Exhibit 1
MAIL-WELL, INC.
Common Stock
UNDERWRITING AGREEMENT
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February 12, 1998
PRUDENTIAL SECURITIES INCORPORATED
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
XXXXXXX, XXXXXX INC.
As the Representatives of the Underwriters
named in Schedule 3 hereto
Gentlemen:
Each of Mail-Well, Inc., a Colorado corporation (the "Company"), and the
selling securityholders set forth on Schedule 2 attached hereto (the "Selling
Securityholders") hereby confirms its agreement with the several underwriters
named in Schedule 3 hereto (the "Underwriters"), for whom you have been duly
authorized to act as representatives (in such capacities, the
"Representatives"), as set forth below. If you are the only Underwriters, all
references herein to the Representatives shall be deemed to be to the
Underwriters.
1. Securities. Subject to the terms and conditions herein contained, the
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Company proposes to issue and sell, and the Selling Securityholders severally
propose to sell to the several Underwriters an aggregate of 3,000,000 shares
(the "Firm Securities") of the Company's Common Stock, par value $0.01 per share
(the "Common Stock"). The Company also proposes to issue and sell to the
several Underwriters not more than 450,000 additional shares of Common Stock if
requested by the Underwriters as provided in Section 4 of this Agreement. Any
and all shares of Common Stock purchased by the Underwriters pursuant to such
options are referred to herein as the "Option Securities" and the Firm
Securities and the Option Securities are referred to herein as the "Securities."
2. Representations and Warranties of the Company. The Company and each
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of the Selling Securityholders, jointly and severally, represents and warrants
to, and agrees with, each of the several Underwriters that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement on
such Form (File No. 333-36337) with
respect to the Securities offered by the Company (the "Company Securities"),
including a basic prospectus subject to completion, has been filed by the
Company with the Securities and Exchange Commission (the "Commission") under the
Act, and one or more amendments to such registration statement may have been so
filed. Such registration statement, so amended, has been declared by the
Commission to be effective under the Act. Such registration statement, as
amended as of the date of this Agreement as specified in Schedule 1 hereto,
meets the requirements set forth in Rule 415(a)(1)(x) under the Act and complies
in all material respects with said Rule. The Company will next file with the
Commission either (A) if the Company relies on Rule 434 under the Act, a Term
Sheet (as hereinafter defined) relating to the Company Securities, that shall
identify the Preliminary Prospectus (as hereinafter defined) that it supplements
containing such information as is required or permitted by Rules 434 and 424(b)
under the Act or (B) if the Company does not rely on Rule 434 under the Act or
pursuant to Rule 424(b) under the Act a final prospectus supplement to the basic
prospectus included in such registration statement, as so amended, describing
the Company Securities and the offering thereof, and in the case of clause (A)
or (B) of this sentence as have been provided to, or discussed with, and
approved by the Representatives as provided in Section 4(a) of this Agreement.
The Company may also file a related registration statement with the Commission
pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Company Securities, which registration shall be effective upon filing
with the Commission. As used in this Agreement, the term "Original Company
Registration Statement" means the registration statement initially filed
relating to the Company Securities, as amended at the time when it was declared
effective, including (A) all financial schedules and exhibits thereto, (B) all
documents incorporated by reference therein filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and (C) any information omitted
therefrom and required to be filed pursuant to Rule 434(c)(2) and 424(b), in the
Integrated Prospectus; the term "Rule 462(b) Company Registration Statement"
means any registration statement filed with the Commission pursuant to Rule
462(b) under the Act (including the Company Registration Statement and any
Company Preliminary Prospectus or Company Prospectus incorporated therein at the
time such Company Registration Statement becomes effective); the term "Company
Registration Statement" includes both the Original Company Registration
Statement and any Rule 462(b) Company Registration Statement; the term "Basic
Prospectus" means the prospectus included in the Company Registration Statement;
the term "Preliminary Company Prospectus" means each preliminary prospectus
supplement specifically relating to the Securities and previously filed pursuant
to Rule 424(b), including all documents incorporated by reference therein filed
under the Exchange Act; the term "Company Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the Preliminary Company Prospectus identified
therein that such Term Sheet supplements; or
(B) if the Company does not rely on Rule 434 under the Act, the Basic
Prospectus as supplemented by the final prospectus supplement relating to
the Company Securities as first filed with the Commission pursuant to Rule
424(b) under the Act, including, in the case
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of clauses (A) or (B) of this sentence, all documents incorporated by
reference therein filed under the Exchange Act;
and the term "Company Prospectus Supplement" means such final prospectus
supplement. The term "Term Sheet" means any abbreviated term sheet that
satisfies the requirements of Rule 434 under the Act. Any reference in this
Agreement to an "amendment" or "supplement" to any Preliminary Company
Prospectus , the Company Prospectus or an "amendment" to any registration
statement (including the Company Registration Statement) shall be deemed to
include any document incorporated by reference therein that is filed with the
Commission under the Exchange Act after the date of such Preliminary Company
Prospectus, Company Prospectus or registration statement, as the case may be;
any reference herein to the "date" of a Prospectus that includes a Term Sheet
shall mean the date of such Term Sheet. For purposes of the preceding sentence,
any reference to the "effective date" of an amendment to a registration
statement shall, if such amendment is effected by means of the filing with the
Commission under the Exchange Act of a document incorporated by reference in
such registration statement, be deemed to refer to the date on which such
document was so filed with the Commission.
(b) In addition, a registration statement on Form S-3 (File No. 333-39013)
with respect to the Securities offered by the Selling Securityholders (the
"Selling Securityholder Securities"), including a prospectus subject to
completion, has been filed by the Company with the Commission under the Act, and
one or more amendments to such registration statement may have been so filed.
After the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act, either (A) if the
Company relies on Rule 434 under the Act, a Term Sheet (as defined herein)
relating to the Selling Securityholder Securities, that shall identify the
Preliminary Selling Securityholder Prospectus (as hereinafter defined) that it
supplements containing such information as is required or permitted by Rules
434, 430A and 424(b) under the Act or (B) if the Company does not rely on Rule
434 under the Act, a prospectus in the form most recently included in an
amendment to such registration statement (or, if no such amendment shall have
been filed, in such registration statement), with such changes or insertions as
are required by Rule 430A under the Act or permitted by Rule 424(b) under the
Act, and in the case of either clause (i)(A) or (i)(B) of this sentence as have
been provided to and approved by the Representatives prior to the execution of
this Agreement, or (ii) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under the Act,
an amendment to such registration statement, including a form of prospectus, a
copy of which amendment has been furnished to and approved by the
Representatives prior to the execution of this Agreement. The Company may also
file a related registration statement with the Commission pursuant to Rule
462(b) under the Act for the purpose of registering certain additional
Securities, which registration shall be effective upon filing with the
Commission. As used in this Agreement, the term "Original Selling
Securityholder Registration Statement" means the registration statement
initially filed relating to the Selling Securityholder Securities, as amended at
the time when it was declared effective, including (A) all financial schedules
and exhibits thereto, (B) all documents incorporated by reference therein filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
(C) any
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information omitted therefrom and required to be filed pursuant to Rule 430A
under the Act and included in the Prospectus; the term "Rule 462(b) Selling
Securityholder Registration Statement" means any registration statement filed
with the Commission pursuant to Rule 462(b) under the Act (including the Selling
Securityholder Registration Statement and any Preliminary Selling Securityholder
Prospectus or Selling Securityholder Prospectus incorporated therein at the time
such Selling Securityholder Registration Statement becomes effective); the term
"Selling Securityholder Registration Statement" includes both the Original
Selling Securityholder Registration Statement and any Rule 462(b) Selling
Securityholder Registration Statement; the term "Preliminary Selling
Securityholder Prospectus" means each preliminary prospectus specifically
relating to the Selling Securityholder Securities and previously filed pursuant
to Rule 424(a) or included in the Selling Securityholder Registration Statement
prior to effectiveness, including all documents incorporated by reference
therein filed under the Exchange Act; the term "Selling Securityholder
Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule 424(b)(7)
under the Act, together with the Preliminary Selling Securityholder
Prospectus identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b) under
the Act, including, in the case of clauses (A) or (B) of this sentence, all
documents incorporated by reference therein filed under the Exchange Act;
or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act,
the prospectus included in the Selling Securityholder Registration
Statement;
and the term "Selling Securityholders Prospectus Supplement: means such final
Prospectus Supplement to the Selling Securityholder Prospectus. The term "Term
Sheet" means any abbreviated term sheet that satisfies the requirements of Rule
434 under the Act. Any reference in this Agreement to an "amendment" or
"supplement" to any Preliminary Selling Securityholder Prospectus or the Selling
Securityholder Prospectus or an "amendment" to any registration statement
(including the Selling Securityholder Registration Statement) shall be deemed to
include any document incorporated by reference therein that is filed with the
Commission under the Exchange Act after the date of such Preliminary Selling
Securityholder Prospectus, Selling Securityholder Prospectus or Selling
Securityholder Registration Statement, as the case may be; any reference herein
to the "date" of a Prospectus that includes a Term Sheet shall mean the date of
such Term Sheet. For purposes of the preceding sentence, any reference to the
"effective date" of an amendment to a registration statement shall, if such
amendment is effected by means of the filing with the Commission under the
Exchange Act of a document incorporated by reference in such registration
statement, be deemed to refer to the date on which such document was so filed
with the Commission.
