EXHIBIT 1.1
DEALER MANAGER AGREEMENT
October 15, 1999
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This agreement (the "Agreement") will confirm the understanding
between Metro-Xxxxxxx-Xxxxx Inc., a Delaware corporation, (the "Company"), and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("DLJ") and Banc of America
Securities LLC ("BofA") pursuant to which the Company has retained DLJ and BofA
to act as its exclusive dealer managers, on the terms and subject to the
conditions set forth herein, in connection with the Company's proposed Rights
Offering (as defined below).
The Company proposes to distribute (the "Rights Offering") to holders
of record of its common stock, $.01 par value per share (the "Common Stock"), as
of the close of business on October 15, 1999 (the "Record Date"), at no charge
to such holders, transferable rights (the "Rights") to subscribe for and
purchase, at the election of the holders of the Rights (the "Rights Holders"),
up to an aggregate of 49,721,268 shares of Common Stock (the "Underlying
Shares") at a subscription price of $14.50 per share (the "Subscription Price").
Holders of the Common Stock will receive 0.328 Rights for each share of Common
Stock held as of the Record Date. Each Right consists of a basic subscription
privilege under which the Rights Holders may purchase one share of Common Stock
for each whole Right held. In addition, Rights Holders who exercise their basic
subscription privilege in full will be eligible to subscribe for additional
shares of Common Stock as described in the Prospectus (as defined below). It is
anticipated that the Rights will be exercisable for a period of approximately 20
days (the "Subscription Period"), subject to extension by the Company, and that
through the next to last day in such period, the Rights will be eligible for
trading on the New York Stock Exchange (the "NYSE"). The Rights and the
Underlying Shares are referred to herein as the "Securities."
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-3, including a prospectus, relating to the Securities. The registration
statement, as amended at the
time it became effective, including the information (if any) deemed to be part
of the registration statement at the time of effectiveness pursuant to Rule 430A
under the Act, is hereinafter referred to as the "Registration Statement"; and
the prospectus (including the base prospectus and the prospectus supplement
dated October 15, 1999) in the form first used to confirm sales of Common Stock
underlying Rights is hereinafter referred to as the "Prospectus" (including, in
the case of all references to the Registration Statement or the Prospectus,
documents incorporated therein by reference). If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional Securities (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement. The terms "supplement" and "amendment" or "amend" as
used in this Agreement with respect to the Registration Statement or the
Prospectus shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by reference in the
Prospectus. Capitalized terms used but not otherwise defined herein have the
meanings set forth in the Prospectus.
1. Retention. The Company hereby retains DLJ and BofA as its
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exclusive dealer managers and, subject to the terms and conditions hereof, you
agree to act as the Company's exclusive dealer managers in connection with the
Rights Offering until the close of business on the earlier of December 8, 1999
or the date the Rights Offering has been consummated. The Company hereby
authorizes you to act on its behalf in accordance with this Agreement. You agree
to use your reasonable best efforts, in accordance with your customary
practices, to solicit the exercise of Rights pursuant to the Rights Offering;
notwithstanding the foregoing, we agree that nothing set forth in this Agreement
shall require you to continue to render services hereunder (a) for the period
during which any injunction, restraining order or other adverse judicial or
regulatory ruling, declaration or other order shall remain in effect with
respect to the Rights Offering if in your judgment you believe it inadvisable to
render services pursuant hereto, or (b) if your continuing so to act would, in
your judgment, violate any statute, regulation or other law of the United States
of America or any state thereof or other jurisdiction applicable to the Rights
Offering. In such capacity you shall act severally as an independent contractor,
and shall not be deemed to act as agent of the Company, and the Company shall
not be deemed to act as your agent. Any liability or duty to the Company
pursuant to this Agreement shall be owed severally and not jointly. The Company
shall retain its own legal, tax and accounting advice from appropriate third
party advisors.
