Exhibit 1.1
WORLD COLOR PRESS, INC.
Common Stock (par value $.01 per share)
Underwriting Agreement
May , 1998
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Certain stockholders named in Schedule II hereto (the "Selling
Stockholders") of World Color Press, Inc., a Delaware corporation (the
"Company"), propose, subject to the terms and conditions stated herein, to sell
to the U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters"),
for whom Xxxxxxx, Xxxxx & Co., Xxxxxx Xxxxxxx & Co. Incorporated, Bear, Xxxxxxx
& Co. Inc., BT Alex. Xxxxx Incorporated and Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation are acting as representatives (the "Representatives"), an
aggregate of 9,000,000 shares (the "Firm Shares") and, at the election of the
Underwriters, up to 1,350,000 additional shares (the "Optional Shares") of
Common Stock, par value $0.01 per share ("Common Stock"), of the Company (the
Firm Shares and the Optional Shares which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares").
It is understood and agreed to by all parties that the Company and the
Selling Stockholders are concurrently entering into an agreement (the
"International Underwriting Agreement") providing for the sale by the Selling
Stockholders of up to a total of 1,150,000 shares of Common Stock (the
"International Shares"), including the overallotment option thereunder, through
arrangements with certain underwriters outside the United States (the
"International Underwriters"), for whom Xxxxxxx Sachs International, Xxxxxx
Xxxxxxx Xxxx Xxxxxx, Bear, Xxxxxxx International Limited, BT Alex. Xxxxx
International and Xxxxxxxxx, Lufkin & Xxxxxxxx International are acting as
representatives. The U.S. Underwriters and the International Underwriters are
simultaneously entering into an Agreement between U.S. and International
Underwriting Syndicates (the "Agreement between Syndicates") which provides,
among other things, for the transfer of shares of Common Stock between the two
syndicates.
Two forms of prospectus are to be used in connection with the offering
and sale of shares of Common Stock contemplated by the foregoing, one relating
to the Shares hereunder and the other relating to the International Shares. The
latter form of prospectus will be identical to the former except for certain
substitute pages as included in the registration statement and amendments
thereto as mentioned below. Except as used in Section 2, 3, 4, 10 and 12 herein,
and except as the context may otherwise require, references herein to the Shares
shall include all the shares of Common Stock which may be sold pursuant to
either this Agreement or the International Underwriting Agreement, and
references herein to any prospectus whether in preliminary or final form, and
whether as amended or supplemented, shall include both the U.S. and the
international versions thereof.
The registration statement as amended at the time it becomes effective,
including any documents incorporated therein by reference and including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "Securities Act"), is hereinafter referred to as the "Registration
Statement;" the U.S. prospectus and the international prospectus in the
respective forms first used to confirm sales of Shares, including any documents
incorporated therein by reference, are hereinafter collectively referred to as
the "Prospectus." If the Company has filed an abbreviated registration statement
to register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement.
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(i) When the Registration Statement becomes effective,
including at the date of any post-effec tive amendment, and at the
Closing Date, the Registration Statement will comply in all material
respects with the provisions of the Act, and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; the Prospectus and any supplements or
amendments thereto will not at the date of the Prospectus, at the date
of any such supplements or amendments and at the Closing Date contain
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, except
that the representations and warranties contained in this paragraph (a)
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any supplement or amendment to them)
made in reliance upon and in conformity with information relating to
the U.S. Underwriters furnished to the Company in writing by the U.S.
Underwriters or on their behalf with their consent expressly for use
therein.
(ii) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 or Rule 462 under the Act,
complied when so filed in all material respects with the Act.
(iii) The Company and each of the Company's "significant
subsidiaries" as such term is defined in Rule 1-02 of Regulation S-X
under the Act (each a "Subsidiary" and collectively, the
"Subsidiaries") has been duly organized, is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to
carry on its business as it is currently being conducted, to own, lease
and operate its properties (and, with respect to the Company, to
execute, deliver and perform this Agreement), and each is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which its ownership or leasing
of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect on the business, results of operations or condition
(financial or otherwise) of the Company and its subsidiaries, taken as
a whole (a "Material Adverse Effect").
(iv) All of the issued and outstanding shares of capital stock
of, or other ownership interests in, each Subsidiary have been duly and
validly authorized and issued, and, as of the Closing Date, all of the
shares of capital stock of, or other ownership interests in, each
Subsidiary will be owned, directly or through Sub sidiaries, by the
Company free and clear of any security interest, mortgage, pledge,
claim, lien or encumbrance (each, a "Lien") other than (i) as created
by the Second Amended and Restated Credit Agreement dated as of June 6,
1997 among the Company, the Lenders party thereto and Bankers Trust
Company, as agent, as amended, and (ii) such other Liens as are not,
individually or in the aggregate, material to the Company and its
subsidiaries, taken as a whole. All such shares of capital stock are
fully paid and nonassessable and, on the Closing Date, will be fully
paid and nonassessable. On the Closing Date, there will be no
outstanding subscrip tions, rights, warrants, options, calls,
convertible securities or commitments of sale related to or entitling
any
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person to purchase or otherwise to acquire any shares of the capital
stock of, or other ownership interest in, any Subsidiary.