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(c) The Commission has not issued any order preventing or suspending the
use of any Preliminary Company or Selling Securityholder Prospectus
(collectively referred to as "Preliminary Prospectus"). When any Preliminary
Prospectus and any amendment or supplement thereto was filed with the
Commission, it (i) contained all statements required to be stated therein in
accordance with, and complied in all material respects with the requirements of,
the Act, the Exchange Act and the respective rules and regulations of the
Commission thereunder, and (ii) did not include any 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, not misleading. When the Company Registration Statement and the Selling
Securityholder Registration Statement (collectively, the "Registration
Statement") was declared effective or when any amendment was or is made thereto,
it (i) contained or will contain all statements required to be stated therein in
accordance with, and complied or will comply in all material respects with the
requirements of, the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. When the Company
Prospectus or the Selling Securityholder Prospectus (collectively, the
"Prospectus") or any Term Sheet that is a part thereof or any amendment or
supplement to the Company Prospectus and the Selling Securityholder Prospectus
(collectively, the "Prospectus Supplement") is filed with the Commission
pursuant to Rule 424(b), on the date when the Prospectus is otherwise amended or
supplemented (or, if the Prospectus or part thereof or such amendment or
supplement is not required to be so filed, when the Registration Statement or
the amendment thereto containing such amendment or supplement to the Prospectus
was or is declared effective) and on the Firm Closing Date and any Option
Closing Date (both as hereinafter defined), each of the Prospectus as amended or
supplemented at any such time, (i) contained or will contain all statements
required to be stated therein in accordance with, and complied or will comply in
all material respects with the requirements of, the Act, the Exchange Act and
the respective rules and regulations of the Commission thereunder and (ii) did
not or will not include any 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, not misleading. The
foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus or any amendment or supplement
thereto, the Registration Statement or any amendment thereto or the Prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule 462(b)
Company Registration Statement or 462(b) Selling Securityholder Registration
Statement (collectively, the "Registration Statement") has not been declared
effective, (i) the Company has filed a Rule 462(b) Registration Statement in
compliance with, and that is effective upon filing pursuant to, Rule 462(b) and
has received confirmation of its receipt, and (ii) the Company has given
irrevocable instructions for transmission of the applicable filing fee in
connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Act or the Commission has
received payment of such filing fee.
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(d) The Company and each of its subsidiaries have been duly organized and
are validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation and are duly qualified to transact
business as foreign corporations and are in good standing under the laws of all
other jurisdictions where the ownership or leasing of their respective
properties or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not amount to a
material liability or disability to the Company and its subsidiaries, taken as a
whole.
(e) The Company and each of its subsidiaries have full power (corporate and
other) to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus; and
the Company has full power (corporate and other) to enter into this Agreement
and to carry out all the terms and provisions hereof to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares and as otherwise set
forth in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) are owned beneficially by the Company free and
clear of any security interests, liens, encumbrances, equities or claims.
(g) The Company has an authorized, issued and outstanding capitalization as
set forth in the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus). All of the issued shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable.
(h) The capital stock of the Company conforms to the description thereof
contained in the Prospectus, or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus.
(i) The Securities have been duly authorized and, when issued and paid for
as provided herein will be validly issued, fully paid and nonassessable. All
corporate action required to be taken for the issuance, delivery and sale of
such Securities has been validly taken. No holders of outstanding shares of
capital stock of the Company are entitled as such to any preemptive or other
rights to subscribe for any shares of the Securities, and no holder of
securities of the Company has any right which has not been fully exercised or
waived to require the Company to register the offer or sale of any securities
owned by such holder under the Act in the public offering contemplated by this
agreement.
(j) Except as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), there are not outstanding
(i) securities or obligations of the Company or any of its subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
such subsidiary, (ii) warrants, rights or options to subscribe for or purchase
from the Company or any such subsidiary any such capital stock or any such
convertible or exchangeable securities or obligations, or (iii) obligations of
the Company or any such subsidiary to issue any
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shares of capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(k) The consolidated financial statements and schedules of the Company and
its consolidated subsidiaries included in the Registration Statement and the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company and
its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Information" if included in
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) and in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, fairly present, on the basis stated in the
Prospectus (or such Preliminary Prospectus) and such Annual Report, the
information included therein.
(l) Deloitte & Touche LLP, who have certified certain financial statements
of the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
in the Registration Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), are independent public
accountants as required by the Act and the Exchange Act and the related
published rules and regulations thereunder.
(m) The execution and delivery of this Agreement have been duly authorized
by the Company and this Agreement has been duly executed and delivered by the
Company and is the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(n) No legal or governmental proceedings are pending to which the Company
or any of its subsidiaries is a party or to which the property of the Company or
any of its subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) and that are not described
therein, and no such proceedings have been threatened against the Company or any
of its subsidiaries or with respect to any of their respective properties; and
no contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described therein (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or filed as required.
(o) The issuance, offering and sale of the Securities to the Underwriters
by the Company pursuant to this Agreement, or the execution, delivery or
performance by the Company of its obligations under this Agreement, and the
consummation of the other transactions herein contemplated do not (i) require
the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained, such as may be
required
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under state securities or blue sky laws or (ii) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other agreement
or instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company or any
of its subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries.
(p) Subsequent to the respective dates as of which information is given in
the Registration Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), neither the Company nor any
of its subsidiaries has sustained any material loss or interference with their
respective businesses or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding and there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), management, business
prospects, net worth, or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(q) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) since the filing of the Registration Statement (A) sold, bid
for, purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(r) The Company has not distributed and, prior to the later of (i) the Firm
Closing Date or the Option Closing Date (as the case may be) and (ii) the
completion of the distribution of the Securities, will not distribute any
offering material in connection with the offering and sale of the Securities
other than the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or other
materials, if any permitted by the Act.
(s) Subsequent to the respective dates as of which information is given in
the Registration Statement or the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus), (i) the Company and its
subsidiaries have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction not in the ordinary course
of business; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock; and (iii) there has not been any material change in
the capital stock, short-term debt or long-term debt of the Company and its
consolidated subsidiaries, except in each case as described in or
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contemplated by the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus).
