Exhibit 1.2
Harcourt General, Inc.
1,372,213 Shares of Common Stock
Purchase Agreement
New York, New York
April 20, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Harcourt General, Inc. (the "Company") organized under the laws of
Delaware, proposes to sell to Xxxxxxx Xxxxx Barney Inc., acting as agent for
and on behalf of Citibank, N.A. (the "Purchaser" and collectively with
Xxxxxxx Xxxxx Xxxxxx Inc. the "Citibank Parties"), 1,372,213 shares (the
"Purchased Securities") of common stock of the Company (the "Common Stock").
In addition, the Company may deliver to the Purchaser additional shares of
Common Stock (the "Additional Securities") in settlement of certain of its
obligations under the Equity Swap Agreement dated as of April 20, 2000,
between the Company and the Purchaser (the "Master Confirmation"). The
Purchased Securities, and the Additional Securities are hereinafter referred
to as the "Securities". Any reference herein to any Resale Registration
Statement, a Preliminary Prospectus, or any Resale Prospectus (each as
defined herein) shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") on or before the Effective Date of such Resale Registration Statement
or the issue date of such Preliminary Prospectus or Resale Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to any Resale Registration Statement, Preliminary
Prospectus or Resale Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the applicable Effective
Date or issue date, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 15 hereof.
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with the Citibank Parties as set forth
below in this Section 1.
(a) The Company has prepared and filed with the Commission all
reports that would be incorporated by reference into a Resale
Registration Statement pursuant to Item 12 of Form S-3 as of the date
hereof (the "Exchange Act Reports"). Each such Exchange Act Report,
when filed with the Commission, complied in all material respects with
the applicable requirements of the Exchange Act and the rules and
regulations thereunder and did not contain any 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, not misleading. Since January 31, 2000, there has
been no material adverse change in the financial condition, earnings,
business or properties of the Company and its subsidiaries considered as
one enterprise ("Material Adverse Effect") whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Exchange Act Reports.
(b) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction in
which it is organized, with full corporate power and authority to
conduct its business as described in the Exchange Act Reports, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify or be in good
standing would not reasonably be expected to have a Material Adverse
Effect.
(c) The authorized equity capitalization of the Company is as set
forth in the Exchange Act Reports; the capital stock of the Company
conforms in all material respects to the description thereof contained
in the Exchange Act Reports; the outstanding shares of Common Stock have
been validly authorized and issued and are fully paid and nonassessable;
the certificates for the Securities are (or, in the case of the
Additional Securities, will be) in valid and sufficient form; and the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities;
and, except as set forth on Schedule I hereto or in the Exchange Act
Reports, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.
(d) There is no pending or, to the knowledge of the Company,
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or property of a character required
to be disclosed in the Exchange Act Reports which is not adequately
disclosed therein, and there is no franchise, contract or other document
of a character required to be described therein, or to be filed as an
exhibit thereto, which is not described or filed as required.
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(e) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action of the Company, and this
Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(f) The execution and delivery of the Master Confirmation has been
duly authorized by all necessary action of the Company, the Master
Confirmation has been duly executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing and, with respect to
indemnification, to public policy considerations.
(g) The Company is not and, after giving effect to the sale of the
Purchased Securities and the application of the proceeds thereof, will
not be an "investment company" as defined in the U.S. Investment Company
Act of 1940, as amended.
(h) Other than filing of the Resale Registration Statement and
compliance with the securities or "blue sky" laws of the various states,
no consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the
transactions contemplated herein and in the Master Confirmation.
(i) None of the issue and sale of the Purchased Securities, the
issue of any Additional Securities, the consummation of any other of the
transactions contemplated herein, in the Master Confirmation or the
fulfillment of the terms hereof or thereof will conflict with, result in
a breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
subsidiaries pursuant to, (A) the charter or by-laws of the Company or
any of its subsidiaries; (B) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or its subsidiaries is a party or by which it is bound or to
which its or their property is subject; or (C) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or its
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subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or its subsidiaries or any of its or their properties,
other than (with respect to clauses (B) and (C)) any conflicts,
breaches, violations or liens which would not reasonably be expected to
have a Material Adverse Effect.
