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Exhibit 2.h
CVS Automatic Common Exchange Security Trust
$_____ Trust Automatic Common Exchange Securities
(subject to exchange into shares of Common Stock, par value
$.01 per share of CVS Corporation)
Underwriting Agreement
May __, 1998
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
As representative (the "Representative")
of the several Underwriters, c/o Goldman, Sachs & Co.)
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
CVS Automatic Common Exchange Security Trust, a trust duly created under
the laws of the State of New York (such trust and the trustees thereof acting in
their capacities as such being referred to herein as the "Trust"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
2,650,000 shares of the $____ Trust Automatic Common Exchange Securities of the
Trust specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of 397,000 additional shares of the $____
Automatic Common Exchange Securities (the "Optional Securities") (the Firm
Securities and the Optional Securities which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Securities").
The $____ Trust Automatic Common Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Common Exchange Securities". Each Automatic Common
Exchange Security will be exchanged for one or fewer shares of Common Stock, par
value $.01 per share ("Stock"), of CVS Corporation, a Delaware corporation (the
"Company"), on May __, 2001 (the "Exchange Date") to be delivered pursuant to a
forward purchase contract (the "Contract"), dated as of May __, 1998, between
the Trust and an existing stockholder of the Company (the "Selling
Stockholder"). The Trust has entered into a Contract with the Selling
Stockholder obligating the Selling Stockholder to deliver to the Trust on the
Exchange Date a number of shares of Stock equal to the product of the Exchange
Rate (as such term is defined in the Trust Prospectus (as defined in Section
1(c)(i))) times the initial number of shares of Stock subject to such Contract.
The Selling Stockholder's obligations under such Contract will be secured by a
pledge of shares of Stock and, if applicable, other collateral pursuant to the
terms of a collateral agreement, dated as of May __, 1998 (the "Collateral
Agreement"), among the Selling Stockholder, The Chase Manhattan Bank, as
collateral agent (in such capacity, the "Collateral Agent"), and the Trust.
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1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters, the Trust and the Selling Stockholder that:
(i) A registration statement on Form S-3 (File No. 333-52055) (the
"Initial Company Registration Statement") in respect of the shares of
Stock deliverable pursuant to the Contracts has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Company
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; no other document with
respect to the Initial Registration Statement or document incorporated by
reference therein has heretofore been filed with the Commission; and no
stop order suspending the effectiveness of the Initial Company
Registration Statement or any post-effective amendment thereto has been
issued and no proceeding for that purpose has been initiated or threatened
by the Commission (any preliminary prospectus included in the Initial
Company Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act
is hereinafter called a "Company Preliminary Prospectus"; the various
parts of the Initial Company Registration Statement, including all
exhibits thereto and including (A) the information contained in the form
of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof and deemed by virtue
of Rule 430A under the Act to be part of the Initial Company Registration
Statement at the time it was declared effective and (B) the documents
incorporated by reference in the prospectus contained in the Initial
Company Registration Statement at the time such part of the Initial
Company Registration Statement became effective, each as amended at the
time such part of the Initial Company Registration Statement became
effective, are hereinafter collectively called the "Company Registration
Statement"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Company Prospectus";
the Trust Registration Statement (as defined in Section 1(c)(i) hereof)
and the Company Registration Statement are hereinafter collectively called
the "Registration Statements" and the Trust Prospectus and the Company
Prospectus are hereinafter collectively called the "Prospectuses"; any
reference herein to any Company Preliminary Prospectus or the Company
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of such Company Preliminary Prospectus or Company
Prospectus, as the case may be; any reference to any amendment or
supplement to any Company Preliminary Prospectus or the Company Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Company Preliminary Prospectus or Company Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Company Preliminary
Prospectus or Company Prospectus, as the case may be; and any reference to
any amendment to the Company Registration Statement shall be deemed to
refer to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Company Registration Statement that is incorporated by reference
in the Company Registration Statement);
(ii) No order preventing or suspending the use of any Company
Preliminary Prospectus has been issued by the Commission, and each Company
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the
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Underwriters through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein or by
the Selling Stockholder expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Company
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 Company 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 the Underwriters through ▇▇▇▇▇▇▇, Sachs & Co.
expressly for use therein;
(iv) The Company Registration Statement conforms, and the Company
Prospectus and any further amendments or supplements to the Company
Registration Statement or the Company Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date as to the Company Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Company Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
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 the
Underwriters through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein or by
the Selling Stockholder for use in the preparation of the answers therein
to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Company 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, which loss or
interference would have a material adverse effect on the current or future
general affairs, management, financial position, stockholders' equity,
properties or results of operations of the Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect"), otherwise than as set
forth or contemplated in the Company Prospectus; and, since the respective
dates as of which information is given in the Company Registration
Statement and the Company Prospectus, there has not been any change in the
capital stock, short-term debt or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity,
properties or results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Company Prospectus;
(vi) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus or
such as do not materially affect the value of such property and do not
interfere with the use made and
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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 interfere with
the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
with corporate power and authority to own its properties and conduct its
business as described in the Company Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(viii) The Company has an authorized capitalization as set forth in
the Company Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description of the Stock
contained in the Company Prospectus;
(ix) Each subsidiary of the Company that is material to the Company
and its subsidiaries taken as a whole (collectively, the "Significant
Subsidiaries") is listed on Schedule A hereto, together with its
jurisdiction of incorporation and the beneficial ownership of the Company
therein. Each Significant Subsidiary has been duly incorporated and is an
existing 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 Prospectuses; and
each Significant Subsidiary of the Company has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases property or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; all of
the issued and outstanding capital stock of each Significant Subsidiary of
the Company has been duly authorized and validly issued and is fully paid
and nonassessable; and the capital stock of each Significant Subsidiary
owned by the Company, directly or through subsidiaries, is owned free and
clear of any mortgage, pledge, lien, security interest, claim, encumbrance
or defect of any kind.
(x) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
which conflict, breach, violation or default would have a Material Adverse
Effect, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws of the Company or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration under
the Act of the shares of Stock 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 of Stock by the Trust pursuant to the
Contracts;
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(xi) Except as described in the Prospectus (A) neither the Company
nor any of its Significant Subsidiaries is in violation of its charter or
by-laws, (B) neither the Company nor any of its subsidiaries is in
violation of any applicable law, ordinance, administrative or governmental
rule or regulation, or any order, decree or judgment of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries and (C) no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event
of default exists, or as a result of consummation of the sale of the
Securities will exist, under any indenture, mortgage, loan agreement,
note, lease, permit, license or other agreement or instrument to which the
Company or any of its subsidiaries is a party or to which any of the
properties, assets or operations of the Company or any such subsidiary is
subject, except, in the case of clauses (B) and (C), for such violations
and defaults that would not have a Material Adverse Effect.