(v) All of the outstanding shares of Common Stock of the
Company (including the Shares) have been duly authorized and validly
issued and are fully paid, non-assessable and were not issued in
violation of any preemptive or similar rights.
(vi) The authorized capital stock of the Company, including
the Shares, conforms in all material respects to the description
thereof contained in the Prospectus.
(vii) Neither the Company nor any of its Subsidiaries is (a)
in violation of its respective charter or by-laws or (b) in default in
the performance of any obligation, agreement or condition contained in
any bond, debenture, note or any other evidence of indebtedness or in
any other agreement, indenture 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 their respective properties is bound except, with
respect to defaults referred to in clause (b), such as would not,
singly or in the aggregate, have a Material Adverse Effect, nor has any
event occurred which with notice or lapse of time or both would
constitute such a violation or default.
(viii) This Agreement and the International Underwriting
Agreement have been duly authorized and validly executed and delivered
by the Company.
(ix) Other than as described in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, pending
against the Company or any of its Subsidiaries or any of their
respective properties, which is required to be disclosed in the
Registration Statement and the Prospectus, or which could reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect
or which might materially and adversely affect the consummation of this
Agreement, the International Underwriting Agreement or the transactions
contemplated hereby and, to the Company's knowledge, no such
proceedings are threatened.
(x) No action has been taken and no statute, rule or
regulation or order has been enacted, adopted or issued by any
governmental agency or body which suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any preliminary
prospectus or suspends the sale of the Shares in any jurisdiction
referred to in Section 5(j) hereof; no injunction, restraining order or
order of any nature by a Federal or state court of competent
jurisdiction has been issued with respect to the Company which would
prevent or suspend the sale of the Shares, the effectiveness of the
Registration Statement, or the use of any pre liminary prospectus in
any jurisdiction referred to in Section 5(j) hereof; and no action,
suit or proceeding is pending against or, to the Company's knowledge,
threatened against the Company or any of the Subsidiaries before any
court or arbitrator or any governmental body, agency or official,
domestic or foreign, which, if adversely determined, would in any
manner draw into question the validity of this Agreement, the
International Underwriting Agreement or the Shares.
(xi) Except as otherwise set forth in the Prospectus or such
as are not material to the business, financial condition or results of
operation of the Company and its subsidiaries taken as a whole, the
Company and each of its Subsidiaries has good title, free and clear of
all liens, claims, encumbrances and restrictions except liens for taxes
not yet due and payable, to all properties and assets described in the
Registration Statement as being owned by it except for liens, claims,
encumbrances and restrictions which would not, singly or in the
aggregate, have a Material Adverse Effect. All leases to which the
Company or any of its Subsidiaries is a party are valid and binding on
the Company or such Subsidiary and, to the Company's knowledge, on the
other party and, to the knowledge of the Company, no default has
occurred or is continuing thereunder, which might result in any
material adverse change in the business, financial condition or results
of operations of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change").
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(xii) Deloitte & Touche LLP are independent public accountants
with respect to the Company as required by the Act. The financial
statements, together with the related schedules and notes set forth in
the Registration Statement and the Prospectus (and any amendment or
supplement thereto), comply as to form in all material respects with
the requirements of the Act and present fairly in all material respects
the consolidated financial position, results of operations and changes
in cash flows of the Company and its subsidiaries on the basis stated
in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and the related
schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved, except as disclosed there in; and the other financial
and statistical information and data set forth in the Registration
Statement and the Prospectus (and any amendment or supplement thereto)
is, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and
records of the Company and its subsidiaries.
(xiii) Subsequent to the date of the most recent balance sheet
for the Company included in the Registration Statement and the
Prospectus, except as set forth in the Registration Statement and the
Prospectus, (i) neither the Company, nor any of the Subsidiaries, has
incurred any liabilities or obligations, direct or contingent, which
are material to the Company and the Subsidiaries taken as a whole, nor
entered into any transaction not in the ordinary course of business and
(ii) there has not been, singly or in the aggregate, any Material
Adverse Change or any development which may reasonably be expected to
involve a Material Adverse Change.
(xiv) The execution, delivery and performance by the Company
of this Agreement, the International Underwriting Agreement, and the
consummation of the transactions contemplated hereby and thereby will
not require any consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental
body (except as such may be required under the Act or state securities
or Blue Sky laws, or by the NASD with regards to the underwriting
arrangements), except for con sents, approvals, authorizations or
orders which would not, singly or in the aggregate, have a Material
Adverse Effect, and will not conflict with or constitute a breach of
any of the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its Subsidiaries or any agreement,
indenture or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries or their respective properties are bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to the Company, any of its Subsidiaries or their
respective properties, except for such conflicts, violations or
breaches which would not, singly or in the aggregate, have a Material
Adverse Effect, and except for such conflicts, violations or breaches
as to which the Company has obtained the necessary consents or waivers.
(xv) The Company and each of the Subsidiaries possess all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "Authorization") of and
from, and has made all declarations and filings with, all Federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary or required
to own, lease, license and use its properties and assets and to conduct
its respective business in the manner described in the Prospectus,
except to the extent that the failure to obtain or file would not,
singly or in the aggregate, have a Material Adverse Effect; all such
Authorizations are valid and in full force and effect and the Company
and each of the Subsidiaries are in compliance with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities and governing bodies having
jurisdiction with respect thereto, except where the failure to be in
full force and effect or to be in compliance would not, singly or in
the aggregate, have a Material Adverse Effect.