(t) The Company and each of its subsidiaries have good and marketable title
in fee simple to all items of real property and marketable title to all personal
property owned by each of them, in each case free and clear of any security
interests, liens, encumbrances, equities, claims and other defects, except such
as do not materially and adversely affect the value of such property and do not
interfere with the use made or proposed to be made of such property by the
Company or such subsidiary, and any real property and buildings held under lease
by the Company or any such subsidiary are held under valid, subsisting and
enforceable leases, with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(u) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(v) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks, service
marks, trade names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their respective
businesses, and neither the Company nor any such subsidiary has received any
notice of infringement of or conflict with asserted rights of any third party
with respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(w) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(x) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(y) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse
change in the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(z) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(aa) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiaries) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being contested in
good faith or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(bb) Neither the Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to occupational safety and health or
to the storage, handling or transportation of hazardous or toxic materials and
the Company and its subsidiaries have received all permits, licenses or other
approvals required of them under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in compliance
with all terms and conditions of any such permit, license or approval, except
any such violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals which would not, singly or in the
aggregate, result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
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(cc) Any certificate signed by any officer of the Company and delivered to
the Representatives or to counsel for the Underwriters in connection with the
offering of the Securities shall be deemed to be a representation and warranty
by the Company to each Underwriter as to the matters covered thereby.
(dd) Except for the shares of capital stock of each of the subsidiaries
owned by the Company and such subsidiaries, neither the Company nor any such
subsidiary owns any shares of stock or any other equity securities of any
corporation or has any equity interest in any firm, partnership, association or
other entity, except as described in or contemplated by the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus).
(ee) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ff) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or any of their respective properties is bound or may be affected in any
material adverse respect with regard to property, business or operations of the
Company and its subsidiaries.
(gg) The Securities conform to the descriptions thereof contained in each
of the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
3. Representations and Warranties of the Selling Securityholders. Each
-------------------------------------------------------------
Selling Securityholder, severally and not jointly, represents and warrants to,
and agrees with, each of the several Underwriters that:
(a) Such Selling Securityholder has full power (corporate and other) to
enter into this Agreement, the related Custody Agreement and Power of Attorney
and to sell, assign, transfer and deliver to the Underwriters the Securities to
be sold by such Selling Securityholder hereunder in accordance with the terms of
this Agreement; the execution and delivery of this Agreement, the related
Custody Agreement and Power of Attorney have been duly authorized by all
necessary corporate action of such Selling Securityholder; and this Agreement,
the related Custody Agreement and Power of Attorney have been duly executed and
delivered by such Selling Securityholder.
-11-
(b) Such Selling Securityholder has duly executed and delivered a power of
attorney and custody agreement (with respect to such Selling Securityholder, the
"Power-of-Attorney" and the "Custody Agreement", respectively), each in the form
heretofore delivered to the Representatives, appointing each of Xxxxxx X.
Xxxxxxx and Xxxxx X. Xxxxxxxx as such Selling Securityholder's attorney-in-fact
(the "Attorney-in-Fact") with authority to execute, deliver and perform this
Agreement on behalf of such Selling Securityholder and appointing American
Securities Transfer, Inc., as custodian thereunder (the "Custodian").
Certificates in negotiable form, endorsed in blank or accompanied by blank stock
powers duly executed, with signatures appropriately guaranteed, representing the
Securities to be sold by such Selling Securityholder hereunder have been
deposited with the Custodian pursuant to the Custody Agreement for the purpose
of delivery pursuant to this Agreement. Such Selling Securityholder has full
power (corporate and other) to enter into the Custody Agreement and the Power-
of-Attorney have been duly authorized by all necessary corporate action of such
Selling Securityholder; the Custody Agreement and the Power-of-Attorney have
been duly executed and delivered by such Selling Securityholder and, assuming
due authorization, execution and delivery by the Custodian, are the legal,
valid, binding and enforceable instruments of such Selling Securityholder. Such
Selling Securityholder agrees that each of the Securities represented by the
certificates on deposit with the Custodian is subject to the interests of the
Underwriters hereunder, that the arrangements made for such custody, the
appointment of the Attorney-in-Fact and the right, power and authority of the
Attorney-in-Fact to execute and deliver this Agreement, to agree on the price at
which the Securities (including such Selling Securityholder's Securities) are to
be sold to the Underwriters, and to carry out the terms of this Agreement, are
to that extent irrevocable and that the obligations of such Selling
Securityholder hereunder shall not be terminated, except as provided in this
Agreement or the Custody Agreement, by any act of such Selling Securityholder,
by operation of law or otherwise, whether in the case of any individual Selling
Securityholder by the death or incapacity of such Selling Securityholder, in the
case of a trust or estate by the death of the trustee or trustees or the
executor or executors or the termination of such trust or estate, or in the case
of a corporate or partnership Selling Securityholder by its liquidation or
dissolution or by the occurrence of any other event. If any individual Selling
Securityholder, trustee or executor should die or become incapacitated or any
such trust should be terminated, or if any corporate or partnership Selling
Securityholder shall liquidate or dissolve, or if any other event should occur,
before the delivery of such Securities hereunder, the certificates for such
Securities deposited with the Custodian shall be delivered by the Custodian in
accordance with the respective terms and conditions of this Agreement as if such
death, incapacity, termination, liquidation or dissolution or other event had
not occurred, regardless of whether or not the Custodian or the Attorney-in-Fact
shall have received notice thereof.
(c) Such Selling Securityholder is the lawful owner of the Securities to be
sold by such Selling Securityholder hereunder and upon sale and delivery of, and
payment for, such Securities, as provided herein, such Selling Securityholder
will convey good and marketable title to such Securities, free and clear of any
interests, liens, encumbrances, equities, claims or other defects.
(d) Such Selling Securityholder has not, directly or indirectly, (i) taken
any action designed to cause or result in, or that has constituted or which
might reasonably be expected to
-12-
constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities or (ii) since the
filing of the Registration Statement (A) sold, bid for, purchased, or paid
anyone any compensation for soliciting purchases of, the Securities or (B) paid
or agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company (except for the sale of Securities
by the Selling Securityholders under this Agreement).
(e) Such Selling Securityholder has reviewed the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) and the
Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the captions "Security Ownership of
Management and Certain Beneficial Owners" and "Selling Securityholders" is
complete and accurate.
(f) The sale by such Selling Securityholder of Securities pursuant hereto
is not prompted by any adverse information concerning the Company that is not
set forth in the Registration Statement or the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus).
(g) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement and the consummation
of the other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act and the Exchange
Act or (ii) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under any indenture, mortgage, deed
of trust, lease or other agreement or instrument to which such Selling
Securityholder is a party or by which such Selling Securityholder or any of such
Selling Securityholder's properties are bound, or the charter documents or by-
laws of such Selling Securityholder or any statute or any judgment, decree,
order, rule or regulation of any court or other governmental authority or any
arbitrator applicable to such Selling Securityholder.
(h) None of the Selling Securityholders has distributed and, prior to the
Option Closing Date will not distribute, any offering material in connection
with the offering and sale of the Securities other than the Registration
Statement or any amendment thereto, any Preliminary Prospectus, any Prospectus
or any amendment or supplement thereto, or other materials, if any permitted by
the Act.
