EXHIBIT 1.1
DRAFT
10,000,000 Shares
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
Common Stock, $.01 par value
UNDERWRITING AGREEMENT
----------------------
, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
XXXXXXX, SACHS & CO.
XXXXX XXXXXX INC.,
As Representatives of the Several Underwriters
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Loews Cineplex Entertainment Corporation, a
Delaware corporation ("Company"), proposes to issue and sell 10,000,000 shares
("Firm Securities") of its Common Stock, $.01 par value ("Securities"), and also
proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 1,500,000 additional shares
("Optional Securities") of its Securities as set forth below. The Firm
Securities and the Optional Securities are herein collectively called the
"Offered Securities". The Company hereby agrees with the several Underwriters
named in Schedule A hereto ("Underwriters") as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-56897) relating to the
Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933 ("Act") and is not proposed
to be amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement ("initial registration statement") has
been declared effective, either (i) an additional registration statement
("additional registration statement") relating to the Offered Securities may
have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)")
under the Act and, if so filed, has become effective upon filing pursuant to
such Rule and the Offered Securities all have been duly registered under the Act
pursuant to the initial registration statement and, if applicable, the
additional registration statement or (ii) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If the Company does not propose to amend the initial registration
statement or if an additional registration statement has been filed and the
Company does not propose to amend it, and if any post-effective amendment to
either such
registration statement has been filed with the Commission prior to the execution
and delivery of this Agreement, the most recent amendment (if any) to each such
registration statement has been declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the
Act or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of this
Agreement, the additional registration statement means (i) if the Company has
advised the Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or the
most recent post-effective amendment thereto (if any) filed prior to the
execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or (ii)
if the Company has advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration statement, the date
and time as of which such registration statement, as amended by such amendment
or post-effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed prior to
the execution and delivery of this Agreement but the Company has advised the
Representatives that it proposes to file one, "Effective Time" with respect to
such additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule 462(b).
"Effective Date" with respect to the initial registration statement or the
additional registration statement (if any) means the date of the Effective Time
thereof. The initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration statement (if
any) and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the General
Instructions of the Form on which it is filed and including all information (if
any) deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is
hereinafter referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the contents
of the initial registration statement incorporated by reference therein and
including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "Additional Registration Statement". The Initial
Registration Statement and the Additional Registration Statement are herein
referred to collectively as the "Registration Statements" and individually as a
"Registration Statement". The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter referred to as
the "Prospectus". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (i) on the Effective
Date of the Initial Registration Statement, the Initial Registration Statement
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission ("Rules and Regulations") and did not include
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, (ii) on the Effective Date of the Additional Registration Statement
(if any), each Registration Statement conformed, or will conform, in all
material respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a material
fact and did not omit, or will not omit, to state any material fact required to
be stated therein or necessary to make the statements therein not misleading and
(iii) on the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material respects
to the requirements of the Act and the Rules and Regulations, and neither of
such documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. If the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the
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Effective Date of the Initial Registration Statement, the Initial Registration
Statement and the Prospectus will conform in all respects to the requirements of
the Act and the Rules and Regulations, neither of such documents will include
any untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and no Additional Registration Statement has been or will be filed.
The two preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Company by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b) hereof.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of its
business requires such qualification, or is subject to no material liability or
disability by reason of failure to be so qualified in any jurisdiction.
(d) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Prospectus; and each subsidiary of the Company is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification, or is subject to no material liability or disability by reason of
failure to be so qualified in any jurisdiction; all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued and is fully paid and nonassessable; and, except
as disclosed in the Prospectus, all of the capital stock of each subsidiary is
owned by the Company, directly or through subsidiaries, free from liens,
encumbrances and defects.
(e) The Company has an authorized capitalization as set forth in
the Prospectus and the Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding shares
of capital stock of the Company are, and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on each Closing Date
(as defined below), such Offered Securities will have been, validly issued,
fully paid and nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus; and, except as disclosed in the
Prospectus, the stockholders of the Company have no preemptive or similar rights
with respect to the Securities.
(f) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person that
would give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with the
offering of the Offered Securities.
(g) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such securities
in the securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Act; and no person has registration rights in
connection with the offering of the Offered Securities.