2. The Rights Offering.
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(a) The Company agrees to furnish you, at its expense, with
as many copies as you may reasonably request of (i) each of the documents
that is filed with the Commission or any other Federal, state, local or
foreign governmental or regulatory authorities or any court (each an "Other
Agency" and collectively, the "Other Agencies") in connection with the
Rights Offering, including each Registration Statement and final prospectus
filed with the Commission and all documents incorporated therein by
reference, (ii) each offering circular, solicitation statement, disclosure
document, or other explanatory statement, or other report, filing,
document, release or communication mailed, delivered, published, or filed
by or on behalf of the Company in connection with the Rights Offering,
including a copy of the form of the rights certificate, the instructions
for use of rights certificates and the notice of guaranteed delivery for
rights certificates, (iii) each document required to be filed with the
Commission pursuant to the
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provisions of the Act and the Exchange Act, pertaining to either the Rights
Offering or the Company during the term of this Agreement and (iv) each
appendix, attachment, modification, amendment or supplement to any of the
foregoing and all related documents (each of (i), (ii), (iii) and (iv),
together with each document incorporated by reference into any of the
foregoing, the "Rights Offering Material").
(b) The Rights Offering Material has been or will be
prepared and approved by, and is the sole responsibility of, the Company.
At the commencement of the Rights Offering, the Company shall cause to be
delivered in a timely manner to each registered holder of any Common Stock
legally or contractually entitled thereto, to the extent required by the
rules of the NYSE, the Rights Offering Material. Thereafter, to the extent
practicable, the Company shall use its reasonable best efforts to cause
copies of such material to be mailed to each person who makes a request
therefore.
(c) The Company acknowledges and agrees that you may use the
Rights Offering Material as specified herein without assuming any
responsibility for independent investigation or verification on your part,
and the Company represents and warrants to you that you may rely on the
accuracy and adequacy of any information delivered to you by or on behalf
of the Company without assuming any responsibility for independent
verification of such information or without performing or receiving any
appraisal or evaluation of the Company's assets or liabilities, except with
respect to any statements contained in, or any matter omitted from, the
Rights Offering Material in reliance upon and in conformity with
information furnished or confirmed in writing by you to the Company
expressly for use therein, and that such information will be true and
accurate in all material respects and will not omit or misstate material
information regarding the Company, including its business, assets,
liabilities, financial condition, plans and prospects.
(d) The Company agrees that no Rights Offering Material will
be used in connection with the Rights Offering or filed with the Commission
or any Other Agency with respect to the Rights Offering without first
obtaining your prior approval, which approval shall not be unreasonably
withheld or delayed.
(e) In connection with the Rights Offering, if the Company
(i) uses or permits the use of, or files with the Commission or any other
governmental or regulatory authority or body, any Rights Offering Material
that (A) has not been submitted to you on a timely basis for your comments
or (B) has been so submitted and with respect to which you reasonably
object or (ii) shall have breached any of its representations, warranties,
agreements or covenants herein, then you shall each be entitled to withdraw
as a dealer manager in connection with the Rights Offering, without any
liability or penalty to you or any other Indemnified Party (as defined in
Schedule A hereto) for such withdrawal and without loss of any right to
indemnification or contribution provided in this Agreement (including such
Schedule A) or to the payment of all fees and expenses payable hereunder
that have accrued to the date of the withdrawal. If you should withdraw,
the fees accrued and reimbursement for your expenses through the date of
such withdrawal shall be paid to you in cash promptly after such date.
(f) The Company agrees to furnish, or cause to be furnished,
to you cards or lists or copies thereof showing the names and addresses of,
and the number of Rights held by, the
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Rights Holders as of the Record Date, and shall advise you, or cause you to
be advised, on each business day during the continuance of the Rights
Offering as to any transfers known to the Company or of record of the
Rights; you agree to use such information only in connection with the
Rights Offering and not to furnish such information to any other persons
except in connection with the Rights Offering.
(g) The Company shall inform you during each business day
during the Rights Offering (to be followed on a daily basis by written
confirmation) as to the respective amounts of Rights which have been
exercised and as to which the holders thereof have delivered rights
certificates during the interval since its previous daily report to you
pursuant to this provision, and the names and addresses of any holders who
have exercised Rights.
(h) The Company agrees to advise you promptly of the
occurrence of any event which could cause the Company to withdraw, rescind,
or modify the Rights Offering and shall also advise you promptly of any
proposal or requirement to amend or supplement any filing required by the
Exchange Act, or "blue sky" or other state securities laws; the Company
will prepare and, if necessary, file with the Commission, as required by
applicable law or regulation, any and all necessary amendments and
supplements to the Rights Offering Material; prior to and during the
continuance of the Rights Offering, the Company will inform you promptly
after it receives notice or becomes aware of the happening of any event, or
the discovery of any fact, that would require the making of any change in
any Rights Offering Material then being used or would affect the truth or
completeness of any representation or warranty contained in this Agreement
if such representation or warranty were being made immediately after the
happening of such event or the discovery of such fact.