(xii) The statements set forth in the Company Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock are accurate, complete and
fair;
(xiii) Other than as set forth in the Company Prospectus, there are
no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xiv) The Company is not and, after giving effect to the offering
and sale of the Securities, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment Company
Act");
(xv) The Stock is listed on the New York Stock Exchange;
(xvi) The Company 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 Securities; and
(xvii) Neither the Company nor any of its subsidiaries does business
with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes;
(xviii) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xix) The Company and its subsidiaries possess adequate
certificates, authorizations, licenses or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them except as would not have a Material Adverse Effect and
have not received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization, license or permit
that individually or in the aggregate could have a Material Adverse
Effect.
(xx) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights,
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confidential information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others with
respect to any intellectual property rights that, individually or in the
aggregate, would have a Material Adverse Effect.
(xxi) Except as disclosed in the Company Prospectus and except as
would not have a Material Adverse Effect, the properties, assets and
operations of each of the Company and its subsidiaries are in compliance
with all applicable federal, state, local and foreign laws (including,
without limitation, common law), rules and regulations, orders, decrees,
judgments, permits and licenses relating to worker health and safety, and
to the protection and clean-up of the natural environment and to the
protection or preservation of natural resources, including, without
limitation, those relating to the processing, manufacturing, generation,
handling, disposal, transportation or release of hazardous materials
(collectively, "Environmental Laws"). Except as disclosed in the Company
Prospectus and except as would not have a Material Adverse Effect, (A) to
the Company's knowledge, none of the Company or any of its subsidiaries is
the subject of any federal, state, local or foreign investigation pursuant
to Environmental Laws, (B) none of the Company or any of its subsidiaries
has received any written notice or claim pursuant to Environmental Laws
and (C) there are no pending, or, to the knowledge of the Company,
threatened actions, suits or proceedings against the Company, any of its
subsidiaries or its properties, assets or operations, in connection with
any Environmental Laws. The term "hazardous materials" shall mean those
substances that are regulated by or pursuant to any applicable
Environmental Laws.
(xxii) The Company and each of its subsidiaries have filed all tax
returns required to be filed, which returns are complete and correct in
all material respects, and neither the Company nor any of its subsidiaries
is in default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto, in each case except
as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(xxiii) 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 subsidiary participate or as to
which the Company or any subsidiary has any liability (the "ERISA Plans")
is in compliance 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, nor does the
Company expect that any such liability will be incurred, that would have a
Material Adverse Effect. Except as described in the Prospectuses, (i) the
value of the aggregate vested and nonvested benefit liabilities under each
of the ERISA Plans that is subject to Section 412 of the Code, determined
as of the end of such ERISA Plan's most recent ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such
Plan's most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such ERISA Plan allocable to such
benefit liabilities by an amount that would have a Material Adverse Effect
and (ii) 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 have a Material Adverse
Effect.
(xxiv) The Company and each of its Significant Subsidiaries
maintains reasonably adequate insurance covering their properties,
operations, personnel and businesses in accordance with customary industry
practice to protect the Company and each of its Significant Subsidiaries
and their businesses.
(b) The Selling Stockholder represents and warrants to, and agrees with,
each of the Underwriters, the Company and the Trust that:
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(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by the Selling Stockholder of this Agreement,
the Contract, the Collateral Agreement, and the Power of Attorney and POA
Custody Agreement hereinafter referred to, and each other agreement
relating to the foregoing to which it is a party (collectively, the
"Selling Stockholder Agreements"), and for the consummation of the
transactions contemplated hereby and thereby, have been obtained; and the
Selling Stockholder has full right, power and authority to enter into the
Selling Stockholder Agreements and to consummate the transactions
contemplated hereby and thereby;
(ii) The compliance by the Selling Stockholder with all of the
provisions of this Agreement and the other Selling Stockholder Agreements
and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, the trust agreement
constituting the Selling Stockholder, or any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Selling Stockholder is a party or by which the Selling Stockholder is
bound or to which any of the property or assets of the Selling Stockholder
is subject, nor will such action result in any violation of the provisions
of the trust agreement constituting the Selling Stockholder, or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Selling Stockholder or the
property of the Selling Stockholder;
(iii) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder. Each other Selling Stockholder
Agreement has been duly authorized, executed and delivered by the Selling
Stockholder and constitutes a valid and legally binding agreement of the
Selling Stockholder enforceable in accordance with its respective terms,
subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles;
(iv) The Selling Stockholder has, and immediately prior to each Time
of Delivery (as defined in Section 4(a) hereof) the Selling Stockholder
will have, good and valid title to the shares of Stock to be pledged and
assigned by it under the Collateral Agreement, free and clear of all
liens, encumbrances, equities or claims other than those created pursuant
to the Collateral Agreement; the Selling Stockholder has full right, power
and authority to pledge and assign the shares of Stock to be pledged and
assigned by the Selling Stockholder pursuant to such Collateral Agreement;
and upon delivery of such shares of Stock to the Collateral Agent, as
defined in the Collateral Agreement, for the benefit of the Trust and
payment therefor pursuant to the Contract, good and valid title to such
shares of Stock, free and clear of all liens, encumbrances, equities or
claims, will pass to the Trust;
(v) The representations and warranties of the Selling Stockholder
set forth in Section 3 of the Collateral Agreement are true and correct on
and as of the date hereof with the same effect as though such
representations and warranties had been set forth in full in this
Agreement;
(vi) During the period beginning from the date hereof and continuing
to and including the date 90 days after the First Time of Delivery, not to
directly or indirectly offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any Stock or any securities of the
Company that are substantially similar to the Stock, including but not
limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, Stock or any such substantially
similar securities, or enter into any swap, option, future, forward or
other agreement that transfers, in whole or in part, the economic
consequence of ownership of Stock or any securities substantially similar
to the Stock, in each case without your prior written consent;
(vii) The 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
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result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities; and
(viii) To the extent that any statements or omissions made in the
Registration Statements, any Preliminary Prospectus, the Prospectuses or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company or the Trust,
as the case may be, by the Selling Stockholder expressly for use therein,
such Preliminary Prospectus and the Registration Statements did, and the
Prospectuses and any further amendments or supplements to the Registration
Statements and the Prospectuses, when they become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act and the Investment Company Act and
the rules and regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(ix) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder agrees to deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(x) Certificates in negotiable form representing all of the shares
of Stock to be pledged and assigned by the Selling Stockholder hereunder
have been placed in custody under a Custody Agreement, in the form
heretofore furnished to you (the "POA Custody Agreement"), duly executed
and delivered by the Selling Stockholder to [Name of Stockholder
Custodian], as custodian (the "POA Custodian"), and the Selling
Stockholder has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you (the "Power of Attorney"), appointing
[Names of Attorneys-in-Fact], and each of them, as the Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority
to execute and deliver this Agreement on behalf of the Selling
Stockholder, deliver this Agreement on behalf of the Selling Stockholder,
to execute and deliver the Contract and the Collateral Agreement, to
authorize the delivery of the shares of Stock to be pledged and assigned
by the Selling Stockholder hereunder and otherwise to act on behalf of the
Selling Stockholder in connection with the transactions contemplated by
this Agreement, the POA Custody Agreement, the Contract and the Collateral
Agreement; and
(xi) The shares of Stock represented by the certificates held in
custody for the Selling Stockholder under the POA Custody Agreement are
subject to the interests of the Collateral Agent for the benefit of the
Trust hereunder, and the arrangements made by the Selling Stockholder for
such custody, and the appointment by the Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent
irrevocable; the obligations of the Selling Stockholder hereunder shall
not be terminated by operation of law, whether by the dissolution of the
Selling Stockholder, or by the death or incapacity of any executor or
trustee or the termination of such estate or trust, or by the occurrence
of any other event; the Selling Stockholder should be dissolved or
terminated, or if any other such event should occur, before the delivery
of the shares of Stock hereunder, certificates representing the shares of
Stock shall be delivered by or on behalf of the Selling Stockholder in
accordance with the terms and conditions of this Agreement, of the
Contract, of the Collateral Agreement and of the POA Custody Agreement, as
appropriate, and actions taken by the Attorneys-in-Fact pursuant to the
Powers of Attorney shall be as valid as if such dissolution, termination
or other event had not occurred, regardless of whether or not the POA
Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such dissolution or other event.
