EXHIBIT 1.2
FORM OF DISTRIBUTION AGREEMENT
February ___, 0000
XXXXXXXXXXX XXXXXXXXX XXXXXXXX
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies/Gentlemen:
1. General. Read-Rite Corporation, a Delaware corporation (the
"Company"), proposes to offer for cash up to $75,000,000 aggregate principal
amount of 10% Convertible Subordinated Notes due September 1, 2004 (the
"Exchange Notes") that are convertible into common stock (the "Shares") of the
Company to Holders who submit their Existing Notes in the Exchange Offer (the
"Cash Offer").
In the event Holders submit indications of interest for more than
$75,000,000 aggregate principal amount in the Cash Offer, the additional
Exchange Notes will be allocated on a pro rata basis based on the amount of each
Holder's indication in the Cash Offer. The additional Exchange Notes issued in
the Cash Offer are to be issued pursuant to an Indenture, dated February __,
2000, as amended or modified from time to time (the "Indenture"), between the
Company, and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). Capitalized terms used herein without definition shall have their
respective meanings set forth in or pursuant to the Registration Statement (as
defined herein).
2. Appointment as Agent. By this Placement Agreement (the "Agreement"),
the Company hereby engages and appoints you as exclusive Distribution Agent (the
"Distribution Agent") for the Cash Offer and authorizes you to act as such in
connection with the Cash Offer.
(a) Subject to the terms and conditions stated herein, the Company
hereby agrees that the Exchange Notes issued in the Cash Offer will be sold
exclusively through the Distribution Agent. Accordingly, the Company agrees
that it will not appoint any other agent to act on its behalf, or assist it in
the placement of the additional Exchange Notes in the Cash Offer. The
Distribution Agent agrees to use its best efforts to obtain purchases from the
Holders for any and all of the additional Exchange Notes at a price of $
per additional Exchange Notes.
(b) The Company shall not sell or approve the solicitation of offers
for the purchase of additional Exchange Notes in excess of the amount which
shall be authorized by the Company or in excess of the aggregate offering price
of the Exchange Notes registered pursuant to the Registration Statement.
3. Registration Statement, Offering Circular/Prospectus and Offering
Materials.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission"), under the Securities Act of 1933, as amended (the
"Securities Act"), the Trust Indenture Act of 1939, as amended (the "TIA"), and
applicable rules and regulations (the "Rules and Regulations") of the Commission
thereunder, a combined Registration Statement on Form S-4 (No. 333-95527) and
Form S-3 (No. ___ - _____), including an Offering Circular/Prospectus, covering
the registration of the additional Exchange Notes and Shares issuable upon
conversion of the Exchange Notes and the Shares that may be issued solely at the
Company's option as payment of interest on the Exchange Notes. The term
"Registration Statement" as used in this Agreement shall mean such registration
statement, including financial statements, schedules and exhibits, in the form
in which it became or becomes, as the case may be, effective and, in the event
of any amendment thereto or the filing of any abbreviated registration statement
pursuant to Rule 462(b) of the Rules and Regulations relating thereto after the
effective date of such registration statement, shall also mean (from and after
the effectiveness of such amendment or the filing of such abbreviated
registration statement) such registration statement as so amended, together with
any such abbreviated registration statement. The term "Offering
Circular/Prospectus" as used in this Agreement shall mean the final offering
circular/prospectus included in the Registration Statement. Notwithstanding the
foregoing, if any revised offering circular/prospectus shall be provided to you
by the Company for use in connection with the Cash Offer that differs from the
Offering Circular/Prospectus referred to in the immediately preceding sentence
(whether or not such revised prospectus is required to be filed with the
Commission pursuant to Rule 424(b) of the Rules and Regulations), the term
"Offering Circular/Prospectus" shall refer to such revised offering
circular/prospectus from and after the time it is first provided to you for such
use. Any reference to the Registration Statement or the Offering
Circular/Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 11 of Form S-4 and Item 12 of
Form S-3 under the Securities Act, as of the date of the Registration Statement
or the Offering Circular/Prospectus, as the case may be, and any reference to
any amendment or supplement to the Registration Statement or the Offering
Circular/Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and the rules and regulations of the Commission thereunder,
which, upon filing, are incorporated by reference therein, as required by Item
11 of Form S-4 and Item 12 of Form S-3. As used in this Agreement, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, the Offering Circular/Prospectus or
any amendment or supplement thereto. The terms "supplement" and "amendment" or
"supplemented" and "amended" as used herein with respect to the Offering
Circular/Prospectus shall include all documents deemed to be incorporated by
reference in the Offering Circular/Prospectus that are filed subsequent to the
date of the Offering Circular/Prospectus and prior to the termination of the
Exchange Offer and Cash Offer by the Company with the Commission pursuant to the
Exchange Act and the rules and regulations of the Commission thereunder.
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4. Use of the Prospectus and Registration Statement.
(a) The Prospectus has been or will be prepared and approved by, and
is the sole responsibility of, the Company. The Company shall disseminate or, to
the extent permitted by law, use its best efforts to disseminate the Prospectus
to each registered Holder of any Existing Notes, as soon as practicable on the
Commencement [Date] (the "Commencement Date"), pursuant to Rule 13e-4 under the
Exchange Act, and comply with its obligations thereunder. Thereafter, to the
extent practicable until three days prior to the Expiration Date of the Cash
Offer, the Company shall use its best efforts to cause copies of the Prospectus
and a return envelope to be mailed to each person who becomes a Holder of record
of any Existing Notes. The Company acknowledges and agrees that you may use the
Prospectus as specified herein without assuming any responsibility for
independent verification on your part other than information about the
Distribution Agent supplied by you in writing and the Company represents and
warrants to you that you may rely on the accuracy and completeness of any
information delivered to you by or on behalf of the Company without assuming any
responsibility for independent verification of such information and without
performing or receiving any appraisal or evaluation of the assets or liabilities
of the Company.
