling Stockholder and constitute valid and
binding obligations of the Selling Stockholder, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
3. The Selling Stockholder is the record owner of the shares of Stock to be
sold by such Selling Stockholder under the Underwriting Agreement; and
4. Assuming that each Underwriter acquires the shares of Stock it has
purchased from any of the Selling Stockholders without notice of any
adverse claim (within the meaning of Section 8-105 of the Uniform
Commercial Code), each Underwriter that has purchased such Stock delivered
on the date hereof to such Underwriter by making payment therefor as
provided in the Underwriting Agreement will have acquired control (within
the meaning of Section 8-106 of the Uniform Commercial Code) of such Stock
free of any adverse claim (within the meaning of Section 8-102 of the
Uniform Commercial Code).
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