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(c) The Trust represents and warrants to, and agrees with, each of the
Underwriters, the Selling Stockholder and the Company that:
(i) A notification on Form N-8A (the "Notification") of registration
of the Trust as an investment company has been filed with the Commission;
a registration statement on Form N-2 (File No. 333-41617 and File No.
811-08539) (the "Initial Trust Registration Statement") in respect of the
Securities has been filed with the Commission; the Initial Trust
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to
you for each of the other Underwriters, have been declared effective by
the Commission in such form; no other document with respect to the Initial
Trust Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Trust Registration Statement or any post-effective amendment thereto has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Trust Registration Statement or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission under the
Act is hereinafter called a "Trust Preliminary Prospectus"; the various
parts of the Initial Trust Registration Statement including all exhibits
thereto and including the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 497(h) under the Act
in accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Trust Registration Statement at
the time it was declared effective, as amended at the time such part of
the Registration Statement became effective, are hereinafter collectively
called the "Trust Registration Statement"; and such final prospectus, in
the form first filed pursuant to Rule 497(h) under the Act, is hereinafter
called the "Trust Prospectus");
(ii) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Investment
Company Act, and the rules and regulations of the Commission thereunder,
and did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Trust
by the Underwriters through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein
or by the Selling Stockholder expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(iii) The Notification and the Trust Registration Statement conform,
and the Trust Prospectus and any further amendments or supplements to the
Notification, the Trust Registration Statement or the Trust Prospectus
will conform, in all material respects to the requirements of the Act and
the Investment Company Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Trust Registration Statement and any amendment thereto and as of
the applicable filing date as to the Trust Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein 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 Trust by the Underwriters through ▇▇▇▇▇▇▇, Sachs & Co.
expressly for use therein or by the Selling Stockholder expressly for use
in the preparation of the answers therein to Item 7 of Form S-3;
(iv) Since the respective dates as of which information is given in
the Trust Registration Statement and the Trust Prospectus, there has not
been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
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management, financial position, results of operations, prospects,
investment objectives, investment policies, or liabilities of the Trust,
otherwise than as set forth or contemplated in the Trust Prospectus, and
there have been no transactions entered into by the Trust which are
material to the Trust other than those in the ordinary course of its
business or as described in the Trust Prospectus;
(v) The Trust has been duly formed, is validly existing as a trust
under the laws of the State of New York, with power and authority to own
its properties and conduct its business as described in the Trust
Prospectus and to enter into and perform its obligations under this
Agreement and the Fundamental Agreements (as defined in Section 1(c)(vii)
hereof); the Trust has all necessary consents, approvals, authorizations,
orders, registrations or qualifications, of and from, and has made all
declarations and filings with, all courts and governmental agencies and
bodies, to own and use its assets and to conduct its business in the
manner described in the Trust Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have a material adverse
effect on the Trust and except the registration under the Act of the
Securities 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 Securities by the
Underwriters; the Trust has no subsidiaries;
(vi) The Trust is registered with the Commission under the
Investment Company Act as a non-diversified, closed-end management
investment company and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Trust, threatened by the Commission; no person is serving
or acting as an officer or trustee of the Trust except in accordance with
the provisions of the Investment Company Act;
(vii) Each of the Contract, the Collateral Agreement, the
Administration Agreement between The Chase Manhattan Bank and the Trust
(the "Administration Agreement"), the Custodian Agreement between The
Chase Manhattan Bank and the Trust (the "Custodian Agreement"), the Paying
Agent Agreement between ChaseMellon Shareholder Services, L.L.C. and the
Trust (the "Paying Agent Agreement"), the Fund Expense Agreement between
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and The Chase Manhattan Bank (the "Fund Expense
Agreement") and the Fund Indemnity Agreement between ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
and the Trust (the "Fund Indemnity Agreement") (the Contract, the
Collateral Agreement, the Administration Agreement, the Custodian
Agreement, the Paying Agent Agreement, the Fund Expense Agreement and the
Fund Indemnity Agreement are herein collectively called the "Fundamental
Agreements") has been duly authorized, executed and delivered by the Trust
and constitutes a valid and legally binding agreement of the Trust,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(viii) The Amended and Restated Trust Agreement dated as of May __,
1998 (the "Trust Agreement") and the Fundamental Agreements comply with
all applicable provisions of the Acts, and all approvals of such
agreements required under the Investment Company Act by the holders of the
Automatic Common Exchange Securities and the trustees have been obtained
and are in full force and effect;
(ix) All of the outstanding Automatic Common Exchange Securities
have been duly and validly authorized and issued and are fully paid and
non-assessable, and the form of certificates used to evidence the
Automatic Common Exchange Securities is in due and proper form and
complies with all provisions of applicable law; the Trust Agreement and
the Fundamental Agreements conform to the descriptions thereof contained
in the Trust Prospectus;
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(x) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will be validly issued, fully paid
and nonassessable; the Securities will conform to the description thereof
in the Trust Prospectus; no person has rights to registration of any
securities because of the filing of the Trust Registration Statement;
(xi) The issue and sale of the Securities and the compliance by the
Trust with all of the provisions of the Securities, this Agreement and
each Fundamental Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, the Trust Agreement or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust is a party