4. Purchase, Sale and Delivery of the Securities. (a) On the basis of
---------------------------------------------
the representations, warranties, agreements and covenants herein contained
(except as may be otherwise specified in Schedule 1) and subject to the terms
and conditions herein set forth and therein set forth, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters,
-13-
severally and not jointly, agrees to purchase from the Company and each of the
Selling Securityholders, severally and not jointly, at a purchase price set
forth in Schedule 1 hereto, the number of Firm Securities set forth opposite the
name of such Underwriter in Schedule 3 hereto. One or more certificates in
definitive form for the Firm Securities that the several Underwriters have
agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to
the Company at least 48 hours prior to the Firm Closing Date, shall be delivered
by or on behalf of the Company and each of the Selling Securityholders to the
Representatives for the respective accounts of the Underwriters, against payment
by or on behalf of the Underwriters of the purchase price therefor by wire
transfer in same-day funds (the "Wired Funds") to the account of the Company and
each of the Selling Securityholders. Such delivery of and payment for the Firm
Securities shall be made at the date, time and place identified in Schedule 1
hereto or at such other place, time or date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 9 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company and each of the Selling
Securityholders will make such certificate or certificates for the Firm
Securities available for checking and packaging by the Representatives at the
offices in New York, New York of the Company's transfer agent or registrar at
such other place as the Representatives and the Company may agree at least 24
hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Securities as contemplated by the Prospectus,
the Company hereby grants to the several Underwriters an option to purchase the
Option Securities. The purchase price to be paid for any Option Securities
shall be the same price per share as the price per share for the Firm Securities
set forth above in paragraph (a) of this Section 4. The option granted hereby
may be exercised as to all or any part of the Option Securities from time to
time within thirty days after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading). The Underwriters shall
not be under any obligation to purchase any of the Option Securities prior to
the exercise of such option. The Representatives may from time to time exercise
the option granted hereby by giving notice in writing or by telephone (confirmed
in writing) to the Company setting forth the aggregate principal amount of
Option Securities as to which the several Underwriters are then exercising the
option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the
Representatives but shall not be earlier than two business days or later than
five business days after such exercise of the option and, in any event, shall
not be earlier than the Firm Closing Date. The time and date set forth in such
notice, or such other time on such other date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 10 hereof, is herein called the "Option Closing Date" with respect to
such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters, and,
subject to the terms and conditions herein set forth, each of the Underwriters
(severally and not jointly) shall become obligated to purchase from the Company
the same percentage of the total number of the Option Securities as to which the
several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of
-14-
the aggregate number of Firm Securities, as adjusted by the Representatives in
such manner as they deem advisable to avoid fractional Shares. If the option is
exercised as to all or any portion of the Option Securities, one or more
certificates in definitive form for such Option Securities, and payment
therefor, shall be delivered on the related Option Closing Date in the manner,
and upon the terms and conditions, set forth in paragraph (a) of this Section 3,
except that reference therein to the Firm Securities and the Firm Closing Date
shall be deemed, for purposes of this paragraph (b), to refer to such Option
Securities and Option Closing Date, respectively.
(c) The Company and each of the Selling Securityholders hereby acknowledges
that the wire transfer by or on behalf of the Underwriters of the purchase price
for any Securities does not constitute closing of a purchase and sale of the
Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the Securities
from the Company and each of the Selling Securityholders. Furthermore, in the
event that the Underwriters wire funds to the Company and each of the Selling
Securityholders prior to the completion of the closing of a purchase of
Securities, the Company and each of the Selling Securityholders hereby
acknowledge that until the Underwriters execute and deliver a receipt for the
Securities, by facsimile or otherwise, the Company and each of the Selling
Securityholders will not be entitled to the Wired Funds and shall return the
Wired Funds to the Underwriters as soon as practicable (by wire transfer of
same-day funds) upon demand. In the event that the closing of a purchase of
Securities is not completed and the wire funds are not returned by the Company
or any of the Selling Securityholders to the Underwriters on the same day the
Wired Funds were received by the Company and each of the Selling
Securityholders, the Company and each of the Selling Securityholders agrees to
pay to the Underwriters in respect of each day the wire funds are not returned
by it, in same-day funds, interest on the amount of such wire funds in an amount
representing the Underwriters' cost of financing as reasonably determined by the
Representatives.
(d) It is understood that any of you, individually and not as one of the
Representatives, may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
5. Covenants of the Company. The Company covenants and agrees with each
------------------------
of the Underwriters that:
(a) If required, the Company will file the Prospectus or any Term Sheet
that constitutes a part thereof and any amendment or supplement thereto with the
Commission in the manner and within the time period required by Rules 434 and
424(b) under the Act. During any time when a prospectus relating to the
Securities is required to be delivered under the Act, the Company (i) will
comply with all requirements imposed upon it by the Act and the Exchange Act and
the respective rules and regulations of the Commission thereunder to the extent
necessary to permit the continuance of sales of or dealings in the Securities in
accordance with the provisions hereof and of each of the Prospectus, as then
amended or supplemented, and (ii) will not file with the Commission the
prospectus or the amendment referred to in the fifth sentence of Section 2(a)
hereof, any amendment
-15-
or supplement to such prospectus or any amendment to the Registration Statement
or any Rule 462(b) Registration Statement of which the Representatives shall not
previously have been advised and furnished with a copy for a reasonable period
of time prior to the proposed filing and as to which filing the Representatives
shall not have given their consent. The Company will prepare and file with the
Commission, in accordance with the rules and regulations of the Commission,
promptly upon request by the Representatives or counsel for the Underwriters,
any amendments to the Registration Statement or amendments or supplements to the
Prospectus that may be necessary or advisable in connection with the
distribution of the Securities by the several Underwriters, and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective by the Commission as promptly as possible. The Company will
advise the Representatives, promptly after receiving notice thereof, of the time
when the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto has
been filed and will provide evidence satisfactory to the Representatives of each
such filing.
(b) The Company will advise the Representatives, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Original Registration
Statement or any Rule 462(b) Registration Statement or any post-effective
amendment thereto or any order directed at any document incorporated by
reference in the Registration Statement or the Prospectus or any amendment or
supplement thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement thereto,
(ii) the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Original Registration Statement or any Rule 462(b) Registration
Statement, for amending or supplementing any Preliminary Prospectus or the
Prospectus or for additional information. The Company will use its best efforts
to prevent the issuance of any such stop order and, if any such stop order is
issued, to obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities for
offering and sale under the securities or blue sky laws of such jurisdictions as
the Representatives may designate and will continue such qualifications in
effect for as long as may be necessary to complete the distribution of the
Securities, provided, however, that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement each of the Prospectus to comply with the Act or the
Exchange Act or the respective rules or regulations of the Commission
-16-
thereunder, the Company will promptly notify the Representatives thereof and,
subject to Section 4(a) hereof, will prepare and file with the Commission, at
the Company's expense, an amendment to the Registration Statement or an
amendment or supplement to the Prospectus that corrects such statement or
omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the Representatives
and to counsel for the Underwriters a signed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto (in
each case including exhibits thereto) or any Rule 462(b) Registration Statement,
certified by the Secretary or an Assistant Secretary of the Company to be true
and complete copies thereof as filed with the Commission by electronic
transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as a
prospectus relating to the Securities is required to be delivered under the Act,
as many copies of each Preliminary Prospectus, the Prospectus, or any amendment
or supplement thereto, as the Representatives may reasonably request; without
limiting the application of clause (iii) of this sentence, the Company, not
later than (A) 6:00 PM, New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 10:00 AM,
New York City time on such date or (B) 2:00 PM, New York City time, on the
business day following the date of determination of the public offering price,
if such determination occurred after 10:00 AM, New York City time, on such date,
will deliver to the Underwriters, without charge, as many copies of the
Prospectus and any amendment or supplement thereto as the Representatives may
reasonably request for purposes of confirming orders that are expected to settle
on the Firm Closing Date.
(f) During the period when the Prospectus is required by the Act to be
delivered in connection with sales of the Securities, the Company will file
promptly all documents required to be filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act.