(xvi) The Company is not (a) an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the
"Investment Company Act"), or (b) a "holding company" or a
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"subsidiary company" of a holding company, or an "affiliate" thereof
within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
(xvii) Except as disclosed in the Prospectus, there are no
holders of any security of the Company or any Subsidiary (debt or
equity) who have or will have any right to require the registration of
such security by virtue of the filing of the Registration Statement or
the execution by the Company of this Agreement or the International
Underwriting Agreement.
(xviii) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through Xxxxxxx, Sachs & Co. expressly for use therein;
(xix) The Company has not (i) taken, directly or indirectly,
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 Shares or (ii) since the initial
filing of the Registration Statement (A) sold, bid for, purchased, or
paid anyone any compensation for soliciting purchases of, the Shares or
(B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(xx) There are no contracts or other documents of a character
required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Act which have not been described in the
Prospectus or filed as exhibits to the Registration Statement.
(b) Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents and warrants (at and
as of the date hereof and at and as of each Time of Delivery as defined in
Section 4 hereof) to, and agrees with, each of the U.S. Underwriters that:
(i) Such Selling Stockholder holds the Shares being sold by
such Selling Stockholder hereunder and under the International
Underwriting Agreement, free and clear of all liens, encumbrances,
equities or claims; immediately prior to each Time of Delivery such
Selling Stockholder will hold the Shares being sold by such Selling
Stockholder hereunder and under the International Underwriting
Agreement on such date, free and clear of all liens, encumbrances,
equities or claims; and upon delivery of such Shares and payment
therefor pursuant hereto and the International Underwriting Agreement
assuming that such U.S. Underwriters and International Underwriters
purchase such Shares in good faith and without notice of any such lien,
encumbrance, equity or claim or other adverse claim within the meaning
of the Uniform Commercial Code as in effect in the State of New York,
the U.S. Underwriters and International Underwriters will hold such
Shares, free and clear of all liens, encumbrances, equities or claims,
arising as a result of action by the Selling Shareholders;
(ii) Such Selling Stockholder has full right, power and
authority to enter into this Agreement and the International
Underwriting Agreement; the execution, delivery and performance of this
Agreement and the
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International Underwriting Agreement and the consummation by such
Selling Stockholder of the transactions contemplated hereby and thereby
will not conflict with or result in breach or violation of any of the
terms or provisions of, or constitute a default under, (a) any
indenture, mortgage, deed of trust, loan agreement, stock option or
other employee benefit plan, or other agreement or instrument to which
such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of such
Selling Stockholder is subject, (b) nor will such action result in any
violation of the provisions of the charter, bylaws, deed of trust,
partnership agreement or other constituent documents, if any, relating
to such Selling Stockholder or any statute or any order, rule or
regulation of any court or government agency or body having
jurisdiction over such Selling Stockholder or any properties of such
Selling Stockholder, except in the case of clause (a) above, for such
conflicts, breaches or violations which would not, singly or in the
aggregate, have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the execution,
delivery and performance by such Selling Stockholder of each of this
Agreement or the International Underwriting Agreement and the
consummation of the transactions contemplated hereby and thereby,
except for consents, approval, authorizations, orders, registrations or
qualifications which would not singly or in the aggregate, have a
Material Adverse Effect, and except the registration under the Act of
the Shares and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the U.S. Underwriters and the International Underwriters or by the NASD
with regards to the U.S. Underwriting Agreement and the International
Underwriting Agreement; and this Agreement and the International
Underwriting Agreement have been duly authorized, executed and
delivered by the Selling Stockholders;
(iii) To the extent that any statements or omissions made in
the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto are made in reliance upon and in
conformity with information furnished in writing to the Company by such
Selling Stockholder expressly for use therein, the Registration
Statement and such Preliminary Prospectus do not, and the Prospectus
and any amendments or supplements thereto will not, as of the
applicable effective date or as of the applicable filing date, as the
case may be, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein no misleading; and
(iv) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
2. PURCHASE OF SHARES. On the basis of the representations and
warranties contained in, and subject to the terms and conditions of, this
Agreement, each Selling Stockholder hereby, severally and not jointly, agrees to
sell the number of Firm Shares set forth opposite such Selling Stockholder's
name in Schedule II hereto to the several U.S. Underwriters and each of the U.S.
Underwriters, severally and not jointly, agrees to purchase the number of Firm
Shares set forth opposite that U.S. Underwriter's name in Schedule I hereto.
