EXHIBIT 1
THE XXXXX XXXXXX COMPANIES INC.
Class A Common Stock
(par value $.01 per share)
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Form of Underwriting Agreement
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June __, 2004
Xxxxxxx, Sachs & Co.,
X.X. Xxxxxx Securities Inc.
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Certain stockholders of The Xxxxx Xxxxxx Companies Inc., a Delaware
corporation (the "Company"), named in Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 11,305,000 shares (the "Firm Shares"), of Class A Common Stock, par
value $.01 per share ("Stock"), of the Company, and at the election of the
Underwriters, up to 1,695,000 additional shares (the "Optional Shares") of
Stock. The Firm Shares and the Optional Shares that the Underwriters elect to
purchase pursuant to Section 2 hereof are collectively called the "Shares."
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-115584)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, but including all documents
incorporated by reference in the prospectus contained therein,
furnished to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
(including any prospectus supplement) filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Registration Statement at the time it was declared
effective or such part of the Rule 462(b) Registration Statement, if
any, became or hereafter becomes effective and (ii) the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement and the 462(b) Registration Statement, if any,
at the time such part of each such registration statement became
effective, each as amended at the time such part of each such
registration statement became effective, are hereinafter collectively
called the "Registration Statement"; and such final prospectus
(including any prospectus supplement), in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, 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, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Xxxxxxx, Sachs & Co. or X.X. Xxxxxx
Securities Inc. expressly for use therein or by a Selling Stockholder
expressly for use in the preparation of the responses therein to Item 7
of Form S-3;
(iii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
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and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will 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 not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Sachs & Co. or X.X. Xxxxxx Securities Inc. expressly
for use therein;
(iv) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, 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 light of the circumstances
under which they were made, not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx,
Sachs & Co. or X.X. Xxxxxx Securities Inc. expressly for use therein or
by a Selling Stockholder expressly for use in the preparation of the
responses therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its 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; and, 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 (other than pursuant to employee and non-employee
director stock option plans and employment agreements in each case
existing on the date of this Agreement) or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, in each case, otherwise than as set
forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title in fee simple to all 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 in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries or such as do not
and would not, individually or in the aggregate, have a material
adverse effect on the business, prospects, operations, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"); and any real property
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and buildings held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company
and its subsidiaries or such as do not and would not, individually or
in the aggregate, have a Material Adverse Effect;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, 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, except where failure to
be so qualified would not have a Material Adverse Effect; and each
subsidiary of the Company has been duly incorporated or organized and
is validly existing as a corporation, limited liability company or
other legal entity in good standing under the laws of its jurisdiction
of incorporation, except where failure to be in such good standing
would not have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and conform to the description of the Stock
contained in the Prospectus; and all of the issued shares of capital
stock, membership interests or other equity interests of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and (except for directors'
qualifying shares and as disclosed in the Prospectus) are owned
directly or indirectly by the Company (except for minority interests in
those subsidiaries of the Company set forth on Schedule III attached
hereto), free and clear of all liens, encumbrances, equities or claims;
(ix) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation
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 its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties, except for foreign and
state securities and Blue Sky laws, and except for breaches, violations
or defaults (other than any relating to the Certificate of
Incorporation or By-laws of the Company) that would not, individually
or in the aggregate, have a Material Adverse Effect or in the aggregate
impair the Company's ability to consummate the transactions herein
contemplated; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement except the registration
under the Act of the Shares, any required filings under the Exchange
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
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(x) Neither the Company nor any of Aveda Corporation, Aveda
Services Inc., ELCA Cosmeticos LDA, Xxxxx Xxxxxx Inc., Aramis Inc.,
Clinique Laboratories, Inc., Xxxxx Xxxxxx Europe, Inc., Xxxxx Xxxxxx
International, Inc. and Xxxxx Xxxxxx Cosmetics Ltd. (each, a "Principal
Subsidiary" and collectively, the "Principal Subsidiaries") is in
violation of its Certificate of Incorporation or By-laws and neither
the Company nor any of its subsidiaries is in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound,
which default would have a Material Adverse Effect;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, and under the caption
"Certain Relationships and Related Transactions" set forth in the
Company's proxy statement dated September 15, 2003 and incorporated by
reference into the Company's Annual Report on Form 10-K for the year
ended June 30, 2003, insofar as they purport to summarize the
provisions of the laws, documents and transactions referred to therein
for purposes of complying with the requirements of Form S-3, are
accurate and correct in all material respects;
(xii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(xiii) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed;
(xiv) Each of the Company and its subsidiaries owns or has
rights to adequate foreign and domestic patents, patent licenses,
trademarks, service marks, trade names, inventions, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") necessary to
