EXHIBIT 1.1
$110,000,000
WORLD COLOR PRESS, INC.
% CONVERTIBLE SENIOR SUBORDINATED NOTES
UNDERWRITING AGREEMENT
October __, 1997
October __, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
BT Alex. ▇▇▇▇▇ Incorporated
Credit Suisse First Boston Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
World Color Press, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters (as defined below)
$110,000,000 principal amount at maturity of its % Convertible Senior
Subordinated Notes due 2007 (the "FIRM SECURITIES") to be issued pursuant to the
provisions of an Indenture dated as of October __, 1997 (the "INDENTURE")
between the Company and State Street Bank and Trust Company, as Trustee (the
"TRUSTEE").
The Company also proposes to issue and sell to the several
Underwriters not more than an additional $16,500,000 of its % Convertible
Senior Subordinated Notes due 2007 (the "ADDITIONAL SECURITIES") if and to the
extent that the Representatives shall have determined to exercise, on behalf of
the Underwriters, the right to purchase such notes granted to the Underwriters
in Section 2 hereof. The Firm Securities and the Additional Securities are
hereinafter collectively referred to as the "SECURITIES". The %
Convertible Senior Subordinated Notes due 2007 to be issued pursuant to the
Indenture after giving effect to the sales contemplated hereby are hereinafter
referred to as the "SECURITIES". The shares of common stock, par value $.01 per
share, of the Company (the "COMMON STOCK") issuable upon conversion of the
Securities are hereinafter referred to as the "SHARES."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement relating to the Securities. The
registration statement as amended at the time it becomes effective,
including any documents incorporated therein by reference and including the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION
STATEMENT;" the prospectus in the form first used to confirm sales of
Securities, including any documents incorporated therein by reference, is
hereinafter referred to as the "PROSPECTUS." If the Company has filed an
abbreviated registration statement to register additional shares of Common Stock
pursuant to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION
STATEMENT"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.
Concurrently with the offering of the Securities, the Company is
offering 3,500,000 shares of common stock, par value $.01 per share, of the
Company (4,025,000 shares if the over-allotment option to the underwriters is
exercised in full)(the "EQUITY OFFERING"). The consummation of the offerings of
the Securities is not contingent upon the Equity Offering or vice versa.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) When the Registration Statement becomes effective, including at
the date of any post-effective amendment, and at the Closing Date, the
Registration Statement will comply in all material respects with the
provisions of the Act, and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; the
Prospectus and any supplements or amendments thereto will not at the date
of the Prospectus, at the date of any such supplements or amendments and at
the Closing Date contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties contained in
this paragraph (a) shall not apply to (i) statements in or omissions from
the Registration Statement or the Prospectus (or any supplement or
amendment to them) made in reliance upon and in conformity with information
relating to the Underwriters furnished to the Company in writing by the
Underwriters or on their behalf with their consent expressly for use
therein or
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(ii) that part of the Registration Statement that constitutes the Statement
of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as amended
(the "INDENTURE ACT"), of the Trustee.
(b) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 or Rule 462 under the Act, complied when so filed in
all material respects with the Act.
(c) The Company and each of the Company's "significant subsidiaries"
as such term is defined in Rule 1-02 of Regulation S-X under the Act (each
a "SUBSIDIARY" and collectively, the "SUBSIDIARIES") has been duly
organized, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the requisite corporate
power and authority to carry on its business as it is currently being
conducted, to own, lease and operate its properties (and, with respect to
the Company, to execute, deliver and perform this Agreement), and each is
duly qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which its ownership or leasing of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not have a material adverse
effect on the business, results of operations or condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole (a
"MATERIAL ADVERSE EFFECT").
(d) All of the issued and outstanding shares of capital stock of, or
other ownership interests in, each Subsidiary have been duly and validly
authorized and issued, and, as of the Closing Date, all of the shares of
capital stock of, or other ownership interests in, each Subsidiary will be
owned, directly or through Subsidiaries, by the Company free and clear of
any security interest, mortgage, pledge, claim, lien or encumbrance (each,
a "LIEN") other than (i) as created by the Second Amended and Restated
Credit Agreement dated as of June 6, 1997 among the Company, the Lenders
party thereto and Bankers Trust Company, as agent, as amended, and (ii)
such other Liens as are not, individually or in the aggregate, material to
the Company and its subsidiaries, taken as a whole. All such shares of
capital stock are fully paid and nonassessable and, on the Closing Date,
will be fully paid and nonassessable. On the Closing Date, there will be
no outstanding subscriptions, rights, warrants, options, calls, convertible
securities or commitments of
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sale related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, any
Subsidiary.