or by which the Trust is bound or to which any of the property or assets
of the Trust is subject, nor will such action result in any violation of
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the consummation
by the Trust of the transactions contemplated by this Agreement or the
Fundamental Agreements, other than the registration under the Act of the
Securities 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 Securities by the
Underwriters;
(xii) The Trust is not in default in the performance or observance
of any obligation, covenant or condition thereunder and, to the knowledge
of the Trust, no event has occurred that with the passage of time or the
giving of notice or both would constitute a default thereunder; the Trust
is not in default in the performance or observance of any obligation,
covenant or condition contained in any other agreement or instrument to
which it is a party or by which it or any of its properties may be bound;
(xiii) The statements set forth in the Trust Prospectus under the
caption "Description of the Securities", insofar as they purport to
constitute a summary of the terms of the Securities, under the caption
"Certain Federal Income Tax Considerations", and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and agreements referred to therein, are accurate, complete and fair;
(xiv) Other than as set forth in the Trust Prospectus, there are no
legal or governmental proceedings pending to which the Trust is a party or
of which any property of the Trust is the subject which, if determined
adversely to the Trust, would individually or in the aggregate have a
material adverse effect on the current or future financial position, or
results of operations of the Trust; and, to the best of the Trust's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xv) There are no material restrictions, limitations or regulations
with respect to the ability of the Trust to invest its assets as described
in the Trust Prospectus, other than as described therein;
(xvi) The Automatic Common Exchange Securities outstanding prior to
the issuance of the Securities and the Securities have been approved for
listing on the New York Stock Exchange subject to notice of issuance; the
Trust's Registration Statement on Form 8-A under the Exchange Act is
effective; and
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(xvii) Coopers & ▇▇▇▇▇▇▇ L.L.P., who have certified certain
financial statements included in the Trust Registration Statement, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, (a) the Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at a
purchase price of $______ per Security, the number of Firm Securities (to be
adjusted by you so as to eliminate fractional securities determined by
multiplying the aggregate number of Securities to be sold by the Trust by a
fraction, the numerator of which is the aggregate number of Firm Securities to
be purchased by such Underwriter as set forth opposite the name of such
underwriter in Schedule 1 hereto and the denominator of which is the aggregate
number of firm Securities to be purchased by all of the Underwriters from the
Trust hereunder and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Securities as provided below,
the Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at
the price per Security set forth in clause (a) of this Section 2, that portion
of the number of Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional
securities)determined by multiplying such number of Optional Securities by a
fraction the numerator of which is the maximum number of Optional Securities
which such Underwriter is entitled to purchase as set forth opposite the name of
such Underwriter in Schedule 1 hereto and the denominator of which is the
maximum number of Optional Securities that all of the Underwriters are entitled
to purchase hereunder. The agreements in this Section made by the Trust are for
the benefit of and enforceable by each of the Underwriters and the Selling
Stockholder. The agreements in this Section made by the Underwriters are for the
benefit of and are enforceable by the Selling Stockholder and the Trust.
The Trust hereby grants to each of the Underwriters the right to purchase
at their election up to Optional Securities, at the purchase price per Security
set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised only by written notice from you to
the Trust (with copies to the Selling Stockholder's Attorney-in-Fact), given
within a period of 30 calendar days after the date of this Agreement and setting
forth the aggregate number of Optional Securities to be purchased and the date
on which such Optional Securities are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Trust otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
As compensation to the Underwriters for their commitments hereunder, and
in view of the fact that the proceeds of the sale of the Securities will be used
by the Trust as specified in the Contract, the Selling Stockholder at each Time
of Delivery will pay to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., an amount equal to $____ per
Security for the Securities to be delivered at such Time of Delivery.
Alternatively, as a matter of convenience, ▇▇▇▇▇▇▇, Sachs & Co. may deduct such
amount from the purchase price of the Securities, and in such event the Selling
Stockholder shall be deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm Securities,
the Underwriters propose to offer the Firm Securities for sale upon the terms
and conditions set forth in the Trust Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight hours' prior
notice to the Trust, shall be delivered by or on behalf of the Trust to ▇▇▇▇▇▇▇,
Sachs & Co. through the facilities of The Depository Trust Company ("DTC"), for
the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer to the order of the
Trust in Federal (same day) funds. The Trust will cause the certificates
representing the Securities to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery (as
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defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on May __, 1998 or such other time and date as you and the Trust may agree
upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New
York City time, on the date specified by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in the written
notice given by ▇▇▇▇▇▇▇, Sachs & Co. of the Underwriters' election to purchase
the Optional Securities, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and
the Trust may agree upon in writing. Such time and date for delivery of the Firm
Securities is herein called the "First Time of Delivery", such time and date for
delivery of the Optional Securities, 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".
At each Time of Delivery, the Selling Stockholder will pay, or cause to be
paid, the compensation payable at such Time of Delivery to the Underwriters
under Section 2 hereof by wire transfer of Federal (same-day) funds to the
account specified by ▇▇▇▇▇▇▇, Sachs & Co.
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7(p) hereof, will be delivered at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at such Time
of Delivery. A meeting will be held at the Closing Location at 3:30 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 City are generally authorized or obligated by
law or executive order to close.