carry on their respective businesses as of the date hereof, and neither
the Company nor any of its subsidiaries is aware that it would
interfere with, infringe upon or otherwise come into conflict with any
Intellectual Property rights of third parties as a result of the
operation of the business of the Company or any subsidiary as of the
date hereof that, individually or in the aggregate, if subject to an
unfavorable decision, ruling or finding would have a Material Adverse
Effect;
(xv) Except as disclosed in the Prospectus, there are no holders
of securities (debt or equity) of the Company or any of its
subsidiaries, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or any of its subsidiaries, who have the right to request the
Company or any of its subsidiaries to register securities held by them
under the Act;
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(xvi) 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");
(xvii) The Stock is listed on the New York Stock Exchange; and
(xviii) KPMG LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent
public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(xix) The Company and its consolidated subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in
accordance with management's authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is
permitted only in accordance with management's authorization; (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences; (E) material information relating to the
Company and its consolidated subsidiaries is promptly made known to
the officers responsible for establishing and maintaining the system
of internal accounting controls; and (F) any significant
deficiencies or weaknesses in the design or operation of internal
accounting controls which could adversely affect the Company's
ability to record, process, summarize and report financial data, and
any fraud whether or not material that involves management or other
employees who have a significant role in internal controls, are
adequately and promptly disclosed to the Company's independent
auditors and the audit committee of the Company's board of
directors; and
(xx) The Company and its consolidated subsidiaries employ
disclosure controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods
specified in the Commission's rules and forms, and is accumulated
and communicated to the Company's management, including its
principal executive officer and principal financial officer,
appropriate to allow timely decisions regarding disclosure.
(b) Each of the Selling Stockholders severally and not jointly,
solely with respect to itself, represents and warrants to, and covenants and
agrees with, each of the Underwriters and the Company that:
(i) Such Selling Stockholder has been duly created, is validly
existing as a trust under the laws of the State of New York, has the
power and authority to own its property and to conduct its business
and has been duly qualified 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, or is subject to no material liability
or disability by reason of the failure to be so qualified in any
such jurisdiction;
(ii) No consent, approval, authorization or order of any court
or governmental agency or body is required to be obtained by such
Selling Stockholder for the execution and delivery by such Selling
Stockholder of this Agreement, the Custody Agreement, if any, and
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the Power of Attorney hereinafter referred to and for the sale and
delivery by such Selling Stockholder of the Shares to be sold by
such Selling Stockholder hereunder, except such as have been
obtained, the registration of the sale of such Shares under the Act,
the registration under the Exchange Act of the Stock, and such as
may be required under foreign and state securities and Blue Sky
Laws; and such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Custody Agreement, if
any, and the Power of Attorney and to sell, assign, transfer and
deliver as provided herein the Shares to be sold by such Selling
Stockholder hereunder;
(iii) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the obligations of such Selling Stockholder under this
Agreement, the Custody Agreement, if any, and the Power of Attorney
and the consummation by such Selling Stockholder of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation 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 such
Selling Stockholder is a party or by which such Selling Stockholder
is bound, or to which any of the property or assets of such Selling
Stockholder is subject, nor will such action result in any violation
of the provisions of the constituent documents of such Selling
Stockholder or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder,
except that such Selling Stockholder makes no representation under
this paragraph as to the registration or filing requirements or
disclosure provisions of the securities laws of the United States or
the securities or Blue Sky laws of any other jurisdiction;
(iv) Such Selling Stockholder has, and immediately prior to each
Time of Delivery (as defined in Section 4 hereof) of such Shares by
such Selling Stockholder, such Selling Stockholder will have, good
and valid title to the Shares to be sold by such Selling Stockholder
hereunder (or an equal number of shares of Class B Common Stock, par
value $.01 per share, of the Company ("Class B Common Stock")
convertible into such Shares), free and clear of all liens,
encumbrances, equities or claims; and, upon delivery of such Shares
to be sold by such Selling Stockholder hereunder and payment
therefor pursuant hereto, good and valid title to such Shares, free
and clear of all liens, encumbrances, equities or claims, will be
transferred by such Selling Stockholder to the several Underwriters;
(v) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, such Selling Stockholder will not offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any
Stock or securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other
than dispositions among Lauder Family Members or pursuant to
employee stock option plans and employment agreements in each case
existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this
Agreement, provided that this provision shall continue to apply with
respect to the securities received upon such conversion or exchange)
without your prior written consent;
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(vi) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares;
(vii) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and
in conformity with written information furnished to the Company by
such Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus
and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and will not 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;
(viii) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions
herein contemplated, such Selling Stockholder will deliver to you
prior to or at the First Time of Delivery (as hereinafter defined)
of Shares by such Selling Stockholder a properly completed and
executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(ix) Unless waived in writing by Xxxxxxx, Sachs & Co. and X.X.