(e) All of the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued and are fully paid, non-assessable
and were not issued in violation of any preemptive or similar rights; the
Company has duly authorized and reserved for issuance the Shares to be
issued upon the conversion of the Securities, and when issued pursuant to
conversion of the Securities in accordance with the Indenture, the Shares
will be validly issued, fully paid, and non-assessable and will not be
issued in violation of any preemptive or similar rights.
(f) The authorized capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Prospectus.
(g) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters in accordance with the terms
of this Agreement, will be entitled to the benefits of the Indenture and
will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and general
principles of equity.
(h) Neither the Company nor any of its Subsidiaries is (a) in
violation of its respective charter or by-laws or (b) in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument, to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
or their respective properties is bound except, with respect to defaults
referred to in clause (b), such as would not, singly or in the aggregate,
have a Material Adverse Effect, nor has any event occurred which with
notice or lapse of time or both would constitute such a violation or
default.
(i) This Agreement has been duly authorized and validly executed and
delivered by the Company.
(j) Other than as described in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, pending against
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the Company or any of its Subsidiaries or any of their respective
properties, which is required to be disclosed in the Registration Statement
and the Prospectus, or which could reasonably be expected to have, singly
or in the aggregate, a Material Adverse Effect or which might materially
and adversely affect the consummation of this Agreement, the Indenture or
the transactions contemplated hereby and thereby, and, to the Company's
knowledge, no such proceedings are threatened.
(k) No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency or
body which suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any preliminary prospectus or suspends the
sale of the Securities in any jurisdiction referred to in Section 6(d)
hereof; no injunction, restraining order or order of any nature by a
Federal or state court of competent jurisdiction has been issued with
respect to the Company which would prevent or suspend the sale of the
Securities, the effectiveness of the Registration Statement, or the use of
any preliminary prospectus in any jurisdiction referred to in Section 6(d)
hereof; and no action, suit or proceeding is pending against or, to the
Company's knowledge, threatened against the Company or any of the
Subsidiaries before any court or arbitrator or any governmental body,
agency or official, domestic or foreign, which, if adversely determined,
would in any manner draw into question the validity of this Agreement, the
Indenture or the Securities.
(l) Except as disclosed in the Registration Statement and the
Prospectus or as would not, singly or in the aggregate, have a Material
Adverse Effect: (i) the Company and each of the Subsidiaries is in
compliance with all laws and regulations relating to protection of human
health or environment or imposing liability or standards of conduct
concerning any Materials of Environmental Concern (as defined below)
("ENVIRONMENTAL LAWS") applicable to it, including, without limitation,
possession of required permits and compliance with the terms and conditions
thereof, and there are no circumstances known to the Company that will
prevent such compliance in the future; (ii) neither the Company nor any of
the Subsidiaries has received any written notice, and there is no pending
or, to the Company's knowledge, threatened action, suit or proceeding
before or by any court or governmental agency or body ("ENVIRONMENTAL
CLAIM"), alleging potential liability (including, but not limited to,
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investigatory, cleanup or governmental response costs, natural resources or
property damages, personal injuries, or penalties) of the Company or any of
the Subsidiaries or any person or entity for whom the Company or any of the
Subsidiaries has contractually retained or assumed responsibility, arising
out of, based on, or resulting from the presence, or release, discharge,
emission or disposal into the environment, of any Materials of
Environmental Concern at or from any location, owned or operated by the
Company or any of the Subsidiaries, as the case may be, or any violation or
alleged violation of any Environmental Law; and (iii) there are no past or
present actions, activities, conditions, events or incidents that could be
reasonably expected to form the basis of any such Environmental Claim; the
term Materials of Environmental Concern means (a) any "hazardous substance"
as defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (b) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act, as amended, (c) any petroleum
or petroleum product, (d) any polychlorinated biphenyl and (e) any
pollutant or contaminant or hazardous, dangerous, or toxic chemical,
material, waste or substance regulated or defined under any other
Environmental Law.