(g) The Company, as soon as practicable, will make generally available to
its Securityholders and to the Representatives a consolidated earnings statement
of the Company and its subsidiaries that satisfies the provisions of Section
11(a) of the Act and Rule 158 thereunder.
(h) The Company will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Prospectus.
(i) The Company will not, directly or indirectly, without the prior written
consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to
purchase or otherwise sell or dispose (or announce any offer, sale, offer of
sale, contract of sale, pledge, grant of any option to purchase or other sale or
disposition) of any shares of Common Stock or any securities convertible into,
or exchangeable or exercisable for, shares of Common Stock for a period of 90
days after the date hereof, except (i) pursuant to this Agreement, (ii) for
issuances pursuant to the exercise of employee stock options outstanding on the
date hereof, (iii) pursuant to the Company's dividend reinvestment plan, (iv)
pursuant to the terms
-17-
of convertible securities of the Company outstanding on the date hereof or (v)
as payment of any part of the purchase price for envelope, high impact printing
or other paper conversion businesses (or businesses or capital stock of
businesses which are engaged in such businesses (provided, however, that such
shares will be subject to the same restrictions on transfer for the same time
period set forth in this paragraph (i)).
(j) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company. Prudential Securities Incorporated may, in its sole discretion,
at any time and without notice, release all or any portion of the Securities
subject to such lock-up agreements.
(k) The Company will obtain the agreements described in Section 8(f) hereof
prior to the Firm Closing Date.
(l) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to any Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
(m) If the Company elects to rely on Rule 462(b), the Company shall both
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated
under the Act by the earlier of (i) 10:00 P.M. Eastern time on the date of this
Agreement and (ii) the time confirmations are sent or given, as specified by
Rule 462(b)(2).
(n) If and to the extent specified in Schedule 1, the Company will use its
best efforts to cause the Securities to be duly authorized for listing on the
New York Stock Exchange.
6. Covenants of Selling Securityholders.
------------------------------------
(a) Each Selling Securityholder will not, directly or indirectly, without
the prior written consent of Prudential Securities Incorporated, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares
-18-
of Common Stock legally or beneficially owned by such Selling Securityholder or
any securities convertible into, or exchangeable or exercisable for, shares of
Common Stock for a period of 90 days after the date hereof. Prudential
Securities Incorporated may, in its sole discretion, at any time and without
notice, release all or any portion of the Securities subject to such lock-up
agreements.
(b) Such Selling Securityholder will not, directly or indirectly (i) take
any action designed to cause or result in, or that has constituted or which
might reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (a) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or any other securities of the
Company convertible into, or exchangeable or exercisable for, shares of Common
Stock or (b) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company (except for the sale of
Securities by the Selling Securityholders under this Agreement).
(c) Each of the Selling Securityholders agrees to deliver to you prior to
or at the Firm Closing Date (as hereinafter defined) 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).
7. Expenses. (a) The Company will pay all costs and expenses incident to
--------
the performance of its obligations under this Agreement, whether or not the
transactions contemplated herein are consummated or this Agreement is terminated
pursuant to Section 12 hereof, including all costs and expenses incident to (a)
the printing or other production of documents with respect to the transactions,
including any costs of printing the registration statement originally filed with
respect to the Securities and any amendment thereto, any Rule 462(b)
Registration Statement, any Preliminary Prospectus, the Prospectus and any
amendment or supplement thereto, this Agreement and any blue sky memoranda, (b)
all arrangements relating to the delivery to the Underwriters of copies of the
foregoing documents, (c) the fees and disbursements of the counsel, accountants
and any other experts or advisors retained by the Company, (d) preparation,
issuance and delivery to the Underwriters of any certificates evidencing the
Securities, including transfer agent's and registrar's fees, (e) the
qualification of the Securities under state securities and blue sky laws,
including filing fees and fees and disbursements of counsel for the Underwriters
relating thereto, (f) the filing fees of the Commission (and the National
Association of Securities Dealers, Inc.) relating to the Securities, (g) the
listing of the Securities on any stock exchange, (h) meetings with prospective
investors in the Securities (other than as shall have been specifically approved
by the Representatives to be paid for by the Underwriters) and (i) advertising
relating to the offering of the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the
Underwriters).
(b) Each Selling Securityholder will pay or cause to be paid all costs and
expenses incident to the performance of such Selling Securityholder's
obligations hereunder which are not otherwise specifically provided for in this
Section, including without limitation (i) any fees and expenses of counsel for
such Selling Securityholder; (ii) additional federal or state registration and
-19-
filing fees, printing expenses and other expenses resulting solely from the
inclusion of shares owned by such Selling Securityholder in the offering to
which this Agreement relates; and (iii) all expenses and taxes incident to the
sale and delivery of the shares to be sold by such Selling Securityholder to the
Underwriters hereunder. It is understood, however, that the Company shall bear,
and the Selling Securityholders shall not be required to pay or to reimburse the
Company for, the cost of any other matters not directly relating to the sale and
purchase of the shares pursuant to this Agreement.
(c) If the sale of the Securities provided for herein is not consummated
because any condition to the obligations of the Underwriters set forth in
Section 8 hereof is not satisfied, because this Agreement is terminated pursuant
to Section 12 hereof or because of any failure, refusal or inability on the part
of the Company to perform all obligations and satisfy all conditions on its part
to be performed or satisfied hereunder other than by reason of a default by any
of the Underwriters, the Company will reimburse the Underwriters severally upon
demand for all out-of-pocket expenses (including fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities. The Company shall not in any event be
liable to any of the Underwriters for the loss of anticipated profits from the
transactions covered by this Agreement.