5. (a) The Trust agrees with each of the Underwriters:
(i) To prepare the Trust Prospectus in a form approved by you and to
file such Trust Prospectus pursuant to Rule 497(h) 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 Trust Registration
Statement or Trust Prospectus prior to the last Time of Delivery which
shall be disapproved by you promptly after reasonable notice thereof; to
advise you, promptly after it receives notice thereof, of the time when
any amendment to the Trust Registration Statement has been filed or
becomes effective or any supplement to the Trust 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 Trust with the Commission pursuant to the Act,
the Investment Company Act and the Exchange Act subsequent to the date of
the Trust Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities; 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 Trust Preliminary Prospectus or prospectus or any order
pursuant to Section 8(e) of the Investment Company Act, of the suspension
of the qualification of the Securities 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 Trust Registration Statement or Trust 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 Trust
Preliminary Prospectus or prospectus or suspending any such qualification
or order pursuant to Section 8(e) of the Investment Company Act, promptly
to use its best efforts to obtain the withdrawal of such order;
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(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities 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 Securities, provided that in connection therewith
the Trust shall not be required to qualify as a foreign trust or
association or to file a general consent to service of process in any
jurisdiction;
(iii) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, at the expense of the Selling Stockholder, to furnish the
Underwriters with copies of the Trust 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 Trust Prospectus in connection with the
offering or sale of the Securities and if at such time any event shall
have occurred as a result of which the Trust 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 Trust Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement the
Trust Prospectus in order to comply with the Act, to notify you and upon
your request to prepare and furnish without charge to the Underwriters and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Trust Prospectus or a supplement to the
Trust Prospectus which will correct such statement or omission or effect
such compliance; and in case the Underwriters are required to deliver a
prospectus in connection with sales of any of the Securities at any time
nine months or more after the time of issue of the Trust Prospectus, upon
your request but at the expense of the Underwriters, to prepare and
deliver to the Underwriters as many copies as you may request of an
amended or supplemented Trust Prospectus complying with Section 10(a)(3)
of the Act;
(iv) To make generally available to the Trust's security holders as
soon as practicable, but in any event not later than eighteen months after
the effective date of the Trust Registration Statement (as defined in Rule
158(c) under the Act), an earnings statement of the Trust (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
Trust, Rule 158);
(v) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Trust
Prospectus under the caption "Use of Proceeds"; and
(vi) To use its best efforts to maintain the listing of the
Automatic Common Exchange Securities and the Securities on the New York
Stock Exchange.
(b) The Company agrees with each of the Underwriters:
(i) To prepare the Company Prospectus in a form approved by you and
to file such Company 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 Company Registration
Statement or Company Prospectus prior to the last Time of Delivery which
shall be disapproved by you promptly after reasonable notice thereof, such
disapproval not to be unreasonably exercised; to advise you, promptly
after it receives notice thereof, of the time when any amendment to the
Company Registration Statement has been filed or becomes effective or any
supplement to the Company Prospectus or any amended Company Prospectus has
been filed and to furnish you with copies thereof; to file promptly all
reports and any
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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 Company Prospectus and
for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Securities; 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 Company
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the shares of Stock to be delivered pursuant to the
Contracts 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 Company
Registration Statement or Company Prospectus or for additional
information; and, in the event of the issuance of any stop order or any
order preventing or suspending the use of any Company Preliminary
Prospectus or prospectus or suspending any such qualification, to promptly
use its best efforts to obtain the withdrawal of such order;
(ii) 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;
(iii) Prior to 10:00 a.m. New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Company 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 Company
Prospectus in connection with the offering or sale of the Securities and
if at such time any events shall have occurred as a result of which the
Company 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 Company Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Company Prospectus or to file under the
Exchange Act any document incorporated by reference in the Company
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 the Underwriters and to any dealer in securities as many
copies as you may from time to time reasonably request of an amended
Company Prospectus or a supplement to the Company Prospectus which will
correct such statement or omission or effect such compliance, and in case
the Underwriters are required to deliver a prospectus in connection with
sales of any of the Securities at any time nine months or more after the
time of issue of the Company Prospectus, upon your request but at the
expense of the Underwriters, to prepare and deliver to the Underwriters as
many copies as you may request of an amended or supplemented Company
Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(v) During the period beginning from the date hereof and continuing
to and including the date 90 days after the First Time of Delivery, not to
directly or indirectly offer, sell, contract to sell or otherwise dispose
of any Stock or any securities of the Company (other than pursuant to
employee
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plans described in the Prospectus) that are substantially similar to the
Stock, including but not limited to any securities that are convertible
into or exchangeable for, or that represent the right to receive, Stock or
any such substantially similar securities, or enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part,
the economic consequence of ownership of Stock or any securities
substantially similar to the Stock, in each case without your prior
written consent;
(vi) 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, stockholders' 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;
(vii) During a period of five 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 (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; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission); and
(viii) To use its best efforts to maintain the listing of the Stock
on the New York Stock Exchange.
6. The Trust, the Company and the Selling Stockholder covenant and agree
with each of the Underwriters that:
(a) the Company will pay or cause to be paid: any and all expenses
incident to the performance of or compliance with its obligations under
this agreement, including, without limitation, (i) the fees, disbursements
and expenses of the Company's counsel and accountants (including in
connection with the delivery of opinions and/or comfort letters) in
connection with the registration of the Securities and the Stock under the
Act and the performance of the Company's obligations hereunder; (ii) all
expenses, including filing fees, in connection with the preparation,
printing and filing of the Company Registration Statement, Company
Preliminary Prospectus and the Company Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof and
of the Notification, the Trust Registration Statement, any Trust
Preliminary Prospectus and the Trust Prospectus to the Underwriters and
dealers; (iii) the cost of printing or producing this Agreement and any
Blue Sky Memorandum, closing documents (including any compilations
thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities and the Stock; (iv) all
expenses in connection with the qualification of the Securities and the
Stock for offering and sale under state securities laws as provided in
Section 5(b)(ii) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in
connection with any Blue Sky survey; (v) the filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the NASD of the terms of the sale of
the Stock; (vi) all fees and expenses in connection with the preparation
and filing of a registration statement under the Exchange Act relating to
the Stock and all costs and expenses incident to the listing of the Stock
on the New York Stock Exchange or other national or regional exchange;
(vii) the costs and charges of any transfer agent or registrar for the
Stock; (viii) the cost
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of preparing certificates representing the Stock; (ix) all reasonable fees
and expenses of one legal counsel to the Selling Stockholder in connection
with this Agreement; and (x) all other costs and expenses incident to the
performance of all obligations hereunder which are not otherwise
specifically provided for in this Section 6;
(b) the Selling Stockholder will pay or cause to be paid the
following: (i) all expenses and taxes incident to the sale and delivery of
the shares of Stock to be sold or pledged by the Selling Stockholder; (ii)
all expenses, [other than filing fees], in connection with the
preparation, printing and filing of the Notification, the Trust
Registration Statement, any Trust Preliminary Prospectus and the Trust
Prospectus and amendments and supplements thereto; (iii) [the filing fees
incident to,] and the fees and disbursements of counsel for the
Underwriters in connection with, securing any required review by the NASD
of the terms of the sale of the Securities; (iv) all fees and expenses in
connection with the preparation and filing of a registration statement
under the Exchange Act relating to the Securities and all costs and
expenses incident to the listing of the Securities on the New York Stock
Exchange or other national or regional exchange [other than the filing fee
relating thereto]; (v) all fees, expenses and costs in connection with the
marketing of the Securities; (vi) any fees and expenses of counsel for the
Selling Stockholder other than the one counsel referred to in clause (a)
of this Section 6; (vii) the fees and expenses of the Attorney-in-Fact and
the POA Custodian; and (vii) any of the costs and expenses referred to in
clause (a) of this Section 6, to the extent such expenses are over and
above the expenses that would have been incurred by the Company in
connection with an offering of Stock; and
(c) the Underwriters will pay or cause to be paid: (i) the
organizational expenses and the ongoing expenses of the Trust and all
fees, disbursements and expenses of the Trust's counsel and the Trust's
accountants in connection with the registration of the Securities under
the Act and the Investment Company Act; [(ii) the filing fees relating to
the filing of the Notification and the Trust Registration Statement and
amendments and supplements thereto; (iv) the filing fees incident to
securing any required review by the NASD of the terms of the sale of the
Securities; and (v) the filing fee relating to the incident to the listing
of the Securities on the New York Stock Exchange]. In connection with
Clause (b)(i) of the preceding sentence, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. agrees to
pay New York State stock transfer tax, and the Selling Stockholder agrees
to reimburse ▇▇▇▇▇▇▇, Sachs & Co. for associated carrying costs if such
tax payment is not rebated on the day of payment and for any portion of
such tax payment not rebated.