(m) Except as otherwise set forth in the Prospectus or such as are
not material to the business, financial condition or results of operation
of the Company and its subsidiaries taken as a whole, the Company and each
of its Subsidiaries has good title, free and clear of all liens, claims,
encumbrances and restrictions except liens for taxes not yet due and
payable, to all properties and assets described in the Registration
Statement as being owned by it except for liens, claims, encumbrances and
restrictions which would not, singly or in the aggregate, have a Material
Adverse Effect. All leases to which the Company or any of its Subsidiaries
is a party are valid and binding on the Company or such Subsidiary and, to
the Company's knowledge, on the other party and, to the knowledge of the
Company, no default has occurred or is continuing thereunder, which might
result in any material adverse change in the business, financial condition
or results of operations of the Company and its subsidiaries, taken as a
whole(a "MATERIAL ADVERSE CHANGE").
(n) Deloitte & Touche LLP are independent public accountants with
respect to the Company as required by the Act. The financial statements,
together with the related schedules and notes set forth in the Registration
Statement and the Prospectus (and any amendment
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or supplement thereto), comply as to form in all material respects with the
requirements of the Act and present fairly in all material respects the
consolidated financial position, results of operations and changes in cash
flows of the Company and its subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and the related schedules and
notes have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, except as
disclosed therein; and the other financial and statistical information and
data set forth in the Registration Statement and the Prospectus (and any
amendment or supplement thereto) is, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements
and the books and records of the Company and its subsidiaries.
(o) Subsequent to the date of the most recent balance sheet for the
Company included in the Registration Statement and the Prospectus, except
as set forth in the Registration Statement and the Prospectus, (i) neither
the Company, nor any of the Subsidiaries, has incurred any liabilities or
obligations, direct or contingent, which are material to the Company and
the Subsidiaries taken as a whole, nor entered into any transaction not in
the ordinary course of business and (ii) there has not been, singly or in
the aggregate, any Material Adverse Change or any development which may
reasonably be expected to involve a Material Adverse Change.
(p) The execution, delivery and performance by the Company of this
Agreement, the Indenture and the consummation of the transactions
contemplated hereby and thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
Act or state securities or Blue Sky laws, or by the NASD with regards to
the underwriting arrangements), except for consents, approvals,
authorizations or orders which would not, singly or in the aggregate, have
a Material Adverse Effect, and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
charter or by-laws of the Company or any of its Subsidiaries or any
agreement, indenture or other instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
or their respective properties are bound, or violate or conflict with any
laws, administrative regulations or rulings or court decrees
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applicable to the Company, any of its Subsidiaries or their respective
properties, except for such conflicts, violations or breaches which would
not, singly or in the aggregate, have a Material Adverse Effect, and except
for such conflicts, violations or breaches as to which the Company has
obtained the necessary consents or waivers.
(q) The Company and each of the Subsidiaries possess all
certificates, consents, exemptions, orders, permits, licenses,
authorizations, or other approvals (each, an "AUTHORIZATION") of and from,
and has made all declarations and filings with, all Federal, state, local
and other governmental authorities, all self-regulatory organizations and
all courts and other tribunals, necessary or required to own, lease,
license and use its properties and assets and to conduct its respective
business in the manner described in the Prospectus, except to the extent
that the failure to obtain or file would not, singly or in the aggregate,
have a Material Adverse Effect; all such Authorizations are valid and in
full force and effect and the Company and each of the Subsidiaries are in
compliance with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities and governing
bodies having jurisdiction with respect thereto, except where the failure
to be in full force and effect or to be in compliance would not, singly or
in the aggregate, have a Material Adverse Effect.
(r) The Company is not (a) an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT"), or (b) a "holding company" or a "subsidiary company" of a holding
company, or an "affiliate" thereof within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
(s) Except as disclosed in the Prospectus, there are no holders of
any security of the Company or any Subsidiary (debt or equity) who have or
will have any right to require the registration of such security by virtue
of the filing of the Registration Statement or the execution by the Company
of this Agreement.
(t) The Company and each of its Subsidiaries maintain adequate
insurance for the conduct of their respective businesses and the value of
their respective properties. All such insurance is outstanding and in
force on the date hereof.