(i) The Company shall arrange for each information agent and
subscription agent named in the Rights Offering Material to cooperate with
you in all respects reasonably requested by you.
You are authorized to communicate directly with the Subscription Agent
(and any other subscription agent or information agent designated or retained by
the Company) with respect to matters relating to the Rights Offering.
Subject to applicable law, the dealer managers may continue at any
time to own or trade securities of the Company for its own or others' account.
3. Compensation and Expense Reimbursement. In consideration of the
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services to be rendered by you pursuant hereto, the character and sufficiency of
which the Company hereby acknowledges, the Company agrees to pay you, in cash,
the following non-refundable amounts:
(a) A fee, payable on the third business day after
completion of the Rights Offering by wire transfer of immediately available
funds to an account designated by DLJ, equal to 3% of the aggregate
Subscription Price for all Underlying Shares issued in connection with the
Rights Offering, excluding Underlying Shares purchased by the Tracinda
Group and Underlying Shares purchased by Record Date Holders upon exercise
of such Holders' basic subscription privilege and oversubscription
privilege as described in the Prospectus; and
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(b) Whether or not the Rights Offering is effected and
whether or not this Agreement has expired or has been terminated, the
Company shall pay (i) all expenses of preparation, printing, filing,
mailing and dissemination of the Rights Offering Material and any other
documents related to the Rights Offering; (ii) all fees and expenses paid
by brokers, dealers (including you), commercial banks, trust companies and
nominees for their customary mailing and handling expenses incurred in
forwarding Rights Offering Material and any other documents related to the
Rights Offering to their customers; (iii) all fees and expenses of the
Subscription Agent and any information agent or other persons rendering
services in connection with the Rights Offering; (iv) all advertising
charges; (v) all filing fees applicable to any transaction addressed herein
required to be paid to any governmental or regulatory agency (including any
required of you by the National Association of Securities Dealers, Inc.);
(vi) all fees and expenses payable in connection with the registration or
qualification of the Securities under state securities or "blue sky" laws;
(vii) all listing fees and any other fees and expenses incurred in
connection with the listing on the NYSE of the Securities; and (viii) all
other expenses incurred in connection with the Rights Offering.
4. Termination. Subject to Section 11 hereof, you may resign and the
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Company may terminate your engagement hereunder at any time. Your engagement
hereunder may be extended by written agreement of the parties hereto. If this
Agreement were to expire or terminate for any reason, however, DLJ and BofA
shall be entitled to receive all of the fees earned in accordance with Section
3(a) hereof and amounts payable in respect of expenses incurred in accordance
with Section 3(b) hereof up to and including the effective date of such
expiration or termination; provided that if this Agreement were to expire or
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terminate for any reason and the Rights Offering is not completed, and on or
prior to May 8, 2000, the Company or any affiliate of the Company proceeds with
any rights offering, DLJ and BofA also shall be entitled to receive all of the
amounts due and payable pursuant to Sections 3(a) and (b) hereof as if this
Agreement were to remain in effect with respect to such rights offering.
5. Indemnity. The Company agrees to indemnify the Indemnified
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Parties (as defined in Schedule A) as set forth in Schedule A, which Schedule A
is incorporated herein and made a part hereof.
6. Representations and Warranties of the Company and Certain of its
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Subsidiaries. The Company and each subsidiary of the Company named on the
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signature pages (the "Signatory Subsidiaries"), jointly and severally,
represents and warrants to each dealer manager that:
(a) The Registration Statement has become effective (other
than any Rule 462(b) Registration Statement to be filed by the Company
after the effectiveness of this Agreement); any Rule 462(b) Registration
Statement filed after the effectiveness of this Agreement will become
effective no later than 10:00 P.M., New York City time, on the date of this
Agreement; and no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act; (ii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement), when it became effective, did not contain and, as
amended, if applicable, will not at
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time of effectiveness of such amendment contain, any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness
of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the
Act, (iv) if the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement and any amendments thereto, when they become
effective (A) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (B) will comply in all
material respects with the Act and (v) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to you furnished to the Company in writing by you
expressly for use therein.