Xxxxxx Securities Inc. prior to the execution of this Agreement,
such Selling Stockholder has duly executed and delivered a custody
agreement appointing Mellon Investor Services, L.L.C. as custodian
(the "Custodian"), for the Shares being sold by such Selling
Stockholder (the "Custody Agreement"), and certificates in
negotiable form representing all of the Shares to be sold by such
Selling Stockholder hereunder (or an equal number of shares of Class
B Common Stock convertible into such Shares) have been deposited
with and are being held by the Custodian or, if certificates
representing all of such Shares have not been deposited with the
Custodian, the Shares with respect to which no certificates have
been deposited are held in book-entry form on behalf of the Selling
Stockholder by the Custodian (either in the Custodian's book-entry
system or through The Depository Trust Company ("DTC")) and have
been segregated on the Custodian's books as the Shares that are the
subject of this Agreement. Such Selling Stockholder agrees and
acknowledges that the Shares (including the Class B Common Stock
convertible into such Shares) being sold by such Selling Stockholder
hereunder are held, or will be held immediately prior to the
Closing, in book-entry form on behalf of such Selling Stockholder by
the Custodian (either in the Custodian's book-entry system or
through DTC). Such Selling Stockholder has duly executed and
delivered a Power of Attorney in the form heretofore furnished to
you (the "Power of Attorney"), appointing the person(s) indicated in
Schedule II hereto as such Selling Stockholder's attorney(s)-in-fact
(the "Attorney(s)-in-Fact") with authority to authorize the delivery
of the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection
with the transactions contemplated by this Agreement to the extent
set forth in the Power of Attorney; and
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(x) The Shares either in book-entry form or represented by
certificates held, or to be held, in custody for such Selling
Stockholder under the Custody Agreement (or if there is no Custody
Agreement or if the Shares are not represented by certificates, as
specified on Schedule IV hereto) are subject to the interests of the
Underwriters hereunder; the arrangements made by such Selling
Stockholder for such custody and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are
to that extent irrevocable; the obligations of such Selling
Stockholder hereunder shall not be terminated by operation of law,
whether by the death or incapacity of any executor or trustee or the
termination of such estate or trust, in the case of an estate or
trust, or by the occurrence of any other event; if any such executor
or trustee should die or become incapacitated, or if any such estate
or trust should be terminated, or if any other such event should
occur, before the delivery of the Shares hereunder, certificates
representing the Shares shall be delivered by or on behalf of such
Selling Stockholder in accordance with the terms and conditions of
this Agreement and the Custody Agreement, if any; and actions taken
by the Attorneys-in-Fact pursuant to the Power of Attorney shall be
as valid as if such death, incapacity, termination or other event
had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) each of
the Selling Stockholders agrees, severally and not jointly, to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders, at a purchase price
per share of $[ ], the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Firm Shares to be sold by each of the Selling Stockholders as set forth opposite
their respective names in Schedule II hereto by a fraction, the numerator of
which is the aggregate number of Firm Shares 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 to be purchased by
all of the Underwriters from all of the Selling Stockholders hereunder and (b)
in the event and to the extent that the Underwriters shall exercise the election
to purchase Optional Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling Stockholders, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares 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 Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 1,695,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the Firm Shares. Any such election to
purchase Optional Shares shall be made as set forth in Schedule II hereto. Any
such election to purchase Optional Shares may be exercised only by written
notice from Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc. to the
Attorneys-in-Fact, given within a period of 30 calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice.