(b) The Company agrees to provide you with as many copies as you may
reasonably request of the Prospectus and Registration Statement. The Company
agrees that within a reasonable time prior to using or filing with the
Commission or any governmental or regulatory entity or agency (an "Other
Agency"), including the National Association of Securities Dealers, Inc. (the
"NASD"), the Prospectus and Registration Statement, it will submit copies of
such materials to you and your counsel and will give reasonable consideration to
your and your counsel's comments, if any, thereon. The Company agrees prior to
the termination of the Cash Offer, before amending or supplementing the
Registration Statement or the Prospectus, to furnish copies of drafts to, and
consult with, the Distribution Agent and its counsel ("Distribution Agent's
counsel") within a reasonable time in advance of filing with the Commission of
any amendment or supplement to the Registration Statement, or Prospectus and
will give reasonable consideration to your and your counsel's comments, if any,
thereon.
(c) The Company has furnished or shall use its best efforts to
furnish to you, or cause the transfer agents or registrars for the Exchange
Notes to furnish to you, as soon as practicable after the date hereof (to the
extent not previously furnished), cards or lists in reasonable quantities or
copies thereof showing the names of persons who were the holders of record or,
to the extent available, the beneficial owners of the Exchange Notes as of a
recent date, together with their addresses. Additionally, the Company shall
update, or cause the transfer on agents or registrars referred to above to
update, such information from time to time during the term of this Agreement as
may be reasonably requested by you. Except as otherwise provided herein, you
agree to use such information only in connection with the Cash Offer.
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(d) The Company authorizes the Distribution Agent to use the
Prospectus in connection with the Cash Offer for such period of time as any such
materials are required by law to be delivered in connection therewith.
(e) The Company agrees that any reference to the Distribution Agent
in any Prospectus or in any newspaper announcement or press release or other
document or communication is subject to the Distribution Agent's prior consent,
which consent shall not be unreasonably withheld.
5. Withdrawal. In the event that the Company (i) uses or permits the use
of, or files with the Commission or any Other Agency, or any amendment or
supplement to the Registration Statement or the Prospectus, and such document
(a) has not been submitted to you previously for your and your counsel's
comments or (b) has been so submitted, and you or your counsel have made
comments which have not been reflected in a manner reasonably satisfactory to
you or your counsel; or (ii) shall have breached, in any material respect, any
of its representations, warranties, agreements or covenants herein, then you
shall be entitled to withdraw as Distribution Agent in connection with the Cash
Offer without any liability or penalty to you and without loss of any right to
indemnification or contribution provided in Section 11 or to the payment of all
fees and expenses payable under Sections 6 and 7 below which have accrued to the
date of such withdrawal (it being agreed that in the event of any such
withdrawal, for the purpose of determining the fees payable to you pursuant to
Section 6, the aggregate principal amount of Existing Notes tendered pursuant to
the Cash Offer as of the close of business on the date of such withdrawal which
are thereafter acquired by the Company or any of its subsidiaries or affiliates
pursuant to the Cash Offer or otherwise shall be deemed to have been acquired as
of the date of such withdrawal).
6. Fees. As compensation for your services in connection with the Cash
Offer, the Company will pay you a fee determined as set forth below as of the
Expiration Date with regard to the Existing Notes validly tendered and accepted
for exchange pursuant to the Cash Offer: the fee for the Cash Offer if paid in
Exchange Notes, will be (i) fungible with the Exchange Notes except in relation
to resale restrictions (explained below), and (a) will be 5% of the final Cash
Offer amount or, (b) if paid in cash, 4% of the final Cash Offer amount. If the
fee for the Cash Offer is paid in Exchange Notes, such Exchange Notes will not
be covered by the Registration Statement.
7. Expenses.
(a) The Company agrees that it will pay the costs and expenses
incident to the performance of the obligations hereunder, including, without
limitation (i) all costs and expenses incurred by dealers and brokers (including
yourself), commercial banks, trust companies and nominees for their customary
mailing and handling expenses incurred in forwarding the Prospectus to their
customers, (ii) the filing fees and expenses, if any, incurred with respect to
any filing with the NASD, (iii) all costs and expenses incident to the
preparation, issuance, execution and delivery of the Exchange Notes upon
exchange of the Existing Notes, (iv) all
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costs and expenses incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and the Prospectus (including,
without limitation, in each case all exhibits, amendments and supplements
thereto), (v) all costs and expenses incurred in connection with the
registration or qualification of the Exchange Notes issuable upon exchange of
the Existing Notes under the laws of such jurisdictions as the Distribution
Agent may designate, if any (including, without limitation, reasonable fees of
counsel for the Distribution Agent and its reasonable disbursements), (vi) all
costs and expenses incurred in connection with the printing (including word
processing and duplication costs) and delivery of the Prospectus and
Registration Statement (including, without limitation, any preliminary and
supplemental blue sky memoranda) including, without limitation, mailing and
shipping; (vii) all advertising expenses related to the Cash Offer and the fees
and expenses of the Exchange Agent and the Information Agent; (viii) all fees
and expenses incurred in marketing the Cash Offer, including but not limited to
road show presentations, if any; and (ix) the fees and disbursements of Wilson,
Sonsini, Xxxxxxxx and Xxxxxx, counsel to the Company, and Ernst & Young LLP,
auditors to the Company. In addition, the Company agrees to reimburse the
reasonable out-of-pocket expenses of the Distribution Agent in connection with
the Cash Offer, including, without limitation, the reasonable legal fees and
expenses of the Distribution Agent's Counsel in connection with the Cash Offer.
(b) In addition to its other obligations under Section 11(a) hereof,
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding described in Section 11(a)
hereof, it will reimburse the Distribution Agent on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Distribution Agent
for such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the
Distribution Agent shall promptly return such payment to the Company together
with interest. Any such interim reimbursement payments which are not made to
the Distribution Agent within thirty (30) days of a request for reimbursement
shall bear interest compounded daily, determined on the basis of the prime rate
(or other commercial lending rate for borrowers of the highest credit standing)
listed from time to time in The Wall Street Journal which represents the base
rate on corporate loans posted by a substantial majority of the nation's thirty
(30) largest banks ("Prime Rate"). Any such interim reimbursement payments
which are not made to the Distribution Agent within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request.