(h) The Offered Securities have been approved for listing on The
New York Stock Exchange and The Toronto Stock Exchange, subject to notice of
issuance.
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(i) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or authority is
required for the issuance and sale of the Offered Securities or the performance
by the Company of its obligations under this Agreement, except such as have been
obtained under the Act and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Securities by the Underwriters.
(j) Neither the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement nor
consummation of the transactions ("Concurrent Transactions") described in the
Prospectus under the caption "The Concurrent Transactions" do or will (i)
contravene any provision of the Amended and Restated Certificate of
Incorporation or Amended and Restated By-Laws of the Company, (ii) contravene,
result in a breach of or constitute a default under any agreement or instrument
binding upon the Company or any of its subsidiaries, or (iii) violate (x) any
present statute, rule or regulation of any governmental agency or authority
applicable to the Company or any subsidiary of the Company, or (y) any judgment,
decree or order of any court or governmental agency or body applicable to the
Company or any subsidiary of the Company;
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to (i) all real properties owned by
them and (ii) all other properties and assets owned by them that are material to
the Company and its subsidiaries taken as a whole, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them; and except
as disclosed in the Prospectus, the Company and its subsidiaries hold any leased
real or personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof by them.
(m) The Company and its subsidiaries possess such certificates,
authorities or permits issued by appropriate governmental agencies or bodies as
are necessary to conduct the business now operated by them except where the
failure to possess such certificates, authorities or permits would not
individually or in the aggregate have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries, taken as a whole ("Material Adverse Effect"), and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit.
(n) Neither the Company nor any of its subsidiaries is (A) in
violation of (i) its Certificate of Incorporation or By-laws or (ii) any law,
ordinance, administrative or governmental or regulatory rule, regulation,
requirement or standard applicable to the Company or any of its subsidiaries or
any order, decree or judgment of any governmental, regulatory or accrediting
agency or body or any court having jurisdiction over the Company or any of its
subsidiaries or (B) in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, in the case
of (A) (ii) and (B) above, for any such violations or defaults as would not
individually or in the aggregate have a Material Adverse Effect.
(o) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that might
have a Material Adverse Effect.
(p) The Company and its subsidiaries own, possess or have rights
to acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently employed by
them, except where the failure to own, possess or acquire such intellectual
property rights would not individually or in
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the aggregate have a Material Adverse Effect, and neither the Company nor any
subsidiary has received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(q) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
the Company is not aware of any pending investigation which might lead to such a
claim.
(r) There are no legal or governmental proceedings pending or
threatened against or affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely to the Company or any
of its subsidiaries, would be reasonably likely to materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement or consummate the Concurrent Transactions or, except as disclosed in
the Prospectus, would be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect, or which are otherwise material in the context
of the sale of the Offered Securities; and no such actions, suits or proceedings
are threatened or, to the Company's knowledge, contemplated.
(s) The financial statements included in each Registration
Statement and the Prospectus present fairly the consolidated financial position
of each of the Company, Xxxxx-Star Partners and Cineplex Odeon Corporation
("CPX") as of the dates shown and their respective results of operations and
cash flows for the periods shown, and, except as disclosed in the Prospectus,
such financial statements have been prepared in conformity with generally
accepted accounting principles in the United States in the case of each of the
Company and Xxxxx-Star Partners and in conformity with generally accepted
accounting principles in Canada in the case of CPX, in each case applied on a
consistent basis, and the schedules included in each Registration Statement
present fairly the information required to be stated therein. The pro forma
financial statements and other pro forma financial information included in each
Registration Statement and the Prospectus present fairly the information shown
therein, have been prepared in all respects in accordance with the Commission's
rules and guidelines with respect to pro forma financial information, have been
properly compiled on the pro forma basis described therein and the assumptions
used provide a reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the related pro
forma adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts. There are no financial
statements (historical or pro forma) that are required to be included in any
Registration Statement or the Prospectus pursuant to the Act and the Rules and
Regulations that are not included in any Registration Statement or the
Prospectus as required.
(t) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company convertible into or
exchangeable for any capital stock of the Company, (B) warrants, rights or
options to subscribe for or purchase from the Company any capital stock or any
such convertible or exchangeable securities or obligations or (C) obligations of
the Company to issue any capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or obligations.