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(u) There is (i) no significant unfair labor practice complaint
pending against the Company or any of the Subsidiaries or, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations board,
and no significant grievance or significant arbitration proceeding arising
out of or under any collective bargaining agreement is so pending against
the Company or any of the Subsidiaries or, to the best knowledge of the
Company, threatened against any of them, and (ii) no significant strike,
labor dispute, slowdown or stoppage pending against the Company or any of
the Subsidiaries or, to the best knowledge of the Company, threatened
against it or any of the Subsidiaries except for such actions specified in
clause (i) or (ii) above, which, singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(v) All material tax returns required to be filed by the Company and
each of its Subsidiaries in any jurisdiction have been filed, other than
those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due pursuant to such returns or pursuant to any assessment
received by the Company or any of its Subsidiaries have been paid, other
than those being contested in good faith and for which adequate reserves
have been provided in accordance with GAAP or those currently payable
without penalty or interest.
(w) The Company has not (i) taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Securities or (ii) since the initial filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company.
(x) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(y) Any term sheet and prospectus subject to completion provided by
the Company to the Underwriters for use in connection with the offering and
sale of the Securities pursuant to Rule 434 under the Act, taken
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together, are not materially different from the Prospectus included in the
Registration Statement at the time of its effectiveness or an effective
post-effective amendment thereto (exclusive of any information deemed to be
a part thereof by virtue of Rule 434(d) under the Act).
(z) There are no contracts or other documents of a character required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Act which have not been described in the Prospectus or
filed as exhibits to the Registration Statement.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Securities set forth in Schedule I hereto
opposite its names at U.S.$_____ a share (the "PURCHASE PRICE").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Additional Securities, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to $16,500,000
Additional Securities at the Purchase Price. If the Representatives, on behalf
of the Underwriters, elect to exercise such option, the Representatives shall so
notify the Company in writing not later than 30 days after the date of this
Agreement, which notice shall specify the number of Additional Securities to be
purchased by the Underwriters and the date on which such shares are to be
purchased. Such date may be the same as the Closing Date (as defined below) but
not earlier than the Closing Date nor later than ten business days after the
date of such notice. Additional Securities may be purchased as provided in
Section 4 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Securities. If any Additional
Securities are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the number of Additional Securities that bears the same
proportion to the total number of Additional Securities to be purchased as the
number of Firm Securities set forth in Schedule I hereto opposite the name of
such Underwriter bears to the total number of Firm Securities.
The Company hereby agrees that, without the prior written consent of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it will not,
during the period ending 90 days after the date of the Prospectus, (i) offer,
pledge, sell, contract to sell, sell any option or contract
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to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereby and the Shares
to be sold in the Equity Offering or (B) the issuance by the Company of shares
of Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing. The Company further agrees that, without the prior written
consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated on behalf of the Underwriters, it
will not, during the period beginning on the date hereof and continuing to and
including the Closing Date, not offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company or warrants to purchase or
otherwise acquire debt securities of the Company substantially similar to the
Securities (other than (i) the Securities and (ii) commercial paper issued in
the ordinary course of business).
3. TERMS OF PUBLIC OFFERING. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
% of their principal amount at maturity (the "PUBLIC OFFERING PRICE"),
plus accrued interest, if any, from , 1997 to the date of payment and
delivery and to certain dealers selected by you at a price that represents a
concession not in excess of % of their principal amount at maturity, and
that any Underwriter may allow, and such dealers may reallow, a concession, not
in excess of % of their principal amount at maturity, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Securities shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Securities for the respective accounts of the
several Underwriters at 10:00 a.m., New York City time, on October ___, 1997, or
at such other time on the same or such other date, not later than October ___,
1997,
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as shall be designated in writing by you. The time and date of such payment
are hereinafter referred to as the "CLOSING DATE."
Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several
Underwriters at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than October __, 1997, as shall be designated in
writing by the Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
Certificates for the Firm Securities and Additional Securities shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Securities and Additional Securities shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Securities to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Company to sell the Securities to the Underwriters and the several
obligations of the Underwriters to purchase and pay for the Securities on the
Closing Date are subject to the condition that the Registration Statement shall
have become effective not later than [_______] (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is
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defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) above and to the
effect that the representations and warranties of the Company contained in
this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before
the Closing Date.