(c) In addition to its other obligations under Section 11(b) hereof,
the Distribution Agent agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding described in
Section 11(b) hereof, it will reimburse the Company on a monthly basis for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of
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the Distribution Agent's obligation to reimburse the Company for such expenses
and the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company shall
promptly return such payment to the Distribution Agent together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within thirty (30) days
of a request for reimbursement shall bear interest at the Prime Rate from the
date of such request.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Sections 7(b) and 7(c)
hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall be
apportioned among the reimbursing parties, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or a written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 7(b) and 7(c) hereof
and will not resolve the ultimate propriety or enforceability of the obligation
to indemnify for expenses which is created by the provisions of Sections 11(a)
and 11(b) hereof or the obligation to contribute to expenses which is created by
the provisions of Section 11(d) hereof.
8. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to you, and agrees with you, that:
(a) The Registration Statement, including the Prospectus, has been
prepared by the Company in conformity with the requirements of the Securities
Act and the Rules and Regulations of the Commission thereunder and has been
filed with the Commission; such amendments to such Registration Statement and
Prospectus and such abbreviated registration statements pursuant to Rule 462(b)
of the Rules and Regulations as may have been required prior to the date hereof
have been similarly prepared and filed with the Commission; and the Company will
file such additional amendments to such Registration Statement and Prospectus
and such abbreviated registration statements as may hereafter be required.
Copies of such Registration Statement and Prospectus, including all amendments
thereto and all documents incorporated by reference therein, and of any
abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations have been or, if filed after the Commencement Date, will be,
delivered to you and your counsel.
(b) The Registration Statement, including the Prospectus, has been
filed as of the Commencement Date; will become effective not later than the
Expiration Date; and the Commission has not issued any order refusing or
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of any Prospectus or instituted proceedings for
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that purpose; the Prospectus, including the Registration Statement, comply and,
as amended or supplemented, if applicable, will comply in all material respects
with the Securities Act, the Exchange Act and the TIA, and the applicable Rules
and Regulations of the Commission thereunder; the Registration Statement, when
it became effective, did 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 required to be stated therein or necessary to make the
statements therein not misleading; and neither the Prospectus nor the
Registration Statement contains, and, as amended or supplemented, if applicable,
will 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; provided, however, that none of the
representations and warranties contained in this subparagraph (b) shall apply to
information contained in or omitted from the Registration Statement or
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with, written information relating to you furnished to the Company by
you specifically for use in the preparation thereof.
The Incorporated Documents heretofore filed, when they were filed (or,
if any amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the requirements
of the Exchange Act and the Rules and Regulations of the Commission thereunder;
any further Incorporated Documents so filed will, when they are filed, conform
in all material respects with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; no such document when it was filed
(or, if an amendment with respect to any such document was filed, when such
amendment was filed), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and no such further amendment will
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.
(c) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation with full power and authority (corporate and other) to own, lease
and operate its properties and conduct its business as described in the
Prospectus; the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries taken as a whole ("Material Adverse Effect").
(d) Each of the Company's subsidiaries has been duly incorporated and
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and has the corporate power to own, lease and
operate its properties and to conduct its business as described in the
Prospectus, and is qualified to do business as a foreign corporation and is in
good standing in each jurisdiction, if any, in which the ownership and
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leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in good
standing would not have a Material Adverse Effect.
(e) All issued and outstanding shares of capital stock of each of the
Company's material subsidiaries has been duly authorized and validly issued and
are fully paid and nonassessable, and, has not been issued in violation of or
subject to any preemptive right, co-sale right, registration right, right of
first refusal or other similar right and, except as disclosed in the
Registration Statement and Prospectus, are owned by the Company free and clear
of any pledge, lien, security interest, encumbrance, claim or equitable interest
(other than such preemptive rights or other rights to subscribe for or purchase
securities as were fully complied with or expressly waived or with respect to
the violation of which the right to make a claim is barred by the applicable
statute of limitations.
(f) The Company has full legal right, power and authority to enter
into and perform its obligations under this Agreement, the Indenture and the
Exchange Notes and to consummate the Cash Offer and all other transactions
contemplated in the Prospectus. The Cash Offer and all other actions by the
Company contemplated in the Prospectus have been duly and validly authorized by
all necessary corporate action by the Company, and no other corporate
proceedings by the Company are necessary to authorize such actions. This
Agreement has been duly authorized, executed and delivered by the Company and is
a legal, valid and binding agreement on the part of the Company, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the execution and delivery by the Company of, and the
performance by the Company of its obligations under this Agreement, the Cash
Offer, the issuance and delivery by the Company of the Exchange Notes pursuant
to the Cash Offer, the consummation of the Cash Offer, and the other
transactions contemplated in the Prospectus, and the fulfillment of the terms
hereof and thereof, do not and will not result in a material breach or violation
of any of the terms and provisions of, or constitute a default under, (i) any
material bond, debenture, note or other evidence of indebtedness, or under any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of its subsidiaries or
their respective properties may be bound, and except where such breach,
violation, or default would not have a Material Adverse Effect, (ii) the charter
or bylaws of the Company or any of its subsidiaries, or (iii) any law, order,
rule, regulation, writ, injunction, judgment or decree of any court, government
or governmental agency or body, domestic or foreign, having jurisdiction over
the Company or any of its subsidiaries or over their respective properties. No
consent, approval, authorization, permit or order of or qualification with any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or over their
respective properties is required for the execution and delivery of this
Agreement, the Cash Offer, the issuance and delivery of the Exchange Notes
pursuant to the Cash Offer, and the consummation by the Company or any of its
subsidiaries of the transactions contemplated herein or in the Prospectus,
except such as may be required under the Securities
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Act, the Exchange Act, or under state or other securities, or Blue Sky laws or
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR" Act) all of which requirements have been satisfied. Notwithstanding the
foregoing, to the extent any of the foregoing representations speak as to any of
the Company's subsidiaries, such representations shall be deemed to be made only
as it relates to the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, and the
Cash Offer, the issuance and delivery by the Company of the Exchange Notes
pursuant to the Cash Offer, and the consummation of the Cash Offer, but no other
transaction contemplated in the Prospectus.