(u) Each "employee benefit plan" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), in which
employees of the Company or any
5
subsidiary participate or as to which the Company or any subsidiary has any
liability (the "ERISA Plans") is in compliance in all material respects with the
applicable provisions of ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"). Neither the Company nor any subsidiary has any liability, with
respect to the ERISA Plans or otherwise and whether or not contingent, under
Title IV of ERISA, nor does the Company expect that any such liability will be
incurred. Neither the Company nor any subsidiary has any liability, whether or
not contingent, with respect to any ERISA Plan that provides post-retirement
welfare benefits that would individually or in the aggregate have a Material
Adverse Effect. The descriptions of the Company's stock option, stock bonus and
other stock plans or arrangements, and of the options or other rights granted
and exercised thereunder, and of the employment agreements to which the Company
and/or any of its subsidiaries are a party, set forth in the Prospectus are
accurate and complete in all material respects.
(v) The Company and its subsidiaries maintain a system of
internal accounting controls sufficient for purposes of the prevention or
detection of errors or irregularities in amounts that could be expected to be
material to the Company's consolidated financial statements and the recording of
transactions so as to permit the preparation of such consolidated financial
statements in conformity with generally accepted accounting principles.
(w) The Company and its subsidiaries carry or are entitled to
the benefits of insurance in such amounts and covering such risks as are
generally maintained by companies of established repute engaged in the same or a
similar business, and all such insurance is in full force and effect.
(x) The Company and its subsidiaries have filed on a timely
basis all federal, state, local and foreign tax returns required to be filed (or
such returns were included in the consolidated federal, state, local or foreign
tax returns of Sony Corporation of America ("SCA")), such returns are complete
and correct in all material respects, and all taxes shown by such returns (or
included in any consolidated returns of SCA) or otherwise due and payable have
been paid, except such taxes as are being contested in good faith and as to
which adequate reserves have been provided. The charges, accruals and reserves
on the books of the Company and its subsidiaries in respect of any tax liability
for any year not finally determined are adequate to meet any assessments or
reassessments for additional taxes and there has been no formal or informal tax
deficiency asserted against the Company or any of its subsidiaries that would,
individually or in the aggregate, have a Material Adverse Effect.
(y) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
material adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries taken as
a whole, and, except as disclosed in or contemplated by the Prospectus, there
has been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(z) Neither the Company nor any of its affiliates has taken, nor
will the Company take or permit any of its affiliates to take, any action which
is designed to or which has constituted or will constitute or which might have
or be expected to cause or result in stabilization or manipulation of the price
of any security of the Company in connection with the offering of the Offered
Securities.
(aa) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940.
3. Purchase, Sale and Delivery of Offered Securities. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to sell
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Company, at a purchase price of $ per share, the respective
6
numbers of shares of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn
to the order of at the office of Xxxxx Xxxxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M., New York time,
on , 1998, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "First Closing Date". For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, the First Closing Date (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the office of Credit Suisse First Boston Corporation, New York, New
York at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the Underwriters only for
the purpose of covering over-allotments made in connection with the sale of the
Firm Securities. No Optional Securities shall be sold or delivered unless the
Firm Securities previously have been, or simultaneously are, sold and delivered.
The right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of , at the above office of Xxxxx Xxxxxxxxxx LLP.
The certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of Credit Suisse First Boston Corporation at a reasonable time in advance
of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission
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pursuant to and in accordance with subparagraph (1) (or, if
applicable and if consented to by CSFBC, subparagraph (4)) of Rule 424(b) not
later than the earlier of (A) the second business day following the execution
and delivery of this Agreement or (B) the fifteenth business day after the
Effective Date of the Initial Registration Statement.
The Company will advise CSFBC promptly of any such filing pursuant to Rule
424(b). If the Effective Time of the Initial Registration Statement is prior to
the execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities under the
Act but the Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or the
related prospectus or the Initial Registration Statement, the Additional
Registration Statement (if any) or the Prospectus and will not effect such
amendment or supplementation without CSFBC's consent; and the Company will also
advise CSFBC promptly of the effectiveness of each Registration Statement (if
its Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration Statement
or the Prospectus and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best efforts
to prevent the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs 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 to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify CSFBC of such event and will
promptly prepare and file with the Commission, at its own expense, an amendment
or supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its securityholders
an earnings statement covering a period of at least 12 months beginning after
the Effective Date of the Initial Registration Statement (or, if later, the
Effective Date of the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Company's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (six of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M.,
New York time, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial Registration
Statement. All other documents shall be so furnished as soon as available. The
Company will pay the expenses of printing and distributing to the Underwriters
all such documents.