8. Conditions of the Underwriters' Obligations. Except as otherwise
-------------------------------------------
provided in Schedule 1, the obligations of the several Underwriters to purchase
and pay for the Firm Securities shall be subject, in the Representatives' sole
discretion, to the accuracy of the representations and warranties of the Company
and each Selling Securityholder contained herein as of the date hereof and as of
the Firm Closing Date, as if made on and as of the Firm Closing Date, to the
accuracy of the statements of the Company's and each Selling Securityholder's
officers made pursuant to the provisions hereof, to the performance by the
Company and each Selling Securityholder of its covenants and agreements
hereunder and to the following additional conditions:
(a) If the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
time confirmations are sent or given as specified by Rule 462(b)(2), or with
respect to the Original Registration Statement, or such later time and date as
shall have been consented to by the Representatives; if required, the Prospectus
or any Term Sheet that constitutes a part thereof and any amendment or
supplement thereto shall have been filed with the Commission in the manner and
within the time period required by Rule 434 and 424(b) under the Act; no stop
order suspending the effectiveness of the Registration Statement or any post-
effective amendment thereto and no order directed at any document incorporated
by reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto shall have been issued and no proceedings for that purpose
shall have been instituted or threatened or, to the knowledge of the Company or
the Representatives, shall be contemplated by the Commission; and the Company
shall have complied with any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Rothgerber, Appel, Powers & Xxxxxxx LLP, counsel for the
Company, to the effect that:
-20-
(i) the Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and are
duly qualified to transact business as foreign corporations and are in good
standing under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the
Company and its subsidiaries, taken as a whole;
(ii) the Company and each of its subsidiaries have corporate power
to own or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the Prospectus,
and the Company has corporate power to enter into this Agreement and to
carry out all the terms and provisions hereof and thereof to be carried out
by it;
(iii) the issued shares of capital stock of each of the Company and
its subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares and as
otherwise set forth in each of the Prospectus and the Prospectus
Supplement, and are owned beneficially by the Company free and clear of any
perfected security interests or, to the best knowledge of such counsel, any
other security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in each of the Prospectus and the Prospectus
Supplement; all of the issued shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance with all applicable federal
and state securities laws and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase
securities; the Securities have been duly authorized for listing, subject
to official notice of issuance, on the New York Stock Exchange;
(v) the Securities have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be validly issued,
fully paid and nonassessable. All corporate action required to be taken
for the issuance, delivery and sale of such Securities has been validly
taken. No holders of outstanding shares of capital stock of the Company
are entitled as such to any preemptive or other rights to subscribe for any
shares of Securities; and no holders of securities of the Company are
entitled to have such securities registered under the Registration
Statement;
(vi) the statements set forth under the heading "Description of
Common Stock" in the Prospectus, insofar as such statements purport to
summarize certain provisions of the securities of the Company described
therein, provide a fair summary of such provisions; and the descriptions in
each of the Prospectus and the Prospectus Supplement, of such of the
statutes, regulations, legal or governmental proceedings, contracts and
other documents as
-21-
have been included therein, insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, provide
a fair summary of such legal matters, documents and proceedings;
(vii) the execution and delivery of this Agreement has been duly
authorized by all necessary corporate action of the Company and this
Agreement has been duly executed and delivered by the Company;
(viii) each of the Securities conform in all material respects as to
legal matters to the descriptions thereof contained in the Prospectus;
(ix) no legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are required to be
described in the Registration Statement or the Prospectus and the
Prospectus Supplement and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened against
the Company or any of its subsidiaries or with respect to any of their
respective properties; and no contract or other document is required to be
described in the Registration Statement, the Prospectus or the Prospectus
Supplement or to be filed as an exhibit to the Registration Statement that
is not described therein or filed as required;
(x) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, or the execution,
delivery or performance by the Company of its obligations under this
Agreement, and the consummation of the other transactions herein
contemplated do not (A) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except
such as have been obtained and such as may be required under state
securities or blue sky laws, or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease 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
or any of their respective properties are bound, or the charter documents
or by-laws of the Company or any of its subsidiaries, or any statute or any
judgment, decree, order, rule or regulation of any court or other
governmental authority or any arbitrator known to such counsel and
applicable to the Company or any of its subsidiaries;
(xi) the Registration Statement is effective under the Act; any
required filing of the Prospectus, or any Term Sheet that constitutes a
part thereof pursuant to Rules 434 and 424(b) has been made in the manner
and within the time period required by Rules 434 and 424(b); and no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto and no order directed at any document
incorporated by reference in the Registration Statement or the Prospectus
or any amendment or supplement
-22-
thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best knowledge of such counsel, are
contemplated by the Commission;
(xii) the Registration Statement originally filed with respect to the
Securities and each amendment thereto and any Rule 462(b) Registration
Statement, the Prospectus (in each case, including the documents
incorporated by reference therein but not including the financial
statements and other financial information contained therein, as to which
such counsel need express no opinion), as of their respective effective or
issue dates, comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the respective rules and
regulations of the Commission thereunder;
(xiii) if the Company elects to rely on Rule 434, the Prospectus is
not "materially different", as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time of its
effectiveness or any effective post-effective amendment thereto (including
such information that is permitted to be omitted pursuant to Rule 430A);
and
(ix) 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 of 1940, as amended.
Such counsel shall also state that they have participated in the preparation of
the Registration Statement, the Prospectus and the Prospectus Supplement and
have no reason to believe that the Registration Statement, as of its effective
date, contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of their date or the date of
such opinion, included or includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deem proper, on certificates of responsible
officers of the Company and public officials and, as to matters involving the
application of laws of any jurisdiction other than the State of Colorado or the
United States, to the extent satisfactory in form and scope to counsel for the
Underwriters, upon local counsel in such jurisdictions. The foregoing opinion
shall also state that the Underwriters are justified in relying upon such
opinion of local counsel, and copies of such opinion shall be delivered to the
Representatives and counsel for the Underwriters.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) Each of the Selling Securityholders shall have furnished to the
Representatives an opinion from Xxxxx Xxxxxxxxxx, Esq., General Counsel to the
Company, dated the Closing Date, to the effect that:
-23-
(i) Such Selling Securityholder has full corporate power to enter
into this Agreement, the Custody Agreement and the Power-of-Attorney and to
sell, transfer and deliver the Securities being sold by such Selling
Securityholder hereunder in the manner provided in this Agreement and to
perform its obligations under the Custody Agreement; the execution and
delivery of this Agreement, the Custody Agreement and the Power-of-Attorney
have been duly authorized by all necessary corporate action of such Selling
Securityholder; this Agreement, the Custody Agreement and the Power-of-
Attorney have been duly executed and delivered by such Selling
Securityholder; assuming due authorization, execution and delivery by the
Custodian, the Custody Agreement and the Power-of-Attorney are the legal,
valid, binding and enforceable instruments of such Selling Securityholder,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(ii) the delivery by such Selling Securityholder to the several
Underwriters of certificates for the Securities being sold hereunder by
such Selling Securityholder against payment therefor as provided herein,
will convey good and marketable title to such Securities to the several
Underwriters, free and clear of all security interests, liens,
encumbrances, equities, claims or other defects;
(iii) the sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the Power of Attorney and the consummation of the other
transactions herein and therein contemplated do not (A) require the
consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained and such as
may be required under state securities or blue sky laws, or (B) conflict
with or result in a breach or violation of any of the terms and provisions
of, or constitute a default under (1) any indenture, mortgage, deed of
trust, lease or other agreement or instrument to which such Selling
Securityholder or any of such Selling Securityholder's properties are bound
(other than such conflicts, breaches, defaults or violations which would
not impair such Selling Securityholders obligations hereunder or have any
adverse effect on the Underwriters as such or the title to the Shares), (2)
the charter documents or by-laws of such Selling Securityholder or (3) any
statute or, to the best of such counsel's knowledge, any judgment, decree,
order, rule or regulation of any court or other governmental authority or
any arbitrator applicable to such Selling Securityholder.
In rendering such opinion, such counsel may rely, as to matters of fact, to
the extent such counsel deem proper, on certificates of responsible officers of
the Selling Securityholders and public officials.
-24-
(d) The Representatives shall have received a certificate from each Selling
Securityholder, signed by an appropriate officer of such Selling Securityholder,
dated the Closing Date, to the effect that:
(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on and as
of the Closing Date;
(ii) to the extent that any statements or omissions are made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with
written information furnished to the Company by such Selling Securityholder
specifically for use therein, the Registration Statement, as amended as of
the Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein
not misleading, and the Prospectus, as amended or supplemented as of the
Closing Date, does not include any 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, not
misleading; and
(iii) such Selling Securityholder has performed all covenants and
agreements on its part to be performed or satisfied at or prior to the
Closing Date.