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3. Upon the authorization by you of the release of the Firm Shares,
the Underwriters propose to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc. may request upon
at least forty-eight hours' prior notice to the Selling Stockholders, shall be
delivered by or on behalf of the Selling Stockholders to Xxxxxxx, Xxxxx & Co.
and X.X. Xxxxxx Securities Inc., for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same day) funds to the account specified by each of
the Selling Stockholders to Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of Xxxxxxx, Xxxxx & Co., X.X. Xxxxxx Securities Inc. or
The Depository Trust Company or its designated custodian, as the case may be
(the "Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Shares, 9:30 a.m., New York City time, on [ ], 2004
or such other time and date as Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities
Inc. and the Selling Stockholders may agree upon in writing, and, with respect
to the Optional Shares, 9:30 a.m., New York City time, on the date specified by
Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc. in the written notice given
by Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc. of the Underwriters'
election to purchase such Optional Shares, or such other time and date as
Xxxxxxx, Xxxxx & Co. and X.X. Xxxxxx Securities Inc. and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(i) hereof, will be delivered at the offices
of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Closing Location"), and the Shares will be delivered at the Designated Office,
all at each Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
10
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; 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),
14 or 15(d) of 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; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(c) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process, or take any action that would subject the Company to any
tax, in any jurisdiction;
(d) Prior to 10:00 a.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to use its
best efforts to furnish the Underwriters with written and electronic copies of
the Prospectus in New York City in such quantities as you may reasonably
request, and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time any
events shall have occurred 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 under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or omission
11
or effect such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine months
or more after the time of issue of the Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
written and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(e) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(f) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Stock or securities of the Company that are substantially similar
to the Shares, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee or
non-employee director stock option plans and employment agreements, in each
case, existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), or to
file any registration statement with the Commission under the Act relating to
any such securities without your prior written consent;
(g) To make available to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
to make available to its stockholders as soon as practicable after the end of
each of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail; and
(h) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you such additional information concerning the business and financial condition
of the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission).
6. The Company and each of the Selling Stockholders covenant and
agree with one another and with the Underwriters that each Selling Stockholder
will pay or cause to be paid a pro rata share (based on the number of Shares to
be sold by such Selling Stockholder hereunder) of the following: (i) the filing
fees and fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
12
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(c)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) the filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (v) the cost of preparing stock certificates; (vi) the cost and charges
of any transfer agent or registrar; and (vii) all other costs and expenses
incident to the performance of the Company's and such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section 6, including (A) any fees and expenses of counsel for the Company and
such Selling Stockholder, (B) such Selling Stockholder's pro rata share of the
fees and expenses of the Attorney-in-Fact and (C) all expenses and taxes
incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder. In connection with clause (C) of the
preceding sentence, the Underwriters agree to pay New York State stock transfer
tax, and each of the Selling Stockholders agrees to reimburse the Underwriters
for associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that, except as provided in this Section 6, and Sections 8 and 11
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, stock transfer taxes on resale of any of the Shares
by them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and the Selling Stockholders herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) 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 Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the
Underwriters, shall have furnished to you such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated such Time of
Delivery, with respect to the matters covered in paragraphs (i), (vi), (ix)
(including with respect to the caption "Underwriting") and (xii) of subsection
(c) below, that the Company has an authorized capitalization as set forth in the
Prospectus, and such other related matters as you 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;
(c) Weil, Gotshal & Xxxxxx, LLP, counsel for the Company, shall have
furnished to you their written opinion and letter (a draft of such opinion and
letter are attached as Annex II(b) hereto), dated such Time of Delivery, in form
and substance reasonably satisfactory to you, to the effect that:
13
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of
the Company (including the Shares being delivered at such Time of
Delivery) have been duly and validly authorized and issued and are
fully paid and non-assessable; and the Shares conform to the
description of the Stock contained in the Prospectus;
(iii) The Company is duly qualified to transact business in the
State of New York and is in good standing under the laws of the
State of New York;
(iv) Each of the Principal Subsidiaries which is incorporated in
the United States ("U.S. Principal Subsidiaries") is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and, to the best of such counsel's
knowledge, all of the issued shares of capital stock of each U.S.