Each U.S. Underwriter shall be obligated to purchase from each Selling
Stockholder that number of Firm Shares which represents the same proportion of
the number of Firm Shares to be sold by each Selling Stockholder as the number
of Firm Shares set forth opposite the name of such U.S. Underwriter in Schedule
I represents of the total number of Firm Shares to be purchased by all of the
U.S. Underwriters pursuant to this Agreement. The respective purchase
obligations of the U.S. Underwriters with respect to the Firm Shares shall be
rounded among the U.S. Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Selling Stockholders grant to the U.S. Underwriters an
option to purchase an aggregate of up to 1,350,000 Optional Shares as set forth
in Schedule II hereto. Such option is granted solely for the purpose of covering
over-allotments in the sale of Firm Shares and is exercisable as provided in
Section 4 hereof. Optional Shares shall be purchased severally for the account
of the U.S. Underwriters in proportion to the number of Firm Shares set forth
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opposite the name of such U.S. Underwriters in Schedule I hereto. The respective
purchase obligations of each U.S. Underwriter with respect to the Optional
Shares shall be adjusted by the Representatives so that no U.S. Underwriter
shall be obligated to purchase Optional Shares other than in 100 share amounts.
The price of both the Firm Shares and any Optional Shares shall be $
per share.
The Selling Stockholders shall not be obligated to deliver any of the
Shares to be delivered on the First Delivery Date or the Second Time of Delivery
(as hereinafter defined), as the case may be, except upon payment for all the
Shares to be purchased on such Delivery Date as hereinafter provided.
3. Upon the authorization by you of the release of the Firm
Shares, the several U.S. Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each U.S. Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as Xxxxxxx, Xxxxx & Co. may request upon at least
forty- eight hours' prior notice to the Selling Stockholders shall be delivered
by or on behalf of the Selling Stockholders to Xxxxxxx, Sachs & Co., through the
facilities of the Depository Trust Company ("DTC"), for the account of such U.S.
Underwriter, against payment by or on behalf of such U.S. Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
accounts specified by each of the Selling Stockholders, as their interests may
appear, to Xxxxxxx, Xxxxx & Co. at least forty-eight hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian Xxxxxxx, Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Designated Office"). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
............., 19.. or such other time and date as Xxxxxxx, Xxxxx & Co. and the
Selling Stockholders may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York time, on the date specified by Xxxxxxx,
Sachs & Co. in the written notice given by Xxxxxxx, Xxxxx & Co. of the
Underwriters' election to purchase such Optional Shares, or such other time and
date as Xxxxxxx, Sachs & Co. and the Selling Stockholders may agree upon in
writing. Such time and date for delivery of the Firm Shares is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Shares, if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called
a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by
or on behalf of the parties hereto pursuant to Section 8 hereof, including the
cross receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 8(n) hereof will be delivered at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at .......p.m., New York City time, on the New York Business
Day next preceding such Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the U.S. Underwriters:
(a) To prepare the Prospectus in a form approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the Time of Delivery which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed
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or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York
Business Day next succeeding the date of this Agreement and the International
Underwriting Agreement and from time to time, to furnish the U.S. Underwriters
with copies of the Prospectus in New York City in such quantities as you may
reasonably request, and, if the delivery of a prospectus is required at any time
prior to the expiration of nine months after the time of issue of the Prospectus
in connection with the offering or sale of the Shares and if at such time any
events shall have occurred as a result of which the Prospectus as then amended
or supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each U.S.
Underwriter and to any dealer in securities as many copies as you may from time
to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any U.S. Underwriter is required to deliver a prospectus
in connection with sales of any of the Shares at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such U.S. Underwriter, to prepare and deliver to such U.S. Underwriter as
many copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act), an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158 under the Act);
(e) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholder's equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail;
(f) During a period of three years from the effective date of
the Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you
8
(i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed;
(g) To use its best efforts to comply with the rules and
regulations of the New York Stock Exchange with respect to the offering of the
Shares; and
(h) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 9:30 A.M., Washington, D.C. time, on the business
day immediately following the date of this Agreement, and the Company shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
(i) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdiction as you shall reasonably
request.
(j) The Company hereby agrees that, without the prior written
consent of Xxxxxxx, Sachs & Co. on behalf of the U.S. Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Shares to be sold hereunder or (B) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing.
6. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDERS. Each Selling
Stockholder agrees:
(a) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Prospectus
not, directly or indirectly, to offer, sell, contract to sell or otherwise
transfer or dispose of any capital stock of the Company or securities
convertible or exchangeable or exercisable for capital stock of the Company
(other than Shares to be sold to the U.S. Underwriters and the International
Underwriters), without the prior written consent of the Representatives;
(b) That the obligations of such Selling Stockholder hereunder
shall not be terminated by any act of such Selling Stockholder, by operation of
law or, in the case of an individual, by the death or incapacity of such
individual Selling Stockholder or, in the case of a partnership, by the
termination of such partnership, or, in the case of a corporation, the
dissolution or liquidation of such corporation, or, in the case of a trust, by
the death or incapacity of any executor or trustee or the termination of such
trust or the occurrence of any other event;
(c) To deliver to you, as Representatives, prior to the First
Time of Delivery, 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); and
(d) To advise the Representatives promptly of any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the accuracy of any of its representations or warranties
or its inability to perform the agreements and indemnities herein at any time
prior to payment being made to such Selling Stockholder on either Time of
Delivery and take such steps as may be reasonably requested by the
Representatives to remedy any such material adverse change or inability.
9
7. EXPENSES. The Selling Stockholders, jointly and severally, covenant
and agree with the several U.S. Underwriters and the International Underwriters
that the Selling Stockholders will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the U.S. Underwriters and any dealers; (ii) the cost of delivering,
printing or producing any Agreement among Underwriters (U.S. Version), Agreement
among Underwriters (International Version), this Agreement, the International
Underwriting Agreement, the Agreement between U.S. and International
Underwriting Syndicates, any Selling Agreement, the Blue Sky Memorandum and any
other documents in connection with the offering, purchase, sale and delivery of
the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the fees and disbursements of counsel for the U.S.