(j) Any certificate signed by any officer of the Company and
delivered to the Citibank Parties or counsel for the Citibank Parties
shall be deemed a representation and warranty by the Company as to
matters covered thereby.
2. Representations and Warranties of the Purchaser.
The Purchaser represents and warrants to, and agrees with, the
Company as set forth below in this Section 2.
(a) The Purchaser (i) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits
and risks of an investment in the Securities and is able to bear the
economic risk of investment in the Securities; (ii) it is an "accredited
investor" as that term is defined in Regulation D promulgated under the
Securities Act, and that it is a sophisticated investor, capable of
evaluating the merits and risks of investing in the Company; and (iii)
is purchasing the Purchased Securities for its own account (or the
account of an affiliate) with no present intention of distributing any
of the Securities or any arrangement or understanding with any other
persons regarding the distribution of the Securities, it being
understood that the foregoing representation does not limit the right of
the Purchaser to resell the Securities pursuant to an effective Resale
Registration Statement or as otherwise contemplated in the Master
Confirmation.
(b) The Purchaser shall, in connection with any transfer of
Securities, provide to the transfer agent for the Common Stock prompt
notice of any Securities sold pursuant to any Resale Registration
Statement or otherwise.
(c) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action by the Purchaser, and this
Agreement has been duly executed and delivered by the Purchaser and
constitutes the valid and legally binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
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(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(d) No consent, approval, authorization, filing with or order of
any court or governmental agency or body is required in connection with
the transactions contemplated herein and in the Master Confirmation.
(e) During the negotiation of the transactions contemplated
herein, Purchaser and its representatives have been afforded full and
free access to the Company's Exchange Act Reports, have been afforded an
opportunity to ask questions of the Company's officers concerning the
Company's business, operations, financial condition, assets, liabilities
and other relevant matters, and have been given all such information as
has been requested, in order to evaluate the merits and risks of the
prospective investment contemplated herein.
3. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Company the Purchased Securities at a purchase price per share equal
to $36.4375 per share.
4. Delivery and Payment. Delivery of and payment for the
Purchased Securities shall be made at 10:00 AM, New York City time, on April
25, 2000 (such date and time of delivery and payment for the Purchased
Securities being herein called the "Closing Date"). Delivery of the
Purchased Securities shall be made to Xxxxxxx Xxxxx Barney Inc., as agent for
and on behalf of the Purchaser, against payment by the Purchaser of the
purchase price therefor by wire transfer in immediately available funds.
Certificates for the Purchased Securities shall be registered in such names
and in such denominations as the Purchaser may request.
5. Certain Agreements. The Company agrees with the Citibank
Parties that:
(a) The Company shall promptly advise the Citibank Parties (i) of
any request by the Commission or its staff for any amendment of any
Exchange Act Report of the Company or for any additional information;
and (ii) of the institution or threatening of any enforcement
proceeding, including any stop order, by the Commission against the
Company and relating to any Exchange Act Report or other document filed
by the Company with the Commission, including any registration statement
filed under the Act.
(b) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
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stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any Securities.
(c) The Company shall notify in writing the Citibank Parties as
promptly as practicable at any time that the Company determines that, as
a result of a change in the capital stock of the Company, the Citibank
Parties hold more than 4.9% of the common stock of the Company.
(d) The Company shall, for so long as any Securities are owned by
the Citibank Parties, (i) upon reasonable prior written notice, permit
representatives of the Citibank Parties access to the books and records
and to the principal executive and operating officers of the Company
during normal business hours at such times as may be mutually agreed
between the Citibank Parties and the Company, as the case may be, at any
time during which the Citibank Parties may have an intention to resell
any of the Securities; and (ii) furnish to the Citibank Parties such
certificates of officers of the Company relating to the business,
operations and affairs of the Company and its respective subsidiaries,
any Resale Registration Statement or Resale Prospectus and any
amendments or supplements thereto, this Agreement, the Master
Confirmation and the performance by the Company of its respective
obligations hereunder and thereunder as the Citibank Parties may from
time to time reasonably request.