Principal Subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances
or claims;
(v) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings
pending or overtly threatened against the Company or any of its
subsidiaries or involving the Company or any of its subsidiaries or
any property of the Company or any of its subsidiaries which would
be required to be disclosed in the Prospectus;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The compliance by the Company with all of the provisions
of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or
violation 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 known to such counsel to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, and that is material to the Company and its subsidiaries
taken as a whole, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any New York, Delaware corporate or Federal law, rule or
regulation (other than foreign and state securities or Blue Sky
laws, as to which such counsel expresses no opinion, and other than
Federal securities laws, as to which such counsel expresses no
opinion except as otherwise set forth herein), or any judgment,
writ, injunction, decree, order or ruling of any court or
governmental authority binding on the Company of which such counsel
is aware;
14
(viii)No consent, approval, authorization, order, registration
or qualification of or with any New York, Delaware corporate or
Federal governmental authority is required for the consummation by
the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares, any required
filings under the Exchange Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws as to which such
counsel need express no opinion (it being understood that the
opinion may be limited to those consents, approvals, authorizations,
orders, registrations or qualifications that, in such counsel's
experience, are normally applicable to the transactions of the type
contemplated by this Agreement);
(ix) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, are accurate and
correct in all material respects;
(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined
in the Investment Company Act;
(xi) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements
and related notes, the financial statement schedules and other
financial and accounting data therein, as to which such counsel need
express no opinion), when they became effective or were filed with
the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable and the rules and regulations of the Commission
thereunder; and
(xii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related notes, the financial statement schedules and other financial
and accounting data included in the Registration Statement or
Prospectus, as to which such counsel need express no opinion) comply
as to form in all material respects with the requirements of the Act
and the rules and regulations thereunder.
In addition, such counsel shall state that it has participated in
conferences with directors, officers and other representatives of the Company,
various of the Selling Stockholders, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and, although such counsel has not independently verified and is
not passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, except to the extent specified in subsection (ix) of this Section
7(c), no facts have come to such counsel's attention which leads such counsel to
believe that the Registration Statement (including any documents incorporated by
reference therein), on the effective date thereof (or, in the case of documents
incorporated by reference, when such documents became effective or were filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading or that the Prospectus, on the date thereof or on the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
15
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel expresses no view with respect to the financial statements and
related notes, the financial statement schedules and the other financial and
accounting data included in the Registration Statement or Prospectus); and they
do not know of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated by reference or
described as required.
In rendering such opinion, such counsel may state that it expresses no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the corporate laws of the State of Delaware and the federal laws of
the United States;
(d) Debevoise & Xxxxxxxx, counsel for each of the Selling Stockholders,
shall have furnished to you their written opinion (a draft of which is attached
as Annex II(c) hereto) with respect to each such Selling Stockholder, dated such
Time of Delivery, in form and substance satisfactory to you, to the effect that:
(i) Such Selling Stockholder validly exists as a trust under,
and is governed by, the laws of the State of New York; and the
trustee or trustees, if there are more than one, of such Selling
Stockholder has or have the requisite power and authority, on behalf
of such Selling Stockholder, to enter into this Agreement, the
Custody Agreement, if any, and the Power of Attorney, and to
consummate the transactions contemplated hereby and thereby in
connection with the Shares to be sold by such Selling Stockholder
under this Agreement;
(ii) The Custody Agreement, if any, and the Power of Attorney
have been duly executed and delivered by such Selling Stockholder
and constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(iii) This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder; and the sale by such Selling
Stockholder of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of
the obligations of such Selling Stockholder under this Agreement,
the Custody Agreement, if any, and the Power of Attorney and the
consummation by such Selling Stockholder of the transactions herein
and therein contemplated will not conflict with or result in a
breach or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result in