(g) Except as disclosed in the Prospectus, there is not any pending
or, to the best of the Company's knowledge, threatened action, suit, claim or
proceeding against the Company, any of its subsidiaries or any of their
respective officers or any of their respective properties, assets or rights
before any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or over
their respective officers or properties or otherwise which (i) might prevent
consummation of the Cash Offer, the transactions contemplated hereby or thereby
or the other transactions contemplated in the Prospectus or (ii) is required to
be disclosed in the Registration Statement or the Prospectus, and is not so
disclosed; and there are no agreements, contracts, leases or documents of the
Company or any of its subsidiaries of a character required to be described or
referred to in the Registration Statement or the Prospectus or any Incorporated
Document or to be filed as an exhibit to the Registration Statement or any
Incorporated Document by the Securities Act or the Rules and Regulations
thereunder or by the Exchange Act or the Rules and Regulations of the Commission
thereunder which have not been accurately described in all material respects in
the Registration Statement or Prospectus or any Incorporated Document or filed
as exhibits to the Registration Statement or any Incorporated Document.
(h) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable, have
been issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and the authorized and outstanding capital
stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" and conforms in all material respects to the statements
relating thereto contained in the Registration Statement and the Prospectus and
any Incorporated Document (and such statements correctly state the substance of
the instruments defining the capitalization of the Company); the Shares issuable
pursuant to the terms of the Exchange Notes have been duly authorized for
issuance and delivery and, when issued and delivered by the Company in
accordance with the terms of the Exchange Notes will be duly and validly issued
and fully paid and nonassessable, and will be free and clear of any pledge,
lien, security interest, encumbrance, claim or equitable interest; and no
preemptive right, co-sale right, registration right, right of first refusal or
other similar right of shareholders exists with respect to any of the Shares
issuable in the Cash Offer or the issuance thereof other than those that have
been expressly waived prior to the date hereof and those that will automatically
expire upon and will not apply to the consummation of the transactions
contemplated on or before the Closing Date; and if the Rights,
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if any, issuable under the Preferred Shares Right Agreement have been duly
authorized and when, and if, issued upon the terms of the Preferred Shares
Rights Agreement will be valid and binding obligations of the Company
enforceable in accordance with their terms. No further approval or authorization
of any shareholder, the Board of Directors of the Company or others is required
for the issuance or transfer of the Shares issuable in accordance with the Cash
Offer and except as may be required under the Securities Act, the Exchange Act
or under state or other securities or Blue Sky laws.
(i) The Indenture has been or will be duly authorized by the Company,
has been filed as of the Commencement Date, will be qualified under the TIA, not
later than the Expiration Date and assuming due authorization, execution and
delivery of the Indenture by the Trustee, when executed and delivered by the
Company, will constitute a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(j) The Exchange Notes to be issued pursuant to the Cash Offer have
been authorized, and assuming due authorization, execution and delivery of the
Indenture by the Trustee, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in accordance with the terms of the
Cash Offer, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Company enforceable in accordance with their
terms, except as the enforcement thereof may be limited by the (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws affecting enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity); the Exchange Notes will conform in all material
respects to the description thereof contained in the Prospectus.
(k) The consolidated financial statements (including the related
notes) included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendments or supplements thereto) present fairly, in
all material respects, the financial position, the results of operations and
cash flows of the Company at the dates and for the periods indicated in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated except as may otherwise be stated
therein. The interim consolidated financial statements (including the related
notes) included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendments and supplements thereto) have been prepared
on a basis consistent with the audited consolidated financial statements and
include in your opinion all adjustments, including normal recurring adjustments
necessary to present fairly the financial information therein. The selected and
summary consolidated financial and statistical data included in the Registration
Statement and the Prospectus (and any amendments or supplements thereto) present
fairly the information shown therein and have been compiled on a basis
consistent with the audited financial statements presented therein. No
financial statements or schedules, other than the consolidated financial
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statements or schedules that are included in the Registration Statement and the
Prospectus (and any amendments or supplements thereto), are required to be
included therein.
(l) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and has been accepted for quotation on The NASDAQ Stock Market, and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from The NASDAQ Stock Market, nor has the Company
received any notification that the Commission or NASD is contemplating
terminating such registration or listing.
(m) The Company has conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it is not and will not become an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations thereunder.
(n) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, and (ii) completion of the distribution of
the additional Exchange Notes in exchange for the Existing Notes pursuant to the
Cash Offer, any offering material in connection with the Cash Offer other than
the Prospectus.
(o) The Company has not taken and will not take, directly or
indirectly, any action resulting in a violation of Rule 102 promulgated under
the Exchange Act or designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock to
facilitate the distribution of the Exchange Notes, except for which the approval
thereof will be obtained by the Company in a no-action letter of the Commission
to be delivered to the Company prior to the Expiration Date.
(p) The Exchange Agent Agreement between the Company and Norwest Bank
Minnesota, National Association (the "Exchange Agent Agreement") is or will be
in full force and effect.
(q) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances, owns or operates any real
property contaminated with any substance that is subject to any environmental
laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental
laws, which violation, contamination, liability or claim would, individually or
in the aggregate, have a Material Adverse Effect; and the Company is not aware
of any pending investigation which would reasonably be expected to lead to such
a claim.