(e) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxxx & Xxxxx L.L.P., counsel for the Underwriters, with
respect to the issuance and sale of the Firm Securities, the Registration
Statement and the Prospectus and such other related matters as the
Representatives may reasonably require, and the Company shall have furnished to
such counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(f) The Representatives shall have received from Deloitte & Touche LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the Company
and its consolidated subsidiaries within the meaning of the Act, the
Exchange Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial statements
and schedules examined by them and included in the Registration Statement
and the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act, the Exchange Act and the
related published rules and regulations thereunder;
(iii) on the basis of their limited review in accordance with
standards established by the American Institute of Certified Public
Accountants of any interim unaudited
-25-
consolidated condensed financial statements of the Company and its
consolidated subsidiaries as indicated in their report incorporated in the
Registration Statement and the Prospectus, a reading of the latest
available interim unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries, for the six months ended
June 30, 1997 and of the unaudited consolidated financial statements of the
Company and its consolidated subsidiaries for the periods from which such
amounts are derived, carrying out certain specified procedures (which do
not constitute an examination made in accordance with generally accepted
auditing standards) that would not necessarily reveal matters of
significance with respect to the comments set forth in this paragraph
(iii), a reading of the minute books of the shareholders, the board of
directors and any committees thereof of the Company and each of its
consolidated subsidiaries, and inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for
financial and accounting matters, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated condensed financial statements of
the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of the
Act, the Exchange Act and the related published rules and regulations
thereunder, or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited consolidated financial statements included in the
Registration Statement and the Prospectus;
(B) at a specific date not more than five business days prior to
the date of such letter, there were any changes in the capital stock
or long-term debt of the Company and its consolidated subsidiaries or
any decreases in net current assets or Securityholders' equity of the
Company and its consolidated subsidiaries, in each case compared with
amounts shown on the June 30, 1997 unaudited consolidated condensed
balance sheet included in the Registration Statement and the
Prospectus, or for the period from August 1, 1997 to such specified
date there were any decreases, as compared with the period from August
1, 1996 to a year prior to such specified date, in sales, net
revenues, net income before income taxes or total or per share amounts
of net income of the Company and its consolidated subsidiaries, except
in all instances for changes, decreases or increases set forth in such
letter; and
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records
of the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus under the captions "Prospectus
Summary -- The Company," "Capitalization," and ["Management's Discussion
and Analysis of Financial Condition and Results of Operations,"] in Exhibit
II to the Registration Statement or under Part I, Item 1 and Part II, Items
6 and 7 of the Company's Annual Report
-26-
on Form 10-K for the year ended December 31, 1997 and under Part I, Items 1
and 2 of the Company's Quarterly Reports on Form 10-Q for the three months
ended March 31, 1997 and June 30, 1997, respectively, incorporated by
reference in the Registration Statement and the Prospectus, and have
compared such amounts, percentages and financial information with such
records of the Company and its consolidated subsidiaries and with
information derived from such records and have found them to be in
agreement, excluding any questions of legal interpretation.
In the event that the letters referred to above set forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letters shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (f) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(g) The Representatives shall have received a certificate, dated the Firm
Closing Date, of the chief executive officer and the chief financial officer of
the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm Closing
Date; the Registration Statement, as amended as of the Firm Closing Date,
does not include any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplemented as of the Firm Closing Date,
does not include any 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, not misleading; and
the Company has performed all covenants and agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the Firm
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto and no order directed at
any document incorporated by reference in the Registration Statement or the
Prospectus or any amendment or supplement thereto has been issued, and no
proceedings for that purpose have been instituted or threatened or, to the
best of the Company's knowledge, are contemplated by the Commission; and
(iii) subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, neither the Company
nor any of its subsidiaries
-27-
has sustained any material loss or interference with their respective
businesses or properties from fire, flood, hurricane, accident or other
calamity, whether or not covered by insurance, or from any labor dispute or
any legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise), management, business
prospects, net worth or results of operations of the Company or any of its
subsidiaries, except in each case as described in or contemplated by the
Prospectus.
(h) The Representatives shall have received from Selling Securityholder and
each person who is a director or officer of the Company an agreement to the
effect that such person will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock for
a period of 90 days after the date of this Agreement.
(i) On or before the Firm Closing Date, the Representatives and counsel for
the Underwriters shall have received such further certificates, documents or
other information as they may have reasonably requested from the Company.
(j) Prior to the commencement of the offering of the Securities, the
Securities shall have been approved for listing on the New York Stock Exchange,
subject to official notice of issuance.
All opinions, certificates, letters and documents delivered pursuant to
this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and pay
for any Option Securities shall be subject, in their discretion, to each of the
foregoing conditions to purchase the Firm Securities, except that all references
to the Firm Securities and the Firm Closing Date shall be deemed to refer to
such Option Securities and the related Option Closing Date, respectively.
9. Indemnification and Contribution.
--------------------------------
(a) The Company and each of the Selling Securityholders, jointly and
severally, agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter or such controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as
-28-
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or the Selling Securityholders in Section 2 and Section 3 of this
Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto, any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in connection
with the marketing of the Securities, including, without limitation,
slides, videos, films and tape recordings
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
Selling Securityholder will 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 any
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement or any amendment thereto, any Preliminary
Prospectus, the Prospectus or any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
specifically for use therein; and provided, further, that the Company and each
Selling Securityholder will not be liable to any Underwriter or any person
controlling such Underwriter with respect to any such untrue statement or
omission made in any Preliminary Prospectus that is corrected in the Prospectus
(or any amendment or supplement thereto) if the person asserting any such loss,
claim, damage or liability purchased Securities from such Underwriter but was
not sent or given a copy of the Prospectus (as amended or supplemented), other
than the documents incorporated by reference therein, at or prior to the written
confirmation of the sale of such Securities to such person in any case where
such delivery of the Prospectus (as amended or supplemented) is required by the
Act, unless such failure to deliver the Prospectus (as amended or supplemented)
was a result of noncompliance by the Company with its obligations contained in
-29-
Section 5 of this Agreement. This indemnity agreement will be in addition to
any liability which the Company may otherwise have. The Company and each
Selling Securityholder will not, without the prior written consent of the
Underwriter or Underwriters purchasing, in the aggregate, more than fifty
percent (50%) of the Securities, settle or compromise or consent to the entry of
any judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
such Underwriter or any person who controls any such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of all of the Underwriters and such
controlling persons from all liability arising out of such claim, action, suit
or proceeding.
Notwithstanding the foregoing, the Underwriters agree that, in the case of
any loss, claim, damage, liability or judgment for which they may claim
indemnification hereunder, they will first make demand for indemnification from
the Company, and will not seek to enforce any right or remedy granted under this
Section 9 against any Selling Securityholder, unless and until the Company shall
have failed to observe or comply in all material respects with any of its
obligations hereunder in respect of such loss, claim, damage, liability or
judgment for a period of at least 30 days following the delivery of a written
demand therefor. In the event that the Company and the Selling Securityholders
shall have failed to comply with their obligations in respect of any loss,
claim, damage, liability or judgment, the Underwriters further agree that they
will not commence any legal proceeding against any Selling Securityholder to
recover such loss, claim, damage, liability or judgment unless, prior to or
concurrently therewith, they shall have commenced a legal proceeding against the
Company to recover the same and during the period of 30 days following the date
on which any judgment against the Company becomes final and is not subject to
appeal, the Underwriters will take commercially reasonable efforts to enforce
and collect the judgment entered against the Company. After the expiration of
such period, the Underwriters may seek to enforce the judgment entered against
such Selling Securityholder; provided, however, that the Underwriters shall be
relieved of their obligation to seek a satisfaction against the Company if, at
any time, (i) the Company files a petition for relief under the United States
Bankruptcy Code (the "Bankruptcy Code"), (ii) an order for relief is entered
against the Company in an involuntary case under the Bankruptcy Code and such
order remains in effect for 30 consecutive days, (iii) the Company makes an
assignment for the benefit of its creditors or (iv) any court orders or approves
the appointment of a receiver or custodian for the Company or a substantial
portion of its assets and such order continues in effect for 30 consecutive
days.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, each Selling Securityholder and each person,
if any, who controls the Company or such Selling Securityholder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person or such Selling Securityholder may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement or alleged untrue statement
-30-
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus and the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application, 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 reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person or such Selling Securityholder in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 9. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 9 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 9, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party
-31-
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
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 (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that 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
Securityholders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties 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, the Selling
Securityholders or the Underwriters, the parties' relative intents, knowledge,
access to information and opportunity to correct or prevent such statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Company, the Selling Securityholders and the Underwriters
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to above
in this paragraph (d). Notwithstanding any other provision of this paragraph
(d), no Underwriter shall be obligated to make contributions hereunder that in
the aggregate exceed the total public offering price of the Securities purchased
by such Underwriter under this Agreement, less the aggregate amount of any
damages that such Underwriter has otherwise been required to pay in respect of
the same or any substantially similar claim, and 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 to contribute hereunder are
several in proportion to their respective underwriting obligations and not
joint, and contributions among Underwriters shall be governed by the provisions
of the agreement among underwriters. For purposes of this paragraph (d), each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the
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Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company.