any violation of the provisions of the constituent documents of such
Selling Stockholder or of any New York, Delaware corporate or
Federal statute, rule or regulation or any judgment, writ,
injunction, decree, order or ruling known to such counsel of any
court or governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder,
except that such counsel need not express any opinion as to
compliance with the registration or filing requirements or
disclosure provisions of the securities laws of the United States or
the securities or Blue Sky laws of any other jurisdiction;
16
(iii) No consent, approval, authorization or order of any New
York, Delaware corporate or Federal governmental agency or body is
required to be obtained by such Selling Stockholder for the
consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, the Custody Agreement, if any, and
the Power of Attorney in connection with the Shares to be sold by
such Selling Stockholder hereunder, except such as have been duly
obtained and are in full force and effect, the registration of the
Shares under the Act, the registration of the Stock under the
Exchange Act and such as may be required under state or foreign
securities or Blue Sky laws in connection with the purchase and
distribution of such Shares by the Underwriters (as to which such
counsel need express no opinion) (it being understood that the
opinion may be limited to those consents, approvals, authorizations,
orders, registrations or qualifications that, in such counsel's
experience, are normally applicable to the transactions of the type
contemplated by this Agreement);
(iv) Such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement;
(v) With respect to Shares represented by stock certificates,
assuming that the Underwriters purchase the Shares to be delivered
at such Time of Delivery for value and without notice of any adverse
claim as such terms are used in Section 8-105 of the Uniform
Commercial Code as currently in effect in the State of New York (the
"New York UCC"), the delivery of certificates representing such
Shares either registered in the name of the Underwriters or
effectively endorsed to the Underwriters or in blank will pass to
the Underwriters all rights that such Selling Stockholder has in
such Shares, free of all adverse claims as such term is used in
Section 8-105 of the New York UCC; and
(vi) With respect to Shares not represented by stock
certificates, upon (A) the payment for the Shares to be delivered at
such Time of Delivery in accordance with this Agreement, (B) to the
extent such registration has not previously been effected, the
registration of the transfer of such Shares to, and registration of
such Shares in the name of, Cede & Co. or such other nominee
designated by DTC and (C) the crediting of such Shares on the books
of DTC to the "securities accounts" (as defined in Section 8-501 of
the New York UCC) maintained by DTC for the various Underwriters,
(x) the Underwriters will acquire "security entitlements" (as
defined in Section 8-102 of the New York UCC) in respect of such
Shares and (y) no "action based on an adverse claim" (within the
meaning of Section 8-502 of the New York UCC) may be asserted
against the Underwriters with respect to such security entitlements,
assuming that each Underwriter does not have "notice" (within the
meaning of Section 8-105 of the UCC) of any "adverse claim" (as
defined in Section 8-102 of the New York UCC) to such Shares.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States and in rendering its opinion
in subparagraph (v) such counsel may rely upon a certificate of such Selling
Stockholder in respect of matters of fact as to ownership of, and liens,
encumbrances, equities or claims on the Shares sold by such Selling Stockholder,
provided that such counsel shall state that they believe that both you and they
are justified in relying upon such certificate;
17
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, KPMG LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto (the executed copy of the letter delivered prior to the execution
of this Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective amendment to
the Registration Statement and as of each Time of Delivery is attached as Annex
I(b) hereto);
(f) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any 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, and
(ii) 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 its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity, results of operations or
Intellectual Property of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of Xxxxxxx, Xxxxx & Co. and
X.X. Xxxxxx Securities Inc. so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange (the "Exchange"); (ii) a suspension or
material limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United States;
(iv) the outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in the judgment of Xxxxxxx, Xxxxx &
Co. and X.X. Xxxxxx Securities Inc. makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered
at each Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholders of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (f) of this
Section 7, and as to such other matters as you may reasonably request;
18
(i) The Selling Stockholders shall have obtained and delivered to the
Underwriters executed copies of an agreement from each of the Lauder Family
Members (other than The Lauder Foundation), substantially to the effect set
forth in Subsection 1(b)(v) hereof in form and substance satisfactory to you;
(j) The Company shall have complied with the provisions of Section 5(d)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(k) Each of the Selling Stockholders shall have delivered to the
Underwriters certificates required by Treasury Regulation section 1.1445-2(b)(2)
in order to avoid withholding of tax under Section 1445 of the Internal Revenue
Code of 1986, as amended.