-11-
9. Further Agreements of the Company. The Company agrees with you that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof to become effective as soon as possible but
no later than the Expiration Date, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; the Company will use its best efforts to
cause any abbreviated registration statement pursuant to Rule 462(b) of the
rules and regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus has been filed; if for any reason
the filing of the final form of the Prospectus is required under Rule 424(b)(3)
of the rules and regulations, it will provide evidence satisfactory to you that
the Prospectus contains such information and has been filed with the Commission
within the time period prescribed; it will notify you promptly of any request by
the Commission for the amending or supplementing of the Registration Statement
or the Prospectus or for additional information relating to the Cash Offer;
promptly upon your request, it will prepare and file with the Commission any
amendments or supplements to the Registration Statement or Prospectus which, in
the opinion of your counsel, may be necessary or advisable in connection with
the Cash Offer; it will promptly prepare and file with the Commission, and
promptly notify you of the filing of, any amendments or supplements to the
Registration Statement or Prospectus which may be necessary to correct any
statements or omissions, if, at any time when a prospectus relating to the Cash
Offer is required to be delivered under the Securities Act and the Exchange Act,
any event shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Cash Offer as then in effect would include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and it will file no amendment or supplement to the
Registration Statement or Prospectus or the Incorporated Documents, or, prior to
the end of the period of time in which the Prospectus relating to the Cash Offer
are required to be delivered under the Securities Act and the Exchange Act, file
any document which upon filing becomes an Incorporated Document, which shall not
previously have been submitted to you a reasonable time prior to the proposed
filing thereof and will give reasonable consideration to you or your counsel's
comments, if any, thereon, subject, however, to compliance with the Securities
Act and the Rules and Regulations, the Exchange Act and the rules and
regulations of the Commission thereunder and the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any order by the Commission
refusing or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any refusal or stop order or to
obtain its withdrawal at the earliest possible moment if such refusal or stop
order should be issued.
-12-
(c) The Company will use its best efforts to qualify the Exchange
Notes issuable pursuant to the Cash Offer under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in effect
for so long as may be required for purposes of the Cash Offer, except that the
Company shall not be required in connection therewith or as a condition thereof
to qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction in which it is not otherwise required to be so
qualified or to so execute a general consent to service of process. In each
jurisdiction in which the Exchange Notes shall have been qualified as above
provided, the Company will make and file such statements and reports in each
year as are or may be required by the laws of such jurisdiction.
(d) To make generally available to its security holders and to the
Distribution Agent as soon as practicable an earnings statement covering a
twelve-month period beginning not later than the first day of the Company's
fiscal quarter next following the effective date of the Registration Statement
that satisfies the provisions of Section 11(a) of the Securities Act and the
Rules and Regulations of the Commission thereunder.
(e) To use its best efforts to advise or cause the Exchange Agent to
advise the Distribution Agent at 5:00 P.M., Eastern Standard Time, or promptly
thereafter, daily (or more frequently if requested), by telephone or facsimile
transmission, with respect to Existing Notes tendered as follows: (i) the
aggregate principal amount of Existing Notes validly tendered and represented by
confirmations of receipt of book-entry transfer of Existing Notes pursuant to
the procedures set forth in the Cash Offer on such day; (ii) the aggregate
principal amount of any Existing Notes properly withdrawn on such day; and (iii)
the cumulative totals of the principal amount of Existing Notes in categories
(i) through (ii), inclusive, above.
(f) Without limiting Sections 5, 7 and 13 of this Agreement, if the
transactions contemplated hereby are not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed hereunder or to fulfill any condition of your obligations
hereunder, the Company will reimburse the you for all out-of-pocket expenses
(including fees and disbursements of Distribution Agent's Counsel) incurred by
you in connection with the Cash Offer.
10. Conditions of Distribution Agent's Obligations. Your obligations as
provided herein shall be subject, as of the Commencement Date and all times on
and prior to the Closing Date, to the accuracy of the representations and
warranties of the Company herein, to the accuracy of the statements of officers
of the Company made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have been filed; and no stop order
refusing or suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company or you, threatened by the Commission, and any request of the
Commission for additional information (to be included in
-13-
the Registration Statement, the Prospectus, any Incorporated Document, or
otherwise) shall have been complied with to the reasonable satisfaction of
Distribution Agent's Counsel.
(b) The Registration Statement shall become effective prior to the
Expiration Date and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for that purpose shall have been initiated
or, to the knowledge of the Company or you, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus, any Incorporated Document, or otherwise)
shall have been complied with to the reasonable satisfaction of Distribution
Agent's Counsel.
(c) After execution and delivery of this Agreement and prior to the
Closing Date there shall not have occurred any change, or development involving
a prospective change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or operations,
of the Company and its subsidiaries, taken as a whole, from that described in
the Prospectus that, in the Distribution Agent's judgment, is material and
adverse and that makes it, in the Distribution Agent's judgment, impracticable
to recommend that holders of Existing Notes participate in the Cash Offer on the
terms and in the manner contemplated in the Registration Statement.
(d) All corporate proceedings and other legal matters in connection with
this Agreement, the Registration Statement, the Prospectus, or otherwise, and
the registration, authorization, issue, and delivery of the Exchange Notes
issuable in accordance with the Cash Offer, shall have been reasonably
satisfactory to Distribution Agent's Counsel, and such counsel shall have been
furnished with such papers and information as they may reasonably have requested
to enable them to pass upon the matters referred to in this Section.