(c) Each of the Company and its "significant subsidiaries"
(as such term is defined in Rule 1-02 of Regulation S-X) and each Signatory
Subsidiary (each "significant subsidiary" and Signatory Subsidiary, a
"Subsidiary" and collectively, "Subsidiaries"), has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing
as a foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified
would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(d) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale or
liens granted or issued by the Company or any of its Subsidiaries relating
to or entitling any person to purchase or otherwise to acquire any shares
of the capital stock of the Company or any of its Subsidiaries, except as
otherwise disclosed in the Registration Statement or the Prospectus.
(e) All the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights; the
Rights have been duly authorized for issuance by the Company pursuant to
the Rights Offering, and, the Underlying Shares, when issued and delivered
by the Company pursuant to this Agreement, against payment of the purchase
price therefor, will be duly authorized, validly issued and fully paid and
non-assessable; the Securities and the Common Stock conform in all material
respects to all statements relating thereto contained in the Prospectus and
such description conforms to any description thereof set forth in the
certificates evidencing the Common Stock and the Rights and the Company's
Amended and Restated Certificate of Incorporation and bylaws; no holder of
the Securities will be subject to personal
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liability by reason of being such a holder; and the issuance of the
Securities in the Rights Offering is not subject to the preemptive or other
similar rights of any securityholder of the Company.
(f) All of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued and are
fully paid and non-assessable, and are owned by the Company, directly or
indirectly through one or more subsidiaries, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature,
except as disclosed in the Prospectus.
(g) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus.
(h) Neither the Company nor any of the Subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained
in any indenture, loan agreement, mortgage, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of the Subsidiaries or their respective property
is bound, except for defaults that would not have a material adverse effect
on the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole.
(i) The execution, delivery and performance of this
Agreement by the Company and the Signatory Subsidiaries, the compliance by
the Company with all the provisions hereof and the consummation of the
transactions contemplated hereby and the use of proceeds from the Rights
Offering as described in the prospectus under the caption "Use of Proceeds"
will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except
such as may be required under the federal securities laws or the securities
or Blue Sky laws of the various states), (ii) conflict with or constitute a
breach of any of the terms or provisions of, or a default under or result
in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to, the
charter or by-laws of the Company or any of its subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is bound,
other than the Company's bridge loan that will be repaid with the proceeds
of the Rights Offering, (iii) constitute a Repayment Event (as defined
below) other than the Company's bridge loan that will be repaid with the
proceeds of the Rights Offering, (iv) violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective property or (v) result
in the suspension, termination or revocation of any Authorization (as
defined below) of the Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization. As used
in this Agreement, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
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(j) There are no legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries is or could
be a party or to which any of their respective property is or could be
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described; nor are there any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not so described or filed as
required.
(k) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), any provisions of the Employee Retirement Income Security Act of
1974, as amended, or any provisions of the Foreign Corrupt Practices Act,
or the rules and regulations promulgated thereunder, except for such
violations which, singly or in the aggregate, would not have a material
adverse effect on the business, prospects, financial condition or results
of operation of the Company and its subsidiaries, taken as a whole.
(l) Each of the Company and its subsidiaries has such
permits, licenses, consents, exemptions, franchises, authorizations and
other approvals (each, an "Authorization") of, and has made all filings
with and notices to, all governmental or regulatory authorities and self-
regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws, as are
necessary to own, lease, license and operate its respective properties and
to conduct its business as it is now operated, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole. Each such Authorization is valid and in
full force and effect and each of the Company and its subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction
with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow,
revocation, suspension or termination of any such Authorization or results
or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the Company
or any of its subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such
event or the presence of any such restriction would not, singly or in the
aggregate, have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(m) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any Authorization, any related constraints on
operating activities and any potential liabilities to third parties) which
would, singly or in the aggregate, have a material adverse effect on the
business, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
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(n) This Agreement has been duly authorized, executed and
delivered by the Company and the Signatory Subsidiaries. The Standby
Agreement has been duly authorized, executed and delivered by the Company.
The Subscription Agent Agreement has been duly authorized by the Company.
(o) Xxxxxx Xxxxxxxx LLP are independent public accountants
with respect to the Company and its subsidiaries as required by the Act.
(p) The consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in
financial position of the Company, its predecessors and their respective
subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply; such statements and related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with generally accepted accounting principles the information
required to be stated therein; and the other financial and statistical
information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.
(q) The Company is not and, after giving effect to the
offering and sale of the Shares 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.
(r) Other than as described in the Registration Statement
and the Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company or to require the Company to
include such securities with the Shares registered pursuant to the
Registration Statement.