Underwriters in connection with such qualification and in connection with the
Blue Sky Memorandum; (iii) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Shares; (iv) the cost of preparing stock certificates; (v) the
cost and charges of any transfer agent or registrar; (vi) any stock transfer
taxes payable in connection with sales of Shares to the U.S. Underwriter and
International Underwriters and (vii) all other costs and expenses incident to
the performance of the Company's and the Selling Stockholders' obligations
hereunder which are not otherwise specifically provided for in this Section 7.
It is understood, however, that, except as provided in this Section 7, Section 9
and Section 12 hereof, the U.S. Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, stock transfer taxes on resale of
any of the Shares by them, and any advertising expenses in connection with any
offers they may make.
8. The obligations of the U.S. Underwriters hereunder, as to the Shares
to be delivered at each Time of Delivery, shall be subject, in their discretion,
to the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
5(a) hereof; if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have become effective by 9:30 A.M.,
Washington, D.C. time, on the business day immediately following the date of
this Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) The Underwriters shall have received on the Closing Date
an opinion of Xxxxxx & Xxxxxxx, counsel for the Company, dated the Closing Date,
to the effect that:
(1) the Company and its subsidiaries listed on
Exhibit A hereto (collectively, the "Ma terial Subsidiaries")
have each been duly incorporated and are validly existing and
in good standing under applicable corporate law of their
respective states of incorporation. The Company and its Mate
rial Subsidiaries each have the corporate power and authority
to own, lease and operate their respec tive properties and to
conduct their respective businesses as described in the
Registration Statement and the Prospectus;
(2) (x) all of the outstanding shares of Common Stock
(including the Shares) have been duly authorized and validly
issued and are fully paid, non-assessable and (y) to such
counsel's knowledge were not issued in violation of to any
preemptive or similar rights;
10
(3) this Agreement and the International
Underwriting Agreement have been duly authorized, executed
and delivered by the Company;
(4) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the Act and no proceedings for that purpose
have been initiated by the Commis sion; and any required
filing of the Prospectus pursuant to Rule 424(b) under the Act
has been made in accordance with Rule 424(b) and 430A under
the Act;
(5) the statements in the Prospectus under the
captions "Description of Capital Stock," "Certain United
States Tax Consequences to Non-United States Holders," and
"Underwriters" (but only statements that summarize the
provisions of this Agreement) insofar as such statements
consti tute a summary of legal matters, documents or
proceedings referred to therein, are accurate in all material
respects;
(6) the execution, delivery and performance by the
Company of this Agreement, the International Underwriting
Agreement compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated
hereby will not (A) to the best of such counsel's knowledge,
require any consent, approval, authorization or other order
of, or filing with, any federal, California, New York,
Illinois or District of Columbia court or governmental agency
or body (except such as have been obtained under the Act or
such as may be required under state securities or Blue Sky
laws, or by the NASD with regards to the underwriting
arrangements), (B) conflict with or consti tute a breach of
any of the terms or provisions of the certificate of
incorporation or by-laws of the Company or any of its
Subsidiaries or of any agreement or document filed as an
exhibit to the Regis tration Statement, or (C) violate or
conflict with any federal, California, New York, Illinois or
District of Columbia statute, rule or regulation applicable to
the Company or its subsidiaries or the General Corporation Law
of the State of the Delaware (other than federal or state
securities laws, which are specifically addressed elsewhere
herein), except for such conflicts and violations as to which
the Company has obtained the necessary consents or waivers;
(7) neither the Company nor any of the Subsidiaries
is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(8) to such counsel's knowledge, no consent,
approval, authorization or order of, or filing with, any
federal or New York court or governmental agency or body is
required for the sale of the Shares pursuant to the
Underwriting Agreement, except such as have been obtained
under the Act and such as may be required under state
securities laws in connection with the purchase and
distribution of such Securities by the Underwriters; and
(9) the Registration Statement and the Prospectus,
and any amendment or supplement thereto, comply as to form in
all material respects with the requirements for registration
statements on Form S-3 under the Act; it being understood,
however, that such counsel expresses no opinion with respect
to the financial statements, schedules and other financial
data included in the Registration Statement or the Prospectus.
In passing upon the compliance as to form of the Registration
Statement and the Prospectus, such counsel may state that it
has assumed that the statements made therein are correct and
complete.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the U.S. Underwriters and their counsel, at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although they are not passing upon, and do not assume any
responsibility for, the accuracy,
11
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as set forth in paragraph (v) above) and
have not made any independent check or verification thereof, during the course
of such par ticipation, no facts came to their attention that caused them to
believe that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date or as of the Closing
Date, contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; it being understood
that such counsel shall express no belief with respect to the financial
statements, schedules and other financial data included in the Registration
Statement or the Prospectus.