8. (a) The Company and each of the Selling Stockholders, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company and the Selling Stockholders shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Xxxxxxx, Xxxxx & Co. or X.X. Xxxxxx Securities Inc. expressly for use
therein. Notwithstanding the provisions of this subsection (a), no Selling
Stockholder shall be required to pay an amount in excess of the gross proceeds
received by such Selling Stockholder from the Shares sold by it hereunder.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Xxxxxxx, Xxxxx & Co. or
X.X. Xxxxxx Securities Inc. expressly for use therein; and will reimburse the
Company and each Selling Stockholder for any legal or other expenses reasonably
incurred by the Company or such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
19
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Selling Stockholders on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
20
The Company, each of the Selling Stockholders and each of the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which 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 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Selling Stockholders shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Selling Stockholders
that you have so arranged for the purchase of such Shares, or the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Selling Stockholders shall have the right to postpone a Time
of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, then the
Selling Stockholders shall have the right to require each non-defaulting
21
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all of the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholders shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Underwriters to purchase and of the
Selling Stockholders to sell the Optional Shares) shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholders, except for the expenses to be borne by the Company
and the Selling Stockholders and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Selling Stockholders as provided herein, each of the Selling Stockholders pro
rata (based on the number of Shares to be sold by such Selling Stockholder
hereunder), will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly; and in all dealings with any Selling Stockholder
hereunder, you and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such Selling Stockholder
made or given by any or all of the Attorneys-in-Fact for such Selling
Stockholder.
22
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you in care of Xxxxxxx, Xxxxx & Co., 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration Department and X.X. Xxxxxx
Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Desk; if to any Selling Stockholder shall be delivered or sent by mail, telex or
facsimile transmission to counsel for such Selling Stockholder at its address
set forth in Schedule II hereto; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: General Counsel; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. At any time and from time to time after the Time of Delivery, the
Selling Stockholders agree to cooperate with the Underwriters, and at the
request of the Underwriters, to execute and deliver any further instruments or
documents and to take all such further action as the Underwriters may reasonably
request in order to carry out the intent of the parties hereunder with respect
to the sale and delivery of the Shares to the Underwriters.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us ten counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
23
Any person executing and delivering this Agreement as
Attorney-in-Fact for a Selling Stockholder represents by so doing that he has
been duly appointed as Attorney-in-Fact by such Selling Stockholder pursuant to
a validly existing and binding Power of Attorney which authorizes such
Attorney-in-Fact to take such action.
Very truly yours,
THE XXXXX XXXXXX COMPANIES INC.
By:
--------------------------------------------
Name:
Title:
XXXXXX XXXXXXXXX AS TRUSTEE OF THE XXXXX
XXXXXX 1994 TRUST, U/A/D JUNE 2, 1994, AS
AMENDED, BETWEEN XXXXX XXXXXX AS SETTLOR, AND
XXXXXXX X. XXXXXX, XXXXXX X. XXXXXX AND
XXX X. XXXXXX, AS INITIAL TRUSTEES
By:
--------------------------------------------
Xxxxxx Xxxxxxxxx, Trustee
XXXXXXX X. XXXXXX, XXXXXX X. XXXXXX AND XXX X.
XXXXXX, AS TRUSTEES OF THE XXXXX XXXXXX 2002
TRUST, U/A/D APRIL 5, 2002, AS AMENDED, BETWEEN
XXXXX XXXXXX, AS SETTLOR, AND SUCH TRUSTEES
By:
------------------------------------------
Xxxxxxx X. Xxxxxx, Trustee
By:
------------------------------------------
Xxxxxx X. Xxxxxx, Trustee
By:
------------------------------------------
Xxx X. Xxxxxx, Trustee
24
XXXXXXX X. XXXXXX, XXXXXX X. XXXXXX AND XXX X.
XXXXXX, AS TRUSTEES OF THE XXXXX XXXXXX 2001
CHARITABLE TRUST, U/A/D AUGUST 9, 2001, BETWEEN
XXXXXXX X. XXXXXX, XXXXXX X. XXXXXX AND XXX X.