(e) For so long as the Master Confirmation shall remain in effect,
(i) not later than 90 days following the end of the fiscal year of the
Company or 45 days following the end of each fiscal quarter of the
Company, the Company shall provide the Citibank Parties (A) a copy of
the applicable Annual Report on Form 10-K or Quarterly Report on Form
10-Q of the Company then required to be filed by the Company with the
Commission; (B) a certificate of the Chief Financial Officer, General
Counsel or other authorized officer of the Company to the effect that
such Annual Report on Form 10-K or Quarterly Report on Form 10-Q
complied in all material respects, as of the date of the filing thereof
with the Commission, with the applicable requirements of the Exchange
Act and the rules and regulations thereunder and did not contain any
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, not misleading; and (ii)
promptly upon the filing thereof the Company shall provide the Citibank
Parties with a copy of each other report filed with the Commission by
the Company.
(f) The Company agrees to pay all reasonable expenses incident to
the performance of its obligations hereunder and under the Master
Confirmation, including (i) the preparation and filing of any Resale
Registration Statement and all amendments thereto; (ii) the cost of
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printing and delivering certificates evidencing the Securities; (iii)
the cost of printing and delivering any Resale Registration Statement,
Preliminary Prospectus and Resale Prospectus in such quantities as the
Citibank Parties may reasonably request; (iv) the fees and expenses of
independent accountants for the Company and the Company's counsel; (v)
the qualification of the Securities for sale under state securities or
blue sky laws; (vi) the listing of the Securities on the New York Stock
Exchange; and (vii) all transfer or other taxes (other than income
taxes) payable in connection with the issuance, sale or transfer of the
Securities, and (viii) the reasonable fees and disbursements of counsel
to Citibank and its affiliates incurred in connection with any sales
(other than in an Underwritten Offering in connection with an Unwind
Period with respect to the full Outstanding Aggregate Amount, as such
terms are defined in the Master Confirmation).
6. Conditions to the Obligations of the Purchaser. The
obligations of the Purchaser to purchase the Purchased Securities shall be
subject to the accuracy in all material respects of the representations and
warranties on the part of the Company contained herein as of the Closing
Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance in all
material respects by the Company of its obligations hereunder and to the
following additional conditions:
(a) No enforcement proceeding, including any stop order, by the
Commission against the Company and relating to any Exchange Act Report
or other document filed by the Company with the Commission, including
any registration statement filed under the Act, shall have been
instituted or, to the knowledge of the Company, threatened.
(b) The Company shall have requested and caused Xxxx X. Xxxxxx and
Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for the Company, to furnish to the
Citibank Parties the opinions, dated the Closing Date and addressed to
the Citibank Parties, substantially in the form agreed upon by Citibank
and the Company.
(c) The Company shall have furnished to the Citibank Parties, a
certificate of the Company signed by its Chief Financial Officer,
General Counsel or other authorized officer or manager, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date, and the Company, has complied in all material respects with
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all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Exchange Act Reports, there has been no Material
Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated
in the Exchange Act Reports.
(d) The Company and the Purchaser shall have entered into the
Master Confirmation.
(e) Prior to the Closing Date, the Company shall have furnished
to the Citibank Parties such further information, certificates and
documents as the Citibank Parties may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Citibank Parties and counsel for
the Citibank Parties, this Agreement and all obligations of the Citibank
Parties hereunder may be canceled at the Closing Date by Xxxxxxx Xxxxx Barney
Inc., as agent for and on behalf of the Purchaser. Notice of such
cancellation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxxx Xxxxx Xxxxxx, Inc., 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, XX on the Closing Date.