(e) You shall have received the opinion of Wilson, Sonsini, Xxxxxxxx and
Xxxxxx, counsel for the Company, dated the Commencement Date (except as to
clauses (xiii and xx)) and the Closing Date, respectively, addressed to you to
the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;
(ii) The Company has the corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus;
(iii) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction, if any, in
which the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be
so qualified or be in good standing would not have a Material Adverse
Effect;
-14-
(iv) Each of the Company's subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, and has the
corporate power to own, lease and operate its properties and to
conduct its business as described in the Prospectus, and is qualified
to do business as a foreign corporation and is in good standing in
each jurisdiction, if any, in which the ownership and leasing of its
properties or the conduct of its business requires such qualification,
except where the failure to be so qualified or be in good standing
would not have a Material Adverse Effect;
(v) All issued and outstanding shares of capital stock of each
of the Company's material subsidiaries have been duly authorized and
validly issued and are fully paid and nonassessable, and, to such
counsel's knowledge, have not been issued in violation of or subject
to any preemptive right, co-sale right, registration right, right of
first refusal or other similar right and are owned by the Company free
and clear of any pledge, lien, security interest, encumbrance, claim
or equitable interest (other than such preemptive rights or other
rights to subscribe for or purchase securities as were fully complied
with or expressly waived or with respect to the violation of which the
right to make a claim is barred by the applicable statute of
limitations);
(vi) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus as of the dates stated
therein, the issued and outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, will not have been
issued in violation of or subject to any preemptive right, co-sale
right, registration right, right of first refusal or other similar
right;
(vii) The Exchange Notes to be issued pursuant to the Cash Offer
have been authorized, and assuming due authorization, execution and
delivery of the Indenture by the Trustee, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered in accordance with the terms of the Exchange Offer, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company enforceable in accordance with
their terms, except as the enforcement thereof may be limited by the
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity); the Exchange Notes will conform in all material respects to
the description thereof contained in the Prospectus; and will not have
been issued in violation of or subject to any preemptive right, co-
sale right, registration right, right of first refusal or other
similar right (other than such preemptive rights or other rights to
subscribe for or purchase securities as were fully complied with or
-15-
expressly waived or with respect to the violation of which the right
to make a claim is barred by the applicable statute of limitations;
(viii) The Company has the corporate power and authority to
enter into this Agreement, the Exchange Agent Agreement, the
Information Agent Agreement, and the Indenture under which the
Exchange Notes will be issued pursuant to the Cash Offer;
(ix) This Agreement, the performance by the Company of it
obligations hereunder, the Cash Offer, the issuance and delivery by
the Company of the Indenture pursuant to the Cash Offer and
consummation of the Cash Offer has been duly authorized by all
necessary corporate action on the part of the Company; this Agreement
has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except insofar as indemnification provisions may be limited by
applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally or by general
equitable principles;
(x) The Exchange Agent Agreement has been duly authorized,
executed and delivered by the Company;
(xi) The Company is not, or after giving effect to the Cash
Offer, will not be, and the Company is not directly or indirectly
"controlled" by, an "investment company," as such terms are defined in
the 1940 Act;
(xii) The Registration Statement has been filed under the
Securities Act prior to the Commencement Date and, to such counsel's
knowledge, no refusal order preventing effectiveness and after no
effectiveness stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act;
(xiii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements,
including supporting schedules and financial data derived therefrom as
to which such counsel need express no opinion), as of the effective
date of the Registration Statement, complied as to form in all
material respects with the requirements of the Securities Act and the
applicable rules and regulations thereunder; and each of the
Incorporated Documents (other than the financial statements (including
supporting schedules) and the financial data derived therefrom as to
which such counsel need express no opinion) complied when filed
pursuant to the Exchange Act and the applicable rules and regulations
of the Commission thereunder as to
-16-
form in all material respects with the requirements of the Securities
Act and the rules and regulations and the Exchange Act and the
applicable rules and regulations of the Commission thereunder;
(xiv) The information in the Prospectus under the captions "The
Cash Offer," "U.S. Federal Income Tax Considerations," "Description of
the Existing Notes" and "Description of the Exchange Notes," insofar
as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, have been reviewed by
such counsel and fairly present the information called for with
respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein and the form of certificates
evidencing the Common Stock of the Company comply with Delaware law;
(xv) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes
are accurate and fairly present the information required to be
presented by the Securities Act and the applicable rules and
regulations thereunder; the descriptions of the Dealer Manager
Agreement, the Distribution Agreement, the Bank Facility Agreement,
Registration Statement and the Prospectus are accurate and fair
summaries of the material terms of such agreements;
(xvi) The execution and delivery by the Company of, and the
performance by the Company of it obligations under this Agreement, the
Cash Offer, the issuance and delivery by the Company of the Exchange
Notes pursuant to the Cash Offer and consummation of the Cash Offer,
and the fulfillment of the terms hereof and thereof will not (a)
result in any violation of the Company's charter or bylaws or (b) to
such counsel's knowledge, result in a material breach or violation of
any of the terms and provisions of, or constitute a default under, any
material bond, debenture, note or other evidence of indebtedness, or
any material lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument known to
such counsel to which the Company is a party or by which its
properties are bound, or any applicable statute, rule or regulation
known to such counsel or, to such counsel's knowledge, any order, writ
or decree of any court, government or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
over any of their properties or operations; provided, however, that no
opinion need be rendered concerning state securities or Blue Sky laws;
(xvii) No consent, approval, authorization, permit or order of
or qualification with any court, government or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries,
or over any of their properties or operations is necessary in
connection with the consummation by the Company of its obligations
under this Agreement, the Cash Offer, the issuance and delivery of the
Exchange Notes pursuant to the Cash Offer and the
-17-
consummation of the Cash Offer, except such as have been obtained
under the Securities Act or Exchange Act or such as may be required
under state or other securities or Blue Sky laws;
(xviii) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or
any of its subsidiaries of a character required to be disclosed in the
Registration Statement, the Prospectus or any Incorporated Document by
the Securities Act or the Rules and Regulations thereunder or by the
Exchange Act or the applicable Rules and Regulations of the Commission
thereunder, other than those described therein;
(xix) To such counsel's knowledge, neither the Company nor any of
its subsidiaries is presently (a) in material violation of its
respective charter or bylaws, or (b) in material breach of any
applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries, or over any of their properties or
operations;
(xx) The Indenture has been duly qualified under the TIA, has
been duly authorized, executed and delivered by the Company and
assuming due authorization, execution and delivery of the Indenture by
the Trustee, constitutes a valid and binding agreement of the Company
enforceable in accordance with its terms except as the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting
enforcement of creditors' rights generally and (ii) general principles
of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
(xxi) The Exchange Notes when executed and authenticated in
accordance with the provisions of the Indenture, assuming due
authorization, execution and delivery of the Indenture by the Trustee,
and delivered in accordance with the terms of the Cash Offer, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company enforceable in accordance with
their terms, except as the enforcement thereof may be limited by the
(i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting enforcement of creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in
equity).