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(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution.
(g) During the period of five years hereafter, the Company will furnish to
the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under the
Securities Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning the Company as CSFBC may reasonably
request.
(h) The Company will pay all expenses incident to the performance of its
obligations under this Agreement and will reimburse the Underwriters for any
filing fees and other expenses (including reasonable fees and disbursements of
counsel) incurred in connection with qualification of the Offered Securities for
sale under the laws of such jurisdictions as CSFBC designates and the printing
of memoranda relating thereto, for the filing fee incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. of the
Offered Securities, for any travel expenses of the Company's officers and
employees and any other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities and for
expenses incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters. The
Company agrees that it will pay all transfer and other similar taxes (including,
without limitation, all real estate and real property transfer taxes) related to
or resulting from the Combination (as defined in the Prospectus) and/or the
offering of the Offered Securities and it agrees further to indemnify and hold
harmless each Underwriter from any losses, claims, damages or liabilities, joint
or several, that may be incurred by any such Underwriter with respect to such
taxes and to reimburse each such Underwriter for any legal or other expenses
reasonably incurred by any such Underwriter in connection with investigating or
defending any such loss, claim, damage, or liability as such expenses are
incurred.
(i) For a period of 90 days after the date of the Prospectus, the Company
will not offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, or file with the Commission a registration statement under the
Act relating to, any additional shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer, sale,
pledge, disposition or filing, without the prior written consent of CSFBC,
except grants of employee stock options pursuant to the terms of a plan in
effect on the date hereof and issuances of Common Stock pursuant to the exercise
of options under any such plan.
(j) The Company will cause each of Sony Pictures Entertainment Inc.,
Universal Studios, Inc., The Xxxxxxx Xxxxxx Xxxxxxxx Discretionary Trust, The
Xxxxxxx Xxxxxxxx Trust, The Xxxxxxx X. Xxxxxxxx Trust, The Xxxxxxx Xxxxxxx
Foundation, Bojil Equities Inc., Xxxxx Xxxxxxx and Xxx. Xxxxxx Xxx Xxxxxx and
each of the Company's directors and executive officers to agree that they will
not offer, sell, contract to sell, pledge or otherwise dispose of, directly or
indirectly, any Securities or securities convertible into or exercisable or
exchangeable for any Securities, or publicly disclose the intention to make any
such offer, sale, pledge or disposal, without the prior written consent of
CSFBC, for a period of 90 days after the date of the Prospectus.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
9
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of Price Waterhouse LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules examined by
them and included in the Registration Statements comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in the
Registration Statements;
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of the Company, a
reading of the minutes of all meetings of the stockholders and directors
(including each committee thereof), inquiries of officials of the Company who
have responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the Registration
Statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally accepted
accounting principles in the United States;
(B) at the date of the latest available balance sheet read by such
accountants, and at a subsequent specified date not more than three business
days prior to the date of this Agreement, there was any decrease in
stockholders' equity or change in the capital stock or any increase in short-
term indebtedness or long-term debt of the Company and its consolidated
subsidiaries or, at the date of the latest available balance sheet read by such
accountants, and at a subsequent specified date not more than three business
days prior to the date of this Agreement, there was any decrease in consolidated
net current assets or net assets, as compared with amounts shown on the latest
balance sheet included in the Prospectus; and
(C) for the period from the closing date of the latest income statement
included in the Prospectus to the closing date of the latest available income
statement read by such accountants, and to a subsequent specified date not more
than three business days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period of the previous year, in
consolidated net revenues, EBITDA, Total EBITDA, Attributable EBITDA or net
operating income or in the total or per share amounts of consolidated income
before extraordinary items or net income,
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur;
(iv) they have read the unaudited pro forma information included in the
Registration Statement and made inquiries of officials of the Company who have
responsibility for financial and accounting matters and have performed other
specified procedures, and nothing came to their attention that caused them to
believe that the unaudited pro forma financial data included in the Registration
Statements do not comply as to form in all material respects with the applicable
accounting
10
requirements of the Act and the related published Rules and Regulations or that
the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements; and