7. Registration of the Securities. (a) The Company agrees:
(i) as soon as practicable after the Closing Date, but in no
event later than 30 days after the Closing Date, to prepare and
file with the Commission a Resale Registration Statement covering
the resale by the Citibank Parties, from time to time of a number
of shares of Common Stock at least equal to the number of
Purchased Securities and 588,091 Additional Securities in any
manner of distribution specified in the Master Confirmation (the
"Initial Resale Registration Statement"), but in any event
permitting distribution by underwritten public offering, direct
sales from time to time and block trades, and use its best efforts
to obtain effectiveness of the Initial Resale Registration
Statement as promptly as practicable following such filing, but in
no event later than 120 days after the Closing Date. If the
aggregate number of Purchased Securities plus any Additional
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Securities exceeds the number of shares of Common Stock covered by
the Initial Resale Registration Statement, then the Company shall
promptly prepare and file with the Commission such additional
Resale Registration Statement or Statements as shall be necessary
to cover the resale by the Citibank Parties of such Additional
Securities in the same manner as contemplated by the Initial Resale
Registration Statement, (ii) to use its best efforts to maintain
each Resale Registration Statement continuously effective until the
later to occur of (A) the termination of the Master Confirmation;
and (B) the final disposition by the Citibank Parties of all
Purchased Securities, Additional Securities and Securities received
by it under the Master Confirmation; provided, however, that the
Company shall be entitled to suspend for a period of up to 5
Business Days during an Unwind Period (as defined in the Master
Confirmation) the rights of the Citibank Parties to make sales
pursuant to any Resale Registration Statement otherwise required to
be kept effective by it hereunder, if the Board of Directors of the
Company determines in good faith that there is a material
undisclosed development in the business or affairs of the Company
(including any pending or proposed financing, recapitalization,
acquisition or disposition), the disclosure of which at such time
could be adverse to the Company's interests. The Company shall be
deemed not to have used its best efforts to maintain a Resale
Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in the Citibank
Parties' inability to effect public sales of the Securities
thereunder, unless (X) such action is required by applicable law;
or (Y) such action is taken by the Company in good faith and for
valid business reasons (not including avoidance of its respective
obligations under this Agreement), including any pending or
proposed financing, recapitalization, acquisition or disposition,
so long as the Company promptly thereafter prepares and files with
the Commission a post-effective amendment to such Resale
Registration Statement or an amendment or supplement to the related
Resale Prospectus and such other documents so that such Resale
Prospectus shall not include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. Nothing in this Section 7 shall preclude the
Citibank Parties from exercising its right to declare an Early
Termination Date under the Master Confirmation;
(ii) to cause (A) any Resale Registration Statement and any
amendment thereto and any Resale Prospectus forming a part thereof
and any amendment or supplement thereto to comply in all material
respects with the Act and the Exchange Act and the respective rules
and regulations thereunder; (B) any Resale Registration Statement
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and any amendment thereto not, when it becomes effective, to
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; and (C) any Resale
Prospectus forming a part of any Resale Registration Statement and
any amendment or supplement thereto not to include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(iii) to advise the Citibank Parties in writing (A) when a
Resale Registration Statement or any post-effective amendment
thereto shall have been filed with the Commission and when such
Resale Registration Statement or any post-effective amendment
thereto shall have become effective; (B) of any request by the
Commission for any amendment or supplement to any Resale
Registration Statement or related Resale Prospectus or for
additional information; (C) of the issuance by the Commission of
any stop order suspending the effectiveness of any Resale
Registration Statement or the initiation of any proceedings for
that purpose; (D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction designated by the Citibank
Parties in accordance with clause (ix) below or the initiation or
threatening of any proceeding for such purpose; and (E) the
happening of any event that requires the making of any changes in
any Resale Registration Statement or related Resale Prospectus so
that, as of such date, the statements therein are not misleading
and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of
any such Resale Prospectus, in the light of the circumstances under
which they were made) not misleading, which notice shall be
accompanied by an instruction to suspend the use of such Resale
Prospectus until the requisite changes shall have been made;
(iv) to make generally available to its security holders as
soon as practicable after the Effective Date of each Resale
Registration Statement and after the date of each underwriting or
similar agreement relating to a disposition of any Securities,
including any confirmation relating to a block trade, an earning
statement satisfying the provisions of Section 11(a) of the Act and
Rule 158 thereunder;
(v) to (A) make reasonably available for inspection during
normal business hours by any underwriter or executing dealer
participating in any disposition of Securities pursuant to any
Resale Registration Statement (whether through an underwritten
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offering, an "at the market offering", a block transaction or
otherwise) and any attorney, accountant or other agent retained by
such underwriter or executing dealer all relevant financial and
other records, pertinent corporate documents and properties of the
Company and its respective subsidiaries; (B) cause the officers,
directors and employees of the Company and its respective
subsidiaries to supply all relevant information reasonably
requested by any such underwriter, executing dealer, attorney,
accountant or agent in connection with any such Resale Registration
Statement as is customary for due diligence examinations; (C) make
such representations and warranties to such underwriter or
executing dealer in form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten offerings;
(D) request and cause counsel to the Company to furnish to the
Citibank Parties opinions and updates thereof (which counsel and
opinions (in form, substance and scope) shall be reasonably
satisfactory to the Citibank Parties), addressed to the Citibank
Parties and any such underwriter or executing dealer, covering such
matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by the Citibank Parties or such underwriter or executing
dealer; (E) request and cause the independent certified public
accountants of the Company (and, if necessary, of any other
independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be,
including in any Resale Registration Statement) to furnish to the
Citibank Parties "cold comfort" letters and updates thereof
addressed to the Citibank Parties and any such underwriter or
executing dealer, in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection
with primary underwritten offerings; (F) deliver such documents and
certificates as may be reasonably requested by the Citibank Parties
or any such underwriter or executing dealer and to evidence
compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the
Company; and (G) to enter into an agreement in connection with the
resale of the Securities in form and substance reasonably
satisfactory to each of them and containing such terms as are
customary for the applicable disposition of the Common Stock
including provisions for the indemnification of, and contribution
in connection with the liability of any underwriters of the
Securities, and their respective control persons and affiliates.