It is understood, however, that the Company shall bear, and the Selling
Stockholder shall not be required to pay or to reimburse the Company for, the
cost of any other matters not directly relating to the sale and purchase of the
shares of Stock pursuant to this Agreement, and that, except as provided in this
Section 6, Section 8 and Section 10 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, transfer
taxes on resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties of the Trust, the Company
and the Selling Stockholder herein are, at and as of such Time of Delivery, true
and correct, the condition that the Trust, the Company and the Selling
Stockholder shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectuses shall have been filed with the Commission pursuant to
Rule 424(b) or Rule 497(h), as applicable, within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Sections 5(a)(i) and 5(b)(i) hereof; no stop order suspending
the effectiveness of the Registration Statements or any part thereof, and no
order pursuant to Section 8(e) of the
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Investment Company Act affecting this transaction, 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) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Trust, shall have furnished to
you their written opinion or opinions, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Trust (x) has been duly formed and is validly existing as a
trust under the laws of the State of New York and (y) is registered with
the Commission under the Investment Company Act as a non-diversified,
closed-end management investment company;
(ii) The Securities have been duly authorized and validly issued and
are fully paid and non-assessable and are entitled to the benefits
provided by the Trust Agreement;
(iii) The Securities will be exchanged for shares of Stock in
accordance with the terms of the Trust Agreement and the Contract (unless
a Reorganization Event (as defined in the Contract) occurs or the Selling
Stockholder selects the Cash Settlement Alternative (as defined in the
Contract) thereunder), subject to bankruptcy, insolvency, fraudulent
transfers, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iv) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Trust under the Federal laws of the
United States and the laws of the State of New York for the issuance, sale
and delivery of the Securities by the Trust to you have been obtained or
made;
(v) This Agreement has been duly authorized, executed and delivered
by the Trust;
(vi) Each Fundamental Agreement has been duly authorized, executed
and delivered by the Trust and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a valid and legally
binding agreement of the Trust enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfers, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(vii) The statements in the Trust Prospectus under the caption
"Certain Federal Income Tax Considerations", to the extent that such
statements constitute summaries of the legal matters referred to therein,
fairly represent their opinion as to such matters;
(viii) On the basis of information which was reviewed in the course
of the performance of the services referred to in their opinion,
considered in the light of their understanding of the applicable law
(including the requirements of Form N-2 and the character of the
Prospectus contemplated thereby) and the experience they have gained
through their practice under the Act and the Investment Company Act, such
counsel, confirm that, in their opinion, the Trust Registration Statement,
as of its effective date, and the Trust Prospectus, as of the date of the
Trust Prospectus, appeared on their face to be appropriately responsive in
all material respects to the requirements of the Act and the Investment
Company Act and the applicable rules and regulations of the Commission
thereunder; and that nothing that came to their attention in the course of
such review has caused them to believe that
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the Trust 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 Trust Prospectus, as of the date of the Trust
Prospectus, contained any untrue statement of a material fact or omitted
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; also, nothing that has come to such counsel's attention in the
course of certain procedures (as described in such opinion) has caused
such counsel to believe that the Trust Prospectus, as of the date and time
of delivery of such opinion, contained any untrue statement of a material
fact or omitted 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; provided, however, that such opinion may state
that the limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration
process are such, however, that such counsel do not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Trust Registration Statement or the Trust
Prospectus except for those made under the captions "Underwriting",
"Investment Objective and Policies" and "Description of the Securities" in
the Trust Prospectus insofar as they relate to provisions of documents
therein described, and such counsel need not express any opinion or belief
as to the financial statements or other financial data contained in the
Trust Registration Statement or Trust Prospectus; and provided further
that such counsel may state that they have not participated in the
preparation of the Company Registration Statement or the Company
Prospectus, and need not express any opinion or belief with respect
thereto or with respect to information relating to the Company contained
in the Trust Prospectus under the captions "Prospectus Summary--The
Company", "Investment Objectives and Policies---The Company" and "Risk
Factors--Risks Relating to the Company and the Company's Industry";
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Trust, shall have furnished to
the Selling Stockholder their written opinion, dated such Time of Delivery, with
respect to paragraphs (i)(y), (iv) and (vii) of subsection (c) above and, in
addition, to the effect that the statements in the Trust Prospectus under the
captions "Underwriting", "Investment Objective and Policies" and "Description of
the Securities", insofar as such statements summarize provisions of documents
referred to therein, are accurate in all material respects and fairly summarize
the matters referred to therein;
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States;
(e) ▇▇▇▇▇, Polk & ▇▇▇▇▇▇▇▇, special counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an existing
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 Company Prospectus;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery)
have been duly and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform to the description of the Stock
contained in the Prospectus;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iv) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the sale of the Shares or the consummation by
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the Company of the transactions contemplated by this Agreement, 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 of Stock by the Trust pursuant to the Contracts
(it being understood that this opinion is limited to those consents,
approvals, authorizations, orders, registrations or qualifications that,
in our experience, are normally applicable to transactions of the type
contemplated by this Agreement);
(v) The statements set forth in the Company Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock (including shares of Stock
subject to the Contracts), insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(vi) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(vii) The documents incorporated by reference in the Company
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
and they have no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may be contained,
in the case of a registration statement which became effective under the
Act, 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, in the case of other documents
which were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading.