(e) The liability of each Selling Securityholder under this Section 9
shall not exceed the total public offering price of the Securities sold by such
Selling Securityholder, less applicable underwriting discounts and commissions.
10. Default of Underwriters. If one or more Underwriters default in their
-----------------------
obligations to purchase Firm Securities or Option Securities hereunder and the
aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 11 hereof. In the event of any default by one or more Underwriters as
described in this Section 10, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 3 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
11. Survival. The respective representations, warranties, agreements,
--------
covenants, indemnities and other statements of the Company, its officers, the
Selling Securityholders and the several Underwriters 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 (i) any investigation made by or
on behalf of the Company, any of its officers or directors, any Selling
Securityholder, any Underwriter or any controlling person referred to in Section
9 hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 7
and 9 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
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12. Termination. (a) This Agreement may be terminated with respect to the
-----------
Firm Securities or any Option Securities in the sole discretion of the
Representatives by notice to the Company and each of the Selling Securityholders
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company or any of the Selling
Securityholders shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Firm Closing Date or
such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in the sole
judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or any
development involving a prospective material adverse change (including,
without limitation, a change in management or control of the Company), in
the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except in each
case as described in or contemplated by the Prospectus (exclusive of any
amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by the
Commission or trading in securities generally on the New York Stock
Exchange shall have been suspended or minimum or maximum prices shall have
been established on such exchange;
(iii) a banking moratorium shall have been declared by New York or
United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or material
adverse change in general economic, political or financial conditions
having an effect on the U.S. financial markets that, in the sole judgment
of the Representatives, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Securities as contemplated by
the Registration Statement, as amended as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 12 shall be
without liability of any party to any other party except as provided in Section
11 hereof.
13. Information Supplied by Underwriters. The statements set forth in the
------------------------------------
last paragraph on the front cover page and under the heading "Underwriting" in
any Preliminary Prospectus or the Prospectus (to the extent such statements
relate to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 9 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
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14. Notices. All communications hereunder shall be in writing and, if
-------
sent to any of the Underwriters, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing as set forth in Schedule 1; if
sent to the Selling Securityholders, to the addresses set forth on Schedule 2;
and if sent to the Company, shall be delivered or sent by mail, telex or
facsimile transmission and confirmed in writing to the Company at 00 Xxxxxxxxx
Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx Xxxxxxxxxx, Esq.
15. Successors. This Agreement shall inure to the benefit of and
----------
shall be binding upon the several Underwriters, the Company, the Selling
Securityholders and their respective successors and legal representatives, and
nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right, remedy or claim
under or in respect of this Agreement, or any provisions herein contained, this
Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person except that (i) the indemnities of the Company contained in
Section 9 of this Agreement shall also be for the benefit of any person or
persons who control any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Underwriters
contained in Section 9 of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Securities from any Underwriter shall be deemed a successor because
of such purchase.
16. Applicable Law. The validity and interpretation of this
--------------
Agreement, and the terms and conditions set forth herein, shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
17. Consent to Jurisdiction and Service of Process. All judicial
----------------------------------------------
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, each of the Selling Securityholders
accepts for himself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts and
waives any defense of forum non conveniens and irrevocably agrees to be bound by
any judgment rendered thereby in connection with this Agreement. Each Selling
Securityholder designates and appoints Xxxxx Xxxxxxxxxx, Esq., General Counsel
to the Company, and such other persons as may hereafter be selected by the
Selling Securityholder irrevocably agreeing in writing to so serve, as its agent
to receive on its behalf service of all process in any such proceedings in any
such court, such service being hereby acknowledged by each Selling
Securityholder to be effective and binding service in every respect. A copy of
any such process so served shall be mailed by registered mail to each Selling
Securityholder at its address provided in Schedule 2 attached hereto; provided,
however, that, unless otherwise provided by applicable law, any failure to mail
such copy shall not affect the validity of service of such process. If any
agent appointed by the Selling Securityholder refuses to accept service, each
Selling Securityholder hereby agrees that service of process sufficient for
personal jurisdiction in any action against each Selling Securityholder in the
State of New York may
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be made by registered or certified mail, return receipt requested, to each
Selling Securityholder at its address provided in Schedule 2 attached hereto,
and each Selling Securityholder hereby acknowledges that such service shall be
effective and binding in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any Underwriter to bring proceedings against each Selling Securityholder in the
courts of any other jurisdiction.
18. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute an agreement binding the Company and each of the
several Underwriters.
Very truly yours,
MAIL-WELL, INC.
By:
--------------------------------
Name:
Title:
The foregoing Agreement is hereby SELLING SECURITYHOLDERS
confirmed and accepted as of the
date first above written.
-----------------------------------
PRUDENTIAL SECURITIES INCORPORATED Xxxxxx X. Xxxxxxx
BEAR, XXXXXXX & CO., INC.
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION -----------------------------------
XXXXXXX, XXXXXX INC. Xxxx X. Xxxxxx
By:
-------------------------- -----------------------------------
Xxxx-Xxxxxx Canfin Xxxxx Xxxxxxxxxx
Managing Director
For itself and on behalf of the
Representatives. *
-----------------------------------
Xxxxx X. Hevrdejz
*
-----------------------------------
Xxxxxx X. Xxxxxxxx
*By:
-------------------------------
Xxxxxx X. Xxxxxxx
by Power of Attorney
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SCHEDULE 1
MAIL-WELL, INC.
PRICE DETERMINATION AGREEMENT
Common Stock
A. General
Registration Statement File Nos. 333-39013 and 333-36337
Date of Underwriting Agreement: February 11, 1998
Send Notices to Underwriters to:
Closing date, time and location: February 17, 1998; 7:30 a.m.
Denver time; offices of
Rothgerber, Appel, Powers &
Xxxxxxx L.L.P., One Tubor
Center, 0000 00xx Xxxxxx,
Xxxxx 0000, Xxxxxx, XX. 00000
Other terms and conditions: NA
B. Terms of Securities
Number of shares of Common Stock: 3,000,000
Purchase price per share: $ 37.485
Public offering price: $ 39.25
Other provisions: $1.00 Dealer Concession
$0.10 Dealer Reallowance
C. Lock-up period:
Last day of lock-up period contemplated by Sections 5(i) and 6(a): May
12, 1998
D. Exceptions to the conditions to the Underwriters' obligations provided for
in Section 8 (if any): NA
H. Locations:
Packaging/Inspection:
Pre-Closing: Rothgerber, Xxxxx; See address at A. above
Closing: Rothgerber, Xxxxx; See address at A. above
Banks:
SCHEDULE 2
SELLING SECURITYHOLDERS
NUMBER OF FIRM
SELLING SECURITYHOLDER SECURITIES TO BE PURCHASED
------------------------ --------------------------
Xxxxxx X. Xxxxxxx 250,000
Xxxx X. Xxxxxx 3,700
Xxxxx Xxxxxxxxxx 2,000
Xxxxx X. Xxxxxxxx 300,000
Xxxxxx X. Xxxxxxxx 12,000
SCHEDULE 3
UNDERWRITERS
NUMBER OF FIRM
SECURITIES TO
UNDERWRITER BE PURCHASED
------------------------------------ --------------
Prudential Securities Incorporated 1,050,000
Bear, Xxxxxxx & Co., Inc. 1,050,000
Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation 450,000
Xxxxxxx, Xxxxxx Inc. 450,000
=========
Total ......................................... 3,000,000