The foregoing actions set forth in clauses (C), (D), (E), (F) and
(G) shall be performed, unless waived by the Citibank Parties, upon
or at (1) the effectiveness of each Resale Registration Statement
and each post-effective amendment thereto; (2) each closing under
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any underwriting, purchase or similar agreement as and to the
extent required thereunder; and (3) the confirmation of any block
trade or direct resale by the Citibank Parties; and the
commencement of any Unwind Period;
(vi) to cause the transfer agent for the Common Stock to
issue, promptly upon the effectiveness of the Initial Resale
Registration Statement, certificates evidencing the Purchased
Securities bearing no legends evidencing restrictions on the sale
of such Purchased Securities and to cooperate with the Citibank
Parties in issuing to persons purchasing from the Citibank Parties
certificates evidencing the Securities in such names and
denominations as they may request;
(vii) to use its best efforts to prevent the issuance and to
obtain the withdrawal of any order suspending the effectiveness of
each Resale Registration Statement or Resale Prospectus or
suspending the qualification (or exemption from qualification) of
any of the Securities for sale in any jurisdiction designated by
the Citibank Parties in accordance with clause (ix) below;
(viii) to furnish to the Citibank Parties with respect to
the Securities registered under any Resale Registration Statement
such reasonable number of copies of such Resale Registration
Statement and the related Resale Prospectus, including any
supplements and amendments thereto and any documents incorporated
by reference therein;
(ix) to qualify the Securities for sale under the securities
or blue sky laws in such jurisdictions as shall be designated to
the Company in writing by the Citibank Parties; provided, however,
that the Company shall not be required to qualify to do business,
subject itself to taxation or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so
consented;
(x) to file promptly any necessary listing applications or
amendments or supplements to existing listing applications to cause
any shares of Common Stock covered by any Resale Registration
Statement to be listed or admitted to trading, on or prior to the
effectiveness of such Resale Registration Statement, on any
national stock exchange or automated quotation system on which the
Common Stock is then listed or traded and to cause the same to be
so listed not later than the effective date of such Resale
Registration Statement; and
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(xi) not to file any Resale Registration Statement
(including the Initial Resale Registration Statement) or Resale
Prospectus or any amendment or supplement thereto, unless a copy
thereof shall have been first submitted to the Purchaser and the
Purchaser shall not have objected thereto in good faith; provided,
however, that if the Purchaser does not object within three
Business Days of receiving any such material, there shall be deemed
to have been no objections thereto; and provided further that the
foregoing shall not limit the obligations the Company under Section
5(d) hereof.
(b) The Citibank Parties shall notify the Company at least one
Business Day prior to the earlier of the date on which they intend to
commence effecting any resales of Securities under a Resale Registration
Statement or the date of pricing with respect to the public resale or other
disposition of any Shares under a Resale Registration Statement effected
through an underwritten offering or a block trade and, if the Company does
not, within such one-day period, advise the Citibank Parties of the existence
of any facts of the type referred to in subsection 7(a)(iii)(E) above, then
the Company shall be deemed to have jointly and severally represented to each
of the Citibank Parties that no such facts then exist and each of the
Citibank Parties may rely on such representation in making such resales. The
Citibank Parties agree that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 7(a)(iii)(E)
hereof they will forthwith discontinue disposition pursuant to such Resale
Registration Statement or prospectus until their receipt of the copies of the
supplemented or amended prospectus relating to such Resale Registration
Statement or prospectus or until they are advised in writing by the Company
that the use of the applicable prospectus may be resumed. The preceding
sentence shall not limit the obligations of the Company under Section 5(e) or
subsections (a)(ii) and (a)(vii) of this Section 7 or the terms of the Master
Confirmation.