(v) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information contained in the
Registration Statements and the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are derived from the
general accounting records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such results.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration is
subsequent to such execution and delivery, "Registration Statements" shall mean
the Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
(b) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG confirming that they are independent public accountants
within the meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules examined by
them and included in the Registration Statements comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the Canadian
Institute of Chartered Accountants for reviews of unaudited interim financial
statements in prospectuses (which procedures shall include those specified by
the American Institute of Certified Public Accountants Statement of Auditing
Standards No. 71);
(iii) on the basis of the review referred to in clause (ii) above, a
reading of the latest available interim financial statements of CPX, a reading
of the minutes of all meetings of the shareholders and directors (including each
committee thereof) of CPX and its subsidiaries, inquiries of officials of CPX
who have responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements included in the Registration
Statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally accepted
accounting principles in Canada;
11
(B) at the date of the latest available balance sheet read by such
accountants, and at the date of the Combination (May 14, 1998), there was any
decrease in stockholders' equity or change in the capital stock or any increase
in short-term indebtedness or long-term debt of CPX and its consolidated
subsidiaries or, at the date of the latest available balance sheet read by such
accountants, and at the date of the Combination, there was any decrease in
consolidated net current assets or net assets, as compared with amounts shown on
the latest balance sheet included in the Prospectus; or
(C) for the period from the closing date of the latest income statement
included in the Prospectus to the closing date of the latest available income
statement read by such accountants, and to the date of the Combination, there
were any decreases, as compared with the corresponding period of the previous
year, in consolidated net revenues, EBITDA, Modified EBITDA or consolidated net
income, or in the total or per share amounts of consolidated net income or
income from continuing operations before extraordinary items,
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur; and
(iv) they have compared specified dollar amounts (or percentages derived
from such dollar amounts) and other financial information contained in the
Registration Statements and the Prospectus (in each case to the extent that such
dollar amounts, percentages, numerical data and other financial information are
derived from the general accounting records of CPX and its subsidiaries subject
to the internal controls of CPX's accounting system or are derived directly from
such records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts, percentages,
numerical data and other financial information to be in agreement with such
results.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration is
subsequent to such execution and delivery, "Registration Statements" shall mean
the Initial Registration Statement and the additional registration statement as
proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
(c) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by CSFBC. If the
Effective Time of the Additional Registration Statement (if any) is not prior to
the execution and delivery of this Agreement, such Effective Time shall have
occurred not later than 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, the time the Prospectus is printed and distributed to any
Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Underwriters including the
12
Representatives, is material and adverse and makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and payment for
the Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or any
public announcement that any such organization has under surveillance or review
its rating of any debt securities of the Company (other than an announcement
with positive implications of a possible upgrading, and no implication of a
possible downgrading, of such rating); (iii) any suspension or limitation of
trading in securities generally on The New York Stock Exchange or The Toronto
Stock Exchange, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Offered Securities.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel for the
Company, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and conduct
its business as described in the Prospectus;
(ii) The Offered Securities delivered on the Closing Date and
all other outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and conform in
all material respects to the description thereof contained in the Prospectus;
and, except as disclosed in the Prospectus, the stockholders of the Company have
no preemptive or similar rights with respect to the Securities;
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act; and, to the
knowledge of such counsel, no person has registration rights in connection with
the offering of the Offered Securities;
(iv) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as defined
in the Investment Company Act of 1940;
(v) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or authority of the
United States or of the State of New York or pursuant to any present provision