(s) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement), (i) there has not occurred any material adverse change
or any development involving a prospective material adverse change in the
condition, financial or otherwise, or the earnings, assets, business,
management or operations of the Company and its subsidiaries, taken as a
whole, (ii) there has not been any material adverse change or any
development involving a prospective material adverse change in the capital
stock or in the long-term debt of the Company or any of its subsidiaries
and (iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent.
(t) There is no (i) significant unfair labor practice
complaint, grievance or arbitration proceeding pending or threatened
against the Company or any of the Subsidiaries before the National Labor
Relations Board or any state or local labor relations board or (ii) strike,
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labor dispute, slowdown or stoppage pending or threatened against the
Company or any of the Subsidiaries, except for such actions specified in
clause (i) or (ii) above, which, singly or in the aggregate, would not have
a material adverse effect on the business, prospects, financial condition
or results of operations of the Company and the Subsidiaries, taken as a
whole.
(u) There are no contracts or documents which are required
to be described in the Registration or the Prospectus or to be filed as
exhibits thereto which have not been so described or filed as required.
(v) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names or other
intellectual property ("intellectual property") currently employed by them
in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a material adverse
effect on the business, prospects, financial condition or results of
operation of the Company and its subsidiaries, taken as a whole; and, other
than as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of infringement
of or conflict with asserted rights of others with respect to any of such
intellectual property which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a material adverse
effect on the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(w) Neither the Company nor any of its subsidiaries own any
real property. The Company and its subsidiaries have good title to all
personal property owned by them which is material to the business of the
Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries, in each
case except as described in the Prospectus.
(x) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks, or have adequate self-insurance reserves, in such amounts as are
prudent and customary in the businesses in which they are engaged; and
neither the Company nor any of its subsidiaries (i) has received notice
from any insurer or agent of such insurer that substantial capital
improvements or other material expenditures will have to be made in order
to continue such insurance or (ii) has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers at a
cost that would not have a material adverse effect on the business,
prospects, financial conditions or results of operations of the Company and
its subsidiaries, taken as a whole.
10
(y) The Rights have been approved for trading on the NYSE,
subject to official notice of issuance;
7. Covenants of Company. The Company covenants and agrees with you
--------------------
as follows:
(a) The Company shall at all times during the Rights
Offering have performed all of its obligations hereunder theretofore to be
performed.
(b) The Company agrees to furnish to you, at your reasonable
request, a certificate from the Company, dated such date (and reaffirmed
upon completion of the Rights Offering) and signed by the chief executive
officer of the Company, to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct
as of such date (and reaffirmed upon completion of the Rights Offering) and
that the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied on or before
such date (and reaffirmed upon completion of the Rights Offering).
(c) The Company will advise you promptly of (i) the
occurrence of any event that could cause the Company to withdraw, rescind,
terminate or modify the Rights Offering, (ii) the occurrence of any event,
or the discovery of any fact, the occurrence or existence of which it
believes would require the making of any change in any of the Rights
Offering Material then being used in connection with the Rights Offering or
would cause any representation or warranty contained in this Agreement to
be untrue or inaccurate, (iii) the issuance by the Commission or any Other
Agency of any comment or order or the taking of any other action concerning
the Rights Offering (and, if in writing, the Company will furnish you with
a copy thereof), (iv) the suspension of qualification of the Securities in
any jurisdiction, (v) any material developments in connection with the
Rights Offering, including, but not limited to, the commencement of any
lawsuit concerning the Rights Offering, (vi) the occurrence of a Repayment
Event, and (vii) any other information relating to the Rights Offering, the
Rights Offering Material or this Agreement which you may from time to time
reasonably request.
(d) The Company shall use its best efforts to comply with
the applicable provisions of the Act and the Exchange Act, and other
applicable securities law.
(e) The Company shall use the net proceeds received by it
from the sale of the Underlying Shares in the manner specified in the
Prospectus under the caption "Use of Proceeds".
(f) The Company shall make generally available to its
security holders and to you as soon as practicable an earnings statement
which will satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 of the Commission promulgated thereunder covering a period of
at least twelve months beginning with the first fiscal quarter of the
Company occurring after the "effective date" (as defined in Rule 158) of
the Registration Statement.