(c) The Citibank Parties agree with the Company that it shall be a
condition to the obligations of the Company to take any action pursuant to
Section 7 with respect to the Securities of the Citibank Parties that such
Citibank Parties shall furnish to the Company such information regarding
themselves, the Securities held by them, and the intended method of
disposition of such Securities as shall be required to effect the
registration of such Citibank Parties' Securities.
8. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company, or its respective officers and of the Citibank Parties set forth
in or made pursuant to this Agreement or the Master Confirmation will remain
in full force and effect, regardless of any investigation made by or on
behalf of the Citibank Parties or the Company or any of the officers,
13
directors or controlling persons of the Company, and will survive the
execution of this Agreement and the Master Confirmation and the delivery of
and payment for the Securities. The indemnity provisions of Paragraph 11 of
the Master Confirmation shall survive the termination or cancellation of this
Agreement, and/or the termination or cancellation of the Master Confirmation.
9. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to either of the Citibank Parties,
will be mailed, delivered or telefaxed to Xxxxxx Xxxxxxxxxxx, Esq., c/o
Citibank at 000 Xxxxxxxxx Xxxxxx , Xxx Xxxx, Xxx Xxxx 00000; or, if sent to
the Company will be mailed, delivered or telefaxed to Xxxx X. Xxxxxx, Esq.
c/o Harcourt General, Inc. at 00 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000.
10. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons of the Company and the
Citibank parties, and, in the case of Section 7 hereof, each person who
purchases any Securities from the Citibank Parties otherwise than pursuant to
an effective Resale Registration Statement or in accordance with Rule 144
under the Act, if available, and no other person will have any right or
obligation hereunder. Any assignee or transferee of rights or obligations of
the Citibank Parties under the Master Confirmation shall be subject to all of
the terms of this Agreement.
11. Amendments. This Agreement may not be amended or modified
except pursuant to an instrument in writing signed by the Company and the
Citibank Parties.
12. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
13. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
14. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
15. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the U.S. Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
14
"Business Day" shall mean any day other than a Saturday, a Sunday
or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the U.S. Securities and Exchange
Commission.
"Effective Date" shall mean each date and time any Resale
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement, as the case may be,
became or become effective.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Initial Resale Registration Statement" shall have the meaning set
forth in Section 7(a) hereof.
"Preliminary Prospectus" shall mean any preliminary prospectus
included in a Resale Registration Statement at the applicable Effective
Date that omits Rule 430A Information.
"Resale Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in a Resale Registration
Statement at the applicable Effective Date.
"Resale Registration Statement" shall mean each registration
statement relating to the resale by the Citibank Parties of the
Securities, including exhibits and financial statements, as amended at
the Effective Date and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective,
shall also mean such registration statement as so amended or such Rule
462(b) Registration Statement, as the case may be. Such term shall
include any Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under
the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
15
Resale Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the resale of Securities covered by the applicable Resale
Registration Statement.
Capitalized terms not defined herein shall have the meanings
provided for such terms in the Master Confirmation.
* * *
16
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the Citibank Parties.
Very truly yours,
Harcourt General, Inc.
By: . . . . . . . . . . . . . . . . . . .
Name: Xxxx X. Xxxx
Title: Senior Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citibank, N.A.
By: Xxxxxxx Xxxxx Barney Inc.
By: . . . . . . . . . . . . . . .
Name:
Title
17
Schedule I
Options Granted in FY00 under the Company's 1997 Incentive Plan
Options
Grant Date Granted *
------------ --------------
12/8/99 1,828,150
12/14/99 470,000
1/18/00 4,000
----------
TOTAL 2,302,150
----------
* All options were granted at an exercise price equal to the fair market
value of the Common Stock on the date of grant.
18