of the General Corporation Law of the State of Delaware ("DGCL") is required for
the issuance or sale of the Offered Securities or the performance by the Company
of its obligations under this Agreement, except such as have been obtained under
the Act and such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Offered Securities by the
Underwriters;
(vi) Neither the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement nor
consummation of the Concurrent Transactions do or will (A) contravene any
provision of the Amended and Restated Certificate of
13
Incorporation or Amended and Restated By-Laws of the Company, (B) contravene,
result in a breach of or constitute a default under any agreement or instrument
binding upon the Company (or any of its subsidiaries) that is listed as an
exhibit to the Registration Statement, or (C) violate (x) any present statute,
rule or regulation of any governmental agency or authority of the United States
of America or the State of New York or any present provision of the DGCL
applicable to the Company or any subsidiary of the Company, or (y) any judgment,
decree or order of any court or governmental agency or body of the United States
of America or the State of New York or of any court or governmental agency or
body of the State of Delaware pursuant to the DGCL set forth in an Officer's
Certificate attached to such opinion (which Officer's Certificate shall certify
that such judgments, decrees and orders constitute the only such judgments,
decrees and orders applicable to the Company and its subsidiaries); provided,
however, that such counsel need not express any opinion with respect to any
violation, breach or default not ascertainable from the face of any such
agreement, instrument, judgment, decree or order, or arising under or based upon
any cross-default provision insofar as such violation relates to a default under
an agreement that is not referred to in subclause (B) or arising under or based
upon any covenant of a financial or numerical nature or which requires
arithmetic computation;
(vii) The statements in the Prospectus under the captions "The
Concurrent Transactions", "The Stockholders Agreement", "Description of Certain
Indebtedness", "Description of Capital Stock" and "Certain United States Federal
Tax Considerations for Non-United States Holders" have been reviewed by such
counsel and, insofar as such statements constitute a summary of laws, contracts
or documents or proceedings, fairly summarize in all material respects the
matters referred to therein;
(viii) The Initial Registration Statement was declared effective
under the Act, the Additional Registration Statement (if any) was filed and
became effective under the Act, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in such opinion
on the date specified therein or was included in the Initial Registration
Statement or the Additional Registration Statement (as the case may be), and, to
the knowledge of such counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued under the Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission;
(ix) Each Registration Statement and the Prospectus, and each
amendment or supplement thereto, as of their respective effective or issue
dates, appeared on their face to comply as to form in all material respects with
the requirements of the Act and the Rules and Regulations (it being understood
that such counsel need not express any opinion on the financial statements, the
notes or schedules thereto or other financial information included therein or
omitted therefrom); and
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
In addition, such counsel shall state that in the course of the
preparation by the Company of the Registration Statements and the Prospectus,
such counsel participated in conferences with certain of the officers and
representatives of, and the independent public accountants for the Company, at
which the contents of the Registration Statements and the Prospectus were
discussed. Such counsel shall further state that between the date of
effectiveness of the Registration Statement and the time of delivery of such
opinion, such counsel participated in additional conferences with certain of the
officers and representatives of, and independent public accountants for the
Company, at which the contents of the Registration Statements and the Prospectus
were discussed. Such counsel may state that, given the limitations inherent in
the independent verification of factual matters and the character of
determinations involved in the registration process, such counsel is not passing
upon or assuming any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the Prospectus,
except as set forth in paragraph (ix) above. Subject to the foregoing and on the
basis of the information gained in the performance of the services referred to
above, including
14
information obtained from officers and other representatives of, and the
independent public accountants for, the Company, such counsel shall state that
no facts have come to their attention that have caused them to believe that a
Registration Statement, as of its effective date, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus, as of its date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Also, subject to the
foregoing, such counsel shall state that no facts have come to their attention
in the course of the proceedings described in the second sentence of this
paragraph that cause them to believe that the Prospectus, as of the date and
time of delivery of this letter, contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel shall
state that they express no view or belief, however, with respect to financial
statements, the notes or schedules thereto or other financial information
included in or omitted from the Registration Statements or the Prospectus.