In rendering the opinion set forth in paragraph (3) above, such counsel
may state that such opinion is subject to the following exceptions, limitations
and qualifications: (i) the effect of bankruptcy, insolvency, reorganization,
fraudulent transfers or obligations, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or law, and the discretion of the court
before which any proceeding therefor may be brought; and (iii) the
unenforceability under certain circumstances under law or court decisions of
provisions providing for the indemnification of or contribution to a party with
respect to a liability where such indemnification or contribution is contrary to
public policy.
Such opinion shall be rendered to the Representatives at the request of
the Company and shall so state therein.
(c) The Representatives shall have received on the Closing
Date an opinion, dated the Closing Date, of Xxxxxxxx X. Xxxxx, Vice Chairman,
Chief Legal and Administrative Officer and Secretary of the Company,
to the effect that:
(1) to the best of such counsel's knowledge, (a)
there is no action, suit or proceeding before or by any court
or governmental agency or body pending against the Company or
any Subsid iary or any of their respective properties that is
required to be described in the Registration Statement or
Prospectus which is not so described as required and (b) there
is no contract or other document required to be described in
the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement or incorporated therein
which is not so described, filed or incorporated as required,
it being understood that such counsel need not express any
opinion as to the financial state ments, notes or schedules or
other financial data included therein;
(2) to such counsel's knowledge, the execution and
delivery of this Agreement by the Company does not violate any
order of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and
(3) to such counsel's knowledge, all of the
outstanding capital stock of each of the Subsidiaries is owned
of record, directly by the Company or by a subsidiary of the
Company, either directly or indirectly, free and clear of any
security interest, claim, lien or encumbrance, other than any
security interests which may be described in the Prospectus;
to such counsel's knowledge, there are no outstanding rights,
warrants or options to acquire, or instruments convertible
into or ex changeable for, any shares of capital stock or
other equity interest in any Subsidiary, except as may be
described in the Prospectus.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the U.S. Underwriters and their counsel, at which the
contents of the Registration Statement and the Prospectus and related matters
were discussed and, although such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement and
12
the Prospectus and has not made any independent check or verification thereof,
during the course of such participation, no facts came to such counsel's
attention that caused such counsel to believe that the Registration Statement,
at the time it became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the Prospectus,
as of its date or as of the Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that such counsel shall express no
belief with respect to the financial statements, schedules and other financial
data included in the Registration Statement or the Prospectus.
(d) The U.S. Underwriters shall have received on the Closing
Date an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Underwriters, dated the Closing Date, reasonably satisfactory to them.
(e) Xxxxxx & Xxxxxxx, counsel to the Selling Stockholders,
shall have furnished to the Representatives their written opinion, addressed to
the U.S. Underwriters and the International Underwriters dated such Time of
Delivery, in form and substance satisfactory to the Representatives, to the
effect that:
(i) This Agreement and the International Underwriting
Agreement have been duly authorized, executed and delivered by or on
behalf of each Selling Stockholder;
(ii) Each of the Selling Stockholders (together, the "Common
Stock Partnerships") has full right, partnership power and authority to
enter into this Agreement and the International Underwriting Agreement.
The execution, delivery and performance of this Agreement and the
International Underwriting Agreement and the consummation by such
Common Stock Partnership of the transactions contemplated hereby and
thereby will not result in any violation of the partnership agreement
relating to such Common Stock Partnership or any statute or any order,
rule or regulation known to such counsel, that in their experience is
normally applicable to transactions of the type contemplated by this
Agreement and the International Underwriting Agreement of any United
States federal or state court or governmental agency or body having
jurisdiction over such Common Stock Partnership or the property of such
Common Stock Partnership;
(iii) To the knowledge of such counsel, no consent, approval,
authorization, order, registration or qualification of or with any such
United States federal or state court or governmental agency or body is
required for the execution, delivery and performance by such Selling
Shareholder of this Agreement or the International Underwriting
Agreement and the consummation by such Selling Stockholder of the
transactions contemplated hereby and thereby, except as may be required
by the Act, the Exchange Act, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws or by the NASD in connection
with the purchase and distribution of the Shares by the U.S.
Underwriters and with regard to the underwriting arrangements; and
(iv) Upon delivery of the Shares listed on Schedule II (the
"Securities") hereto to the U.S. Underwriters indorsed to the U.S.
Underwriters or in blank in the State of New York and payment therefor
pursuant hereto, the U.S. Underwriters will acquire the Securities free
of any adverse claim, within the meaning of Section 8-102(a)(1) of the
Uniform Commercial Code as in effect in the State of New York, assuming
that the U.S. Underwriters acquired the Securities without notice of
any such adverse claim.
In rendering such an opinion, such counsel may (i) state that
such opinion is limited to matters governed by U.S. federal law, New York law
and the Delaware Revised Uniform Limited Partnership Act and (ii) rely as to
matters of fact upon the representations and warranties of the Selling
Stockholders contained herein as to the opinions set forth in clause (i) and
(iv) above.