11
(g) The Company shall furnish copies of the Prospectus to
you in New York City prior to 10:00 a.m., New York City time, on the
business day next succeeding the date of this Agreement in such quantities
as you may reasonably request and, during the period of time after the
commencement of the Rights Offering if in the opinion of counsel for the
dealer managers a prospectus relating to the Securities is required by law
to be delivered in connection with the Rights Offering, if any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a Rights Holder, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to you and the Rights Holders, such amendments or supplements to
the Prospectus as may be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to the Rights Holders, be misleading or so
that the Prospectus will comply with law.
(h) The Company shall deliver, at the expense of the
Company, to you, two signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits and documents incorporated by reference therein.
(i) The Company shall endeavor to qualify the Rights and the
Underlying Shares for offer under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to continue such
qualification in effect so long as reasonably required for distribution of
the Securities; provided that the Company shall not be required to file a
general consent to service of process in any jurisdiction.
8. Conditions to Your Obligations. Your obligations under this
------------------------------
Agreement are subject to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) Christensen, Miller, Fink, Jacobs, Xxxxxx, Xxxx &
Xxxxxxx, LLP, counsel for the Company, shall have furnished to you its
written opinion, dated the date hereof, addressing the matters set forth in
Schedule B attached hereto.
(b) O'Melveny & Xxxxx LLP, counsel for you, shall have
furnished to you its written opinion, dated the date hereof, addressing the
matters set forth in Schedule C attached hereto.
(c) All representations, warranties and other statements of
the Company contained in this Agreement are now and at the commencement of,
at all times during the continuance of, and upon consummation of, the
Rights Offering shall be true and correct.
(d) The Company at all times shall have performed all of its
obligations hereunder.
(e) Throughout the Subscription Period, no stop order,
restraining order or injunction shall have been issued by the Commission or
any court and no litigation shall have been commenced or threatened before
the Commission or any court with respect to (i) the making or consummation
of the Rights Offering, or (ii) the execution, delivery or performance by
the
12
Company of this Agreement, which you or your legal counsel believe
makes it inadvisable for you to continue to render services pursuant
hereto.
(f) It shall not have been unlawful under any law, rule or
regulation, Federal, state or local, for you to render services pursuant to
this Agreement, or to continue so to act, as the case may be.
(g) Since the respective dates as of which information is
given in the Prospectus other than as set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date
of this Agreement), and at all times during the Subscription Period, (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the
earnings, assets, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there shall not have been any change
or any development involving a prospective change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any
such case described in clause 8(g)(i), 8(g)(ii) or 8(g)(iii), in your
judgment, is material and adverse and, in your judgment, makes it
impracticable to proceed with the Rights Offering on the terms and in the
manner contemplated in the Prospectus.
(h) On the date of this Agreement, Xxxxxx Xxxxxxxx LLP shall
have furnished to you a letter, dated the date hereof, in form and
substance satisfactory to you, containing statements and information of the
type customarily included in accountants' "comfort letters" with respect to
the financial statements and certain financial information contained or
incorporated by reference in the Registration Statement and the Prospectus.
9. Reference to You. The Company agrees that any reference to you or
----------------
any of your affiliates in the Rights Offering Material, or any other release,
publication or communication to any party outside the Company, is subject to
your prior approval. If you resign or are terminated prior to the dissemination
of any the Rights Offering Material or any other release or communication, no
reference shall be made therein to you without your prior written permission.
10. Access to Information. In connection with your activities
---------------------
hereunder, the Company agrees to furnish you and your counsel with all
information concerning the Company that you reasonably deem appropriate and
agrees to provide you with reasonable access to the Company's officers,
directors, accountants, counsel, consultants and other appropriate agents and
representatives.
11. Survival of Certain Provisions. The indemnity and contribution
------------------------------
agreements contained in Section 5 of this Agreement (including Schedule A
hereto), the covenants, representations and warranties of the Company made
pursuant to Sections 6 and 7 of this Agreement, the provisions contained in
Sections 3 and 4 of this Agreement and this Section 1 shall remain operative and
in full force and effect regardless of (a) any failure to commence, or the
withdrawal, termination or consummation of, the Rights Offering or the
termination or assignment of this Agreement, (b) any investigation made by or on
behalf of any indemnified person, and (c) the completion of your services
hereunder, and shall be binding upon, and shall inure to the benefit of, any
successors, assigns, heirs and personal representatives of the Company, you, the
indemnified persons and any such person.