(f) The Representatives shall have received an opinion, dated
such Closing Date, of Xxxx X. XxXxxxx, Xx., Esq., General Counsel of the
Company, to the effect that:
(i) The Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which the ownership or
lease of property by the Company or the conduct of the Company's business
requires such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such jurisdiction;
(ii) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus; and each
subsidiary of the Company is duly qualified to do business as foreign
corporation in good standing in each jurisdiction in which the ownership or
lease of property by any subsidiary of the Company or the conduct of any such
subsidiary's business requires such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any such
jurisdiction; all of the issued and outstanding capital stock of each subsidiary
of the Company has been duly authorized and validly issued and is fully paid and
nonassessable; and, except as disclosed in the Prospectus, all of the capital
stock of each subsidiary is owned by the Company, directly or through
subsidiaries, free from liens, encumbrances and defects;
(iii) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or authority is
required for the issuance or sale of the Offered Securities or the performance
by the Company of its obligations under this Agreement, except such as have been
obtained under the Act and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the Offered
Securities by the Underwriters;
(iv) Neither the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this Agreement nor
consummation of the Concurrent Transactions does or will (i) contravene any
provision of the Amended and Restated Certificate of Incorporation or Amended
and Restated By-Laws of the Company, (ii) contravene, result in a breach of or
constitute a default under any agreement or instrument binding upon the Company
or any of its subsidiaries, or (iii) violate (x) any present statute, rule or
regulation of any governmental agency or authority applicable to the Company or
any subsidiary of the Company, or (y) any judgment, decree or order of any court
or governmental agency or body applicable to the Company or any subsidiary of
the Company;
(v) The Company and its subsidiaries have good and marketable
title in fee simple to all real property owned by them, in each case free and
clear of all liens, encumbrances and defects
15
except such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries (in giving the opinion in this
clause, such counsel may state that no examination of record titles for the
purpose of such opinion has made, and that such counsel is relying upon a
general review of the titles of the Company and its subsidiaries, upon opinions
of local counsel and abstracts, reports and policies of title companies rendered
or issued at or subsequent to the time of acquisition of such property by the
Company or its subsidiaries, upon opinions of counsel to the lessors of such
property and, in respect of matters of fact, upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state that
such counsel believes that both you and such counsel are justified in relying
upon such opinions, abstracts, reports, policies and certificates);
(vi) To such counsel's knowledge, there are no legal or
governmental proceedings pending or threatened against the Company or any of its
subsidiaries which, if determined adversely to the Company or any of its
subsidiaries, (A) would be reasonably likely to materially and adversely affect
the consummation of the transactions contemplated by this Agreement or the
Concurrent Transactions or (B) except as disclosed in the Prospectus, would
individually or in the aggregate have a Material Adverse Effect or which are
otherwise material in the context of the sale of the Offered Securities;
(vii) Neither the Company nor any of its subsidiaries is (A) in
violation of (i) its Certificate of Incorporation or By-laws or (ii) any law,
ordinance, administrative or governmental or regulatory rule, regulation,
requirement or standard applicable to the Company or any of its subsidiaries or
any order, decree or judgment of any governmental, regulatory or accrediting
agency or body or any court having jurisdiction over the Company or any of its
subsidiaries or (B) in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound, except, in the case
of (A) (ii) and (B) above, for any such violations or defaults as would not
individually or in the aggregate have a Material Adverse Effect; and
(viii) The statements in the Prospectus under the captions
"Business-Environmental Matters", "Business-Legal Proceedings", "Management-
Employment Agreements", "Management-1997 Stock Incentive Plan", "Certain
Relationships and Related Transactions" and "Shares Eligible for Future Sale"
have been reviewed by such counsel and, insofar as such statements constitute a
summary of laws, contracts or documents or proceedings, fairly summarize in all
material respects the matters referred to therein; and, to the knowledge of such
counsel, there are no legal or governmental proceedings required to be described
in a Registration Statement or the Prospectus which are not described as
required or any contracts or documents of a character required to be described
in a Registration Statement or the Prospectus or to be filed as exhibits in a
Registration Statement which are not described and filed as required.
Such counsel shall also state that such counsel has participated
in the preparation of the Registration Statements and the Prospectus and has no
reason to believe that a Registration Statement, as of its effective date,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its issue date or as of
such Closing Date, contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; it being
understood that such counsel need express no opinion as to the financial
statements, the notes or schedules thereto or other financial data contained in
the Registration Statements or the Prospectus.
16
(g) The Representatives shall have received from Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to pass
upon such matters.
(h) The Representatives shall have received a certificate, dated
such Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to the
best of their knowledge after reasonable investigation, shall state that: the
representations and warranties of the Company in this Agreement are true and
correct; the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any Underwriter;
and, subsequent to the date of the most recent financial statements in the
Prospectus, there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the
Company and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus.
(i) The Representatives shall have received a letter from each
stockholder, director and executive officer of the Company referred to in clause
(j) of Section 5 of this Agreement to the effect contemplated by such clause.