13
(f) On the date of the Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
Deloitte & Touche LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex I hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex I(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Registration Statement and as of each
Time of Delivery is attached as Annex I(b) hereto);
(g) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock (except for
any increase due to the exercise of stock options which were outstanding as of
May [ ]) or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Prospectus, the effect of which, in any such case
described in Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(h) On or after the date hereof (i), no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(i) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Shares being delivered at such Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(j) The Shares at such Time of Delivery shall have been duly
listed on the New York Stock Exchange;
(k) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each of its directors and executive
officers, substantially to the effect set forth in Subsection 6(a) hereof in
form and substance satisfactory to you;
(l) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on the New
York Business Day next succeeding the date of this Agreement; and
(m) The Company and the Selling Stockholders shall have
furnished or caused to be furnished to you at such Time of Delivery certificates
of officers of the Company and of the Selling Stockholders, respectively,
satisfactory to you as to the accuracy of the representations and warranties of
the Company and the Selling Stockholders, respectively, herein at and as of such
Time of Delivery, as to the performance by the Company and the Selling
Stockholders of all of their respective obligations hereunder to be performed at
or prior to such Time of Delivery, and
14
as to such other matters as you may reasonably request, and the Company shall
have furnished or caused to be furnished certificates as to the matters set
forth in subsection (a) and (g) of this Section.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Company shall indemnify
and hold harmless each U.S. Underwriter and each person, if any, who controls
any U.S. Underwriter within the meaning of the Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Shares in connection herewith), to which that
U.S. Underwriter or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse each U.S. Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by that U.S. Underwriter or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; PROVIDED, HOWEVER, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any U.S. Underwriter through the
Representatives expressly for use therein; and PROVIDED, FURTHER, that as to any
Preliminary Prospectus this indemnity agreement shall not inure to the benefit
of any U.S. Underwriter or any person controlling that U.S. Underwriter on
account of any loss, claim, damage, liability or action arising from the sale of
Shares to any person by that U.S. Underwriter if that U.S. Underwriter failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act, and the untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact in such Preliminary Prospectus was corrected
in the Prospectus, unless such failure resulted from non-compliance by the
Company with Section 5(c) hereof. For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated therein by reference, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference in any Preliminary Prospectus or the Prospectus to any
person. The foregoing indemnity agreement is in addition to any liability which
the Company may otherwise have to any U.S. Underwriter or to any controlling
person of that U.S. Underwriter.
(b) The Selling Stockholders (subject to the limitation on
indemnity contained in the last section of this Section 9(b)) severally and not
jointly, shall indemnify and hold harmless each U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the meaning of the Act,
from and against any loss, claim, damage or liability, joint or several, or
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Shares in
connection herewith), to which that U.S. Underwriter or controlling person may
become subject, under the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with information furnished in writing to the
Company by such Selling Stockholder expressly for use therein, and shall
reimburse each U.S. Underwriter and each such controlling person for any legal
or other expenses reasonably incurred by that U.S. Underwriter or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred, PROVIDED, HOWEVER, that as to any Preliminary Prospectus this
indemnity agreement shall not inure to the benefit of any U.S. Underwriter or
any person controlling that U.S. Underwriter on account of any loss, claim,
damage, liability or action arising from the sale of Shares to any person by
that U.S. Underwriter if that U.S. Underwriter failed to send or give a copy of
the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Act, and the untrue statement or alleged
15
untrue statement of a material fact or omission or alleged omission to state a
material fact in such Preliminary Prospectus was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Company with Section
5(c) hereof. For purposes of the last proviso to the immediately preceding
sentence the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and no Underwriter shall be obligated to send
or give any supplement or amendment to any document incorporated by reference in
any Preliminary Prospectus or the Prospectus to any person other than a person
to whom such Underwriter had delivered such incorporated document or documents
in response to a written request therefor. The foregoing indemnity agreement is
in addition to any liability which the Selling Stockholders may otherwise have
to any U.S. Underwriter or any controlling person of that U.S. Underwriter. The
aggregate liability of any Selling Stockholder to indemnify the U.S.
Underwriters and any controlling persons of the U.S. Underwriters pursuant to
the foregoing indemnity agreement shall not exceed the proceeds received by such
Selling Stockholder from the Shares sold by it pursuant to this Agreement.
(c) Each U.S. Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, each person, if any, who
controls the Company within the meaning of the Act and each Selling Stockholder
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company or any such director, officer or
controlling person or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or (ii)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the 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 or on behalf of
that U.S. Underwriter through the Representatives expressly for use therein, and
shall reimburse the Company, any such director, officer or controlling person
and such Selling Stockholder for any legal or other expenses reasonably incurred
by the Company, any such director, officer or controlling person or such Selling
Stockholder in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any U.S. Underwriter may otherwise have to the Company or any such
director, officer or controlling person.
(d) Promptly after receipt by an indemnified party under
subsection (a) ,(b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably, satisfactory to such indemnified party and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(e) If the indemnification provided for this in Section 9
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 9 (a), 9 (b) or 9(c) hereof in respect of any
loss,
16
claim, liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
U.S. Underwriters on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law or if
the indemnified party failed to give the notice required under Section 9(d)
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Selling Stockholders on the one hand and the U.S. Underwriters
on the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the U.S. Underwriters
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by each of the Selling
Stockholders bear to the total underwriting discounts and commissions received
by the U.S. Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company, the Selling Stockholders or the U.S. Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Selling
Stockholders and the U.S. Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 9(e) were to be determined
by pro rata allocation (even if the U.S. Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 9(e)
shall be deemed to include, for purposes of this Section 9(e), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9 (e), no U.S. Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by it and distributed to the public was offered to the
public exceeds the amount of any damages which such U.S. Underwriter has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission, and no Selling Stockholder shall be
required to contribute any amount in excess of the amount by which the proceeds
received by such Selling Stockholder from the Shares sold by it pursuant to this
Agreement exceeds the amount of any damages which such Selling Stockholder has
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The U.S. Underwriters' obligations to contribute as provided
in this Section 9(e) are several in proportion to their respective underwriting
obligations and not joint.