(xxii) The Shares issuable pursuant to the terms of the Exchange
Notes have been duly authorized and reserved for the issuance and
delivery and when issued in accordance with the terms of the Exchange
Notes, will be validly issued, fully paid and non-assessable, and the
issuance of such Shares is not subject to any preemptive or similar
rights under the Company's certificate of incorporation,
-18-
by-laws or applicable law and the Rights, if any, issuable under the
Preferred Shares Rights Agreement have been duly authorized and when,
and if, issued in accordance with the terms of the Rights Agreement
will be valid and binding obligations of the company enforceable in
accordance with their terms.
(xxiii) such counsel (1) is of the opinion that each document
incorporated by reference in the Registration Statement and Prospectus
(except for financial statements and schedules and other financial and
statistical data included therein or incorporated by reference therein
as to which such counsel need not express any opinion), complied as to
form when filed with the Commission in all material respects with the
Exchange Act and the rules and regulations of the Commission
thereunder, (2) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and other
financial and statistical data included or incorporated therein as to
which such counsel need not express an opinion and except for that
part of the Registration Statement that constitutes the Form T-1)
comply as to form in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (3)
has no reason to believe that (except for financial statements and
schedules and other financial and statistical data included or
incorporated by reference therein as to which such counsel need not
express and belief) the Registration Statement and the Prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (4) has no reason to
believe that (except for financial statements and schedules, and other
financial and statistical data as to which such counsel need not
express any belief) the Prospectus at the date of such opinion
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
In addition to their opinions set forth above, Wilson, Sonsini,
Xxxxxxxx & Xxxxxx shall include in its opinion a statement to the effect that
nothing has come to its attention that causes it to believe that the
Registration Statement and Prospectus (other than the financial statements and
notes thereto and supporting schedules and other financial and statistical data
derived therefrom, set forth therein or omitted therefrom, as to which no advice
is given), at the time it was declared effective by the Commission and at all
times subsequent thereto up to and on the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (other than the financial statements and notes thereto and
supporting schedules and other financial and statistical data derived therefrom,
set forth therein or omitted therefrom, as to which no advice is given), as of
its date and at all times subsequent thereto up to and on the Closing Date
included an untrue statement of a material fact or omitted 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. With respect to such
statement,
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Xxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxx may state that its belief is based upon
procedures set forth therein, but it is without independent check or
verification except as specified therein.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States of America or the State of
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certifications of officers of the Company, and of government
officials, in which case their opinion is to state that they are so relying and
that they have no knowledge of any material misstatement or inaccuracy in any
such opinion, representation or certificate. Copies of any opinion,
representation or certificate so relied upon shall be delivered to you, as
Distribution Agent, and to Distribution Agent's Counsel. Such counsel shall
also state that the conditions for the use of Form S-4 and Form S-3 set forth in
the General Instructions thereto have been satisfied. In addition, the
Distribution Agent on the Closing Date shall be entitled to rely on such
counsel's tax opinion delivered in connection with Distributions to the effect
that such Distributions will qualify as a tax-free spinoff under Section 355(e)
of the Internal Revenue Code.
(c) You shall have received on the Closing Date an opinion of Shearman &
Sterling, in form and substance satisfactory to you, with respect to the
sufficiency of all such corporate proceedings and other legal matters relating
to this Agreement and the transactions contemplated hereby as you may reasonably
require, and the Company shall have furnished to such counsel such documents as
they may have requested for the purpose of enabling them to pass upon such
matters.
(d) You shall have received on the Commencement Date and the Closing Date,
letters, dated as of the Commencement Date (or one business day prior thereto)
and Closing Date, as the case may be, from Ernst and Young LLP addressed to you
substantially in the form of that certain draft letter dated February , 2000.
(e) You shall have received a certificate of the Company, dated as of the
Commencement Date (excluding (iii)) and the Closing Date, signed by the Chief
Executive Officer and Chief Financial Officer of the Company, to the effect
that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct in all material respects, as if made on
and as of the Commencement Date or Closing Date or such other date as
of which any representation speaks, as the case may be, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Commencement Date or Closing Date, as the case may be;
(ii) No stop order refusing or suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the
Securities Act;
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(iii) When the Registration Statement became effective and at
all times subsequent thereto up to the date of such certificate, the
Registration Statement and the Prospectus, and any amendments or
supplements thereto, and the Incorporated Documents, when such
Incorporated Documents became effective or were filed with the
Commission, contained all material information required to be included
therein by the Securities Act and the rules and regulations thereunder
or the Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material
respects conformed to the requirements of the Securities Act and the
rules and regulations thereunder or the Exchange Act and the
applicable rules and regulations of the Commission thereunder, as the
case may be, the Registration Statement, and any amendment or
supplement thereto, did not and does not include 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, the Prospectus, and any amendment or supplement thereto,
did not and does not include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and, since the effective date of the Registration
Statement, there has occurred no event required to be set forth in an
amended or supplemented Prospectus which has not been so set forth;
and
(iv) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus and up to the
date of such certificate, and except as disclosed therein, there has
not been (a) any material adverse change in the condition (financial
or otherwise), earnings, operations, business or business prospects of
the Company and its subsidiaries considered as one enterprise, (b) any
transaction that is material to the Company and its subsidiaries
considered as one enterprise, except transactions entered into in the
ordinary course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiaries considered as one
enterprise, incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, (d) any
change in the capital stock or outstanding indebtedness of the Company
that is material to the Company and its subsidiaries considered as one
enterprise, (e) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company; or (f) any loss or
damage (whether or not insured) to the property of the Company or any
of its subsidiaries which has been sustained or will have been
sustained and which has a Material Adverse Effect or a material
adverse effect on the ability of the Company to perform its
obligations under the Cash Offer or consummate the Cash Offer.
