Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement of a Foreign Private Issuer — Form F-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: F-1/A Pre-Effective Amendment to Registration Statement 9 52K
of a Foreign Private Issuer
2: EX-1.1 Underwriting Agreement 39 186K
3: EX-3.1 Articles of Incorporation/Organization or By-Laws 37 120K
4: EX-3.2 Articles of Incorporation/Organization or By-Laws 6 30K
5: EX-4.1 Instrument Defining the Rights of Security Holders 17 79K
6: EX-4.2 Instrument Defining the Rights of Security Holders 1 8K
7: EX-4.3 Instrument Defining the Rights of Security Holders 28 74K
8: EX-8.1 Opinion re: Tax Matters 1 7K
9: EX-8.2 Opinion re: Tax Matters 1 8K
10: EX-10.1 Material Contract 25 79K
19: EX-10.10 Material Contract 15 43K
11: EX-10.2 Material Contract 10 37K
12: EX-10.3 Material Contract 3 16K
13: EX-10.4 Material Contract 3 16K
14: EX-10.5 Material Contract 3 17K
15: EX-10.6 Material Contract 3 17K
16: EX-10.7 Material Contract 17 47K
17: EX-10.8 Material Contract 17 46K
18: EX-10.9 Material Contract 15 44K
20: EX-21.1 Subsidiaries of the Registrant 1 6K
EX-1.1 — Underwriting Agreement
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Exhibit 1.1
[Form of Underwriting Agreement - Subject to Additional Review]
2,000,000 American Depositary Shares
(each representing one Ordinary Share)
TOWN PAGES HOLDINGS plc
UNDERWRITING AGREEMENT
New York, New York
, 1999
SECURITY CAPITAL TRADING, INC.
As Representative of the
several Underwriters named
in Schedule A to Exhibit A
annexed hereto
520 Madison Avenue
10th Floor
New York, New York 10022
Ladies and Gentlemen:
Town Pages Holdings plc, a company incorporated under the laws of the
United Kingdom (the "Company"), confirms its agreement with Security Capital
Trading, Inc. ("Security Capital") and each of the underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in SECTION 11), for
whom Security Capital is acting as Representative (in such capacity, Security
Capital shall hereinafter be referred to as "you" or the "Representative"), with
respect to the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of 2,000,000 American Depositary Shares ("ADSs"),
each representing one (1) Ordinary Share, 1 p per Ordinary Share, of the
Company.
Upon your request, as provided in Section 2(b) of this Agreement, the
Company shall also issue and sell to the Underwriters, acting severally and not
jointly, up to an additional 300,000 ADSs for the purpose of covering
over-allotments, if any. Such 300,000 ADSs are hereinafter referred to as the
"Option ADSs." The Company also proposes to issue and sell to you warrants (the
"Representative's Warrants") pursuant to the Representative's Warrant Agreement
(the "Representative's Warrant Agreement") for the purchase of an additional
200,000 ADSs. The ADSs issuable upon exercise of the Representative's Warrants
are hereinafter referred to as the "Representative's Securities." The ADSs, the
Option ADSs, the Representative's Warrants, and the Representative's Securities
are more fully described in the Registration Statements and the Prospectus
referred to below.
The ADSs will be evidenced by American Depositary Receipts ("ADRs")
issuable in accordance with the deposit agreement dated as of ______________,
1999 (the "Deposit Agreement") among the Company, Bankers Trust Company, as
depositary (the "Depositary"), and all holders from time to time of ADRs issued
thereunder. Each ADR will evidence one (1) or more ADS and each ADS will
represent one (1) Ordinary Share deposited under the Deposit Agreement with the
custodian, Lloyds Bank Registrars (the "Custodian"). Unless the context
otherwise requires, references herein to ADSs shall include the ADRs evidencing
the ADSs.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, each of the Underwriters as of the date
hereof, and as of the Closing Date (as hereinafter defined) and each Option
Closing Date (as hereinafter defined), if any, as follows:
(a) The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement, and an amendment or
amendments thereto, on Form F-1 (No. 333-_________), including any related
preliminary prospectus ("Preliminary Prospectus"), for the registration of the
ADSs and the Option ADSs (collectively, hereinafter referred to as the
"Securities") under the Securities Act of 1933, as amended (the "Act"), which
registration statement and amendment or amendments have been prepared by the
Company in conformity with the requirements of the Act, and the rules and
regulations (the "Regulations") of the Commission under the Act. The Company
will promptly file a further amendment to said registration statement in the
form heretofore delivered to the Underwriters and will not file any other
amendment thereto to which the Underwriters shall have objected in writing after
having been furnished with a copy thereof. Except as the context may otherwise
require, such registration statement, as amended, on file with the Commission at
the time the registration statement becomes effective (including the prospectus,
financial statements, schedules, exhibits and all other documents filed as a
part thereof or incorporated therein (including, but not limited to those
documents or information incorporated by reference therein) and all information
deemed to be a part thereof as of such time pursuant to paragraph (b) of Rule
430(A) of the Regulations), is hereinafter called the "F-1 Registration
Statement", and the form of prospectus in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations, is hereinafter called the
"Prospectus." The Company has also prepared and filed with the Commission, a
registration statement on Form F-6, as amended (No. _________) covering the
registration under the Act of the ADSs evidenced by ADRs. The F-1 Registration
Statement and the F-6 Registration Statement are hereinafter together referred
to as the "Registration Statements." For purposes hereof, "Rules and
Regulations" mean the rules and regulations adopted by the Commission under
either the Act or the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as applicable.
(b) Neither the Commission nor any state regulatory authority has issued
any order preventing or suspending the use of any Preliminary Prospectus, the
Registration Statements or Prospectus or any part of any thereof and no
proceedings for a stop order
2
suspending the effectiveness of the Registration Statements or any of the
Company's securities have been instituted or are pending or threatened. Each of
the Preliminary Prospectus, the Registration Statements and Prospectus at the
time of filing thereof conformed with the requirements of the Act, the Rules and
Regulations, and the U.K Companies Act 1995, and none of the Preliminary
Prospectus, the Registration Statements or Prospectus at the time of filing
thereof 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, in light of the circumstances under which they were made, not
misleading, except that this representation and warranty does not apply to
statements made in reliance upon and in conformity with written information
furnished to the Company with respect to the Underwriters by or on behalf of the
Underwriters expressly for use in such Preliminary Prospectus, Registration
Statements or Prospectus or any amendment thereof or supplement thereto.
(c) When the Registration Statements become effective and at all times
subsequent thereto up to the Closing Date (as defined herein) and each Option
Closing Date (as defined herein), if any, and during such longer period as the
Prospectus may be required to be delivered in connection with sales by the
Underwriters or a dealer, the Registration Statements and the Prospectus will
contain all statements which are required to be stated therein in accordance
with the Act and the Rules and Regulations, and will conform to the requirements
of the Act, the Rules and Regulations, and U.K. Companies Act 1995; neither the
Registration Statements nor the Prospectus, nor any amendment or supplement
thereto, will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, PROVIDED, HOWEVER, that this representation and warranty does
not apply to statements made or statements omitted in reliance upon and in
strict conformity with information furnished to the Company in writing by or on
behalf of any Underwriter expressly for use in the Preliminary Prospectus,
Registration Statements or Prospectus or any amendment thereof or supplement
thereto.
(d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
organization. Except for its wholly-owned subsidiary, Town Pages Limited (the
"Subsidiary"), the Company does not own an interest in any corporation,
partnership, trust, joint venture or other business entity. The Company is duly
qualified and licensed and in good standing as a foreign corporation in each
jurisdiction in which its ownership or leasing of any properties or the
character of its operations requires such qualification or licensing. The
Company has all requisite power and authority (corporate and other), and has
obtained any and all necessary authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental or regulatory
officials and bodies (including, without limitation, those having jurisdiction
over environmental or similar matters), to own or lease its properties and
conduct its business as described in the Prospectus; the Company is and has been
doing business in compliance with all such authorizations, approvals, orders,
licenses, certificates, franchises and permits and all applicable federal,
state, local and foreign laws, rules and regulations; and the Company has not
received any notice of proceedings relating to the revocation or modification of
any such authorization, approval, order, license, certificate, franchise, or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, position, prospects, value,
operation, properties, business
3
or results of operations of the Company. The disclosures in the Registration
Statements concerning the effects of domestic and foreign laws, rules and
regulations on the Company's business as currently conducted and as contemplated
are correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading in light of the circumstances under which they were made.
(e) The Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus under "Capitalization,"
"Description of Share Capital," and "Description of American Depositary
Receipts" and will have the adjusted capitalization set forth therein on the
Closing Date and each Option Closing Date, if any, based upon the assumptions
set forth therein, and the Company is not a party to or bound by any instrument,
agreement or other arrangement providing for it to issue any capital stock,
rights, warrants, options or other securities, except for this Agreement, the
Deposit Agreement, and the Representative's Warrant Agreement as described in
the Prospectus. The Securities and all other securities issued or issuable by
the Company conform or, when issued and paid for, will conform, in all respects
to all statements with respect thereto contained in the Registration Statements
and the Prospectus. All issued and outstanding securities of the Company have
been duly authorized and validly issued and are fully paid and non-assessable
and the holders thereof have no rights of rescission with respect thereto, and
are not subject to personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual rights granted by
the Company. The Securities are not and will not be subject to any preemptive
or other similar rights of any stockholder, have been duly authorized and, when
issued, paid for and delivered in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable and will conform to the
description thereof contained in the Prospectus; the holders thereof will not be
subject to any liability solely as such holders; all corporate action required
to be taken for the authorization, issue and sale of the Securities has been
duly and validly taken; and the certificates representing the Securities will be
in due and proper form. Upon the issuance and delivery pursuant to the terms of
this Agreement of the Securities to be sold by the Company hereunder, the
Underwriters or the Representative, as the case may be, will acquire good and
marketable title to such Securities free and clear of any lien, charge, claim,
encumbrance, pledge, security interest, defect or other restriction or equity of
any kind whatsoever. Upon issuance by the Depositary of the ADRs evidencing the
ADSs against the deposit of the Ordinary Shares in accordance with the terms of
the Deposit Agreement, the ADRs evidencing the ADSs will be duly and validly
issued and the holders thereof will be entitled to the rights specified therein
and in the Deposit Agreement.
(f) The consolidated financial statements of the Company, together with
the related notes and schedules thereto, included in the Registration
Statements, each Preliminary Prospectus and the Prospectus fairly present the
financial position, income, changes in cash flow, changes in stockholders'
equity and the results of operations of the Company at the respective dates and
for the respective periods to which they apply and such financial statements
have been prepared in conformity with generally accepted accounting principles
in the U.K. and the U.S. and the Rules and Regulations, consistently applied
throughout the periods involved and such financial statements as are audited
have been examined by Ernst & Young LLP, who are independent certified public
accountants within the meaning of the Act and the Rules and Regulations, as
indicated in their respective reports filed therewith. There has been no
adverse
4
change or development involving a prospective adverse change in the condition,
financial or otherwise, or in the earnings, position, prospects, value,
operation, properties, business, or results of operations of the Company or the
Subsidiary, whether or not arising in the ordinary course of business, since the
date of the financial statements included in the Registration Statements and the
Prospectus and the outstanding debt, the property, both tangible and intangible,
and the business of the Company and the Subsidiary, conform in all material
respects to the descriptions thereof contained in the Registration Statements
and the Prospectus. Financial information (including, without limitation, any
pro forma financial information) set forth in the Prospectus under the headings
"Summary Financial Data," "Selected Financial Data," "Capitalization," and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," fairly present, on the basis stated in the Prospectus, the
information set forth therein, and have been derived from or compiled on a basis
consistent with that of the audited financial statements included in the
Prospectus; and, in the case of pro forma financial information, if any, the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein. The amounts shown as accrued for current and
deferred income and other taxes in such financial statements are sufficient for
the payment of all accrued and unpaid domestic and foreign income taxes,
interest, penalties, assessments or deficiencies applicable to the Company or
the Subsidiary, whether disputed or not, for the applicable period then ended
and periods prior thereto; adequate allowance for doubtful accounts has been
provided for unindemnified losses due to the operations of the Company or the
Subsidiary; and the statements of income do not contain any items of special or
nonrecurring income not earned in the ordinary course of business, except as
specified in the notes thereto.
(g) The Company and the Subsidiary, respectively (i) has paid all domestic
and foreign taxes for which it is liable, and has furnished all information
returns it is required to furnish to any taxing authority to whose jurisdiction
it may be subject, (ii) has established adequate reserves for such taxes which
are not due and payable, and (iii) does not have any tax deficiency or claims
outstanding, proposed or assessed against it.
(h) No transfer tax, stamp duty or other similar tax is payable by or on
behalf of the Underwriters in connection with (i) the issuance by the Company of
the Securities, (ii) the purchase by the Underwriters of the Securities from the
Company and the purchase by the Representative of the Representative's Warrants
from the Company, (iii) the consummation by the Company of any of its
obligations under this Agreement, or (iv) resales of the Securities in
connection with the distribution contemplated hereby.
(i) The Company and the Subsidiary, respectively, maintains insurance
policies, including, but not limited to, general liability, and property
insurance, which insures each of the Company, the Subsidiary, and its respective
employees, against such losses and risks generally insured against by comparable
businesses. Each of the Company and the Subsidiary (A) has not failed to give
notice or present any insurance claim with respect to any matter, including but
not limited to the Company's or the Subsidiary's business, property or
employees, under any insurance policy or surety bond in a due and timely manner,
(B) does not have any disputes or claims against any underwriter of such
insurance policies or surety bonds or has failed to pay any premiums due and
payable thereunder, or (C) has not failed to comply with all conditions
contained in such insurance policies and surety bonds. There are no facts or
circumstances under
5
any such insurance policy or surety bond which would relieve any insurer of its
obligation to satisfy in full any valid claim of the Company or the Subsidiary.
(j) There is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding (including, without
limitation, those having jurisdiction over environmental or similar matters),
domestic or foreign, pending or threatened against (or circumstances that may
give rise to the same), or involving the properties or business of, the Company
or the Subsidiary which (i) questions the validity of the capital stock of the
Company or the Subsidiary, this Agreement, the Deposit Agreement, or the
Representative's Warrant Agreement, or of any action taken or to be taken by the
Company or the Subsidiary pursuant to or in connection with this Agreement, the
Deposit Agreement, or the Representative's Warrant Agreement, (ii) is required
to be disclosed in the Registration Statements which is not so disclosed (and
such proceedings as are summarized in the Registration Statements are
accurately summarized in all material respects), or (iii) might materially and
adversely affect the condition, financial or otherwise, or the earnings,
position, prospects, stockholders' equity, value, operation, properties,
business or results of operations of the Company.
(k) The Company has full legal right, power and authority to authorize,
issue, deliver and sell the Securities, enter into this Agreement, the Deposit
Agreement, and the Representative's Warrant Agreement and to consummate the
transactions provided for in this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement; and this Agreement, the Deposit Agreement,
and the Representative's Warrant Agreement have each been duly and properly
authorized, executed and delivered by the Company. Each of this Agreement, the
Deposit Agreement, and the Representative's Warrant Agreement constitutes a
legal, valid and binding agreement of the Company enforceable against the
Company in accordance with its terms, and none of the Company's issue and sale
of the Securities, execution or delivery of this Agreement, the Deposit
Agreement, or the Representative's Warrant Agreement, its performance hereunder
and thereunder, its consummation of the transactions contemplated herein and
therein, or the conduct of its business as described in the Registration
Statements, the Prospectus, and any amendments or supplements thereto, conflicts
with or will conflict with or results or will result in any breach or violation
of any of the terms or provisions of, or constitutes or will constitute a
default under, or result in the creation or imposition of any lien, charge,
claim, encumbrance, pledge, security interest, defect or other restriction or
equity of any kind whatsoever upon, any property or assets (tangible or
intangible) of the Company pursuant to the terms of (i) the memorandum and
articles of association, charter or other organizational documents of the
Company, (ii) any license, contract, collective bargaining agreement, indenture,
mortgage, deed of trust, lease, voting trust agreement, stockholders agreement,
note, loan or credit agreement or any other agreement or instrument to which the
Company or the Subsidiary is a party or by which the Company or the Subsidiary
is or may be bound or to which its or assets (tangible or intangible) is or may
be subject, or any indebtedness, or (iii) any statute, judgment, decree, order,
rule or regulation applicable to the Company or the Subsidiary of any
arbitrator, court, regulatory body or administrative agency or other
governmental agency or body (including, without limitation, those having
jurisdiction over environmental or similar matters), domestic or foreign, having
jurisdiction over the Company or the Subsidiary or any of their respective
activities or properties.
6
(l) No consent, approval, authorization or order of, and no filing with,
any court, regulatory body, government agency or other body, English, domestic
or foreign, is required for the issuance of the Securities pursuant to the
Prospectus and the Registration Statements, the issuance of the Representative's
Warrants, the performance of this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement and the transactions contemplated hereby and
thereby, including without limitation, any waiver of any preemptive, first
refusal or other rights that any entity or person may have for the issue and/or
sale of any of the Securities or the Representative's Warrants, except such as
have been or may be obtained under the Act or may be required under state
securities or Blue Sky laws in connection with the Underwriters' purchase and
distribution of the Securities and the Representative's Warrants to be sold by
the Company hereunder.
(m) All executed agreements, contracts or other documents or copies of
executed agreements, contracts or other documents filed as exhibits to the
Registration Statements to which the Company or the Subsidiary is a party or by
which it may be bound or to which its respective assets, properties or business
may be subject have been duly and validly authorized, executed and delivered by
the Company and constitute the legal, valid and binding agreements of the
Company enforceable against it in accordance with its terms. The descriptions
in the Registration Statements of agreements, contracts and other documents are
accurate and fairly present the information required to be shown with respect
thereto by Form F-1 and Form F-6, and there are no contracts or other documents
which are required by the Act to be described in the Registration Statements or
filed as exhibits to the Registration Statements which are not described or
filed as required, and the exhibits which have been filed are complete and
correct copies of the documents of which they purport to be copies.
(n) Subsequent to the respective dates as of which information is set
forth in the Registration Statements and Prospectus, and except as may otherwise
be indicated or contemplated herein or therein, neither the Company nor the
Subsidiary (i) issued any securities or incurred any liability or obligation,
direct or contingent, for borrowed money, (ii) entered into any transaction
other than in the ordinary course of business, or (iii) declared or paid any
dividend or made any other distribution on or in respect of its capital stock of
any class, and there has not been any change in the capital stock, or any change
in the debt (long or short term) or liabilities or material adverse change in or
affecting the general affairs, management, financial operations, stockholders'
equity or results of operations of the Company or the Subsidiary.
(o) No default exists in the due performance and observance of any term,
covenant or condition of any license, contract, collective bargaining agreement,
indenture, mortgage, installment sale agreement, lease, deed of trust, voting
trust agreement, stockholders agreement, partnership agreement, note, loan or
credit agreement, purchase order, or any other agreement or instrument
evidencing an obligation for borrowed money, or any other material agreement or
instrument to which the Company or the Subsidiary is a party or by which the
Company or the Subsidiary may be bound or to which the property or assets
(tangible or intangible) of the Company is subject or affected.
(p) The Company and the Subsidiary, respectively, has generally enjoyed a
satisfactory employer-employee relationship with its employees and is in
compliance with all domestic and foreign laws and regulations respecting
employment and employment practices,
7
terms and conditions of employment and wages and hours. There are no pending
investigations involving the Company by any governmental agency responsible for
the enforcement of such domestic or foreign laws and regulations. There is no
unfair labor practice charge or complaint against the Company or any lockout,
strike, picketing, boycott, dispute, slowdown or stoppage pending or threatened
against or involving the Company or the Subsidiary, or any predecessor entity,
and none has ever occurred. No representation question exists respecting the
employees of the Company or the Subsidiary, and no collective bargaining
agreement or modification thereof is currently being negotiated by the Company
or the Subsidiary. No grievance or arbitration proceeding is pending under any
expired or existing collective bargaining agreements of the Company or the
Subsidiary. No labor dispute with the employees of the Company or the
Subsidiary exists, or, is imminent.
(q) Neither the Company, the Subsidiary, nor any of their respective
employees, directors, stockholders, partners, or affiliates (within the meaning
of the Rules and Regulations) of any of the foregoing has taken or will take,
directly or indirectly, any action designed to or which has constituted or which
might be expected to cause or result in, under the Exchange Act, or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or otherwise.
(r) Except as otherwise disclosed in the Prospectus, each of the Company
and the Subsidiary (i) owns or has the right to use, free and clear of all
liens, charges, claims, encumbrances, pledges, security interests, defects or
other restrictions or equities of any kind whatsoever, all patents, trademarks,
service marks, trade names and copyrights, technology and licenses and rights
with respect to the foregoing, used in the conduct of its business as now
conducted or proposed to be conducted without infringing upon or otherwise
acting adversely to the right or claimed right of any person, corporation or
other entity under or with respect to any of the foregoing, (ii) is not
obligated or under any liability whatsoever to make any payment by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any patent, trademark, service mark, trade name, copyright, know-how, technology
or other intangible asset, with respect to the use thereof or in connection with
the conduct of its business or otherwise, and (iii) has not received any notice
of infringement of or conflict with asserted rights or others with respect to
any of the foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a material adverse effect on
the condition, financial or otherwise, or the business affairs, position,
prospects, properties, results of operations or net worth of the Company or the
Subsidiary.
(s) The Company and the Subsidiary, respectively, owns and has the
unrestricted right to use all trade secrets, know-how (including all other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), inventions, designs, processes, works of authorship, computer
programs and technical data and information (collectively herein "intellectual
property") that are material to the development, manufacture, operation and sale
of all products and services sold or proposed to be sold by the Company or the
Subsidiary, free and clear of and without violating any right, lien, or claim of
others, including without limitation, former employers of its employees;
PROVIDED, HOWEVER, that the possibility exists that other persons or entities,
completely independent of the Company, the Subsidiary, or their respective
employees or agents, could have developed trade secrets or items of technical
information similar or identical to those of the Company or the Subsidiary.
Each of the Company and the
8
Subsidiary is not aware of any such development of similar or identical trade
secrets or technical information by others.
(t) Each of the Company and the Subsidiary has good and marketable title
to, or valid and enforceable leasehold estates in, all items of real and
personal property stated in the Prospectus to be owned or leased by it, free and
clear of all liens, charges, claims, encumbrances, pledges, security interests,
defects, or other restrictions or equities of any kind whatsoever, other than
those referred to in the Prospectus and liens for taxes not yet due and payable.
(u) Ernst & Young LLP, whose report is filed with the Commission as a part
of the F-1 Registration Statement, are independent certified public accountants
as required by the Act and the Rules and Regulations.
(v) The Company has caused to be duly executed legally binding and
enforceable agreements pursuant to which each of the Company's officers,
directors, stockholders and holders of securities exchangeable or exercisable
for or convertible into Ordinary Shares has agreed not to, directly or
indirectly, issue, offer, offer to sell, sell, grant any option for the sale or
purchase of, assign, transfer, pledge, hypothecate or otherwise encumber or
dispose of any shares of Common Stock or securities convertible into,
exercisable or exchangeable for or evidencing any right to purchase or subscribe
for any Ordinary Shares (either pursuant to Rule 144 of the Rules and
Regulations or otherwise) or dispose of any beneficial interest therein for a
period of not less than twelve (12) months following the effective date of the
Registration Statements (the "Lock-Up Period") without the prior written consent
of the Representative and the Company. During the 12 month period commencing on
the effective date of the Registration Statements, the Company shall not,
without the prior written consent of the Representative, sell, contract or offer
to sell, issue, transfer, assign, pledge, distribute, or otherwise dispose of,
directly or indirectly, any Ordinary Shares or any options, rights or warrants
with respect to any Ordinary Shares. The Company will cause the Transfer Agent
(as hereinafter defined) to mark an appropriate legend on the face of stock
certificates representing all of such securities and to place "stop transfer"
orders on the Company's stock ledgers.
(w) There are no claims, payments, issuances, arrangements or
understandings, whether oral or written, for services in the nature of a
finder's or origination fee with respect to the sale of the Securities hereunder
or any other arrangements, agreements, understandings, payments or issuance with
respect to the Company, or any of its officers, directors, stockholders,
partners, employees or affiliates, that may affect the Underwriters'
compensation, as determined by the National Association of Securities Dealers,
Inc. ("NASD").
(x) The ADSs have been approved for listing on the American Stock Exchange
("Amex").
(y) Neither the Company, the Subsidiary, nor any of its respective
officers, employees, agents or any other person acting on behalf of the Company
or the Subsidiary has, directly or indirectly, given or agreed to give any
money, gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent
of a customer or supplier, or official or employee of any governmental agency
(domestic or foreign) or instrumentality of any government (domestic or foreign)
or any political
9
party or candidate for office (domestic or foreign) or other person who was, is,
or may be in a position to help or hinder the business of the Company or the
Subsidiary (or assist the Company or the Subsidiary in connection with any
actual or proposed transaction) which (a) might subject the Company or the
Subsidiary or any other such person to any damage or penalty in any civil,
criminal or governmental litigation or proceeding (domestic or foreign), (b) if
not given in the past, might have had a material adverse effect on the assets,
business or operations of the Company or the Subsidiary, or (c) if not continued
in the future, might adversely affect the assets, business, condition, financial
or otherwise, earnings, position, properties, value, operations or prospects of
the Company or the Subsidiary. The Company's and the Subsidiary's internal
accounting controls are sufficient to cause the Company and the Subsidiary to
comply with the Foreign Corrupt Practices Act of 1977, as amended.
(z) Except as set forth in the Prospectus, no officer, director,
stockholder or partner of the Company, the Subsidiary, or any "affiliate" or
"associate" (as these terms are defined in Rule 405 promulgated under the Rules
and Regulations) of any of the foregoing persons or entities has or has had,
either directly or indirectly, (i) an interest in any person or entity which
(A) furnishes or sells services or products which are furnished or sold or are
proposed to be furnished or sold by the Company or the Subsidiary, or
(B) purchases from or sells or furnishes to the Company or the Subsidiary any
goods or services, or (ii) a beneficial interest in any contract or agreement to
which the Company or the Subsidiary is a party or by which it may be bound or
affected. Except as set forth in the Prospectus under "Certain Transactions,"
there are no existing agreements, arrangements, understandings or transactions,
or proposed agreements, arrangements, understandings or transactions, between or
among the Company or the Subsidiary and any officer, director, or 5% or greater
securityholder of the Company or the Subsidiary, or any partner, affiliate or
associate of any of the foregoing persons or entities.
(aa) Any certificate signed by any officer of the Company, and delivered to
the Underwriters or to Underwriters' Counsel (as defined herein) shall be deemed
a representation and warranty by the Company to the Underwriters as to the
matters covered thereby.
(bb) The minute books of the Company and the Subsidiary have been made
available to the Underwriters and contain a complete summary of all meetings and
actions of the directors (including committees thereof) and stockholders of the
Company and the Subsidiary, since the time of their respective incorporation,
and reflect all transactions referred to in such minutes accurately in all
material respects.
(cc) Except and to the extent described in the Prospectus, no holders of
any securities of the Company or the Subsidiary or of any options, warrants or
other convertible or exchangeable securities of the Company have the right to
include any securities issued by the Company or the Subsidiary in the F-1
Registration Statement or any registration statement to be filed by the Company
or the Subsidiary or to require the Company to file a registration statement
under the Act and no person or entity holds any anti-dilution rights with
respect to any securities of the Company.
10
(dd) The Company has as of the effective date of the Registration
Statements entered into an employment agreement with Andrew Neville
Lyndon-Skeggs in the form filed as Exhibit 10.2 to the F-1 Registration
Statement.
(ee) Each of the Company and the Subsidiary confirms as of the date hereof
that it is in compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and
each of the Company and the Subsidiary further agrees that if it or any
affiliate commence engaging in business with the government of Cuba or with any
person or affiliate located in Cuba after the date the Registration Statements
become or have become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date is later,
or if the information reported or incorporated by reference in the Prospectus,
if any, concerning the Company's, the Subsidiary's, or any affiliate's, business
with Cuba or with any person or affiliate located in Cuba changes in any
material way, the Company and the Subsidiary will provide the Department notice
of such business or change, as appropriate, in a form acceptable to the
Department.
(ff) The Company is not, and upon the issuance and sale of the Securities
as herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus under the caption "Use of Proceeds" will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(gg) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparations of financial
statements in conformity with generally accepted accounting principles in the
U.K. and the U.S. and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorizations; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) Each of the Company and the Subsidiary has reviewed its operations and
that of any third parties with which the Company or the Subsidiary has a
material relationship to evaluate the extent to which the business or operations
of the Company or the Subsidiary will be affected by the Year 2000 Problem. As
a result of such review, the disclosure in the Registration Statement under
Year 2000 is accurate and complies in all material respects with the rules and
regulations of the Act. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
11
2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) On the basis of the representations, warranties, covenants and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter,
severally and not jointly, agrees to purchase from the Company at a price of
$_______ per ADS, that number of ADSs set forth in Schedule A opposite the name
of such Underwriter, subject to such adjustment as the Representative in its
sole discretion shall make to eliminate any sales or purchases of fractional
ADSs, plus any additional number of ADSs which such Underwriter may become
obligated to purchase pursuant to the provisions of SECTION 11 hereof.
(b) In addition, on the basis of the representations, warranties,
covenants and agreements herein contained, but subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase all or any part of an
additional 300,000 ADSs at a price of $_________ per ADS. The option granted
hereby will expire thirty (30) days after (i) the date the F-1 Registration
Statement becomes effective, if the Company has elected not to rely on Rule 430A
under the Rules and Regulations, or (ii) the date of this Agreement if the
Company has elected to rely upon Rule 430A under the Rules and Regulations, and
may be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the ADSs upon notice by the Representative to the Company
setting forth the number of Option ADSs as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for any
such Option ADSs. Any such time and date of delivery (an "Option Closing Date")
shall be determined by the Representative, but shall not be later than three (3)
full business days after the exercise of said option, nor in any event prior to
the Closing Date, as hereinafter defined, unless otherwise agreed upon by the
Representative and the Company. Nothing herein contained shall obligate the
Underwriters to make any over-allotments. No Option ADSs shall be delivered
unless the ADSs shall be simultaneously delivered or shall theretofore have been
delivered as herein provided.
(c) Payment of the purchase price for, and delivery of certificates
for, the ADSs shall be made at the offices of the Representative at 520 Madison
Avenue, 10th Floor, New York, New York 10022, or at such other place as shall be
agreed upon by the Representative and the Company. Such delivery and payment
shall be made at 10:00 a.m. (New York City time) on ________, 1999 or at such
other time and date as shall be agreed upon by the Representative and the
Company, but not less than three (3) nor more than five (5) full business days
after the effective date of the F-1 Registration Statement (such time and date
of payment and delivery being herein called the "Closing Date"). In addition,
in the event that any or all of the Option ADSs are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
for, such Option ADSs shall be made at the above-mentioned office of the
Representative or at such other place as shall be agreed upon by the
Representative and the Company on each Option Closing Date as specified in the
notice from the Representative to the Company. Delivery of the certificates for
the ADSs and the Option ADSs, if any, shall be made to the Underwriters against
payment by the Underwriters, severally and not jointly, of the purchase price
for the ADSs and the Option ADSs, if any, to the order of the Company for the
ADSs and the Option ADSs, if any, by New York Clearing House funds. In the
event such option is exercised, each of the Underwriters, acting severally and
not jointly, shall purchase that
12
proportion of the total number of Option ADSs then being purchased which the
number of ADSs set forth in Schedule A hereto opposite the name of such
Underwriter bears to the total number of ADSs, subject in each case to such
adjustments as the Representative in its discretion shall make to eliminate any
sales or purchases of fractional ADSs. Certificates for the ADSs and the Option
ADSs, if any, shall be in definitive, fully registered form, shall bear no
restrictive legends and shall be in such denominations and registered in such
names as the Underwriters may request in writing at least two (2) business days
prior to the Closing Date or the relevant Option Closing Date, as the case may
be. The certificates for the ADSs and the Option ADSs, if any, shall be made
available to the Representative at such office or such other place as the
Representative may designate for inspection, checking and packaging no later
than 9:30 a.m. on the last business day prior to the Closing Date or the
relevant Option Closing Date, as the case may be.
(d) On the Closing Date, the Company shall issue and sell to the
Representative Representative's Warrants at a purchase price of $.0001 per
warrant, which Representative's Warrants shall entitle the holders thereof to
purchase an aggregate of 200,000 ADSs. The Representative's Warrants shall be
exercisable for a period of four (4) years commencing at the beginning of the
second year after their issuance and sale at a price equaling one hundred twenty
percent (120%) of the respective initial public offering price of the ADSs. The
Representative's Warrant Agreement and form of Warrant Certificate shall be
substantially in the form filed as Exhibit 4.3 to the F-1 Registration
Statement. Payment for the Representative's Warrants shall be made on the
Closing Date.
3. PUBLIC OFFERING OF THE ADSS. As soon after the F-1 Registration
Statement becomes effective as the Representative deems advisable, the
Underwriters shall make a public offering of the ADSs (other than to residents
of or in any jurisdiction in which qualification of the Securities is required
and has not become effective) at the price and upon the other terms set forth in
the Prospectus. The Representative may from time to time increase or decrease
the public offering price after distribution of the ADSs has been completed to
such extent as the Representative, in its sole discretion deems advisable. The
Underwriters may enter into one of more agreements as the Underwriters, in each
of their sole discretion, deem advisable with one or more broker-dealers who
shall act as dealers in connection with such public offering.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees with each of the Underwriters as follows:
(a) The Company shall use its best efforts to cause the Registration
Statements and any amendments thereto to become effective as promptly as
practicable and will not at any time, whether before or after the effective date
of the Registration Statements, file any amendment to the Registration
Statements or supplement to the Prospectus or file any document under the Act or
Exchange Act before termination of the offering of the Shares by the
Underwriters of which the Representative shall not previously have been advised
and furnished with a copy, or to which the Representative shall have objected or
which is not in compliance with the Act, the Exchange Act, the U.K. Companies
Act 1995, or the Rules and Regulations.
(b) As soon as the Company is advised or obtains knowledge thereof,
the Company will advise the Representative and confirm the notice in writing
(i) when the
13
Registration Statements, as amended, becomes effective, if the provisions of
Rule 430A promulgated under the Act will be relied upon, when the Prospectus has
been filed in accordance with said Rule 430A and when any post-effective
amendment to the Registration Statements becomes effective; (ii) of the issuance
by the Commission of any stop order or of the initiation, or the threatening, of
any proceeding suspending the effectiveness of the Registration Statements or
any order preventing or suspending the use of the Preliminary Prospectus or the
Prospectus, or any amendment or supplement thereto, or the institution of
proceedings for that purpose; (iii) of the issuance by the Commission or by any
state securities commission of any proceedings for the suspension of the
qualification of any of the Securities for offering or sale in any jurisdiction
or of the initiation, or the threatening, of any proceeding for that purpose;
(iv) of the receipt of any comments from the Commission; and (v) of any request
by the Commission for any amendment to the Registration Statements or any
amendment or supplement to the Prospectus or for additional information. If the
Commission or any state securities commission shall enter a stop order or
suspend such qualification at any time, the Company will make every effort to
obtain promptly the lifting of such order or suspension.
(c) The Company shall file the Prospectus (in form and substance
satisfactory to the Representative) or transmit the Prospectus by a means
reasonably calculated to result in filing with the Commission pursuant to Rule
424(b)(1) (or, if applicable and if consented to by the Representative, pursuant
to Rule 424(b)(4)) not later than the Commission's close of business on the
earlier of (i) the second business day following the execution and delivery of
this Agreement and (ii) the fifth business day after the effective date of the
Registration Statements.
(d) The Company will give the Representative notice of its intention
to file or prepare any amendment to the Registration Statements (including any
post-effective amendment) or any amendment or supplement to the Prospectus
(including any revised prospectus which the Company proposes for use by the
Underwriters in connection with the offering of the Securities which differs
from the corresponding prospectus on file at the Commission at the time the F-1
Registration Statement becomes effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the Rules and Regulations),
and will furnish the Representative with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file any such prospectus to which the
Representative or Orrick, Herrington & Sutcliffe LLP ("Underwriters' Counsel")
shall object.
(e) The Company shall endeavor in good faith, in cooperation with the
Representative, at or prior to the time the Registration Statements become
effective, to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as the Representative may designate to permit the
continuance of sales and dealings therein for as long as may be necessary to
complete the distribution, and shall make such applications, file such documents
and furnish such information as may be required for such purpose; PROVIDED,
HOWEVER, the Company shall not be required to qualify as a foreign corporation
or file a general or limited consent to service of process in any such
jurisdiction. In each jurisdiction where such qualification shall be effected,
the Company will, unless the Representative agrees that such action is not at
the time necessary or advisable, use all reasonable efforts to file and make
such statements or reports at such times as are or may reasonably be required by
the laws of such jurisdiction to continue such qualification.
14
(f) During the time when a prospectus is required to be delivered
under the Act, the Company shall use all reasonable efforts to comply with all
requirements imposed upon it by the Act and the Exchange Act, as now and
hereafter amended and by the Rules and Regulations, as from time to time in
force, so far as necessary to permit the continuance of sales of or dealings in
the Securities in accordance with the provisions hereof and the Prospectus, or
any amendments or supplements thereto. If at any time when a prospectus
relating to the Securities is required to be delivered under the Act, any event
shall have occurred as a result of which, in the opinion of counsel for the
Company or Underwriters' Counsel, the Prospectus, as then amended or
supplemented, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Company will notify the Representative promptly and
prepare and file with the Commission an appropriate amendment or supplement in
accordance with Section 10 of the Act, each such amendment or supplement to be
satisfactory to Underwriters' Counsel, and the Company will furnish to the
Underwriters copies of such amendment or supplement as soon as available and in
such quantities as the Underwriters may request.
(g) As soon as practicable, but in any event not later than
forty-five (45) days after the end of the 12-month period beginning on the day
after the end of the fiscal quarter of the Company during which the effective
date of the Registration Statements occurs (ninety (90) days in the event that
the end of such fiscal quarter is the end of the Company's fiscal year), the
Company shall make generally available to its security holders, in the manner
specified in Rule 158(b) of the Rules and Regulations, and to the
Representative, an earnings statement which will be in the detail required by,
and will otherwise comply with, the provisions of Section 11(a) of the Act and
Rule 158(a) of the Rules and Regulations, which statement need not be audited
unless required by the Act, covering a period of at least twelve (12)
consecutive months after the effective date of the Registration Statements.
(h) During a period of five (5) years after the date hereof, the
Company will furnish to its stockholders, as soon as practicable, annual reports
(including financial statements audited by independent public accountants) and
unaudited quarterly reports of earnings, and will deliver to the Representative:
(i) concurrently with furnishing such quarterly reports to its
stockholders, statements of income of the Company for each quarter in the
form furnished to the Company's stockholders and certified by the Company's
principal financial or accounting officer;
(ii) concurrently with furnishing such annual reports to its
stockholders, a balance sheet of the Company as at the end of the preceding
fiscal year, together with statements of operations, stockholders' equity,
and cash flows of the Company for such fiscal year, accompanied by a copy
of the certificate thereon of independent certified public accountants;
15
(iii) as soon as they are available, copies of all reports
(financial or other) mailed to stockholders;
(iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, the NASD or
any securities exchange;
(v) every press release and every material news item or article
of interest to the financial community in respect of the Company, or its
affairs, which was released or prepared by or on behalf of the Company; and
(vi) any additional information of a public nature concerning the
Company (and any future subsidiaries) or its businesses which the
Representative may request.
During such five-year period, if the Company has active subsidiaries, the
foregoing financial statements will be on a consolidated basis to the extent
that the accounts of the Company and its subsidiary(ies) are consolidated, and
will be accompanied by similar financial statements for any significant
subsidiary which is not so consolidated.
(i) The Company will maintain a transfer agent ("Transfer Agent")
and, if necessary under the jurisdiction of incorporation of the Company, a
Registrar (which may be the same entity as the Transfer Agent) for its ADSs.
(j) The Company will furnish to the Representative or on the
Representative's order, without charge, at such place as the Representative may
designate, copies of each Preliminary Prospectus, the Registration Statements
and any pre-effective or post-effective amendments thereto (two of which copies
will be signed and will include all financial statements and exhibits), the
Prospectus, and all amendments and supplements thereto, including any prospectus
prepared after the effective date of the Registration Statements, in each case
as soon as available and in such quantities as the Representative may request.
(k) On or before the effective date of the Registration Statements,
the Company shall provide the Representative with true original copies of duly
executed, legally binding and enforceable agreements pursuant to which, for a
period of twelve (12) months from the effective date of the Registration
Statements, each of the Company's securityholders and holders of securities
exchangeable or exercisable for or convertible into Ordinary Shares agrees that
it or he or she will not, directly or indirectly, issue, offer to sell, sell,
grant an option for the sale or purchase of, assign, transfer, pledge,
hypothecate or otherwise encumber or dispose of any Ordinary Shares or
securities convertible into, exercisable or exchangeable for or evidencing any
right to purchase or subscribe for any Ordinary Shares (either pursuant to
Rule 144 of the Rules and Regulations or otherwise) or dispose of any beneficial
interest therein without the prior consent of the Representatives (collectively,
the "Lock-up Agreements"). During the 12 month period commencing on the
effective date of the Registration Statements, the Company shall not, without
the prior written consent of the Representative, sell, contract or offer to
sell, issue, transfer, assign, pledge, distribute, or otherwise dispose of,
directly or indirectly, any shares of capital stock or any options, rights or
warrants with respect to any shares of capital stock of the
16
Company. On or before the Closing Date, the Company shall deliver instructions
to the Transfer Agent authorizing it to place appropriate legends on the
certificates representing the securities subject to the Lock-up Agreements and
to place appropriate stop transfer orders on the Company's ledgers.
(l) Neither the Company, the Subsidiary, nor any of its respective
officers, directors, stockholders, nor any of their respective affiliates
(within the meaning of the Rules and Regulations) will take, directly or
indirectly, any action designed to, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the price of
any securities of the Company.
(m) The Company shall apply the net proceeds from the sale of the
Securities in the manner, and subject to the conditions, set forth under "Use of
Proceeds" in the Prospectus. No portion of the net proceeds will be used,
directly or indirectly, to acquire any securities issued by the Company.
(n) The Company shall timely file all such reports, forms or other
documents as may be required from time to time, under the Act, the Exchange Act,
and the Rules and Regulations, and all such reports, forms and documents filed
will comply as to form and substance with the applicable requirements under the
Act, the Exchange Act, and the Rules and Regulations.
(o) The Company shall furnish to the Representative as early as
practicable prior to each of the date hereof, the Closing Date and each Option
Closing Date, if any, but no later than two (2) full business days prior
thereto, a copy of the latest available unaudited interim financial statements
of the Company (which in no event shall be as of a date more than thirty (30)
days prior to the date of the Registration Statements) which have been read by
the Company's independent public accountants, as stated in their letters to be
furnished pursuant to SECTIONS 6(j) hereof.
(p) The Company shall cause the ADSs to be quoted on Amex and, for a
period of five (5) years from the date hereof, use its best efforts to maintain
the Amex quotation of the and ADSs to the extent outstanding.
(q) For a period of five (5) years from the Closing Date, the Company
shall furnish to the Representative at the Company's sole expense, (i) daily
consolidated transfer sheets relating to the ADSs, (ii) the list of holders of
all of the Company's securities and (iii) a Blue Sky "Trading Survey" for
secondary sales of the Company's securities prepared by counsel to the Company.
(r) As soon as practicable, (i) but in no event more than five (5)
business days before the effective date of the Registration Statements, file a
Form 8-A with the Commission providing for the registration under the Exchange
Act of the Securities and (ii) but in no event more than thirty (30) days after
the effective date of the Registration Statements, take all necessary and
appropriate actions to be included in Standard and Poor's Corporation
Descriptions and Moody's OTC Manual and to continue such inclusion for a period
of not less than five (5) years.
17
(s) The Company agrees that it will not for a period of thirty-six
(36) months from the effective date of the Registration Statements extend the
term of lower the exercise price of any existing warrant or option exercisable,
exchangeable or convertible in to any securities of the Company without the
prior written consent of the Representative.
(t) The Company hereby agrees that it will not, for a period of
twelve (12) months from the effective date of the Registration Statements,
adopt, propose to adopt or otherwise permit to exist any employee, officer,
director, consultant or compensation plan or similar arrangement permitting (i)
the grant, issue, sale or entry into any agreement to grant, issue or sell any
option, warrant or other contract right (x) at an exercise price that is less
than the greater of the public offering price of the Ordinary Shares set forth
herein and the fair market value on the date of grant or sale or (y) to any of
its executive officers or directors or to any holder of 5% or more of the
Ordinary Shares; (ii) the payment for such securities with any form of
consideration other than cash; or (iii) the existence of stock appreciation
rights, phantom options or similar arrangements.
(u) Until the completion of the distribution of the Securities, the
Company shall not, without the prior written consent of the Representative and
Underwriters' Counsel, issue, directly or indirectly, any press release or other
communication or hold any press conference with respect to the Company or its
activities or the offering contemplated hereby, other than trade releases issued
in the ordinary course of the Company's business consistent with past practices
with respect to the Company's operations.
(v) For a period equal to the lesser of (i) five (5) years from the
date hereof, and (ii) the sale to the public of the Representative's Securities,
the Company will not take any action or actions which may prevent or disqualify
the Company's use of Form F-1 (or other appropriate form) for the registration
under the Act of the Representative's Securities.
5. PAYMENT OF EXPENSES.
(a) The Company hereby agrees to pay on each of the Closing Date and
the Option Closing Date (to the extent not paid at the Closing Date) all
expenses and fees (other than fees of Underwriters' Counsel, except as provided
in (iv) below) incident to the performance of the obligations of the Company
under this Agreement, the Deposit Agreement, and the Representative's Warrant
Agreement, including, without limitation, (i) the fees and expenses of
accountants and counsel for the Company, (ii) all costs and expenses incurred in
connection with the preparation, duplication, printing (including mailing and
handling charges), filing, delivery and mailing (including the payment of
postage with respect thereto) of the Registration Statements and the Prospectus
and any amendments and supplements thereto and the printing, mailing (including
the payment of postage with respect thereto) and delivery of this Agreement, the
Deposit Agreement, and the Representative's Warrant Agreement, the Agreement
Among Underwriters, the Selected Dealer Agreements, and related documents,
including the cost of all copies thereof and of the Preliminary Prospectuses and
of the Prospectus and any amendments thereof or supplements thereto supplied to
the Underwriters and such dealers as the Underwriters may request, in quantities
as hereinabove stated, (iii) the printing, engraving, issuance and delivery of
the Securities including, but not limited to, (x) the purchase by the
Underwriters of the ADSs and the Option ADSs and the purchase by the
Representative of the Representative's
18
Warrants from the Company, (y) the consummation by the Company of any of its
obligations under this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement, and (z) resale of the ADSs and the Option
ADSs by the Underwriters in connection with the distribution contemplated
hereby, (iv) the delivery of the Ordinary Shares to the Custodian (as defined in
the Deposit Agreement) and the Depositary for the benefit of the Underwriters,
including any stock transfer and stamp duty taxes payable upon the sale and
delivery of the Securities to the Underwriters; (v) the qualification of the
Securities under state or foreign securities or "Blue Sky" laws and
determination of the status of such securities under legal investment laws,
including the costs of printing and mailing the "Preliminary Blue Sky
Memorandum", the "Supplemental Blue Sky Memorandum" and "Legal Investments
Survey," if any, and disbursements and fees of counsel in connection therewith,
(vi) costs and expenses incurred by the Company in connection with the "road
show", (vii) fees and expenses of the Transfer Agent and registrar and all issue
and transfer taxes, if any, (vii) applications for assignment of a rating of the
Securities by qualified rating agencies, (viii) the fees payable to the
Commission and the NASD, (ix) the fees and expenses incurred in connection with
the quotation of the Securities on Amex and any other exchange, (x) to the
extent provided under the Deposit Agreement, all fees and expenses (including
fees, disbursements and expenses of counsel) of the Depositary, the Custodian
and any other custodian appointed under the Deposit Agreement incurred in
connection with the transactions contemplated by this Agreement, the Deposit
Agreement, and the Representative's Warrant Agreement, and (xii) any taxes or
fees payable to any English authorities, brokers, associations or stock
exchanges in connection with the transactions contemplated by this Agreement,
the Deposit Agreement, and the Representative's Warrant Agreement.
(b) If this Agreement is terminated by the Underwriters in accordance
with the provisions of SECTION 6 or SECTION 12, the Company shall reimburse and
indemnify the Underwriters for all of their actual out-of-pocket expenses,
including the fees and disbursements of Underwriters' Counsel, less any amounts
already paid pursuant to SECTION 5(c) hereof.
(c) The Company further agrees that, in addition to the expenses
payable pursuant to subsection (a) of this SECTION 5, it will pay to the
Representative on the Closing Date by certified or bank cashier's check or, at
the election of the Representative, by deduction from the proceeds of the
offering of the ADSs, a non-accountable expense allowance equal to 3% of the
gross proceeds received by the Company from the sale of the ADSs, $50,000 of
which has been paid to date.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder shall be subject to the continuing accuracy of the
representations and warranties of the Company herein as of the date hereof and
as of the Closing Date and each Option Closing Date, if any, as if they had been
made on and as of the Closing Date or each Option Closing Date, as the case may
be; the accuracy on and as of the Closing Date or Option Closing Date, if any,
of the statements of the officers of the Company made pursuant to the provisions
hereof; and the performance by the Company on and as of the Closing Date and
each Option Closing Date, if any, of its covenants and obligations hereunder and
to the following further conditions:
(a) The Registration Statements shall have become effective not later
than 12:00 P.M., New York time, on the date of this Agreement or such later date
and time as shall be
19
consented to in writing by the Representative, and, at the Closing Date and each
Option Closing Date, if any, no stop order suspending the effectiveness of the
Registration Statements shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or contemplated by the
Commission and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
Underwriters' Counsel. If the Company has elected to rely upon Rule 430A of the
Rules and Regulations, the price of the ADSs and any price-related information
previously omitted from the effective F-1 Registration Statement pursuant to
such Rule 430A shall have been transmitted to the Commission for filing pursuant
to Rule 424(b) of the Rules and Regulations within the prescribed time period
and, prior to the Closing Date, the Company shall have provided evidence
satisfactory to the Representative of such timely filing, or a post-effective
amendment providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the Rules and
Regulations.
(b) The Representative shall not have advised the Company that the
Registration Statements, or any amendment thereto, contains an untrue statement
of fact which, in the Representative's opinion, is material, or omits to state a
fact which, in the Representative's opinion, is material and is required to be
stated therein or is necessary to make the statements therein not misleading, or
that the Prospectus, or any supplement thereto, contains an untrue statement of
fact which, in the Representative's opinion, is material, or omits to state a
fact which, in the Representative's opinion, is material and is required to be
stated therein or is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) On or prior to each of the Closing Date and each Option Closing
Date, if any, the Representative shall have received from Underwriters' Counsel,
such opinion or opinions with respect to the organization of the Company, the
validity of the Securities, the Registration Statements, the Prospectus and
other related matters as the Representative may request and Underwriters'
Counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(d) At the Closing Date, the Underwriters shall have received the
favorable opinion of Greenberg Traurig, counsel to the Company, dated the
Closing Date, addressed to the Underwriters and in form and substance
satisfactory to Underwriters' Counsel, to the effect that:
(i) each of the Company and the Subsidiary (A) has been duly
organized and is validly existing as a corporation in good standing under
the laws of its jurisdiction, (B) is duly qualified and licensed and in
good standing as a foreign corporation in each jurisdiction in which its
ownership or leasing of any properties or the character of its operations
requires such qualification or licensing, and (C) has all requisite
corporate power and authority, and has obtained any and all necessary
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
(including, without limitation, those having jurisdiction over
environmental or similar matters), to own or lease its properties and
conduct its business as described in the Prospectus; each of the Company
and the Subsidiary is and has been doing business in compliance with all
such authorizations, approvals, orders, licenses, certificates, franchises
and permits and all
20
domestic and foreign laws, rules and regulations; and, each of the Company
and the Subsidiary has not received any notice of proceedings relating to
the revocation or modification of any such authorization, approval, order,
license, certificate, franchise, or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would materially adversely affect the business, operations, condition,
financial or otherwise, or the earnings, business affairs, position,
prospects, value, operation, properties, business or results of operations
of the Company. The disclosures in the F-1 Registration Statement
concerning the effects of domestic and foreign laws, rules and regulations
on the Company's business as currently conducted and as contemplated are
correct in all material respects and do not omit to state a fact required
to be stated therein or necessary to make the statements contained therein
not misleading in light of the circumstances in which they were made.
(ii) except for the Subsidiary, the Company does not own an
interest in any other corporation, partnership, joint venture, trust or
other business entity;
(iii) the Company has a duly authorized, issued and
outstanding capitalization as set forth in the Prospectus, and any
amendment or supplement thereto, under "CAPITALIZATION", and neither the
Company nor the Subsidiary is a party to or bound by any instrument,
agreement or other arrangement providing for it to issue, sell, transfer,
purchase or redeem any capital stock, rights, warrants, options or other
securities, except for this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement and as described in the Prospectus. The
Securities and all other securities issued or issuable by the Company
conform in all material respects to all statements with respect thereto
contained in the Registration Statements and the Prospectus. All issued
and outstanding securities of the Company and the Subsidiary have been duly
authorized and validly issued and are fully paid and non-assessable; the
holders thereof have no rights of rescission with respect thereto, and are
not subject to personal liability by reason of being such holders; and none
of such securities were issued in violation of the preemptive rights of any
holders of any security of the Company or the Subsidiary or any similar
rights granted by the Company or the Subsidiary. The Securities to be sold
by the Company hereunder and under the Representative's Warrant Agreement
are not and will not be subject to any preemptive or other similar rights
of any stockholder, have been duly authorized and, when issued, paid for
and delivered in accordance with the terms hereof, will be validly issued,
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus; the holders thereof will not be subject to any
liability solely as such holders; all corporate action required to be taken
for the authorization, issue and sale of the Securities has been duly and
validly taken; and the certificates representing the Securities are in due
and proper form. The Representative's Warrants constitute valid and
binding obligations of the Company to issue and sell, upon exercise thereof
and payment therefor, the number and type of securities of the Company
called for thereby. Upon the issuance and delivery pursuant to this
Agreement of the ADSs, the Option ADSs and the Representative's Warrants to
be sold by the Company, the Underwriters and the Representative,
respectively, will acquire good and marketable title to the ADSs, the
Option ADSs and the Representative's Warrants free and clear of any pledge,
lien, charge, claim, encumbrance, security interest, or other restriction
or equity of any kind whatsoever. No transfer tax is payable by or on
21
behalf of the Underwriters in connection with (A) the issuance by the
Company of the Securities, (B) the purchase by the Underwriters of the ADSs
and the Option ADSs from the Company, and the purchase by the
Representative of the Representative's Warrants from the Company (C) the
consummation by the Company of any of its obligations under this Agreement,
the Deposit Agreement, or the Representative's Warrant Agreement, or (D)
resales of the ADSs and the Option ADSs in connection with the distribution
contemplated hereby.
(iv) The Registration Statements are effective under the Act,
and, if applicable, filing of all pricing information has been timely made
in the appropriate form under Rule 430A, and no stop order suspending the
use of the Preliminary Prospectus, the Registration Statements or
Prospectus or any part of any thereof or suspending the effectiveness of
the Registration Statements has been issued and no proceedings for that
purpose have been instituted or are pending or, to the best of such
counsel's knowledge, threatened or contemplated under the Act;
(v) each of the Preliminary Prospectus, the Registration
Statements, and the Prospectus and any amendments or supplements thereto
(other than the financial statements and other financial and statistical
data included therein, as to which no opinion need be rendered) comply as
to form in all material respects with the requirements of the Act and the
Rules and Regulations.
(vi) to the best of such counsel's knowledge, (A) there are no
agreements, contracts or other documents required by the Act to be
described in the Registration Statements and the Prospectus and filed as
exhibits to the Registration Statements other than those described in the
Registration Statements (or required to be filed under the Exchange Act if
upon such filing they would be incorporated, in whole or in part, by
reference therein) and the Prospectus and filed as exhibits thereto, and
the exhibits which have been filed are correct copies of the documents of
which they purport to be copies; (B) the descriptions in the Registration
Statements and the Prospectus and any supplement or amendment thereto of
contracts and other documents to which the Company or the Subsidiary is a
party or by which it is bound, including any document to which the Company
or the Subsidiary is a party or by which it is bound, incorporated by
reference into the Prospectus and any supplement or amendment thereto, are
accurate and fairly represent the information required to be shown by Form
F-1; (C) there is not pending or threatened against the Company or the
Subsidiary any action, arbitration, suit, proceeding, inquiry,
investigation, litigation, governmental or other proceeding (including,
without limitation, those having jurisdiction over environmental or similar
matters), domestic or foreign, pending or threatened against (or
circumstances that may give rise to the same), or involving the properties
or business of the Company or the Subsidiary which (x) is required to be
disclosed in the F-1 Registration Statement which is not so disclosed (and
such proceedings as are summarized in the F-1 Registration Statement are
accurately summarized in all respects), (y) questions the validity of the
capital stock of the Company or the Subsidiary or this Agreement, the
Deposit Agreement, or the Representative's Warrant Agreement, or of any
action taken or to be taken by the Company pursuant to or in connection
with any of the foregoing; (D) no statute or regulation or legal or
governmental proceeding required to be described in the
22
Prospectus is not described as required; and (E) there is no action, suit
or proceeding pending, or threatened, against or affecting the Company or
the Subsidiary before any court or arbitrator or governmental body, agency
or official (or any basis thereof known to such counsel) in which there is
a reasonable possibility of a decision which may result in a material
adverse change in the condition, financial or otherwise, or the earnings,
position, prospects, stockholders' equity, value, operation, properties,
business or results of operations of the Company or the Subsidiary, which
could adversely affect the present or prospective ability of the Company to
perform its obligations under this Agreement, the Deposit Agreement, or the
Representative's Warrant Agreement or which in any manner draws into
question the validity or enforceability of this Agreement, the Deposit
Agreement, or the Representative's Warrant Agreement;
(vii) the Company has full legal right, power and authority
to enter into each of this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement, and to consummate the transactions
provided for therein; and each of this Agreement, the Deposit Agreement,
and the Representative's Warrant Agreement has been duly authorized,
executed and delivered by the Company. Each of this Agreement, the Deposit
Agreement, and the Representative's Warrant Agreement, assuming due
authorization, execution and delivery by each other party thereto
constitutes a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to
or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as
rights to indemnity or contribution may be limited by applicable law), and
none of the Company's execution or delivery of this Agreement, the Deposit
Agreement, and the Representative's Warrant Agreement, its performance
hereunder or thereunder, its consummation of the transactions contemplated
herein or therein, or the conduct of its business as described in the
Registration Statements, the Prospectus, and any amendments or supplements
thereto, conflicts with or will conflict with or results or will result in
any breach or violation of any of the terms or provisions of, or
constitutes or will constitute a default under, or result in the creation
or imposition of any lien, charge, claim, encumbrance, pledge, security
interest, defect or other restriction or equity of any kind whatsoever
upon, any property or assets (tangible or intangible) of the Company or the
Subsidiary pursuant to the terms of, (A) the memorandum and articles of
association, charter or other organizational documents of the Company,
(B) any license, contract, collective bargaining agreement, indenture,
mortgage, deed of trust, lease, voting trust agreement, stockholders
agreement, note, loan or credit agreement or any other agreement or
instrument to which the Company or the Subsidiary is a party or by which it
is or may be bound or to which any of its respective properties or assets
(tangible or intangible) is or may be subject, or any indebtedness, or
(C) any statute, judgment, decree, order, rule or regulation applicable to
the Company or the Subsidiary of any arbitrator, court, regulatory body or
administrative agency or other governmental agency or body (including,
without limitation, those having jurisdiction over environmental or similar
matters), domestic or foreign, having jurisdiction over the Company or the
Subsidiary or any of its respective activities or properties.
23
(viii) no consent, approval, authorization or order, and no
filing with, any court, regulatory body, government agency or other body
(other than such as may be required under Blue Sky laws, as to which no
opinion need be rendered) is required in connection with the issuance of
the ADSs and the Option ADSs pursuant to the Prospectus and the
Registration Statements, the issuance of the Representative's Warrants, the
performance of this Agreement, the Deposit Agreement, and the
Representative's Warrant Agreement, and the transactions contemplated
hereby and thereby;
(ix) the properties and business of the Company and the
Subsidiary conform in all material respects to the description thereof
contained in the Registration Statements and the Prospectus; and the
Company and the Subsidiary, respectively, has good and marketable title to,
or valid and enforceable leasehold estates in, all items of real and
personal property stated in the Prospectus to be owned or leased by it, in
each case free and clear of all liens, charges, claims, encumbrances,
pledges, security interests, defects or other restrictions or equities of
any kind whatsoever, other than those referred to in the Prospectus and
liens for taxes not yet due and payable;
(x) the Company and the Subsidiary, respectively, is not in
breach of, or in default under, any term or provision of any license,
contract, collective bargaining agreement, indenture, mortgage, installment
sale agreement, deed of trust, lease, voting trust agreement, stockholders'
agreement, partnership agreement, note, loan or credit agreement or any
other agreement or instrument evidencing an obligation for borrowed money,
or any other agreement or instrument to which the Company or the Subsidiary
is a party or by which the Company or the Subsidiary may be bound or to
which the properties or assets (tangible or intangible) of the Company or
the Subsidiary is subject or affected; and the Company and the Subsidiary,
respectively, is not in violation of any term or provision of its the
memorandum and articles of association, charter or other organizational
documents of the Company and the Subsidiary, respectively, or in violation
of any franchise, license, permit, judgment, decree, order, statute, rule
or regulation;
(xi) the statements in the Prospectus under "RISK FACTORS,"
"BUSINESS," "MANAGEMENT," "PRINCIPAL STOCKHOLDERS," "RELATED PARTY
TRANSACTIONS", "DESCRIPTION OF SHARE CAPITAL," "DESCRIPTION OF AMERICAN
DEPOSITARY RECEIPTS", and "SHARES ELIGIBLE FOR FUTURE SALE" have been
reviewed by such counsel, and insofar as they refer to statements of law,
descriptions of statutes, licenses, rules or regulations or legal
conclusions, are correct in all material respects;
(xii) the Securities have been accepted for quotation on
Amex;
(xiii) the persons listed under the caption "PRINCIPAL
STOCKHOLDERS" in the Prospectus are the respective "beneficial owners"
(as such phrase is defined in regulation 13d-3 under the Exchange Act)
of the securities set forth opposite their respective names thereunder
as and to the extent set forth therein;
24
(xiv) neither the Company, the Subsidiary, nor any of its
respective officers, stockholders, employees or agents, nor any other
person acting on behalf of the Company has, directly or indirectly, given
or agreed to give any money, gift or similar benefit (other than legal
price concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality of any
government (domestic or foreign) or any political party or candidate for
office (domestic or foreign) or other person who is or may be in a position
to help or hinder the business of the Company or the Subsidiary (or assist
it in connection with any actual or proposed transaction) which (A) might
subject the Company or the Subsidiary to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (B) if not given
in the past, might have had an adverse effect on the assets, business or
operations of the Company or the Subsidiary, as reflected in any of the
financial statements contained in the F-1 Registration Statement, or (C) if
not continued in the future, might adversely affect the assets, business,
operations or prospects of the Company;
(xv) no person, corporation, trust, partnership, association
or other entity has the right to include and/or register any securities of
the Company or the Subsidiary in the Registration Statements, require the
Company or the Subsidiary to file any registration statement or, if filed,
to include any security in such registration statement;
(xvi) except as described in the Prospectus, there are no
claims, payments, issuances, arrangements or understandings for services in
the nature of a finder's or origination fee with respect to the sale of the
Securities hereunder or financial consulting arrangements or any other
arrangements, agreements, understandings, payments or issuances that may
affect the Underwriters' compensation, as determined by the NASD;
(xvii) assuming due execution by the parties thereto other
than the Company, the Lock-up Agreements are legal, valid and binding
obligations of the parties thereto, enforceable against the party and any
subsequent holder of the securities subject thereto in accordance with its
terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application relating to or affecting enforcement of creditors' rights and
the application of equitable principles in any action, legal or equitable,
and except as rights to indemnity or contribution may be limited by
applicable law);
(xviii) Except as described in the Prospectus, neither the
Company nor the Subsidiary maintains, sponsors or contributes to any
program or arrangement that is an "employee pension benefit plan," an
"employee welfare benefit plan," or a "multiemployer plan" as such terms
are defined in Sections 3(2), 3(1) and 3(37), respectively, of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("ERISA
Plans"). Each of he Company and the Subsidiary does not maintain or
contribute, now or at any time previously, to a defined benefit plan, as
defined in Section 3(35) of ERISA. No ERISA Plan (or any trust created
thereunder) has engaged in a "prohibited transaction" within the meaning of
Section 406 of ERISA or Section
25
4975 of the Code, which could subject the Company or the Subsidiary to any
tax penalty on prohibited transactions and which has not adequately been
corrected. Each ERISA Plan is in compliance with all reporting, disclosure
and other requirements of the Code and ERISA as they relate to any such
ERISA Plan. Determination letters have been received from the Internal
Revenue Service with respect to each ERISA Plan which is intended to comply
with Code Section 401(a), stating that such ERISA Plan and the attendant
trust are qualified thereunder. Neither the Company nor the Subsidiary has
never completely or partially withdrawn from a "multiemployer plan."
(xix) the Company and the Subsidiary, respectively, is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA;
(xx) neither the Company, the Subsidiary, nor any of their
affiliates shall be subject to the requirements of or shall be deemed an
"Investment Company," pursuant to and as defined under, respectively, the
Investment Company Act.
Such counsel shall state that such counsel has participated in conferences
with officers and other representatives of the Company, the Subsidiary, and
representatives of the independent public accountants for the Company, at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed the contents of the Preliminary Prospectus, the
Registration Statements, the Prospectus, and related matters and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Preliminary Prospectus, the Registration Statements and Prospectus, on the basis
of the foregoing, no facts have come to the attention of such counsel which lead
them to believe that either the Registration Statements or any amendment
thereto, at the time such Registration Statements or amendment became effective
or the Preliminary Prospectus or Prospectus or amendment or supplement thereto
as of the date of such opinion 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 (it being understood that such
counsel need express no opinion with respect to the financial statements and
schedules and other financial and statistical data included in the Preliminary
Prospectus, the Registration Statements or the Prospectus). Such counsel shall
further state that its opinions may be relied upon by Underwriters' Counsel in
rendering its opinion to the Underwriters.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
jurisdictions in which they are admitted, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an opinion
or opinions (in form and substance satisfactory to Underwriters' Counsel) of
other counsel acceptable to Underwriters' Counsel, familiar with the applicable
laws; (B) as to matters of fact, to the extent they deem proper, on certificates
and written statements of responsible officers of the Company and certificates
or other written statements of officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or good standing
of the Company, provided that copies of any such statements or certificates
shall be delivered to Underwriters' Counsel if requested. The opinion of such
counsel for the Company shall state that the opinion of any such other counsel
is in form satisfactory to
26
such counsel and that the Representative, Underwriters' Counsel and they are
each justified in relying thereon. Any opinion of counsel for the Company shall
not state that it is to be governed or qualified by, or that it is otherwise
subject to, any treatise, written policy or other document relating to legal
opinions, including, without limitation, the Legal Opinion Accord of the ABA
Section of Business Law (1991) or any comparable state accord.
(e) At each Option Closing Date, if any, the Underwriters shall have
received the favorable opinions of Greenberg Traurig, counsel to the Company,
dated as of such Option Closing Date, addressed to the Underwriters and in form
and substance satisfactory to Underwriters' Counsel.
(f) On or prior to each of the Closing Date and each Option Closing
Date, if any, Underwriters' Counsel shall have been furnished such documents,
certificates and opinions as they may reasonably require for the purpose of
enabling them to review or pass upon the matters referred to in subsection (c)
of this SECTION 6, or in order to evidence the accuracy, completeness or
satisfaction of any of the representations, warranties or conditions of the
Company herein contained.
(g) Prior to each of the Closing Date and each Option Closing Date,
if any, (i) there shall have been no material adverse change nor development
involving a prospective change in the condition, financial or otherwise,
earnings, position, value, properties, results of operations, prospects,
stockholders' equity or the business activities of the Company and the
Subsidiary, whether or not in the ordinary course of business, from the latest
dates as of which such condition is set forth in the Registration Statements and
Prospectus; (ii) there shall have been no transaction, not in the ordinary
course of business, entered into by the Company or the Subsidiary, from the
latest date as of which the financial condition of the Company is set forth in
the or the Subsidiary F-1 Registration Statement and Prospectus which is adverse
to the Company or the Subsidiary; (iii) the Company or the Subsidiary shall not
be in default under any provision of any instrument relating to any outstanding
indebtedness; (iv) the Company or the Subsidiary, respectively, shall not have
issued any securities (other than the Securities) or declared or paid any
dividend or made any distribution in respect of its capital stock of any class
and there has not been any change in the capital stock or any material change in
the debt (long or short term) or liabilities or obligations of the Company or
the Subsidiary (contingent or otherwise); (v) no material amount of the assets
of the Company or the Subsidiary shall have been pledged or mortgaged, except as
set forth in the F-1 Registration Statement and Prospectus; (vi) no action, suit
or proceeding, at law or in equity, shall have been pending or threatened (or
circumstances giving rise to same) against the Company or the Subsidiary, or
affecting any of its or their respective properties or businesses before or by
any court or federal, state or foreign commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may adversely affect
the business, operations, earnings, position, value, properties, results of
operations, prospects or financial condition or income of the Company or the
Subsidiary; and (vii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated, threatened or contemplated by
the Commission.
(h) At each of the Closing Date and each Option Closing Date, if any,
the Underwriters shall have received a certificate of the Company signed by the
principal executive officer and by the chief financial or chief accounting
officer of the Company, dated the Closing
27
Date or Option Closing Date, as the case may be, to the effect that each of such
persons has carefully examined the Registration Statements, the Prospectus and
this Agreement, and that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made on and as of the Closing
Date or the Option Closing Date, as the case may be, and the Company has
complied with all agreements and covenants and satisfied all conditions
contained in this Agreement on its part to be performed or satisfied at or
prior to such Closing Date or Option Closing Date, as the case may be;
(ii) No stop order suspending the effectiveness of the
Registration Statements or any part thereof has been issued, and no
proceedings for that purpose have been instituted or are pending or, to
the best of each of such person's knowledge, are contemplated or threatened
under the Act;
(iii) The Registration Statements and the Prospectus and, if
any, each amendment and each supplement thereto, contain all statements and
information required to be included therein, and none of the Registration
Statements, the Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and neither the Preliminary Prospectus or any supplement
thereto included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statements and the Prospectus, (a)
the Company and the Subsidiary, respectively, has not incurred up to and
including the Closing Date or the Option Closing Date, as the case may be,
other than in the ordinary course of its business, any material liabilities
or obligations, direct or contingent; (b) the Company and the Subsidiary,
respectively, has not paid or declared any dividends or other distributions
on its capital stock; (c) the Company and the Subsidiary, respectively, has
not entered into any transactions not in the ordinary course of business;
(d) there has not been any change in the capital stock or long-term debt or
any increase in the short-term borrowings (other than any increase in the
short-term borrowings in the ordinary course of business) of the Company
and the Subsidiary, respectively; (e) the Company and the Subsidiary,
respectively, has not sustained any loss or damage to its properties or
assets, whether or not insured; (f) there is no litigation which is pending
or threatened (or circumstances giving rise to same) against the Company,
the Subsidiary, or any affiliated party which is required to be set forth
in an amended or supplemented Prospectus which has not been set forth; and
(g) there has occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been set forth.
References to the Registration Statements and the Prospectus in this subsection
(i) are to such documents as amended and supplemented at the date of such
certificate.
28
(i) By the Closing Date, the Underwriters will have received
clearance from the NASD as to the amount of compensation allowable or payable to
the Underwriters, as described in the F-1 Registration Statement.
(j) At the time this Agreement is executed, the Underwriters shall
have received a letter, dated such date, addressed to the Underwriters in form
and substance satisfactory (including the non-material nature of the changes or
decreases, if any, referred to in clause (iii) below) in all respects to the
Underwriters and Underwriters' Counsel, from Ernst & Young LLP:
(i) confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and
the applicable Rules and Regulations;
(ii) stating that it is their opinion that the financial
statements and supporting schedules of the Company included in the F-1
Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Rules and Regulations
thereunder and that the Representative may rely upon the opinion of Ernst &
Young LLP with respect to the financial statements and supporting schedules
included in the F-1 Registration Statement;
(iii) stating that, on the basis of a limited review which
included a reading of the latest available unaudited interim financial
statements of the Company, a reading of the latest available minutes of the
stockholders and board of directors and the various committees of the board
of directors of the Company, consultations with officers and other
employees of the Company responsible for financial and accounting matters
and other specified procedures and inquiries, nothing has come to their
attention which would lead them to believe that (A) the unaudited financial
statements and supporting schedules of the Company included in the F-1
Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Rules and
Regulations or are not fairly presented in conformity with generally
accepted accounting principles of the U.K and the U.S. applied on a basis
substantially consistent with that of the audited financial statements of
the Company included in the F-1 Registration Statement, or (B) at a
specified date not more than five (5) days prior to the effective date of
the F-1 Registration Statement, there has been any change in the capital
stock or long-term debt of the Company, or any decrease in the
stockholders' equity or net current assets or net assets of the Company as
compared with amounts shown in the December 31, 1998 balance sheet included
in the F-1 Registration Statement, other than as set forth in or
contemplated by the F-1 Registration Statement, or, if there was any change
or decrease, setting forth the amount of such change or decrease, and (C)
during the period from December 31, 1998 to a specified date not more than
five (5) days prior to the effective date of the F-1 Registration
Statement, there was any decrease in net revenues, net earnings or increase
in net earnings per ordinary share of the Company, in each case as compared
with the corresponding period beginning December 31, 1997, other than as
set forth in or contemplated by the F-1 Registration Statement, or, if
there was any such decrease, setting forth the amount of such decrease;
29
(iv) setting forth, at a date not later than five (5) days
prior to the date of the F-1 Registration Statement, the amount of
liabilities of the Company taken as a whole (including a break-down of
commercial paper and notes payable to banks);
(v) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and earnings,
statements and other financial information pertaining to the Company set
forth in the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the
general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified readings, inquiries
and other appropriate procedures (which procedures do not constitute an
examination in accordance with generally accepted auditing standards) set
forth in the letter and found them to be in agreement;
(vi) statements as to such other matters incident to the
transaction contemplated hereby as the Representatives may request.
(k) At the Closing Date and each Option Closing Date, if any, the
Underwriters shall have received from Ernst & Young LLP a letter, dated as of
the Closing Date or the Option Closing Date, as the case may be, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
SUBSECTION (j) of this SECTION, except that the specified date referred to shall
be a date not more than five (5) days prior to the Closing Date or the Option
Closing Date, as the case may be, and, if the Company has elected to rely on
Rule 430A of the Rules and Regulations, to the further effect that they have
carried out procedures as specified in clause (v) of SUBSECTION (j) of this
Section with respect to certain amounts, percentages and financial information
as specified by the Representative and deemed to be a part of the F-1
Registration Statement pursuant to Rule 430A(b) and have found such amounts,
percentages and financial information to be in agreement with the records
specified in such clause (v).
(l) On each of the Closing Date and each Option Closing Date, if any,
there shall have been duly tendered to the Representative for the several
Underwriters' accounts the appropriate number of Securities.
(m) No order suspending the sale of the Securities in any
jurisdiction designated by the Representative pursuant to SUBSECTION (e) of
SECTION 4 hereof shall have been issued on either the Closing Date or the Option
Closing Date, if any, and no proceedings for that purpose shall have been
instituted or shall be contemplated.
(n) On or before the Closing Date, the Company shall have executed
and delivered to the Representative, (i) the Representative's Warrant Agreement
substantially in the form filed as Exhibit 4.3 to the F-1 Registration
Statement, in final form and substance satisfactory to the Representative, and
(ii) the Representative's Warrants in such denominations and to such designees
as shall have been provided to the Company.
(o) On or before the Closing Date, the ADSs shall have been duly
approved for quotation on Amex, subject to official notice of issuance.
30
(p) On or before the Closing Date, there shall have been delivered to
the Representative all of the Lock-up Agreements, in form and substance
satisfactory to Underwriters' Counsel.
If any condition to the Underwriters' obligations hereunder to be fulfilled
prior to or at the Closing Date or the relevant Option Closing Date, as the case
may be, is not so fulfilled, the Representative may terminate this Agreement or,
if the Representative so elects, it may waive any such conditions which have not
been fulfilled or extend the time for their fulfillment.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters (for purposes of this SECTION 7 "Underwriter" shall include the
officers, directors, partners, employees, agents and counsel of the Underwriter,
including specifically each person who may be substituted for an Underwriter as
provided in SECTION 11 hereof), and each person, if any, who controls the
Underwriter ("controlling person") within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, from and against any and all losses,
claims, damages, expenses or liabilities, joint or several (and actions,
proceedings, investigations, inquiries, suits and litigation in respect
thereof), whatsoever (including but not limited to any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any such claim, action, proceeding, investigation, inquiry, suit or litigation,
commenced or threatened, or any claim whatsoever), as such are incurred, to
which the Underwriter or such controlling person may become subject under the
Act, the Exchange Act or any other statute or at common law or otherwise or
under the laws of foreign countries, arising out of or based upon (A) any untrue
statement or alleged untrue statement of a material fact contained (i) in any
Preliminary Prospectus, the Registration Statements or the Prospectus (as from
time to time amended and supplemented); (ii) in any post-effective amendment or
amendments or any new registration statement and prospectus in which is included
securities of the Company issued or issuable upon exercise of the Securities; or
(iii) in any application or other document or written communication (in this
SECTION 7 collectively called "application") executed by the Company or based
upon written information furnished by the Company in any jurisdiction in order
to qualify the Securities under the securities laws thereof or filed with the
Commission, any state securities commission or agency, Amex or any other
securities exchange; (B) the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), or (C) any breach of any
representation, warranty, covenant or agreement of the Company contained herein
or in any certificate by or on behalf of the Company or any of its officers
delivered pursuant hereto, unless, in the case of clause (A) or (B) above, such
statement or omission was made in reliance upon and in strict conformity with
written information furnished to the Company with respect to any Underwriter by
or on behalf of such Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statements or Prospectus, or any amendment thereof
or supplement thereto, or in any application, as the case may be.
The indemnity agreement in this SUBSECTION (a) shall be in addition to any
liability which the Company may have at common law or otherwise.
31
(b) Each of the Underwriters agrees severally, but not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the Registration Statements, and each other person, if
any, who controls the Company within the meaning of the Act, to the same extent
as the foregoing indemnity from the Company to the Underwriters but only with
respect to statements or omissions, if any, made in any Preliminary Prospectus,
the Registration Statements or Prospectus or any amendment thereof or supplement
thereto or in any application made in reliance upon, and in strict conformity
with, written information furnished to the Company with respect to any
Underwriter by such Underwriter expressly for use in such Preliminary
Prospectus, the Registration Statements or Prospectus or any amendment thereof
or supplement thereto or in any such application, provided that such written
information or omissions only pertain to disclosures in the Preliminary
Prospectus, the Registration Statements or Prospectus directly relating to the
transactions effected by the Underwriters in connection with this Offering. The
Company acknowledges that the statements with respect to the public offering of
the ADSs and the Option ADSs set forth under the heading "Underwriting" and the
stabilization legend in the Prospectus have been furnished by the Underwriters
expressly for use therein and constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this SECTION
7 of notice of the commencement of any claim, action, suit, investigation,
inquiry, proceeding or litigation, such indemnified party shall, if a claim in
respect thereof is to be made against one or more indemnifying parties under
this SECTION 7, notify each party against whom indemnification is to be sought
in writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability which it may have
under this SECTION 7 except to the extent that it has been prejudiced in any
material respect by such failure or from any liability which it may have
otherwise). In case any such claim, action, suit, investigation, inquiry,
proceeding or litigation is brought against any indemnified party, and it
notifies an indemnifying party or parties of the commencement thereof, the
indemnifying party or parties will be entitled to participate therein, and to
the extent it may 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. Notwithstanding the foregoing, the indemnified party or
parties shall have the right to employ its or their own counsel in any such case
but the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless (i) the employment of such counsel shall
have been authorized in writing by the indemnifying parties in connection with
the defense of thereof at the expense of the indemnifying party, (ii) the
indemnifying parties shall not have employed counsel reasonably satisfactory to
such indemnified party to have charge of the defense thereof within a reasonable
time after notice of commencement thereof, or (iii) such indemnified party or
parties shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to one or
all of the indemnifying parties (in which case the indemnifying parties shall
not have the right to direct the defense thereof on behalf of the indemnified
party or parties), in any of which events such fees and expenses of one
additional counsel shall be borne by the indemnifying parties. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one claim, action, suit,
investigation, inquiry, proceeding or litigation or separate but similar or
related claims, actions, suits, investigations, inquiries, proceedings or
litigation in the same jurisdiction
32
arising out of the same general allegations or circumstances. Anything in this
SECTION 7 to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim, action, suit, investigation, inquiry,
proceeding or litigation effected without its written consent; PROVIDED,
HOWEVER, that such consent was not unreasonably withheld. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle,
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit, investigation, inquiry, proceeding or
litigation in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim, action, suit, investigation, inquiry, proceeding or
litigation), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit, investigation, inquiry, proceeding or litigation
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in any
case in which (i) an indemnified party makes claim for indemnification pursuant
to this SECTION 7, 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
the express provisions of this SECTION 7 provide for indemnification in such
case, or (ii) contribution under the Act may be required on the part of any
indemnified party, then each indemnifying party shall contribute to the amount
paid as a result of such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) (A) in such proportion as is appropriate to reflect
the relative benefits received by each of the contributing parties, on the one
hand, and the party to be indemnified on the other hand, from the offering of
the ADSs and the Option ADSs or (B) if the allocation provided by clause (A)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of each of the contributing parties, on the one hand,
and the party to be indemnified on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages, expenses
or liabilities, as well as any other relevant equitable considerations. In any
case where the Company is the contributing party and the Underwriters are the
indemnified party, the relative benefits received by the Company on the one
hand, and the Underwriters, on the other, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the ADSs and the
Option ADSs (before deducting expenses) bear to the total underwriting discounts
received by the Underwriters hereunder, in each case as set forth in the table
on the Cover Page of the Prospectus. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, or by the Underwriters, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
expenses or liabilities (or actions in respect thereof) referred to above in
this SUBSECTION (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
SUBSECTION (d), the Underwriters shall not be required to contribute any amount
in excess of the underwriting discount applicable to the ADSs and the Option
ADSs purchased by the Underwriters hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
33
misrepresentation. For purposes of this SECTION 7, each person, if any, who
controls the Company or the Underwriter within the meaning of the Act, each
officer of the Company who has signed the Registration Statements, and each
director of the Company shall have the same rights to contribution as the
Company or the Underwriter, as the case may be, subject in each case to this
SUBSECTION (d). Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect to which a claim for contribution may be made against another party
or parties under this SUBSECTION (d), notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any obligation it or they may have hereunder or otherwise than under this
SUBSECTION (d), or to the extent that such party or parties were not adversely
affected by such omission. The contribution agreement set forth above shall be
in addition to any liabilities which any indemnifying party may have at common
law or otherwise.
8. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or
contained in certificates of officers of the Company submitted pursuant hereto,
shall be deemed to be representations, warranties and agreements at the Closing
Date and the Option Closing Date, as the case may be, and such representations,
warranties and agreements of the Company and the indemnity agreements contained
in SECTION 7 hereof, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Underwriter, the
Company, any controlling person of any Underwriter or the Company, and shall
survive termination of this Agreement or the issuance and delivery of the
Securities to the Underwriters and the Representative, as the case may be.
9. EFFECTIVE DATE. This Agreement shall become effective at 10:00 a.m.,
New York City time, on the next full business day following the date hereof, or
at such earlier time after the Registration Statements become effective as the
Representative, in its discretion, shall release the Securities for sale to the
public; PROVIDED, HOWEVER, that the provisions of SECTIONS 5, 7 and 10 of this
Agreement shall at all times be effective. For purposes of this SECTION 9, the
Securities to be purchased hereunder shall be deemed to have been so released
upon the earlier of dispatch by the Representative of telegrams to securities
dealers releasing such securities for offering or the release by the
Representative for publication of the first newspaper advertisement which is
subsequently published relating to the Securities.
10. TERMINATION.
(a) Subject to SUBSECTION (b) of this SECTION 10, the Representative
shall have the right to terminate this Agreement, (i) if any domestic or
international event or act or occurrence has materially adversely disrupted, or
in the Representative's opinion will in the immediate future materially
adversely disrupt, the financial markets; or (ii) if any material adverse change
in the financial markets shall have occurred; or (iii) if trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the NASD, the
Boston Stock Exchange, the Commission or any governmental authority having
jurisdiction over such matters; or (iv) if trading of any of the securities of
the Company shall have been suspended, or any of the securities of the Company
shall have been delisted, on any exchange or in any over-the-counter
34
market; (v) if the United States shall have become involved in a war or major
hostilities, or if there shall have been an escalation in an existing war or
major hostilities or a national emergency shall have been declared in the United
States; or (vi) if a banking moratorium has been declared by a state or federal
authority; or (vii) if a moratorium in foreign exchange trading has been
declared; or (viii) if the Company shall have sustained a loss material or
substantial to the Company by fire, flood, accident, hurricane, earthquake,
theft, sabotage or other calamity or malicious act which, whether or not such
loss shall have been insured, will, in the Representative's opinion, make it
inadvisable to proceed with the offering, sale and/or delivery of the
Securities; or (ix) if there shall have been such a material adverse change in
the conditions or prospects of the Company or the Subsidiary, or such material
adverse change in the general market, political or economic conditions, in the
United States, United Kingdom or elsewhere, that, in each case, in the
Representative's judgment, would make it inadvisable to proceed with the
offering, sale and/or delivery of the Securities or (x) if Andrew Neville
Lyndon-Skeggs shall no longer serve the Company in his present capacities.
(b) If this Agreement is terminated by the Representative in
accordance with the provisions of SECTION 10(a) the Company shall promptly
reimburse and indemnify the Representative for all of its actual out-of-pocket
expenses, including the fees and disbursements of counsel for the Underwriters
(less amounts previously paid pursuant to SECTION 5(c) above). Notwithstanding
any contrary provision contained in this Agreement, if this Agreement shall not
be carried out within the time specified herein, or any extension thereof
granted to the Representative, by reason of any failure on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement by
it to be performed or satisfied (including, without limitation, pursuant to
SECTION 6 or SECTION 12) then, the Company shall promptly reimburse and
indemnify the Representative for all of its actual out-of-pocket expenses,
including the fees and disbursements of counsel for the Underwriters (less
amounts previously paid pursuant to SECTION 5(c) above). In addition, the
Company shall remain liable for all Blue Sky counsel fees and disbursements,
expenses and filing fees. Notwithstanding any contrary provision contained in
this Agreement, any election hereunder or any termination of this Agreement
(including, without limitation, pursuant to SECTIONS 6, 10, 11 and 12 hereof),
and whether or not this Agreement is otherwise carried out, the provisions of
SECTION 5 and SECTION 7 shall not be in any way affected by such election or
termination or failure to carry out the terms of this Agreement or any part
hereof.
11. SUBSTITUTION OF THE UNDERWRITERS. If one or more of the Underwriters
shall fail (otherwise than for a reason sufficient to justify the termination of
this Agreement under the provisions of SECTION 6, SECTION 10 or SECTION 12
hereof) to purchase the Securities which it or they are obligated to purchase on
such date under this Agreement (the "Defaulted Securities"), the Representative
shall have the right, within 24 hours thereafter, to make arrangement for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase
all, but not less than all, of the Defaulted Securities in such amounts as may
be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
total number of ADSs to be purchased on such date, the non-defaulting
Underwriters shall be obligated to purchase the full amount thereof in the
proportions that their respective underwriting
35
obligations hereunder bear to the underwriting obligations of all
non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the total
number of ADSs, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriters (or, if such default shall occur
with respect to any Option ADSs to be purchased on an Option Closing Date,
the Underwriters may at the Representative's option, by notice from the
Representative to the Company, terminate the Underwriters' obligation to
purchase Option ADSs from the Company on such date).
No action taken pursuant to this SECTION 11 shall relieve any defaulting
Underwriter from liability in respect of any default by such Underwriter under
this Agreement.
In the event of any such default which does not result in a termination of
this Agreement, the Representative shall have the right to postpone the Closing
Date for a period not exceeding seven (7) days in order to effect any required
changes in the Registration Statements or Prospectus or in any other documents
or arrangements.
12. DEFAULT BY THE COMPANY. If the Company shall fail at the Closing Date
or at any Option Closing Date, as applicable, to sell and deliver the number of
Securities which it is obligated to sell hereunder on such date, then this
Agreement shall terminate (or, if such default shall occur with respect to any
Option ADSs to be purchased on an Option Closing Date, the Underwriters may at
the Representative's option, by notice from the Representative to the Company,
terminate the Underwriters' obligation to purchase Option ADSs from the Company
on such date) without any liability on the part of any non-defaulting party
other than pursuant to SECTION 5, SECTION 7 and SECTION 10 hereof. No action
taken pursuant to this SECTION 12 shall relieve the Company from liability, if
any, in respect of such default.
13. NOTICES. All notices and communications hereunder, except as herein
otherwise specifically provided, shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to the
Representative at Security Capital Trading, Inc., 520 Madison Avenue, 10th
Floor, New York, New York 10022, Attention: Ronald Heineman, with a copy to
Orrick, Herrington & Sutcliffe LLP, 30 Rockefeller Plaza, New York, New York
10112, Attention: Lawrence B. Fisher, Esq. Notices to the Company shall be
directed to the Company at Town Pages Holdings plc, 11 Market Square, Alton,
Hampshire, England, GU34 1HD, United Kingdom, Attention: Andrew Neville
Lydon-Skeggs, with a copy to Greenberg Traurig, 200 Park Avenue, New York, New
York, 10166, Attention: Andrew J. Cosentino, Esq.
14. PARTIES. This Agreement shall inure solely to the benefit of and
shall be binding upon, the Underwriters, the Company and the controlling
persons, directors and officers referred to in SECTION 7 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
36
15. CONSTRUCTION. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to the choice of law or conflict of laws principles.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.
17. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the Representative's
Warrant Agreement constitute the entire agreement of the parties hereto and
supersede all prior written or oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may not be amended
except in a writing, signed by the Representative and the Company.
37
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement among
us.
Very truly yours,
TOWN PAGES HOLDINGS PLC
By:
-----------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written.
SECURITY CAPITAL TRADING, INC.
For itself and as Representative of the
several Underwriters named in
Schedule A hereto.
By:
-----------------------------
Name:
Title:
38
SCHEDULE A
Number of ADSs
Name of Underwriters to be Purchased
-------------------- ---------------
Security Capital Trading, Inc..............................
Total......................................................
------------
2,000,000
============
Dates Referenced Herein and Documents Incorporated by Reference
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