Such counsel shall also state that they have not themselves checked the
accuracy or completeness of, or otherwise verified, the information furnished
with respect to other matters in the Company Registration Statement and the
Prospectus but they have generally reviewed and discussed with certain officers
and other representatives of the Company, its independent public accountants and
your representatives and counsel the information furnished, whether or not
subject to their check or verification. On the basis of such review and
discussion, but without independent check or verification, except as stated, (i)
they are of the opinion that the Company Registration Statement, as of its
effective date, and the Company Prospectus, as of its date (except for the
financial statements, including the notes thereto, and supporting schedules and
other financial, statistical and other accounting data included therein or
omitted therefrom, as to which they express no opinion), complied as to form in
all material respects with the requirements of the Act and the rules and
regulations thereunder and (ii) nothing came to their attention that causes them
to believe that (except for the financial statements, including the notes
thereto, and supporting schedules and other financial, statistical and other
accounting data included therein or omitted therefrom, as to which they express
no opinion) the Company Registration Statement, at 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 to make the statements therein not
misleading or that the Company Prospectus, as of its date or as of such Time of
Delivery, included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.
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In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
laws of the United States;
(f) The Underwriters shall have received an opinion, dated such Closing
Date, of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq., Vice President and General Counsel of the
Company, to the effect that:
(i) The Company has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of failure to be so qualified in any
such jurisdiction (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(ii) Each subsidiary of the Company has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; and all of the issued shares of capital
stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(iii) 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 except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries; 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 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 been made, and that they are 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 they believe that both you and they are
justified in relying upon such opinions, abstracts, reports, policies and
certificates);
(iv) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position
stockholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
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(v) The compliance by the Company with all of the provisions of this
Agreement and the consummation of the transactions herein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of
the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation known to such
counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties;
(vi) Neither the Company nor any of its subsidiaries is in violation
of its Certificate of Incorporation or By-laws or in default in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, or lease or agreement or other instrument to which it is a
party or by which it or any of its properties may be bound;
(vii) Such counsel have no reason to believe that any part of the
Company Registration Statement or any amendment thereto, 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
Company Prospectus or any amendment or supplement thereto, as of its issue
date or as of such Time of Delivery, contained any untrue statement of a
material fact or omitted 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, it being understood that such counsel need
express no opinion as to the financial statements, including the notes
thereto, and supporting schedules and other financial, statistical or
other accounting data contained in or omitted from the Company
Registration Statement or the Company Prospectus.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
laws of the United States;
(g) Honigman, Miller, ▇▇▇▇▇▇▇▇ and ▇▇▇▇, special counsel for the Selling
Stockholder, shall have furnished to you their written opinion, dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) A Power-of-Attorney and a Custody Agreement have been duly
authorized, executed and delivered by the Selling Stockholder and
constitute valid and binding agreements of the Selling Stockholder
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ii) This Agreement has been duly authorized, executed and delivered
by or on behalf of the Selling Stockholder; each Selling Stockholder
Agreement has been duly authorized, executed and delivered by or on behalf
of the Selling Stockholder and constitutes a valid and binding agreement
of the Selling Stockholder enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and the compliance by the Selling Stockholder
with all of the provisions of this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any terms or provisions of the trust
agreement under which the Selling Stockholder was formed, or constitute a
default under, any statute, indenture,
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mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Selling Stockholder, or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property of the Selling Stockholder;
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated by this Agreement and the other Selling
Stockholder Agreements except such consents, approvals, authorizations or
orders which have been duly obtained and are in full force and effect,
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 of such
Shares by the Trust;
(iv) Assuming due authorization, execution and delivery thereof in
the State of New York by the Trust and the Collateral Agent, the
Collateral Agreement, together with the delivery of (x) the certificates
in registered form representing the share of Stock pledged thereunder by
the Selling Stockholder and (y) undated stock powers with respect thereto
endorsed in blank, to the Collateral Agent for the benefit of the Trust,
creates in favor of the Collateral Agent for the benefit of the Trust a
perfected security interest in such Stock under the Uniform Commercial
Code as in effect in the State of New York (the "New York UCC"); upon such
delivery, at the First Time of Delivery, assuming that (A) the Collateral
Agent and the Trust acquire the security interest in such shares without
notice of any adverse claim (within the meaning of the New York UCC) and
(B) the Selling Stockholder has rights in the shares of Stock subject to
the Collateral Agreement, the Collateral Agent will acquire such security
interest in such shares of Stock for the benefit of the Trust free of any
adverse claim (within the meaning of the New York UCC); and
(v) Assuming (A) due authorization, execution and delivery of the
Contract and the Collateral Agreement by the Trust and the Collateral
Agreement by the Collateral Agent, (B) the Selling Stockholder continues
to be the sole registered owner of the shares of Stock to be sold by it,
(C) the certificates representing such shares do not contain any notation
of liens or restrictions, (D) the holders of Securities acquire such
shares of Stock without notice of any adverse claim (within the meaning of
the New York UCC) and (E) undated stock powers with respect to the
certificates representing such shares of Stock effectively endorsed in
blank are delivered to the holders of Securities, upon payment for and
delivery to the holders of Securities of the shares of Stock in accordance
with the Contract and Collateral Agreement, the holders of Securities will
acquire all of the rights of the Selling Stockholder in such shares of
Stock and will also acquire their interest in such shares of Stock free of
any adverse claim (within the meaning of the New York UCC).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, [the law under which the Selling Stockholder was constituted], and the
Federal laws of the United States;
(h) On the date of the Trust 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 Trust Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery, KPMG
Peat Marwick LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you;
(i) Since the respective dates as of which information is given in the
Trust Registration Statement and the Trust Prospectus, there shall not have been
any change, or any development involving a prospective
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change, in or affecting the general affairs, management, financial position,
results of operations, prospects, investment objectives, investment policies or
liabilities of the Trust, otherwise than as set forth or contemplated in the
Trust Prospectus, (ii) 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 Company 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 Company Prospectus, and (iii) since the respective dates as
of which information is given in the Company Prospectus there shall not have
been any change in the capital stock, short-term debt 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, taken as a whole, otherwise than as set forth or contemplated in
the Company Prospectus, the effect of which, in any such case described in
clause (i), (ii) or (iii), is in your judgment so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Trust Prospectus;
(j) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities or preferred stock 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 or preferred stock;
(k) 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 securities of the Company or the Trust 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 material 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 your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at such Time of Delivery on the terms and in the
manner contemplated in the Trust Prospectus;
(l) The Securities shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange;
(m) Each Fundamental Agreement shall have been executed and delivered by
all parties thereto and the Selling Stockholder shall have delivered to the
Collateral Agent the number of shares of Stock required by the Collateral
Agreement to be initially pledged thereunder in accordance with the requirements
of such Collateral Agreement;
(n) The Selling Stockholder shall have obtained and delivered to the
Underwriters executed copies of an agreement from each of Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 401(k) Plan Stock Account and the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ Account substantially to the effect set forth in Subsection
1(b)(iv) hereof in form and substance satisfactory to you;
(o) The Trust and the Company shall have complied with the provisions of
Section 5(a)(iii) and 5(b)(iii) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of this
Agreement; and
(p) The Trust, the Company and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery certificates
of officers of the Trust, the Company and the Selling
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Stockholder, respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Trust, the Company and the Selling
Stockholder, respectively, herein and in the Contracts and Collateral Agreements
at and as of such Time of Delivery, as to the satisfaction and performance by
the Trust, the Company and the Selling Stockholder of all of their respective
obligations hereunder and thereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (i) of this Section
(except in the case of the Selling Stockholder) and as to such other matters
relating to the transactions contemplated herein and therein as you may
reasonably request.