(j) The Representatives shall have received a certificate dated
the Closing Date signed by the chief financial officer of the Company
substantially in the form heretofore approved by the Representatives, with
respect to the Company's compliance with the covenants set forth in the Credit
Agreement (as defined in the Prospectus) and certain other agreements relating
to indebtedness of the Company and its subsidiaries.
(k) The Representatives shall have received letters, dated such
Closing Date, of Price Waterhouse LLP and KPMG, which meet the requirements of
subsections (a) and (b), respectively, of this Section, except that the
specified date referred to in such subsection will be a date not more than three
days prior to such Closing Date for the purposes of this subsection.
(l) The Offered Securities shall have been approved for listing
on the New York Stock Exchange and The Toronto Stock Exchange, subject to notice
of issuance.
The Company will furnish the Representatives with such conformed
copies of such opinions, certificates, letters and documents as the
Representatives reasonably request. CSFBC may in its sole discretion waive on
behalf of the Underwriters compliance with any conditions to the obligations of
the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein
17
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that, with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
Prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the Prospectus correcting such untrue statement or alleged untrue statement in
or omission or alleged omission from such preliminary prospectus if the Company
had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company against any losses, claims, damages or liabilities
to which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, the Prospectus, or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representatives specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of (i) the following
information in the Prospectus furnished on behalf of each Underwriter: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Underwriters, the legend concerning over-allotments and stabilizing on
the inside front cover page and the concession and reallowance figures appearing
in the fourth paragraph under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section or Section 9, as the
case may be, for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
18
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section or Section
9 shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the QIU (as hereinafter defined) within the meaning
of the Act; and the obligations of the Underwriters under this Section shall be
in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed a Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters
default in their obligations to purchase Offered Securities hereunder on either
the First or any Optional Closing Date and the aggregate number of shares of
Offered Securities that such defaulting Underwriter or Underwriters agreed but
failed to purchase does not exceed 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date,
CSFBC may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate number of shares of
19
Offered Securities with respect to which such default or defaults occur exceeds
10% of the total number of shares of Offered Securities that the Underwriters
are obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company, except as provided in Section 10 (provided that if such default occurs
with respect to Optional Securities after the First Closing Date, this Agreement
will not terminate as to the Firm Securities or any Optional Securities
purchased prior to such termination). As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
9. Qualified Independent Underwriter. The Company hereby
confirms that at its request Bear, Xxxxxxx & Co. Inc. has without compensation
acted as "qualified independent underwriter" (in such capacity, the "QIU")
within the meaning of Rule 2720 of the Conduct Rules of the National Association
of Securities Dealers, Inc. in connection with the offering of the Offered
Securities. The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon the QIU's acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage or action as such expenses are incurred.
10. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Underwriters is not consummated, the Company shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 5(h) and the respective obligations of the Company and the Underwriters
pursuant to Section 7 and the obligations of the Company pursuant to Section 9
shall remain in effect, and if any Offered Securities have been purchased
hereunder the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(d),
the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
11. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representatives, c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Loews Cineplex
Entertainment Corporation, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxxx X. Xxxxx, President and Chief Executive Officer, Xxxx X.
Xxxxxx, Senior Vice President, Chief Financial Officer and Treasurer, and Xxxx
X. XxXxxxx, Xx., Senior Vice President and General Counsel; provided, however,
that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder.
20
13. Representation of Underwriters. The Representatives will act
for the several Underwriters in connection with this financing, and any action
under this Agreement taken by the Representatives jointly or by CSFBC will be
binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed 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 Agreement.
15. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of New York
in any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
21
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
LOEWS CINEPLEX ENTERTAINMENT CORPORATION
By..................................................
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
BEAR, XXXXXXX & CO. INC.
BT ALEX. XXXXX INCORPORATED
XXXXXXX, SACHS & CO.
XXXXX XXXXXX INC.
Acting on behalf of themselves and as the Representatives of the
several Underwriters
By CREDIT SUISSE FIRST BOSTON CORPORATION
By..................................................
Name:
Title:
22
SCHEDULE A
Number of
Firm Securities
to be Purchased
---------------
Credit Suisse First Boston Corporation..................
Bear, Xxxxxxx & Co. Inc.................................
BT Alex. Xxxxx Incorporated.............................
Xxxxxxx, Sachs & Co.....................................
Xxxxx Xxxxxx Inc........................................
---------------
Total........................ 10,000,000
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