XXXXXX, IN THEIR CAPACITIES AS TRUSTEES OF THE
XXXXX XXXXXX 1994 TRUST, AND SUCH TRUSTEES
By:
---------------------------------------------
Xxxxxxx X. Xxxxxx, Trustee
By:
---------------------------------------------
Xxxxxx X. Xxxxxx, Trustee
By:
--------------------------------------------
Xxx X. Xxxxxx, Trustee
25
Accepted as of the date hereof:
X.X. Xxxxxx Securities Inc.
By:
-------------------------------------------------
(X.X. Xxxxxx Securities Inc.)
Xxxxxxx, Sachs & Co.
By:
-------------------------------------------------
(Xxxxxxx, Xxxxx & Co.)
On behalf of each of the Underwriters
26
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Shares Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ---------------
Xxxxxxx, Sachs & Co................................................
X.X. Xxxxxx Securities Inc.........................................
------------- -------------
Total................................................... 11,305,000 1,695,000
============= =============
27
SCHEDULE II
Number of Optional
Shares to be
Total Number of Purchased if
Shares Maximum Option
to be Sold Exercised*
---------------- ----------------
The Selling Stockholders**:
The Xxxxx Xxxxxx 1994 Trust 2,176,139 334,018
The Xxxxx Xxxxxx 2002 Trust 8,245,231 1,225,352
The Xxxxx Xxxxxx 2001 Charitable Trust 883,630 135,630
Total.................................................. ------------- -------------
11,305,000 1,695,000
============= =============
* OptionalShares shall be sold in the following order: first, all Optional
Shares to be sold by The Xxxxx Xxxxxx 2001 Charitable Trust; second, all
Optional Shares to be sold by The Xxxxx Xxxxxx 1994 Trust; and third, all
Optional Shares to be sold by The Xxxxx Xxxxxx 2002 Trust.
** Attorneys-in-Fact for each Selling Stockholder: Xxxxxx X.X. Xxxxxxx and
Xxxxx X. Xxxxx
SCHEDULE III
CERTAIN SUBSIDIARIES WITH MINORITY INTERESTS
NOT HELD DIRECTLY OR INDIRECTLY BY THE COMPANY
SUBSIDIARY
----------
ELCA Cosmetics Limited and its wholly-owned subsidiaries:
Xxxxx Xxxxxx Hellas S.A., Xxxxx Xxxxxx Bulgaria EOOD and
Xxxxx Xxxxxx Romania SRL (and its wholly-owned subsidiary,
I.M. Cosmetics S.A.)
Bumble and bumble LLC
Bumble and bumble Products LLC
xxxxx.xxx LLC
ANNEX I
FORM OF COMFORT LETTER OF
KPMG LLP
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been separately
furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly reports on Form
10-Q incorporated by reference into the Prospectus; and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding
whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations,
nothing came to their attention (other than the restatement of the
quarter ended September 30, 2003 to effect discontinued operations, which
restated data is included in Note 19 to the consolidated financial
statements included in the Company's Current Report on Form 8-K/A dated
May 19, 2004) that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the two most recent fiscal years included in the Prospectus
and included in the Company's Current Report on Form 8-K/A dated May 19,
2004 incorporated by reference in the Prospectus agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such fiscal years which were
included or incorporated by reference in the Company's Current Report on
Form 8-K/A dated May 19, 2004 for such fiscal years;
1
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d) (if applicable), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and
its subsidiaries responsible for financial and accounting matters and
such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Company's Quarterly Reports on Form
10-Q incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus (other than the restatement of the quarter ended
September 30, 2003 to effect discontinued operations, which
restated data is included in Note 19 to the consolidated financial
statements included in the Company's Current Report on Form 8-K/A
dated May 19, 2004), for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Company's Current Report on Form 8-K/A dated May 19, 2004;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in Clause (A)
and any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for
the audited financial statements included in the Company's Current
Report on Form 8-K/A dated May 19, 2004;
2
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the
date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any
decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the
Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(vii) In addition to the audit referred to in their report
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages
and financial information specified by the Representatives which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
3