8. (a) The Company will indemnify and hold harmless the Trust and each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Trust or such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Company
Preliminary Prospectus or Trust Preliminary Prospectus, either of the
Registration Statements or either of the Prospectuses, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Trust and each Underwriter for any legal or other expenses reasonably incurred
by the Trust or such Underwriter in connection with investigating or defending
any such action or claim 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 or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Company Preliminary Prospectus or Trust Preliminary Prospectus, either of
the Registration Statements or either of the Prospectuses, or any such amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇, Sachs &
Co. expressly for use therein.
(b) The Selling Stockholder will indemnify and hold harmless the Trust and
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Trust or such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Company
Preliminary Prospectus or Trust Preliminary Prospectus, either of the
Registration Statements or either of the Prospectuses, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Company Preliminary
Prospectus or Trust Preliminary Prospectus, either of the Registration
Statements or either of the Prospectuses or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company or the Trust, as the case may be, by the Selling Stockholder expressly
for use therein; and will reimburse the Trust and each Underwriter for any legal
or other expenses reasonably incurred by the Trust or such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Selling Stockholder shall not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Company Preliminary
Prospectus, any Trust Preliminary Prospectus, either of the Registration
Statements or either of the Prospectuses or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriters through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein.
(c) Each Underwriter will indemnify and hold harmless the Company, the
Trust and the Selling Stockholder against any losses, claims, damages or
liabilities to which the Company, the Trust or the Selling Stockholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue
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26
statement of a material fact contained in any Company Preliminary Prospectus or
Trust Preliminary Prospectus, either of the Registration Statements or either of
the Prospectuses, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in any Company Preliminary Prospectus or Trust Preliminary Prospectus, either of
the Registration Statements or either of the Prospectuses, or any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Trust or the Company by such Underwriter through ▇▇▇▇▇▇▇, Sachs
& Co. expressly for use therein; and will reimburse the Company, the Trust and
the Selling Stockholder for any legal or other expenses reasonably incurred by
the Company, the Trust or the Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(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 satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company, the Trust and the Selling Stockholder on the one hand
and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (d) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Trust and the Selling Stockholder on the
one hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company, the Trust and the
Selling Stockholder 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, the Trust and the Selling
Stockholder bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table
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27
on the cover page of the Trust Prospectus. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, the Trust or the
Selling Stockholder on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust, the
Selling Stockholder and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in subsection (c) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (e), no such Underwriter shall not be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it 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.
(f) The obligations of the Company and the Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company, to each trustee of the Trust and to each
person, if any, who controls the Company, the Trust or the Selling Stockholder
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities 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 Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the purchase
of such Shares, then Trust 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 Securities on such terms. In the event that, within the
respective prescribed periods, you notify Trust that you have so arranged for
the purchase of such Securities, or Trust that it has so arranged for the
purchase of such Securities, you or the Trust shall have the right to postpone
such 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
Trust agrees to file promptly any amendment to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include nay person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Trust as
provided in subsection (a) above, the aggregate number of such Securities which
remains unpurchased does not exceed one-eleventh of he aggregate number of all
the Securities to be purchased at such Time of Delivery, then the Trust shall
have the right to require each non-defaulting Underwriter to purchase the number
of Securities which such Underwriter agreed to purchase hereunder at such Time
of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not been make; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
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28
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and Trust as
provided in subsection (a) above, the aggregate number of such Securities which
remains unpurchased exceeds one-eleventh of the aggregate number of all of the
Securities to be purchased at such Time of Delivery, or if the Trust shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Trust to sell the
Optional Shares shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Trust, except for the expenses to be borne by
the Trust and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Trust, the Selling Stockholder and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Underwriters or any controlling person of the
Underwriters, or the Company, the Trust or the Selling Stockholder or any
officer or director or controlling person of the Company, the Trust or the
Selling Stockholder and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company, the Trust nor the Selling Stockholder shall then be under
any liability to the Underwriters except as provided in Sections 6 and 8 hereof;
but, if for any other reason, any Securities are not delivered by or on behalf
of the Trust as provided herein, the Selling Stockholder will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company, the Trust and the Selling
Stockholder shall then be under no further liability to the Underwriters in
respect of the Securities not so delivered except as provided in Sections 6 and
8 hereof.
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29
12. 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 them in care of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department; if to the Trust
shall be delivered or sent by mail, telex or facsimile transmission in care of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Associates, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; 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; and if to the Selling Stockholder
shall be delivered or sent by mail, telex or facsimile transmission in care of
Honigman, Miller, ▇▇▇▇▇▇▇▇ and ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company, the Trust, the Selling Stockholder and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company, the Trust, the Selling Stockholder and each person who controls the
Company, the Selling Stockholder or the Underwriters, 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 Securities from the Underwriters shall be deemed a
successor or assign by reason merely of such purchase.
14. 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.
15. This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. 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.
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If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriters, the Trust, the Company and the Selling Stockholder.
Very truly yours,
CVS Corporation
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Revocable Living Trust
By:
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as trustee
By:
------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
31
SCHEDULE I
Number of Optional
Securities to be
Total Number of Firm Delivered if
Securities to be Maximum Option
Underwriter Delivered Exercised
----------- --------- ---------
▇▇▇▇▇▇▇, Sachs & Co..................
------------------ ----------------
Total................................. 2,650,000 397,500
================== ================
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ANNEX I
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;
(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
33
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 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
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34
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.
3