(f) Each Selling Stockholder severally confirms, and each of
the U.S. Underwriters agrees that the information (other than the percentage of
shares owned) pertaining to each Selling Stockholder under the caption
"Principal and Selling Stockholders" in the Prospectus constitutes the only
information furnished in writing to the Company by such Selling Stockholder
expressly for the use in the Registration Statement and Prospectus.
10. (a) If any U.S. Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any U.S. Underwriter you do not arrange
for the purchase of such Shares, the Selling Stockholders shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Selling
Stockholders that you have so arranged for the purchase of such Shares, or the
Selling Stockholders notify you that they have so arranged for the purchase of
such Shares, you or the Selling Stockholders shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees
17
to file promptly any amendments to the Registration Statement or the Prospectus
which in your opinion may thereby be made necessary.
(b) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting U.S. Underwriter or U.S. Underwriters by
you and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of all the Shares to be purchased at such
Time of Delivery, then the Selling Stockholders shall have the right to require
each non-defaulting U.S. Underwriter to purchase the number of Shares which such
U.S. Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting U.S. Underwriter to purchase its pro
rata share (based on the number of Shares which such U.S. Underwriter agreed to
purchase hereunder) of the Shares of such defaulting U.S. Underwriter or U.S.
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Shares of a defaulting U.S. Underwriter or U.S. Underwriters by
you and the Selling Stockholders as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased exceeds one-eleventh
of the aggregate number of all of the Shares to be purchased at such Time of
Delivery, or if the Selling Stockholders shall not exercise the right described
in subsection (b) above to require non-defaulting U.S. Underwriters to purchase
Shares of a defaulting U.S. Underwriter or U.S. Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations of
the U.S. Underwriters to purchase and of the Selling Stockholders to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
for the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 7 hereof and the indemnity and contribution
agreements in Section 9 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
U.S. Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or any of the Selling Stockholders, or any
officer or director or controlling person of the Company, or any controlling
person of any Selling Stockholder, and shall survive delivery of and payment for
the Shares.
12. If this Agreement shall be terminated pursuant to Section 10
hereof, neither the Company nor the Selling Stockholders shall then be under any
liability to any U.S. Underwriter except as provided in Sections 7 and 9 hereof;
but, if for any other reason (other than by reason of Section 8(i) hereof) any
Shares are not delivered by or on behalf of the Selling Stockholders as provided
herein, each of the Selling Stockholders pro rata (based on the number of Shares
to be sold by such Selling Stockholder hereunder) will reimburse the U.S.
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
U.S. Underwriters in making preparations for the purchase, sale and delivery of
the Shares not so delivered, but the Company and the Selling Stockholders shall
then be under no further liability to any U.S. Underwriter in respect of the
Shares not so delivered except as provided in Sections 7 and 9 hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
U.S. Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any U.S. Underwriter
made or given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such Selling Stockholder.
18
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives at in care of Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 9(d) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you on request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the U.S. Underwriters, the Company and the Selling Stockholders and,
to the extent provided in Sections 9 and 11 hereof, the officers and directors
of the Company and each person who controls the Company, any Selling Stockholder
or any U.S. Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
U.S. Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
19
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing
and binding Power-of-Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
WORLD COLOR PRESS, INC.
By:
----------------------------------------
Name:
Title:
APC ASSOCIATES, L.P.
KKR Associates, general partner
By:
----------------------------
Name:
Title: General Partner
GR ASSOCIATES, L.P.
KKR Associates, general partner
By:
---------------------------
Name:
Title: General Partner
WCP ASSOCIATES, L.P.
KKR Associates, general partner
By:
---------------------------
Name:
Title: General Partner
20
KKR PARTNERS II, L.P.
KKR Associates, general partner
By:
-----------------------------
Name:
Title: General Partner
Accepted as of the date hereof :
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
By:
-----------------------------
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
21
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
Xxxxxxx, Xxxxx & Co.
Xxxxxx Xxxxxxx & Co. Incorporated
Bear, Xxxxxxx & Co. Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Total
22
SCHEDULE II
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold Exercised
The Company........................................................
The Selling Stockholder(s):
APC Associates, L.P.(a)
GR Associates, L.P.(b)
WCP Associates, L.P.(c)
KKR Partners II, L.P.(d)
Total.....................................................
(a) This Selling Stockholder is represented by Xxxxxx & Xxxxxxx.
(b) This Selling Stockholder is represented by Xxxxxx & Xxxxxxx.
(c) This Selling Stockholder is represented by Xxxxxx & Xxxxxxx.
(d) This Selling Stockholder is represented by Xxxxxx & Xxxxxxx.
23
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been furnished to the representatives of the Underwriters (the
"Representatives")and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which are attached hereto;
and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
A-1
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related
published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus, for
them to be conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B) were
not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in
A-2
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
A-3