(f) The Company shall have furnished to you such further certificates and
documents as you shall reasonably request (including certificates of officers of
the Company) as to the accuracy of the representations and warranties of the
Company herein, as to the performance by
-21-
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to your obligations hereunder.
(g) You shall have received on the Closing Date the execution and delivery
of the Registration Rights Agreement dated February __, 2000.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Distribution Agent's Counsel. The Company will furnish you with such number
of conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
11. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold you harmless against any
losses, claims, damages or liabilities, joint or several, to which you may
become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of the Company
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, Prospectus, or any
amendments or supplements thereto, including any Incorporated Document, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and agrees to reimburse you for any legal or other
expenses reasonably incurred by you in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to you furnished to the Company by you, specifically for
use in the preparation thereof.
The indemnity agreement in this Section 11(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, you and your
affiliates and the partners, directors, officers, employees and agents of you
and your affiliates, and each person, if any, who controls you within the
meaning of the Securities Act or the Exchange Act. This indemnity agreement
shall be in addition to any liabilities which the Company may otherwise have.
(b) You agree to indemnify and hold harmless the Company against any
losses, claims, damages or liabilities, joint or several, to which the Company
may become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based
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upon (i) any breach of any representation, warranty, agreement or covenant of
yours herein contained, (ii) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, or Prospectus, or any
amendments or supplements thereto, including any Incorporated Document, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in the Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, in the case of subparagraphs (ii) and (iii) of this
Section 11(b) to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in reliance
upon, and in conformity with, written information furnished to the Company by
you specifically for use in the Registration Statement, the Prospectus, or any
amendment or supplement thereto or in the preparation thereof, and agree to
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action.
The indemnity agreement in this Section 11(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer of
the Company who signed the Registration Statement and each director of the
Company, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act. This indemnity agreement shall be in
addition to any liabilities which you may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
11 of notice of the commencement of any action, such indemnified party shall, if
a claim in respect thereof is to be made against any indemnifying party under
this Section 11, notify the indemnifying party in writing of the commencement
thereof but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party otherwise than
under this Section 11. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it shall elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of the indemnifying party's
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 11 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
(i) the indemnified party shall have employed
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separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with appropriate
local counsel) approved by the indemnifying party representing all the
indemnified parties under Section 11(a) or 11(b) hereof who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of any
action unless the indemnifying party shall have approved the terms of such
settlement; provided that such consent shall not be unreasonably withheld. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnification
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on all claims that are the subject matter of such proceeding.
(d) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 11
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that you are responsible
for the portion represented by the percentage that the maximum Distribution
Agent's fee payable to the Distribution Agent pursuant to Section 6 hereof bears
to the value of the maximum number of Exchange Notes issuable pursuant to the
Cash Offer, and the Company is responsible for the remaining portion, provided,
however, that (i) you shall not be required to contribute any amount in excess
of the amount by which the fee paid to you pursuant to Section 6 hereof exceeds
the amount of damages which you have been otherwise required to pay and (ii) no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. The contribution
agreement in this Section 11(d) shall extend upon the same terms and conditions
to, and shall inure to the benefit of, each person, if any, who controls you or
the Company within the meaning of the Securities Act or the Exchange Act and
each officer of the Company who signed the Registration Statement and each
director of the Company.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 11, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 11 fairly allocate
the risks in light of the ability of the parties to investigate the
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Company and its business in order to assure that adequate disclosure is made in
the Registration Statement, and the Prospectus as required by the Securities Act
and the Exchange Act.
12. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and you herein or in certificates delivered pursuant hereto, and the
indemnity and contribution agreements contained in Section 11 hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of you or any person controlling you within the meaning of
the Securities Act or the Exchange Act, or by or on behalf of the Company or any
of its officers, directors or controlling persons within the meaning of the
Securities Act or the Exchange Act, and shall survive the completion of the Cash
Offer or termination of this Agreement.
13. Termination. (a) This Agreement shall terminate upon the earliest to
occur of (i) thirty days after the Expiration Date, (ii) any of the conditions
specified in Section 10 has not been fulfilled as of any date such condition is
required to be fulfilled pursuant to Section 10 (and the Distribution Agent
shall have notified the Company thereof) or (iii) the date on which the Company
terminates or withdraws the Cash Offer for any reason (the earliest to occur of
clauses (i), (ii) and (iii) being referred to as the "Termination Date").
(b) Notwithstanding termination of this Agreement pursuant to
subsection (a) above, the obligations of the parties pursuant to Sections 6, 7
and 11 shall survive any termination of this Agreement.
If you elect to terminate this Agreement as provided in this Section
13, you shall promptly notify the Company by telephone, telecopy or telegram, in
each case confirmed by letter.
14. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, or telecopied (and confirmed by letter) to you c/o
BancAmerica Xxxxxxxxx Xxxxxxxx, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, telecopier number (000) 000-0000, Attention:
General Counsel; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Read-Rite, Attention: Executive Vice President -- Administration, with a copy
to Wilson, Sonsini, Xxxxxxxx & Xxxxxx.
15. Parties. This Agreement shall inure to the benefit of and be binding
upon the Distribution Agent and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or entity, other
than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons within the meaning of the
Securities Act or the Exchange Act, officers and directors referred to in
Section 11 hereof, any legal or equitable right, remedy or claim in respect of
this Agreement or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and
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being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors and assigns and said
controlling persons and said officers and directors, and for the benefit of no
other person or entity. No Holder of Existing Notes receiving additional
Exchange Notes upon exchange of such Existing Notes shall be construed a
successor or assign by reason merely of such exchange.
16. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
17. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
Please indicate your willingness to act as Distribution Agent on the terms
set forth herein and your acceptance of the foregoing provisions by signing in
the space provided below for that purpose and returning to us a copy of this
letter, whereupon this letter and your acceptance shall constitute a binding
agreement among us.
Very truly yours,
READ-RITE CORPORATION
By ____________________________________
Name:
Title:
Accepted as of the date first above
written:
FLEETBOSTON XXXXXXXXX XXXXXXXX
By _________________________________
Name:
Title:
