EXHIBIT 1.1
BARBEQUES GALORE LIMITED
2,350,000 Ordinary Shares
Underwriting Agreement
[ ], 1997
J.P. Morgan Securities Inc.
SBC Warburg Dillon Read Inc.
As Representatives
of the Several Underwriters
Listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Barbeques Galore Limited (ACN 008 577 759), formerly The Galore Group
Limited, a corporation organized under the laws applicable in the
Commonwealth of Australia (the "Company"), proposes to issue and sell to
the several Underwriters listed in Schedule I hereto (the "Underwriters"),
for whom you are acting as representatives (the "Representatives"), an
aggregate of 1,900,000 ordinary shares, par value A$3.64 per share (the
"Ordinary Shares"), of the Company, and the shareholders of the Company
named in Schedule II hereto (the "Selling Shareholders") propose to sell to
the Underwriters an
aggregate of 450,000 Ordinary Shares. Such Ordinary Shares to be sold by
the Company and the Selling Shareholders are hereinafter referred to as the
"Firm Shares." It is understood that the Firm Shares are to be represented
by 2,350,000 American Depositary Shares, each representing one Firm Share
(the "Firm ADSs"). Each Selling Shareholder also proposes to sell,
severally and not jointly, for the sole purpose of covering over-allotments
in connection with the sale of the Firm ADSs by the Underwriters, up to the
number of Ordinary Shares (the "Option Shares") set forth opposite such
Selling Shareholder's name on Schedule II hereto under the heading "Number
of Option Shares To Be Sold" (an aggregate of up to an additional 352,500
Ordinary Shares). It is understood that the Option Shares are to be
represented by 352,500 American Depositary Shares, each representing one
Option Share (the "Option ADSs"). The Firm Shares and the Option Shares
are hereinafter referred to collectively as the "Shares." The Firm ADSs
and the Option ADSs are hereinafter referred to as the "ADSs." The ADSs
will be evidenced by American Depositary Receipts ("ADRs") to be issued
pursuant to a Deposit Agreement dated as of [ ], 1997 (the "Deposit
Agreement"), entered into among the Company, Morgan Guaranty Trust Company
of New York, as Depositary (the "Depositary") and all holders from time to
time of ADRs evidencing ADSs issued thereunder.
The Company and the Selling Shareholders are hereinafter sometimes
collectively referred to as the "Sellers." All references herein to
numbers of Ordinary Shares refer to the number of Ordinary Shares to be
outstanding after the Reverse Share Split (as defined in the Prospectus
referred to below).
The Company has prepared and filed with the U.S. Securities and
Exchange Commission (the "Commission") in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Securities Act"), a
registration statement on Form F-1 (File No. 333-37259), including a
prospectus, relating to the Shares underlying the ADSs. The registration
statement as amended at the time when it shall become effective, or, if a
post-effective amendment is filed with respect thereto, as amended by such
post-effective amendment at the time of its effectiveness, including in
each case information (if any) deemed to be part of the registration
statement at the time of effectiveness pursuant to Rule 430A under the
Securities Act is referred to in this Agreement as the "Registration
Statement," and the prospectus in the form first used to confirm sales of
ADSs is referred to in this Agreement as the "Prospectus." If the Company
has filed an abbreviated registration statement to register additional
Shares pursuant to Rule 462(b) under the Securities Act (the "Rule 462
Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462
Registration Statement. The Company has also filed a
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registration statement on Form F-6, as amended, (the "F-6 Registration
Statement") relating to the ADSs.
The Company and each of the Selling Shareholders hereby agree,
severally and not jointly, with the Underwriters as follows:
1. The Company and each of the Selling Shareholders agree, severally
and not jointly, to sell the Firm Shares underlying the Firm ADSs to the
several Underwriters as hereinafter provided, and each Underwriter, upon
the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees to purchase, severally
and not jointly, from the Company and each of the Selling Shareholders at a
purchase price of U.S.$ [ ] per Ordinary Share (equal to U.S.$[ ]
per ADS) (the "Purchase Price") the number of Firm Shares underlying the
Firm ADSs (subject to such adjustments to eliminate fractional ADSs, as you
may determine) determined by multiplying the aggregate number of Firm
Shares underlying the Firm ADSs to be sold by the Company and by each of
the Selling Shareholders as set forth opposite their respective names in
Schedule II hereto under the heading "Number of Firm Shares To Be Sold" by
a fraction, the numerator of which is the aggregate number of Firm Shares
underlying the Firm ADSs to be purchased by such Underwriter as set forth
opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares underlying the
Firm ADSs to be purchased by all the Underwriters from the Company and all
the Selling Shareholders hereunder.
In addition, each Selling Shareholder, severally and not jointly,
agrees to issue and sell the number of Option Shares underlying the Option
ADSs set forth opposite such Selling Shareholder's name in Schedule II
hereto under the heading "Number of Option Shares To Be Sold," to the
several Underwriters as hereinafter provided, and the Underwriters, on the
basis of the representations and warranties herein contained, but subject
to the conditions hereinafter stated, shall have the option to purchase,
severally and not jointly, from the Selling Shareholders at the Purchase
Price that portion of the number of Option Shares underlying the Option
ADSs as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such
number of Option Shares underlying the Option ADSs by a fraction the
numerator of which is the maximum number of Option Shares underlying the
Option ADSs by which such Underwriter is entitled to purchase and the
denominator of which is the maximum number of Option Shares underlying the
Option ADSs that all of the Underwriters are entitled to purchase
hereunder, for the sole purpose of covering over-allotments (if any) in the
sale of Firm ADSs by the Underwriters.
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The Underwriters may exercise the option to purchase the Option
Shares at any time (but not more than once) on or before the thirtieth day
following the date of this Agreement, by written notice from the
Representatives to the Company and the Attorneys-in-Fact (as defined
below). Such notice shall set forth the aggregate number of Option Shares
as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date
and time as the Closing Date (as hereinafter defined) but shall not be
earlier than the Closing Date nor later than the tenth full Business Day
(as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 3
hereof). Any such notice shall be given at least two Business Days prior to
the date and time of delivery specified therein. If less than all of the
Option Shares are to be purchased, each of the Underwriters shall purchase
Option Shares pro rata from the Selling Shareholders.
2. The Company and the Selling Shareholders understand that the
Underwriters intend (i) to make a public offering of the ADSs as soon after
(A) the Registration Statement has become effective and (B) the parties
hereto have executed and delivered this Agreement, as in the judgment of
the Representatives is advisable and (ii) initially to offer the ADSs upon
the terms set forth in the Prospectus.
3. Payment for the Shares underlying the ADSs shall be made by wire
transfer in immediately available funds to the account specified to the
Representatives by the Company with regard to payment to the Company and by
the Attorneys-in Fact, or any of them, with regard to payment to the
Selling Shareholders in the case of the Firm Shares underlying the Firm
ADSs on [ ], 1997, or, at such other time on the same or such other
date, not later than the fifth Business Day thereafter, as the
Representatives and the Company and Attorneys-in-Fact may agree upon in
writing or, in the case of the Option Shares, on the date and time
specified by the Representatives in the written notice of the Underwriters'
election to purchase such Option Shares, which in no event shall be later
than the fifth Business Day after such notice. The time and date of such
payment for the Firm Shares is referred to herein as the "Closing Date" and
the time and date for such payment for the Option Shares, if other than the
Closing Date, are herein referred to as the "Additional Closing Date." As
used herein, the term "Business Day" means any day other than a day on
which banks are permitted or required to be closed in New York City.
Payment for the Shares underlying the ADSs to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be
made only against deposit of such Shares with or in the account maintained
at Morgan Guaranty Trust Company of New York, by [ ], as
custodian for the
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Depositary (the "ADR Custodian"), instruction by the ADR Custodian to the
Depositary to issue such ADSs, and delivery of ADRs evidencing all such
ADSs. The ADRs shall be in definitive form and shall be registered in such
names and in such denominations as the Representatives shall request in
writing addressed to the Depositary not later than one full Business Day
prior to the Closing Date or the Additional Closing Date, as the case may
be, with any transfer or other taxes duly paid by the Company or Selling
Shareholders, as the case may be, payable in connection with (i) the
deposit by the Company and Selling Shareholders of the Shares underlying
the ADSs with the Depositary or the ADR Custodian against the issuance of
ADRs evidencing ADSs and (ii) the sale and delivery by the Company and the
Selling Shareholders of the Shares underlying the ADSs to or for the
account of the Underwriters. The certificates for the ADRs will be made
available for inspection and packaging by the Representatives at the office
of the Depositary not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date or the Additional Closing Date, as
the case may be.
4(A). The Company represents and warrants to each Underwriter that:
(a) no order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission, and
each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities
Act, complied when so filed in all material respects with the
Securities Act, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty
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shall not apply to any statements or omissions made in reliance
upon and in conformity with information relating to any
Underwriter or Selling Shareholder furnished to the Company in
writing by such Underwriter through the Representatives or by
any Selling Shareholder, as applicable, expressly for use
therein;
(b) no stop order suspending the effectiveness of the
Registration Statement or the F-6 Registration Statement has
been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by
the Commission; and the Registration Statement, the Prospectus
and the F-6 Registration Statement (as amended or supplemented
if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may
be, in all material
5
respects with the Securities Act and do not and will not, as of
the applicable effective date as to the Registration Statement
and the F-6 Registration Statement and any amendment thereto,
including the prospectus contained therein, 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 not misleading, and the Prospectus, as of
its date and as amended or supplemented, if applicable, at the
Closing Date or Additional Closing Date, as the case may be,
will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; except that the foregoing
------
representations and warranties shall not apply to statements or
omissions in the Registration Statement or the Prospectus made
in reliance upon and in conformity with information relating to
any Underwriter or Selling Shareholder furnished to the Company
in writing by such Underwriter through the Representatives or
by any Selling Shareholder, as applicable, expressly for use
therein;
(c) the financial statements, and the related notes
thereto, included in the Registration Statement and the
Prospectus present fairly in all material respects the
consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the
results of their operations and changes in their consolidated
financial position for the periods specified; and said
financial statements have been prepared in conformity with
accounting principles generally accepted in the United States
applied on a consistent basis, and the supporting schedules
included in the Registration Statement present fairly in all
material respects the information required to be stated
therein;
(d) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there
has not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries (the "Subsidiaries"),
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
general affairs, business, prospects, management, financial
position, shareholders' equity or results of operations of the
Company and the Subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Prospectus; and except as
set forth or contemplated in the Prospectus neither the Company
nor any of the Subsidiaries has entered into any transaction or
agreement
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(whether or not in the ordinary course of business) material to
the Company and the Subsidiaries taken as a whole;
(e) the Company has been duly incorporated and is validly
existing as a corporation formed under the laws applicable in
the Commonwealth of Australia, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole;
(f) each of the Subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its
business as described in the Prospectus; and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole; and all the outstanding shares
of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully-paid and non-assessable, and
(except for directors' qualifying shares and except as
otherwise set forth in the Registration Statement) are owned by
the Company, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims;
(g) this Agreement has been duly authorized, executed and
delivered by the Company;
(h) the Company has an authorized capitalization as set
forth in the Prospectus and such authorized capital stock
conforms as to legal matters to the description thereof set
forth in the Registration Statement, and all of the outstanding
shares of capital stock of the Company (including the Shares to
be sold by the Selling Shareholders) have been duly authorized
and validly issued, are fully-paid and non-assessable and are
not subject to any
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pre-emptive or similar rights; the Shares underlying the ADSs
to be issued and sold by the Company and the Selling
Shareholders, including the Shares to be deposited by the
Company and the Selling Shareholders with the ADR Custodian in
accordance with the Deposit Agreement, have been duly
authorized, and when such Shares have been so deposited and
paid for by the Underwriters in accordance with the terms of
this Agreement, such Shares will have been duly issued and will
be fully paid and non-assessable and will conform to the
descriptions thereof in the Prospectus; and, except for (i) the
Convertible Notes (as described in the Prospectus) and (ii)
Ordinary Shares issuable or available for grant under the
Company's Executive Share Option Plan and the Company's 1997
Stock Option and Stock Issuance Plan, there are no outstanding
rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into
or exchangeable for, any shares of capital stock or other
equity interests in the Company or any of the Subsidiaries, or
any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any capital
stock of the Company or any such Subsidiary, any such
convertible or exchangeable securities or any such right,
warrants or options, in each of the foregoing cases, to which
the Company is a party; the Company has not granted any
preemptive or other rights to acquire the Shares or the ADSs;
and to the Company's knowledge there are no restrictions on
transfers of the Shares, other than pursuant to arrangements
that will be terminated prior to the sale of the Shares to the
Underwriters;
(i) upon the deposit of the Shares with the Depositary
pursuant to the Deposit Agreement against issuance of the ADRs
evidencing the ADSs, all right, title and interest in such
Shares, subject to the Deposit Agreement, will be transferred
to the Depositary or its nominee, as the case may be, free and
clear of all liens, encumbrances or claims;
(j) upon the sale and delivery of the Shares to be sold by
the Company to the Underwriters, and payment therefor against
deposit thereof with or in the account of the ADR Custodian
maintained in [ ] and delivery of ADRs evidencing
the ADSs as contemplated by this Agreement and the Deposit
Agreement, good and valid title to the ADSs representing such
Shares, free and clear of all liens, encumbrances or claims,
will be transferred to the Underwriters; the ADSs to be
delivered hereunder are freely
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transferable to or for the account of the several Underwriters;
upon delivery by the Depositary of the ADRs evidencing the ADSs
against deposit of the Shares in accordance with the Deposit
Agreement, the ADSs will be duly and validly issued; the ADSs
and the ADRs conform as to legal matters to the description
thereof set forth in the Registration Statement and the
Prospectus in all material respects;
(k) the Deposit Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and to
public policy principles, including but not limited to the
enforceability of any indemnification provision therein;
(l) neither the Company nor any of the Subsidiaries is, or
with the giving of notice or lapse of time or both would be,
(i) in violation of or in default under the Company's
Memorandum and Articles of Association (collectively, the
"Certificate of Incorporation") or (ii) in violation of or in
default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company
or any of the Subsidiaries is a party or by which it or any of
them or any of their respective properties is bound, except (x)
as such violation has been waived by the parties to such
agreement, and written notice given to the Underwriters and (y)
for any such violation or default which has not had, and would
not reasonably be expected to have, a material adverse effect
on the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Effect"); the issue and sale of the Shares
and the ADSs and the performance by the Company of its
obligations under this Agreement and the Deposit Agreement, and
the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries is bound or to which any of the property or assets
of the Company or any of the Subsidiaries is subject, except
for any such conflict, breach or default which could not
reasonably be
9
expected to have a Material Adverse Effect, nor will any such
action result in any violation of the provisions of the
Certificate of Incorporation of the Company or any applicable
law or statute including, without limitation, any order, rule
or regulation of any court or governmental agency or body
having jurisdiction over the Company, the Subsidiaries or any
of their respective properties; and no consent, approval,
authorization, order, license, registration or qualification of
or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the ADSs or
the consummation by the Company of the transactions
contemplated by this Agreement and the Deposit Agreement,
except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as have been obtained
under the Securities Act and as may be required under state
securities or Blue Sky laws in connection with the purchase of
the Shares and distribution of the ADSs by the Underwriters;
(m) other than as set forth or contemplated in the
Prospectus, there are no legal or governmental investigations,
actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against the Company or any of the
Subsidiaries or any of their respective properties or to which
the Company or any of the Subsidiaries is or may be a party or
to which any property of the Company or any of the Subsidiaries
is or may be the subject which, if determined adversely to the
Company or any of the Subsidiaries, could individually or in
the aggregate have, or reasonably be expected to have, a
material adverse effect on the general affairs, business,
prospects, management, financial position, shareholders' equity
or results of operations of the Company and the Subsidiaries,
taken as a whole; and there are no statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement that are not
described or filed as required;
(n) the Company and the Subsidiaries have good and
marketable title in fee simple to all items of real property
and good and marketable title to all personal property owned by
them, in each case free and clear of all liens, encumbrances
and defects except such as are described or referred to in the
Prospectus or such as do not materially adversely affect the
Company and its Subsidiaries taken as a whole and do not
materially interfere with the use made or proposed to be made
of such property by the
10
Company and its Subsidiaries; and any real property and buildings held
under lease by the Company and the Subsidiaries are held by them under
valid, existing and enforceable leases with such exceptions as do not
materially adversely affect the Company and the Subsidiaries, taken as a
whole and do not materially interfere with the use made or currently
proposed to be made of such property and buildings by the Company or the
Subsidiaries;
(o) no relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries, on the one hand, and the directors,
officers, shareholders, customers or suppliers of the Company or any of the
Subsidiaries, on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus which is not
so described;
(p) no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and
sale of the Shares or the ADSs in the Offering, except any such rights
which have been waived;
(q) the Company is not and, after giving effect to the offering and
sale of the Shares, 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 "Investment Company Act");
(r) the Company is not a "passive foreign investment company" within
the meaning of the Internal Revenue Code of 1986, as amended (the "Code"),
and the Rules and Regulations adopted thereunder;
(s) KPMG and Horwath Sydney Partnership, who have certified certain
financial statements of the Company and the Subsidiaries, are each
independent public accountants as required by the Securities Act;
(t) the Company and the Subsidiaries have filed all United States
federal, state and local and all Australian federal, state and local, and
all other foreign, tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith; and there is
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no tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any Subsidiary, except where
the failure to so file or pay would not have a Material Adverse Effect;
(u) the Company is treated as a "public company" for Australian tax
law purposes;
(v) the Company has not taken nor will it take, directly or
indirectly, any action designed to, or that might be reasonably expected
to, cause or result in stabilization or manipulation of the price of the
Ordinary Shares or the ADSs;
(w) the unissued Ordinary Shares issuable upon conversion of the
Convertible Notes to be converted by the Selling Shareholders have been
duly and validly authorized and reserved for issuance, and at the time of
delivery to the Underwriters with respect to such Ordinary Shares, such
Ordinary Shares will be issued and delivered in accordance with the Terms
and Conditions of Convertible Notes and the Galore Shareholders Deed Poll
(collectively, the "Note Agreements"), except to the extent the terms of
the Note Agreements have been waived, and written notice given to the
Underwriters, and will be duly and validly issued, fully paid and non-
assessable and will conform to the description thereof in the Prospectus;
(x) the Convertible Notes were duly authorized and issued pursuant to
the Note Agreements and constitute valid and binding obligations of the
Company and the holders of the Convertible Notes are entitled to the
benefits provided by the Note Agreements; the Note Agreements were duly
authorized, executed and delivered and constitute valid and binding
instruments enforceable in accordance with their terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the Note Agreements conform in all material
respects to the descriptions thereof in the Prospectus;
(y) the Company is not, and after giving effect to the offering of the
ADSs and the other transactions contemplated herein, will not be, in
violation of or in default under the Note Agreements, except to the extent
that such violation or default has
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been waived by the holders of the Convertible Notes and written notice
given to the Underwriters;
(z) each of the Company and the Subsidiaries own, possess or has the
right to use all material patents, patent rights, licenses, inventions,
trade secrets, copyrights, trademarks, service marks, trade names,
technology and know-how (the "Intellectual Property") employed by it in
connection with the business conducted by it as of the date hereof;
(aa) each of the Company and the Subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all material
declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), and all
courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, and neither the Company nor
any such Subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and the Subsidiaries is in compliance in all material respects with
all laws and regulations relating to the conduct of its business as
conducted as of the date hereof;
(bb) there are no existing or, to the best knowledge of the Company,
threatened labor disputes with the employees of the Company or any of the
Subsidiaries which are likely to have a material adverse effect on the
Company and the Subsidiaries, taken as a whole;
(cc) the Company and the Subsidiaries (i) are in compliance in all
material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
material permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental
13
Laws, failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries, taken as a
whole;
(dd) to the knowledge of the Company, there are no legal or
governmental proceedings pending or threatened against the Company or any
of the Subsidiaries under any Environmental Law which, individually or in
the aggregate, could reasonably be expected to have a material adverse
effect on the Company and the Subsidiaries, taken as a whole; and
(ee) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") that is maintained, administered or contributed to by the Company
or any of its affiliates for employees or former employees of the Company
and its affiliates, and to the best knowledge of the Company, has been
maintained in compliance with its terms and the material requirements of
any applicable statutes, orders, rules and regulations, including but not
limited to ERISA and the Code and to the extent any such plan has not been
maintained in compliance with such requirements, the Company shall take
corrective measures to comply with all requirements. To the best knowledge
of the Company, no prohibited transaction, within the meaning of Section
406 of ERISA or Section 4975 of the Code has occurred with respect to any
such plan excluding transactions effected pursuant to a statutory or
administrative exemption. The Company does not maintain a plan subject to
Title IV of ERISA.
(B) Each of the Selling Shareholders, solely as to himself, herself or
itself, severally, and not jointly, represents and warrants to, and agrees with,
each of the Underwriters that:
(a) this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder;
(b) an Irrevocable Power of Attorney and Custody Agreement (with
respect to each Selling Shareholder, the "Power of Attorney and Custody
Agreement") has been duly executed and delivered by each Selling
Shareholder and constitutes a valid and binding agreement of such Selling
Shareholder in accordance with its terms;
14
(c) all consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Shareholder of this Agreement
and the Power of Attorney and Custody Agreement, and for the sale and
delivery of the Shares underlying ADSs to be sold by such Selling
Shareholder hereunder, have been obtained except for the registration of
Shares or ADSs under the Securities Act and such as may be required under
state securities or Blue Sky Laws; and such Selling Shareholder has full
right, power and authority to enter into this Agreement and the Power of
Attorney and Custody Agreement and to sell, assign, transfer and deliver
the Shares underlying ADSs to be sold by such Selling Shareholder
hereunder;
(d) the sale of the Shares underlying ADSs to be sold by such Selling
Shareholder hereunder and the compliance by such Selling Shareholder with
all of the provisions of this Agreement and the Power of Attorney and
Custody Agreement and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a material breach
or violation of any of the terms or provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which such Selling Shareholder is a party
or by which such Selling Shareholder is bound, or to which any of the
material property or assets of such Selling Shareholder is subject, nor
will such action result in any violation of the provisions of the
certificate or articles of incorporation or bylaws of such Selling
Shareholder if such Selling Shareholder is a corporation, the declaration
of trust or other constituent documents if such Selling Shareholder is a
trust, the partnership agreement of such Selling Shareholder if such
Selling Shareholder is a partnership, or any material statute or order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Shareholder or the Shares owned by such
Selling Shareholder;
(e) such Selling Shareholder will have, immediately prior to the
Closing Date or Additional Closing Date, as the case may be, assuming due
issuance of any Shares underlying ADSs to be issued upon conversion of
Convertible Notes, good and valid title to the Shares underlying ADSs to be
sold at the Closing Date or Additional Closing Date, as the case may be, by
such Selling Shareholder, free and clear of all liens, encumbrances,
equities or adverse claims; and, upon delivery of the certificates
representing
15
such Shares underlying ADSs and payment therefor pursuant hereto, good and
valid title to such Shares underlying ADSs, free and clear of all liens,
encumbrances, equities or adverse claims, will pass to the several
Underwriters;
(f) such Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price
of the Ordinary Shares or the ADSs;
(g) all information furnished by or on behalf of such Selling
Shareholder in writing for use in the Registration Statement and Prospectus
is, and on the Closing Date (and the Additional Closing Date, if any) will
be, true, correct, and complete, and does not, and on the Closing Date (and
the Additional Closing Date, if any) will not, contain any untrue statement
of a material fact or omit to state any material fact necessary to make
such information not misleading; and
(h) Nothing has come to such Selling Shareholder's attention that
would cause such Selling Shareholder to believe that the Registration
Statement or the Prospectus (as amended or supplemented) did or will, as of
the applicable effective date of the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any amendment or
supplement thereto, 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 not misleading, and to such Selling
Shareholder's knowledge, without independent review, the Prospectus, as
amended or supplemented, if applicable, at the Closing Date or Additional
Closing Date, as the case may be, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading; and such Selling Shareholder will notify the Company
and you if he, she or it becomes aware of any facts which would cause this
representation to be untrue.
Each of the Selling Shareholders represents and warrants that it has
appointed Robert Rankin and David East, and each of them, as such Selling
Shareholder's attorneys-in-fact (the "Attorneys-in-Fact" or either one of them
an "Attorney-in Fact") with authority to execute and deliver this Agreement on
behalf of such Selling Shareholder, to determine the purchase price to be paid
by
16
the Underwriters to the Selling Shareholders as provided herein, to authorize
the conversion of the Convertible Notes into the Shares underlying the ADSs to
be sold by such Selling Shareholder hereunder and otherwise to act on behalf of
such Selling Shareholder in connection with the transactions contemplated by
this Agreement and the Power of Attorney and Custody Agreement.
Each of the Selling Shareholders specifically agrees that the Shares
underlying the ADSs and the irrevocable notice held in custody for such Selling
Shareholder under the Power of Attorney and Custody Agreement, are subject to
the interests of the Underwriters hereunder, and that the arrangements made by
such Selling Shareholder for such custody, and the appointment by such Selling
Shareholder of the Attorneys-in-Fact by the Power of Attorney and Custody
Agreement, are to that extent irrevocable. Each of the Selling Shareholders
specifically agrees that the obligations of the Selling Shareholders hereunder
shall not be terminated by operation of law, whether by the death or incapacity
of any individual Selling Shareholder, or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of any
other event. If any individual Selling Shareholder or any such executor or
trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the
Shares underlying the ADSs hereunder, certificates representing the Shares
underlying the ADSs shall be delivered by or on behalf of such Selling
Shareholder in accordance with the terms and conditions of this Agreement and
the Power of Attorney and Custody Agreement, and actions taken by the Attorneys-
in-Fact pursuant to the Power of Attorney and Custody Agreement shall be as
valid as if such death, incapacity, termination, dissolution or other event had
not occurred, regardless of whether or not the custodian under the Power of
Attorney and Custody Agreement, the Attorneys-in-Fact, or any of them, shall
have received notice of such death, incapacity, termination, dissolution or
other event.
5(A). The Company covenants and agrees with the several Underwriters as
follows:
(a) to use its reasonable best efforts to cause the Registration
Statement to become effective at the earliest possible time and to file the
final Prospectus with the Commission within the time periods specified by
Rule 424(b) and Rule 430A under the Securities Act and to file promptly all
reports and any definitive proxy or information statements required to be
filed by the Company with the Commission pursuant to Section 13(a), 13(c),
17
14 or 15(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively, the
"Exchange Act") subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or
sale of the Shares underlying the ADSs and to furnish copies of the
Prospectus to the Underwriters in New York City prior to 10:00 a.m., New
York City time, on the Business Day next succeeding the date of this
Agreement in such quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives,
2 signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits and documents
incorporated by reference therein, and to each other Underwriter a
conformed copy of the Registration Statement (as originally filed) and each
amendment thereto, in each case without exhibits or documents incorporated
by reference therein and, during the period mentioned in paragraph (e)
below, to each of the Underwriters as many copies of the Prospectus
(including all amendments and supplements thereto and documents
incorporated by reference therein) as the Representatives may reasonably
request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the Registration
Statement becomes effective, to furnish to the Representatives a copy of
the proposed amendment or supplement for review and not to file any such
proposed amendment or supplement to which the Representatives reasonably
object;
(d) to advise the Representatives promptly, and to confirm such advice
in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or become
effective, (iii) when any supplement to the prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (v) after becoming aware, of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of
any preliminary
18
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi) after becoming aware, of the occurrence
of any event, within the period referenced in paragraph (e) below, as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, and (vii) of the receipt by the Company of any notification
with respect to any suspension of the qualification of the Shares or the
ADSs for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and to use its best efforts
to prevent the issuance of any order suspending any such qualification of
the Shares or the ADSs or notification of any order thereof and, if issued,
to obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the ADSs as in the opinion of counsel for the Underwriters a
prospectus relating to the ADSs is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose names and addresses
the Representatives will furnish to the Company) to which ADSs may have
been sold by the Representatives on behalf of the Underwriters and to any
other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with law;
(f) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
19
(g) through and until the fifth anniversary of the issuance
of the ADSs, to furnish to the Representatives copies of all
reports or other communications (financial or other) furnished to
holders of ADSs, and copies of any reports and financial
statements furnished to or filed with the Commission or any
national securities exchange;
(h) for a period of 180 days after the date of the final
prospectus relating to the initial public offering of the ADSs not
to (i) offer, pledge, announce the intention to sell, contract to
sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or
indirectly, any ADSs or Shares or any securities convertible into
or exercisable or exchangeable for ADSs or Shares or (ii) enter
into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the ADSs or
Shares, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Ordinary Shares or ADSs
or such other securities, in cash or otherwise without the prior
written consent of J.P. Morgan Securities Inc. on behalf of the
Underwriters, other than the Shares to be sold hereunder and any
ADSs or Ordinary Shares of the Company issued upon the exercise of
options granted under existing employee stock option plans;
(i) to use the net proceeds received by the Company from the
sale of the ADSs pursuant to this Agreement in the manner set
forth under the caption "Use of Proceeds" in the Prospectus;
(j) to use its best efforts to list, subject to official
notice of issuance, the ADSs on the Nasdaq Stock Market's Nasdaq
National Market (the "Nasdaq National Market");
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay
or cause to be paid all costs and expenses incident to the
performance of the Company's obligations hereunder, including
without limiting the generality of the foregoing, all costs and
expenses of the Company (i) incident to the preparation,
registration, transfer, execution and delivery of the ADSs and the
Shares, (ii) incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the
Prospectus, any preliminary prospectus (including in each case all
exhibits,
20
amendments and supplements thereto) and the F-6 Registration
Statement, (iii) incurred in connection with the registration or
qualification of the ADSs and the Shares under the laws of such
jurisdictions as the Representatives may designate (including
reasonable fees of counsel for the Underwriters and its
disbursements), (iv) in connection with the listing of the
Ordinary Shares and the ADSs on any stock exchange, (v) related to
the filing with, and clearance of the offering by, the National
Association of Securities Dealers, Inc., (vi) in connection with
the printing (including word processing and duplication costs) and
delivery of this Agreement, the Preliminary and Supplemental Blue
Sky Memoranda and the furnishing to the Underwriters and dealers
of copies of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided, (vii) incident
to the preparation of ADR certificates evidencing the ADSs, (viii)
in connection with preparation and execution of the Deposit
Agreement (including fees and expenses of counsel to the
Depositary not borne by the Depositary) other than the fees and
expenses to be paid by the holders of ADSs pursuant to the
provisions of the Deposit Agreement; (ix) incident to the
appointment of an Authorized Agent (as defined in Section 13), (x)
in connection with the costs and charges of any transfer agent or
registrar, and (xi) incurred directly by the Company in connection
with a "road show" presentation to potential investors;
(l) to file with the Commission such reports on Form SR as
may be required by Rule 463 under the Securities Act; and
(m) so long as the Company is subject to the provisions of
Section 13 or Section 15(d) of the Exchange Act, to file with the
Commission (i) quarterly reports, which will include audited
quarterly consolidated financial information on Form 6-K for the
first three quarters of each fiscal year of the Company, and (ii)
an annual report on Form 20-F within the time periods prescribed
under Section 13 of the Exchange Act for the filing by domestic
issuers of quarterly reports on Form 10-Q and annual reports on
Form 10-K, respectively; provided that, if at any time the filing
of any such report in such fashion is prohibited by the
Commission, such report shall be submitted to the Depositary for
distribution to holders of the ADSs, in lieu of filing with the
Commission.
5(B). Each of the Selling Shareholders covenants and agrees solely as
to himself, herself or itself with each of the several Underwriters as
follows:
21
(a) subject to certain exceptions as provided in the "lock-
up" agreement of each Selling Shareholder referred to in Section
6(k) of this Agreement, for a period of 180 days after the date of
the final prospectus relating to the initial public offering of
the ADSs not to (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any
Ordinary Shares or ADSs or any securities convertible into or
exercisable or exchangeable for Ordinary Shares or ADSs or (ii)
enter into any swap or other agreement that transfers to another,
in whole or in part, any of the economic consequences of ownership
of the Ordinary Shares or ADSs, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery
of Ordinary Shares or ADSs or such other securities, in cash or
otherwise or (iii) make any demand for or exercise any right with
respect to the registration of any Ordinary Shares or any security
convertible into or exercisable or exchangeable for Ordinary
Shares, each of the foregoing without the prior written consent of
J.P. Morgan Securities Inc. on behalf of the Underwriters; and
(b) to deliver to the Representatives prior to or at the
Closing Date a properly completed and executed United States
Treasury Department Form W-8 or W-9, as applicable (or other
applicable form or statement specified by the Treasury Department
regulations in lieu thereof), in order to facilitate the
Underwriters' documentation of their compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated.
6. The several obligations of the Underwriters hereunder to purchase
the Shares underlying the ADSs on the Closing Date or the Additional
Closing Date, as the case may be, are subject to the performance by the
Company and each of the Selling Shareholders of their respective
obligations hereunder and to the following additional conditions:
(a) the Registration Statement shall have become effective
(or if a post-effective amendment is required to be filed under
the Securities Act, such post-effective amendment shall have
become effective) not later than 5:00 P.M., New York City time, on
the date hereof; and no stop order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceedings
for such purpose shall be pending before or threatened by the
22
Commission; the Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the Securities Act and in accordance with Section 5(a)
hereof; and all requests for additional information shall have
been complied with to the reasonable satisfaction of the
Representatives;
(b) the representations and warranties of the Company and the
Selling Shareholders contained herein are true and correct in all
material respects on and as of the Closing Date or the Additional
Closing Date, as the case may be, as if made on and as of the
Closing Date or the Additional Closing Date, as the case may be,
and each of the Company and the Selling Shareholders shall have
complied in all material respects with all agreements and all
conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date or the Additional Closing Date, as
the case may be;
(c) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in
the capital stock or long-term debt of the Company or any of the
Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the general affairs, business, prospects, management, financial
position, shareholders' equity or results of operations of the
Company and the Subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus, the effect of which
in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of
the ADSs on the Closing Date or the Additional Closing Date, as
the case may be, on the terms and in the manner contemplated in
the Prospectus; and neither the Company nor any of the
Subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus;
(d) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be,
(1) a certificate of an executive officer of the Company, with
23
specific knowledge about the Company's financial matters,
satisfactory to the Representatives to the effect set forth in
subsections (a) through (c) of this Section 6 (with respect to the
respective representations, warranties, agreements and conditions
of the Company) of this Section and to the further effect that
there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management,
financial position, shareholders' equity or results of operations
of the Company and the Subsidiaries taken as a whole from that set
forth or contemplated in the Registration Statement and (2) a
certificate of the Selling Shareholders (which may be delivered on
their behalf by the Attorneys-in-Fact), satisfactory to the
Representatives to the effect set forth in subsection (b) of this
Section 6 (with respect to the respective representations,
warranties, agreements and conditions of the Selling
Shareholders);
(e) Brobeck, Phleger & Harrison LLP, Freehill, Hollingdale &
Page and Robert Gavshon, each counsel for the Company, shall have
furnished to the Representatives their written opinions, dated the
Closing Date or the Additional Closing Date, as the case may be,
in form and substance reasonably satisfactory to the
Representatives, as set forth in Exhibits A-1, A-2 and A-3,
respectively;
(f) Brobeck, Phleger & Harrison LLP, special counsel for
certain Selling Shareholders resident in the United States, shall
have furnished to the Representatives their written opinion, dated
the Closing Date or the Additional Closing Date, as the case may
be, in form and substance reasonably satisfactory to the
Representatives, as set forth in Exhibit B-1, and Freehill,
Hollingdale & Page and Andersen Legal, special counsel for the
remaining Selling Shareholders, shall have furnished to the
Representatives their written opinions, dated the Closing Date or
the Additional Closing Date, as the case may be, in form and
substance reasonably satisfactory to the Representatives, each as
set forth in Exhibit B-2;
(g) on the effective date of the Registration Statement and
the effective date of the most recently filed post-effective
amendment to the Registration Statement and also on the Closing
Date or Additional Closing Date, as the case may be, KPMG and
Horwath & Horwath shall have furnished to you letters, dated the
24
respective dates of delivery thereof, in form and substance
satisfactory to you, containing statements and information of the
type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in the Registration Statement and
the Prospectus;
(h) the Representatives shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be,
an opinion of Davis Polk & Wardwell, counsel to the Underwriters,
with respect to the due authorization and valid issuance of the
ADSs, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably request, and such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(i) the ADSs to be delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall have been
approved for quotation on the Nasdaq National Market, subject to
official notice of issuance;
(j) on or prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company and the Selling Shareholders
shall have furnished to the Representatives such further
certificates and documents (not including any additional
representations, warranties or covenants) which are of form and
substance normally and customarily requested in a public offering
transaction as the Representatives shall reasonably request;
(k) the "lock-up" agreements, each substantially in the form
previously distributed, between you and certain shareholders,
officers and directors of the Company relating to sales and
certain other dispositions of shares of Ordinary Shares or ADSs or
certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date or
Additional Closing Date, as the case may be; and
(l) each of the Reverse Share Split and the conversion of all
Convertible Notes into Ordinary Shares (as contemplated in the
Prospectus) shall have been validly consummated; each of the
Galore Shareholders Deed Poll and the Terms and Conditions of
Convertible Notes, relating to the Convertible Notes, shall have
25
been terminated in accordance with its terms, with the Company
having no further obligation thereunder or under the Convertible
Notes; and the Company shall have a capitalization conforming in
all material respects to the description thereof in the
Prospectus.
7. The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities
(including, without limitation, the legal fees and other expenses incurred
in connection with any suit, action or proceeding or any claim asserted)
caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus (as amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities
are caused by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information
relating to any Underwriter or any Selling Shareholder furnished to the
Company in writing by such Underwriter through the Representatives, or by
such Selling Shareholder, expressly for use therein.
Each of the Selling Shareholders severally in proportion to the
number of ADSs to be sold by such Selling Shareholder hereunder agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages and liabilities (including, without limitation,
the legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted) caused by any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, to the extent and only to the
extent that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) in reliance upon, and in conformity with, information
relating to such Selling Shareholder furnished to the Company in writing by
or on behalf of such Selling Shareholder expressly for use in the
Registration Statement,
26
any preliminary prospectus or the Prospectus. Notwithstanding any other
provision of this Section 7, the liability of each Selling Shareholder to
the Underwriters shall not exceed the net amount received by such Selling
Shareholder (after deducting any underwriting discount) from the sale of
the Shares or the ADSs pursuant to this Agreement.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act and each of the Selling Shareholders to the same extent as the
foregoing indemnity from the Company and the Selling Shareholders to each
Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any preliminary
prospectus.
Each of the foregoing indemnification provisions with respect to any
preliminary prospectus shall not inure to the benefit of any indemnified
party on account of any loss, claim, damage or liability (including without
limitation, the legal fees and other expenses incurred in connection with
any suit, action proceeding or any claim asserted) if a copy of the
Prospectus shall not have been delivered or sent to such person within the
time required by the Securities Act and the regulations thereunder and the
untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such preliminary prospectus was
corrected in the Prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
the preceding paragraphs of this Section 7, such person (the "Indemnified
Person") shall promptly notify the person or persons against whom such
indemnity may be sought (each an "Indemnifying Person") in writing, and
such Indemnifying Person, upon request of the Indemnified Person, shall
retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the reasonable fees and expenses
of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Person and not the Indemnifying Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed
to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any
27
such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that no
Indemnifying Person shall, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be
reimbursed as they are incurred. Any such separate firm for the
Underwriters and such control persons of Underwriters shall be designated
in writing by J.P. Morgan Securities Inc. and any such separate firm for
the Company, its directors, its officers who sign the Registration
Statement and such control persons of the Company shall be designated in
writing by the Company. In the case of any such separate firm for the
Selling Shareholders and such controlling persons of Selling Shareholders,
such firm shall be designated in writing by the Selling Shareholders
selling the majority of the amount of Shares sold by the Selling
Shareholders under this Agreement. No Indemnifying Person shall be liable
for any settlement of any proceeding effected without its written consent,
but if settled with such consent or if there be a final judgment for the
plaintiff, each Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement
or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested the Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, such
Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such Indemnifying Person
of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of
any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding.
If the indemnification provided for in the first four paragraphs of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraph, in lieu of indemnifying
such Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on
28
the other hand from the offering of the ADSs or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
and the Selling Shareholders on the one hand and the Underwriters on the
other hand in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
the Selling Shareholders on the one hand and the Underwriters on the other
hand shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by the
Selling Shareholders and the total underwriting discounts and the
commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering
price of the ADSs. The relative fault of the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand 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 and the Selling Shareholders or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation (even if the Underwriters were
--- ----
treated as one entity for such purposes) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required
to contribute any amount in excess of the amount by which the total price
at which the ADSs underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in
proportion to the respective number of ADSs set forth opposite their names
in Schedule I hereto, and not joint.
29
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company and the Selling
Shareholders set forth in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter or by or on behalf of the Company, its officers
or directors or any other person controlling the Company or the Selling
Shareholders and (iii) acceptance of and payment for any of the ADSs.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares)
may be terminated in the absolute discretion of the Representatives, by
notice given to the Company and the Selling Shareholders, if after the
execution and delivery of this Agreement and prior to the Closing Date (or,
in the case of the Option Shares, prior to the Additional Closing Date) (i)
trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange or the American
Stock Exchange, the Nasdaq National Market, the Chicago Board Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade,
(ii) trading of any securities of or guaranteed by the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities, or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment
of the Representatives, is material and adverse and which, in the judgment
of the Representatives, makes it impracticable to market the ADSs being
delivered at the Closing Date or the Additional Closing Date, as the case
may be, on the terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase
ADSs which it or they have agreed to purchase hereunder on such date, and
the aggregate number of ADSs which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-
tenth of the aggregate number of ADSs
30
to be purchased on such date, the other Underwriters shall be obligated
severally in the proportions that the number of ADSs set forth opposite
their respective names in Schedule I bears to the aggregate number of
Underwritten Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representatives may
specify, to purchase the ADSs which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date;
provided that in no event shall the number of ADSs that any Underwriter has
--------
agreed to purchase pursuant to Section 1 be increased pursuant to this
Section 9 by an amount in excess of one-tenth of such number of ADSs
without the written consent of such Underwriter. If on the Closing Date or
the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase ADSs which it or they have
agreed to purchase hereunder on such date, and the aggregate number of ADSs
with respect to which such default occurs is more than one-tenth of the
aggregate number of ADSs to be purchased on such date, and arrangements
satisfactory to the Representatives, the Selling Shareholders, and, in the
case of the Closing Date, the Company, for the purchase of such ADSs are
not made within 36 hours after such default, this Agreement (or the
obligations of the several Underwriters to purchase the Option Shares, as
the case may be) shall terminate without liability on the part of any non-
defaulting Underwriter, the Company or the Selling Shareholders. In any
such case either you, the Selling Shareholders or, in the case of the
Closing Date, the Company, shall have the right to postpone the Closing
Date (or, in the case of the Option Shares, the Additional Closing Date,
but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and in the Prospectus or in
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company or
the Selling Shareholders to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company or the
Selling Shareholders shall be unable to perform their obligations under
this Agreement or any condition of the Underwriters' obligations cannot be
fulfilled, the Company and the Selling Shareholders agree to reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including
the fees and expenses of its counsel) reasonably incurred by the
Underwriters in connection with this Agreement or the offering contemplated
hereunder.
11. The Company and the Selling Shareholders (a) agree that any legal
suit, action or proceeding brought by an Underwriter arising out of or
relating to this Agreement, the Deposit Agreement, the Power of Attorney
and Custody
31
Agreement, or the transactions contemplated hereby or thereby may be
instituted in any federal or state court in New York City, (b) irrevocably
waive, to the fullest extent it may effectively do so, any objection (x)
which it may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any federal or state court in New York City
or (y) that any such suit, action or proceeding has been brought in an
inconvenient forum, and (c) irrevocably submit to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding.
If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder into any currency other than United States
dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the Underwriters could
purchase United States dollars with such other currency in New York City on
the business day preceding that on which final judgment is given. The
obligation of the Company or the Selling Shareholders, as the case may be,
in respect of any sum due from the Company or the Selling Shareholders, as
the case may be, to the Underwriters, or of any Underwriter in respect of
any sum due from such Underwriter to the Company or the Selling
Shareholders, as the case may be, shall, notwithstanding any judgment in a
currency other than United States dollars, not be discharged until the
first business day, following receipt by the Underwriters, the Company or
the Selling Shareholders, as the case may be, of any sum adjudged to be so
due in such other currency, on which (and only to the extent that) the
Underwriters, the Company or the Selling Shareholders, as the case may be,
may in accordance with normal banking procedures purchase United States
dollars with such other currency; if the United States dollars so purchased
are less than the sum originally due to the Underwriters, the Company or
the Selling Shareholders, as the case may be, hereunder, the Company
agrees, the Selling Shareholders agree, and each Underwriter agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Underwriters, the Company or the Selling Shareholders, as the case may be,
against such loss. If the United States dollars so purchased are greater
than the sum originally due to the Underwriters, the Company or the Selling
Shareholders, as the case may be, hereunder, the Underwriters, the Company
and the Selling Shareholders, as the case may be, agree to pay to the
Company, the Selling Shareholders or the Underwriters, as the case may be,
an amount equal to the excess of the dollars so purchased over the sum
originally due to the Underwriters, the Company or the Selling
Shareholders, as the case may be, hereunder.
12. This Agreement shall inure to the benefit of and be binding upon
the Company, the Selling Shareholders and the Underwriters, any controlling
persons referred to herein and their respective successors and assigns.
Nothing expressed
32
or mentioned in this Agreement is intended or shall be construed to give
any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of ADSs from any Underwriter shall be deemed to be
a successor by reason merely of such purchase.
13. Any action by the Underwriters hereunder may be taken by the
Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf
of the Underwriters, and any such action taken by the Representatives
jointly or by J.P. Morgan Securities Inc. alone shall be binding upon the
Underwriters. All notices and other communications hereunder 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 given to the Representatives, c/o J.P. Morgan
Securities Inc., 60 Wall Street, New York, New York 10260 (telefax:______);
Attention: Syndicate Department. Notices to the Company shall be given to
it at Barbeques Galore Limited, 15041 Bake Parkway, #A, Irvine, CA 92718,
(telefax:(714) 597-2434); Attention:____________. Notices to any of the
Selling Shareholders shall be given to both Attorneys-in-Fact at (i) SBC
Warburg Australia, Level 25, Governor Philip Tower, 1 Farrer Place, Sydney
NSW Australia 2000, Attention: Robert Rankin (telefax: (011-612) 9324-
2424), and (ii) Andersen Legal, Level 12, 141 Walker Street, North Sydney
NSW Australia 2060, Attention: David East, (telefax: (011-612) 9964-6650).
14. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
33
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
BARBEQUES GALORE LIMITED
By:
-------------------------
Title:
SELLING SHAREHOLDERS
By:
---------------------------
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the Selling
Shareholders named in
Schedule II to this Agreement.
Accepted: [ ], 1997
By: J.P. Morgan Securities Inc.
Acting on behalf of itself and
the several Underwriters listed
in Schedule I hereto.
By:
------------------------------
Title:
34
SCHEDULE I
Number of Firm
ADSs To Be
Underwriter Purchased
----------- ------------------
J.P. Morgan Securities Inc. .................
SBC Warburg Dillon Read Inc. ................
--------------
Total: 2,350,000
==============
SCHEDULE II
All Share Numbers Reflect the Occurrence
of the Proposed 18.223-for-1 Reverse Stock
Split Prior to the Offering
Number of Firm Number of Total Number of
Selling Shares to Be Option Shares Shares To Be
Shareholders Sold Sold Sold
============================================================================================
- --------------------------------------------------------------------------------------------
Blaironia Pty Limited 23,459 18,376 41,835
- --------------------------------------------------------------------------------------------
Halcyon Pty Limited 9,384 7,351 16,735
- --------------------------------------------------------------------------------------------
Timewalk Pty Limited 23,459 18,376 41,835
- --------------------------------------------------------------------------------------------
RG Investments (Australia) Pty Limited 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
Navarra Investments Pty Ltd. 938 735 1,673
- --------------------------------------------------------------------------------------------
Depofo Pty Ltd. 1,173 919 2,092
- --------------------------------------------------------------------------------------------
Talbot Pty. Limited 4,692 3,675 8,367
- --------------------------------------------------------------------------------------------
Scelara Pty Limited 9,384 7,351 16,735
- --------------------------------------------------------------------------------------------
Borlas Pty Limited 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
Dalbrun Pty Ltd. 9,384 7,351 16,735
- --------------------------------------------------------------------------------------------
Pesas Pty Ltd. (A/C Super Fund) 9,384 7,351 16,735
- --------------------------------------------------------------------------------------------
Rupert Baroona Pty Ltd - the Carter Account 5,865 4,594 10,459
- --------------------------------------------------------------------------------------------
Nassa Investments Pty Limited 4,692 3,675 8,367
- --------------------------------------------------------------------------------------------
Shane D. Finemore 4,692 3,675 8,367
- --------------------------------------------------------------------------------------------
Warana Holdings Pty Ltd. 14,076 11,026 25,102
- --------------------------------------------------------------------------------------------
Kelstan Pty Ltd. 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
Kahuna Investments Pty Limited 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
Megwil Pty Ltd. A/C WPG Superfund 11,730 9,188 20,918
- --------------------------------------------------------------------------------------------
Potter Warburg Nominees Pty. Limited 4,692 3,675 8,367
- --------------------------------------------------------------------------------------------
Todizo Pty Limited 21,817 17,090 38,907
- --------------------------------------------------------------------------------------------
AJA Investments Pty Limited 18,767 14,701 33,468
- --------------------------------------------------------------------------------------------
National Nominees Limited 28,151 22,052 50,203
- --------------------------------------------------------------------------------------------
ANZ Nominees Limited 41,804 32,747 74,551
- --------------------------------------------------------------------------------------------
Conargo Plains Pty Ltd. 4,692 3,676 8,367
- --------------------------------------------------------------------------------------------
RJR Capital Pty Ltd. 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
Chirico Pty Ltd 23,459 18,377 41,836
- --------------------------------------------------------------------------------------------
P.K. Capital Pty Ltd. 6,099 4,778 10,877
- --------------------------------------------------------------------------------------------
Exim Nominees Pty. Ltd. 5,395 4,226 9,621
- --------------------------------------------------------------------------------------------
Dennis Hoffman 216 169 385
- --------------------------------------------------------------------------------------------
Joyce Hoffman 216 169 385
- --------------------------------------------------------------------------------------------
David Katz 3,669 2,874 6,543
- --------------------------------------------------------------------------------------------
Robert & Ann Patricia McLeod 2,158 1,690 3,848
- --------------------------------------------------------------------------------------------
Keith B. Abrams 2,158 1,690 3,848
- --------------------------------------------------------------------------------------------
Richard Wunsh 1,079 845 1,924
- --------------------------------------------------------------------------------------------
Patjon Pty Ltd. 11,631 9,111 20,742
- --------------------------------------------------------------------------------------------
Alney Pty Ltd. 5,552 4,349 9,901
- --------------------------------------------------------------------------------------------
GDL Investments Pty Ltd. 6,079 4,762 10,841
- --------------------------------------------------------------------------------------------
Australip Pty Ltd. 5,395 4,226 9,621
- --------------------------------------------------------------------------------------------
Jack Sack 2,158 1,690 3,848
- --------------------------------------------------------------------------------------------
Page 1
SCHEDULE II
- --------------------------------------------------------------------------------
Dresner Investments Pty Ltd. 2,158 1,690 3,848
- --------------------------------------------------------------------------------
Jokari Pty Ltd. 1,079 845 1,924
- --------------------------------------------------------------------------------
David M. Schnaid 1,407 1,102 2,509
- --------------------------------------------------------------------------------
Lawrence A. Oster 562 439 1,001
- --------------------------------------------------------------------------------
Page 2
Exhibit A-1
-----------
Opinion of Brobeck, Phleger & Harrison LLP, as Counsel to the Company
---------------------------------------------------------------------
(i) each of Barbeques Galore Inc., a California corporation, and The
Galore Group (USA) Inc., a Delaware corporation (the "Material U.S.
Subsidiaries"), has been duly incorporated and is validly existing as a
corporation under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to own its properties and conduct
its business as described in the Prospectus; and to the knowledge of such
counsel, based solely on a review of the certificates of public officials
furnished herewith, each of the Material U.S. Subsidiaries has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole; and, to the knowledge of such counsel, all
of the outstanding shares of capital stock of each Material U.S. Subsidiary
have been duly and validly authorized and issued, are fully paid and non-
assessable, and are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;
(ii) to the knowledge of such counsel, there are no currently
outstanding rights (including, without limitation, preemptive rights),
warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interests in
any of the Material U.S. Subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of any such Material U.S. Subsidiary, any
such convertible or exchangeable securities or any such right, warrants or
options;
(iii) upon the deposit of the Shares to be sold by the Company with the
Depositary pursuant to the Deposit Agreement against issuance of the ADRs
evidencing the ADSs representing such Shares, all right, title and interest
in such Shares, subject to the Deposit Agreement, will be transferred to
the Depositary or its nominee, as the case may be, free and clear of all
liens, encumbrances or claims;
(iv) upon the sale and delivery of the Shares to be sold by the Company
to the Underwriters, and payment therefor against deposit thereof with or
in the account of the ADR Custodian maintained in [ ] and delivery of
ADRs evidencing the ADSs representing such Shares as contemplated by the
Underwriting Agreement and the Deposit Agreement, good and valid title to
the
A-1-1
ADSs representing such Shares, free and clear of all liens, encumbrances or
claims, will be transferred to the Underwriters; the foregoing ADSs to be
delivered hereunder are freely transferable to or for the account of the
several Underwriters; upon delivery by the Depositary of the ADRs
evidencing such ADSs against deposit of such Shares in accordance with the
Deposit Agreement, such ADSs will be duly and validly issued; the ADSs and
the ADRs conform as to legal matters to the description thereof set forth
in the Registration Statement and Prospectus in all material respects;
(v) neither of the Material U.S. Subsidiaries is, or with the giving
of notice or lapse of time or both would be, (i) in violation of or in
default under its articles of incorporation or bylaws or (ii) in violation
of or in default under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed as an exhibit to the
Registration Statement or listed on Annex A hereto, except (x) as such
violation has been waived by the parties to such agreement, and written
notice given to the Underwriters and (y) for any such violation or default
which has not had, and would not reasonably be expected to have, a Material
Adverse Effect; the issue and sale of the Shares to be sold by the Company
and the ADSs representing such Shares and the performance by the Company of
its obligations under the Underwriting Agreement and the Deposit Agreement,
and the consummation of the transactions contemplated therein will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument filed as an exhibit to the
Registration Statement or listed on Annex A hereto, except for any such
conflict, breach or default which would not reasonably be expected to have
a Material Adverse Effect, nor will any such action result in any violation
of the provisions of the articles of incorporation or bylaws of any
Material U.S. Subsidiary or any applicable California or United States
federal law or statute or, to the knowledge of such counsel, any order,
rule or regulation of any California or United States federal court or
governmental agency or body having jurisdiction over such Subsidiaries or
any of their respective properties;
(vi) to such counsel's knowledge, no consent, approval, authorization,
order, license, registration or qualification of or with any California or
United States federal court or governmental agency or body is required for
the issue and sale of the Shares to be sold by the Company or the ADSs
representing such Shares or the consummation of the other transactions
contemplated by the Underwriting Agreement and the Deposit Agreement,
except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained under the Securities
Act and as may be required under United States state securities or Blue Sky
laws in connection with the purchase of any such Shares and distribution of
any such ADSs by the Underwriters;
A-1-2
(vii) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending in the United States or, to the best of such counsel's knowledge,
threatened against the Company or any of the Significant Subsidiaries (as
defined in Regulation S-X) or any of their respective properties or to
which the Company or any of the Significant Subsidiaries is or may be a
party or to which any property of the Company or the Significant
Subsidiaries is or may be the subject which, if determined adversely to the
Company or any of the Significant Subsidiaries, would individually or in
the aggregate have, or reasonably be expected to have, a Material Adverse
Effect; and such counsel does not know of any California or United States
federal statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement that are not described
or filed as required;
(viii) the Company is not and, after giving effect to the offering and
sale of the ADSs, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act;
(ix) the Company is not a "passive foreign investment company" within
the meaning of the Code and the Treasury Regulations adopted thereunder;
(x) each of the Company and the Material U.S. Subsidiaries owns,
possesses or has obtained all material California and United States federal
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all material declarations and filings
with, all United States federal, state, local and other governmental
authorities and all California and United States federal courts and other
tribunals, necessary to own or lease, as the case may be, and to operate
its properties and to carry on its business as conducted as of the date
hereof, and neither the Company nor any such Material U.S. Subsidiary has
received any actual notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the Registration
Statement and the Prospectus;
(xi) the statements in the Prospectus under "Certain Tax Considerations
-- United States Taxation" constitute a summary of the material
consequences under the Code to U.S. Holders other than 10% U.S.
shareholders of the acquisition, ownership and disposition of the ADSs and
Ordinary Shares;
(xii) assuming the accuracy of information furnished by or on behalf
of the Underwriters for inclusion therein, the statements in the Prospectus
under
A-1-3
"Description of American Depositary Receipts" and "Underwriting" and
in the Registration Statement in Items 14 and 15, insofar as such
statements constitute a summary of the terms of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such terms, legal matters, documents
or proceedings; and
(xiii) such counsel is of the opinion that the Registration Statement
and the Prospectus and any amendments and supplements thereto (other than
the financial statements and related schedules therein, and all financial,
statistical, accounting and other numerical information therein, as to
which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Securities Act and nothing
has come to such counsel's attention that (other than the financial
statements and related schedules therein, and all financial, statistical,
accounting and other numerical information therein, as to which such
counsel need express no belief) the Registration Statement and the
prospectus included therein at the time the Registration Statement became
effective did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and further that the Prospectus, as
amended or supplemented, if applicable, does not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The opinion of Brobeck, Phleger & Harrison LLP described above shall be
rendered to the Underwriters. In rendering such opinion, such counsel may
(A) limit their opinion to the federal laws of the United States of
America, the laws of the State of California and the General Corporation
Law of the State of Delaware and (B) rely as to matters of fact, to the
extent such counsel deems proper, on certificates of responsible officers
of the Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. With respect to the matters to
be covered in subparagraph (xiii), counsel may state their opinion is based
upon their participation in the preparation of the Registration Statement
and the Prospectus and any amendment or supplement thereto and review and
discussion of the contents thereof but is without independent check or
verification. Brobeck, Phleger & Harrison LLP standard opinion limitations
will apply.
A-1-4
Exhibit A-2
-----------
Opinion of Freehill, Hollingdale & Page, as Counsel to the Company
------------------------------------------------------------------
(i) the Company has been duly incorporated and is validly existing as
a corporation formed under the laws applicable in the Commonwealth of
Australia, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(ii) the Company is registered under the laws of New South Wales as a
corporation and under the national Corporation Law of Australia is entitled
to transact business in each jurisdiction in Australia;
(iii) each of [list material Australian subsidiaries] (the "Material
Australian Subsidiaries") has been duly incorporated and is validly
existing as a corporation under the laws applicable in the Commonwealth of
Australia, with all requisite power and authority to own its properties and
conduct its business as described in the Prospectus; and is registered
under the laws of its State of incorporation as a corporation and under the
national Corporations Law of Australia is entitled to transact business in
each jurisdiction in Australia; and no matter has come to the attention of
counsel that suggests that all of the outstanding shares of capital stock
of each Material Australian Subsidiary have not been duly and validly
authorised and issued and are fully paid, and except for directors'
qualifying shares and except as otherwise set forth in the Registration
Statement, are not owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims;
(iv) the board of directors of the Company has duly authorised and
executed the Underwriting Agreement on behalf of the Company in accordance
with the laws of Australia;
(v) the Company has an authorised capitalization as set forth in the
Prospectus and such authorised capital stock conforms in all material
respects as to legal matters to the description thereof set forth in the
Registration Statement;
(vi) the shares of capital stock of the Company outstanding (including
the Shares to be sold by the Selling Shareholders) have been duly
authorised and are validly issued and fully paid; the Shares underlying the
ADSs to be issued and sold by the Company and the Selling Shareholders,
including the Shares to be deposited by the
A-2-1
Company and the Selling Shareholders with the ADR Custodian in accordance
with the Deposit Agreement, have been duly authorised, and when such Shares
have been so deposited and paid for by the Underwriters in accordance with
the terms of the Underwriting Agreement, such Shares will have been duly
issued and will be fully paid and will conform to the descriptions thereof
in the Prospectus in all material respects; and except for Ordinary Shares
issuable or available for grant under the Company's Executive Share Option
Plan and the Company's 1997 Stock Option and Stock Issuance Plan, to the
knowledge of such counsel, there are no currently outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interests in the Company or any of the
Material Australian Subsidiaries, or any contract, commitment, agreement,
understanding or arrangement of any kind relating to the issuance of any
capital stock of the Company or any such Material Australian Subsidiary,
any such convertible or exchangeable securities or any such right, warrants
or options, in each of the foregoing cases, to which the Company or any of
the Subsidiaries is a party; the Company has not granted any preemptive or
other rights to acquire the Shares or the ADSs which are presently
outstanding; and to such counsel's knowledge there are no restrictions on
transfers of the Shares, other than pursuant to arrangements which counsel
has been advised will be terminated prior to the sale of the Shares to the
Underwriters;
(vii) the board of directors of the Company has duly authorised and
executed the Deposit Agreement on behalf of the Company in accordance with
the laws of Australia, and the Deposit Agreement constitutes a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganisation, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles and to public policy principles, including but not
limited to the enforceability of any indemnification provision therein;
(viii) to such counsel's knowledge, no consent, approval,
authorisation, order, license, registration or qualification of or with any
Australian court or governmental agency or body is required for the issue
and sale of the Shares or the ADSs or the consummation of the other
transactions contemplated by the Underwriting Agreement and the Deposit
Agreement;
(ix) other than as set forth or contemplated in the Prospectus, to
such counsel's knowledge, there are no legal or governmental
A-2-2
investigations, actions, suits or proceedings pending in Australia or, to
the best of such counsel's knowledge, threatened against the Company or any
of the Material Australian Subsidiaries or any of their respective
properties or to which the Company or any of the Material Australian
Subsidiaries is or may be a party or to which any property of the Company
or the Material Australian Subsidiaries is or may be the subject which, if
determined adversely to the Company or any of the Material Australian
Subsidiaries, would individually or in the aggregate have, or reasonably be
expected to have, a Material Adverse Effect; to such counsel's knowledge,
no such proceedings are threatened or contemplated by Australian
governmental authorities or threatened by others;
(x) the Company is treated as a "public company" for Australian tax
law purposes;
(xi) the statements in the Prospectus under "Description of Ordinary
Shares" and "Certain Tax Considerations--Australian Taxation," insofar as
such statements constitute a summary of the terms of the legal matters,
documents or proceedings referred to therein, are accurate as a matter of
Australian law; and
(xii) each of the Reverse Share Split and the conversion of all
Convertible Notes into Ordinary Shares (as contemplated in the Prospectus)
has been validly consummated; and each of the Galore Shareholders Deed Poll
and the Terms and Conditions of Convertible Notes, relating to the
Convertible Notes, has been terminated in accordance with its terms, with
the Company having no further obligation thereunder or under the
Convertible Notes.
The opinion of Freehill, Hollingdale & Page described above shall be
rendered to the Underwriters. In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws other than Australian laws,
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
reasonably satisfactory to Underwriters' counsel) of other counsel reasonably
acceptable to Underwriters' counsel, familiar with the applicable laws; (B) as
to matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and certificates or other written statements
of officials of jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company. Such counsel may limit its
opinion solely to Australian laws, and express no opinion with respect to the
effect or application of any other laws. Freehill, Hollingdale & Page standard
opinion limitations will apply.
A-2-3
Exhibit A-3
-----------
Opinion of Robert Gavshon, General Counsel
------------------------------------------
for the Company
---------------
(i) neither the Company nor any of the Subsidiaries is, or with the
giving of notice or lapse of time or both would be, (i) in violation of or
in default under its articles of incorporation or bylaws or (ii) in
violation of or in default under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which it or any of them or any of
their respective properties is bound, except (x) as such violation has
been waived by the parties to such agreement, and written notice given to
the Underwriters and (y) for any such violation or default which has not
had, and would not reasonably be expected to have, a Material Adverse
Effect; the issue and sale of the Shares and the ADSs and the performance
by the Company of its obligations under the Underwriting Agreement and the
Deposit Agreement, and the consummation of the transactions contemplated
therein will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which the Company or
any of the Subsidiaries is bound or to which any of the material property
or assets of the Company or any of the Subsidiaries is subject, except for
any such conflict, breach or default which could not reasonably be expected
to have a Material Adverse Effect, nor will any such action result in any
violation of the provisions of the articles of incorporation of the Company
or any Subsidiary or any applicable law or statute or, to the knowledge of
such counsel, any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, such Subsidiaries or
any of their respective properties;
(ii) any real property and buildings held under lease by the Company
and the Subsidiaries are held by them under valid, existing and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such property and
buildings by the Company or the Subsidiaries;
(iii) the Company is not, and after giving effect to the waiver by the
holders of the Convertible Notes, the offering of the ADSs and the other
transactions contemplated herein, will not be, in violation of or in
default in any material respect under the Note Agreements; and
A-3-1
(iv) each of the Company and the Subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all material
declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
courts and other tribunals, domestic or foreign, necessary to own or lease,
as the case may be, and to operate its properties and to carry on its
business as conducted as of the date hereof, and neither the Company nor
any such Subsidiary has received any actual notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except as
described in the Registration Statement and the Prospectus; and each of the
Company and the Subsidiaries is in compliance in all material respects with
all laws and regulations relating to the conduct of its business as
conducted as of the date of the Prospectus.
A-3-2
Exhibit B-1
-----------
Opinion of Brobeck, Phleger & Harrison LLP, as Counsel
------------------------------------------------------
to the U.S. Selling Shareholders
--------------------------------
(i) the Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders who has validly
completed, executed and filed a Substitute Form W-9 (each, a "U.S. Selling
Shareholder");
(ii) an Irrevocable Power of Attorney and Custody Agreement has been duly
executed and delivered by each U.S. Selling Shareholder and constitutes a valid
and binding agreement of such U.S. Selling Shareholder in accordance with its
terms;
(iii) all consents, approvals, authorizations and orders under United
States laws, rules and regulations necessary for the execution and delivery by
each such U.S. Selling Shareholder of the Underwriting Agreement and the Power
of Attorney and Custody Agreement, and for the sale and delivery of the Shares
underlying ADSs to be sold by each such U.S. Selling Shareholder hereunder, have
been obtained except for the registration of Shares or ADSs under the Securities
Act and such as may be required under state securities or Blue Sky laws; and
each such U.S. Selling Shareholder has full right, power and authority to enter
into the Underwriting Agreement and the Power of Attorney and Custody Agreement
and to sell, assign, transfer and deliver the Shares underlying ADSs to be sold
by such U.S. Selling Shareholder thereunder;
(iv) the sale of the Shares underlying ADSs to be sold by each such U.S.
Selling Shareholder thereunder and the compliance by each such U.S. Selling
Shareholder with all of the provisions of the Underwriting Agreement and the
Power of Attorney and Custody Agreement and the consummation of the transactions
therein contemplated will not, to the knowledge of such counsel, conflict with
or result in a material breach or violation of any of the terms or provisions
of, or constitute a default under, any United States statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such U.S. Selling Shareholder is a party or by which such U.S. Selling
Shareholder is bound, or to which any of the material property or assets of such
U.S. Selling Shareholder is subject, nor will such action result in any
violation of the provisions of the certificate or articles of incorporation or
bylaws of such U.S. Selling Shareholder if such U.S. Selling Shareholder is a
corporation, the declaration of trust or other constituent documents if such
U.S. Selling Shareholder is a trust, or the partnership agreement of such U.S.
Selling Shareholder if such U.S. Selling Shareholder is a partnership, nor, to
the
B-1-1
knowledge of such counsel, will such action result in any violation of any
material United States statute or order, rule or regulation of any United States
court or governmental agency or body having jurisdiction over such U.S. Selling
Shareholder or the Shares owned by such U.S. Selling Shareholder; and
(v) each such U.S. Selling Shareholder will have, immediately prior to
the Closing Date, assuming due issuance of any Shares underlying ADSs to be
issued upon conversion of Convertible Notes, good and valid title to the Shares
underlying ADSs to be sold at the Closing Date, by such U.S. Selling
Shareholder, free and clear of all liens, encumbrances, equities or adverse
claims; and, upon delivery of the certificates representing such Shares
underlying ADSs and payment therefor pursuant hereto, and assuming no notice to
the Underwriters of any adverse claim, good and valid title to such Shares
underlying ADSs, free and clear of all liens, encumbrances or equities, will
pass to the several Underwriters.
The opinion of Brobeck, Phleger & Harrison LLP described above shall be
rendered to the Underwriters. In rendering such opinion, such counsel may limit
their opinion solely to the laws of the State of California, the Delaware
General Corporation Law and the federal laws of the United States, and express
no opinion with respect to the effect or application of any other laws.
Brobeck, Phleger & Harrison LLP standard opinion limitations will apply.
B-1-2
Exhibit B-2
-----------
Opinion of Freehill, Hollingdale & Page and Andersen Legal, as Counsel
----------------------------------------------------------------------
to the Selling Shareholders
---------------------------
(i) the Underwriting Agreement has been duly authorized, executed and
delivered by or on behalf of each of the Selling Shareholders who has validly
completed, executed and filed a Substitute Form W-8 (each, a "Non-U.S. Selling
Shareholder");
(ii) an Irrevocable Power of Attorney and Custody Agreement has been duly
executed and delivered by each Non-U.S. Selling Shareholder and constitutes a
valid and binding agreement of such Non-U.S. Selling Shareholder in accordance
with its terms;
(iii) all consents, approvals, authorizations and orders under non-United
States laws, rules and regulations necessary for the execution and delivery by
each such Non-U.S. Selling Shareholder of the Underwriting Agreement and the
Power of Attorney and Custody Agreement, and for the sale and delivery of the
Shares underlying ADSs to be sold by each such Non-U.S. Selling Shareholder
hereunder, have been obtained except for the registration of Shares or ADSs
under the Securities Act and such as may be required under state securities or
Blue Sky laws; and each such Non-U.S. Selling Shareholder has full right, power
and authority to enter into the Underwriting Agreement and the Power of Attorney
and Custody Agreement and to sell, assign, transfer and deliver the Shares
underlying ADSs to be sold by such Non-U.S. Selling Shareholder thereunder;
(iv) the sale of the Shares underlying ADSs to be sold by each such Non-
U.S. Selling Shareholder thereunder and the compliance by each such Non-U.S.
Selling Shareholder with all of the provisions of the Underwriting Agreement and
the Power of Attorney and Custody Agreement and the consummation of the
transactions therein contemplated will not result in any violation of the
provisions of the certificate or articles of incorporation or bylaws of such
Non-U.S. Selling Shareholder if such Non-U.S. Selling Shareholder is a
corporation, the declaration of trust or other constituent documents if such
Non-U.S. Selling Shareholder is a trust, the partnership agreement of such
Selling Shareholder if such Non-U.S. Selling Shareholder is a partnership; and
(v) each such Non-U.S. Selling Shareholder will have, immediately prior
to the Closing Date, assuming due issuance of any Shares underlying ADSs to be
issued upon conversion of Convertible Notes, good and valid title to the Shares
underlying ADSs to be sold at the Closing Date, by such Non-U.S. Selling
Shareholder, free and clear of all liens, encumbrances, equities or adverse
claims;
B-2-1
and, upon delivery of the certificates representing such Shares underlying ADSs
and payment therefor pursuant hereto, and assuming no notice to the Underwriters
of any adverse claim, good and valid title to such Shares underlying ADSs, free
and clear of all liens, encumbrances or equities, will pass to the several
Underwriters.
In rendering such opinions, such counsel may rely as to matters involving
the application of laws other than Australian laws, 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 reasonably satisfactory to
Underwriters' counsel) of other counsel reasonably acceptable to Underwriters'
counsel, familiar with the applicable laws. Such counsel may limit its opinion
solely to Australian laws, and express no opinion with respect to the effect or
application of any other laws. _____________ standard opinion limitations will
apply.
B-2-2