13
12. Notices. Notice given pursuant to any of the provisions of this
-------
Agreement shall be in writing and shall be mailed or delivered (a) to the
Company at Metro-Xxxxxxx-Xxxxx Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, with a copy to Christensen, Miller,
Fink, Jacobs, Xxxxxx, Xxxx & Xxxxxxx, LLP, 2121 Avenue of the Stars, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxx, and (ii) if to any dealer
manager or to you, to you c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Department, with a copy to O'Melveny & Xxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, Attention: Xxx Xxxxxx, or in any case to
such other address as the person to be notified may have requested in writing.
13. Construction. This Agreement, including Schedule A hereto,
------------
incorporate the entire understanding of the parties and (except as otherwise
provided herein) supersedes all previous agreements, and shall be governed by,
and construed in accordance with, the laws of the State of New York as applied
to contracts made and performed in such State, without regard to principles of
conflicts of law. The Company hereby irrevocably and unconditionally submits to
the exclusive jurisdiction of the Federal and New York State courts located in
the City of New York in connection with any suit, action or proceeding related
to this Agreement or any of the matters contemplated hereby, irrevocably waives
any defense of lack of personal jurisdiction and irrevocably agrees that all
claims in respect of any suit, action or proceeding may be heard and determined
in any such court. The Company irrevocably waives, to the fullest extent it may
effectively do so under applicable law, any objection which it may now or
hereafter have to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
14. Severability. Any determination that any provision of this
------------
Agreement (including any provision of Schedule A hereto) may be or is,
unenforceable shall not affect the enforceability of the remainder of this
Agreement (including any provision of Schedule A hereto).
15. Headings. The section headings in this Agreement have been
--------
inserted as a matter of convenience of reference and are not to be deemed to be
part of this Agreement.
16. Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute but one and the same instrument.
17. Third Party Beneficiaries. This Agreement has been and is made
-------------------------
solely for the benefit of the Company, you and the other Indemnified Parties
referred to in Section 5 and Schedule A hereto and their respective successors,
heirs, personal representatives and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement.
18. Advertisements. The Company agrees that you shall have the right
--------------
to place advertisements in financial and other newspapers and journals at your
own expense describing your services to the Company hereunder; provided,
--------
however, that: (a) you shall have submitted to the Company a copy of any such
-------
advertisement for its prior approval, which approval shall not be unreasonably
withheld or delayed, and (b) the publication of such advertisements shall comply
with applicable law.
14
19. Modification. This Agreement may not be modified or amended
------------
except in writing, duly executed by the parties hereto.
20. Confidentiality. To the extent consistent with legal
---------------
requirements, all information given to DLJ and BofA by the Company, unless
publicly available or otherwise available to DLJ and BofA without restriction or
breach of any confidentiality agreement, will be held by DLJ and BofA in
confidence and will not be disclosed to anyone other than DLJ's and BofA's
agents and advisors without the Company's prior approval or used for any purpose
other than those referred to in this Agreement.
21. Tracinda. The dealer managers agree that in the event (a) there
--------
is any breach or default or alleged breach or default by the Company under this
Agreement, or (b) the dealer managers have or may have any claim arising from or
relating to the terms hereof, the dealer managers shall not commence any lawsuit
or otherwise seek to impose any liability whatsoever against Xxxx Xxxxxxxxx, 250
Rodeo, Inc. or Tracinda Corporation (collectively, "Tracinda"). The dealer
managers hereby further agree that (a) Tracinda shall not have any liability
whatsoever with respect to this Agreement or any matters relating to or arising
from this Agreement, including any alleged breach of or default under this
Agreement by the Company; and (b) the dealer managers shall not assert or permit
any party claiming through it to assert a claim or impose any liability against
Tracinda as to any matter or thing arising out of or relating to this Agreement
or any alleged breach of or default under this Agreement by the Company. In
addition, you agree that Tracinda is not a party to this Agreement.
15
If the foregoing terms correctly set forth our agreement, please confirm
this by signing and returning a duplicate copy of this letter. Thereupon, this
letter, as signed in counterpart, shall constitute our agreement on the subject
matter herein.
Very truly yours,
METRO-XXXXXXX-XXXXX INC.
By:
-----------------------------
Title:
METRO-XXXXXXX-XXXXX
STUDIOS INC.
By:
-----------------------------
Title:
ORION PICTURES CORPORATION
By:
-----------------------------
Title:
Confirmed and agreed to as
of the date first above written:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
-------------------------------
Title:
16