The officer signing and delivering such certificate may rely upon the
best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Company, dated the Closing
Date, to the effect that:
(i) the Company and its subsidiaries listed on Exhibit A hereto
(collectively, the "MATERIAL SUBSIDIARIES") have each been duly
incorporated and are validly existing and in good standing under
applicable corporate law of their respective states of incorporation.
The Company and its Material Subsidiaries each have the corporate
power and authority to own, lease and operate their respective
properties and to conduct their respective businesses as described in
the Registration Statement and the Prospectus;
(ii) all of the outstanding shares of Common Stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and were not issued in violation of any preemptive or
similar rights; the Company has duly authorized
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and reserved for issuance the Shares to be issued upon the conversion
of the Securities, and when issued pursuant to conversion of the
Securities in accordance with the Indenture, the Shares will be
validly issued, fully paid, and non-assessable and will not be issued
in violation of any preemptive or similar rights;
(iii)this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued under the
Act and no proceedings for that purpose have been initiated by the
Commission; and any required filing of the Prospectus pursuant to Rule
424(b) under the Act has been made in accordance with Rule 424(b) and
430A under the Act;
(v) the Securities have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and general principles of equity;
(vi) the statements in the Prospectus under the captions
"Description of Notes," "Description of Capital Stock," "Shares
Eligible for Future Sale," "Description of Certain Indebtedness,"
"Certain Federal Income Tax Considerations," and "Underwriters" (but
only as to the description of this Agreement) insofar as such
statements constitute a summary of legal matters, documents or
proceedings referred to therein, are accurate in all material
respects;
(vii)the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company,
enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
14
(viii)the execution, delivery and performance by the Company of
this Agreement and the Indenture, compliance by the Company with all
the provisions hereof and thereof and the consummation of the
transactions contemplated hereby and thereby will not (A) to the best
of such counsel's knowledge, require any consent, approval,
authorization or other order of, or filing with, any federal,
California, New York, Illinois or District of Columbia court or
governmental agency or body (except such as have been obtained under
the Act or such as may be required under state securities or Blue Sky
laws, or by the NASD with regards to the underwriting arrangements),
(B) conflict with or constitute a breach of any of the terms or
provisions of the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries or of any agreement or document
filed as an exhibit to the Registration Statement, or (C) violate or
conflict with any federal, California, New York, Illinois or District
of Columbia statute, rule or regulation applicable to the Company or
its subsidiaries or the General Corporation Law of the State of the
Delaware (other than federal or state securities laws, which are
specifically addressed elsewhere herein), except for such conflicts
and violations as to which the Company has obtained the necessary
consents or waivers;
(ix)neither the Company nor any of the Subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(x)to such counsel's knowledge, no consent, approval,
authorization or order of, or filing with, any federal or New York
court or governmental agency or body is required for the sale of the
Securities pursuant to the Underwriting Agreement or the Indenture,
except such as have been obtained under the Act and such as may be
required under state securities laws in connection with the purchase
and distribution of such Securities by the Underwriters; and
15
(xi) the Registration Statement and the Prospectus, and any
amendment or supplement thereto, comply as to form in all material
respects with the requirements for registration statements on Form S-3
under the Act; it being understood, however, that such counsel
expresses no opinion with respect to the financial statements,
schedules and other financial and statistical data included in the
Registration Statement or the Prospectus. In passing upon the
compliance as to form of the Registration Statement and the
Prospectus, such counsel may state that it has assumed that the
statements made therein are correct and complete.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters and their counsel, at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although they are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement and the Prospectus
(except as set forth in paragraph (vi) above) and have not made any
independent check or verification thereof, during the course of such
participation (relying as to materiality to the extent deemed appropriate
upon the statements of officers and other representatives of the Company),
no facts came to their attention that caused them to believe that the
Registration Statement, at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus, as of its date or as of the Closing
Date, contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; it being
understood that such counsel shall express no belief with respect to the
financial statements, schedules and other financial and statistical data
included in the Registration Statement or the Prospectus.
In rendering the opinion set forth in paragraph (iii) above, such
counsel may state that such opinion is subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, fraudulent transfers or obligations, moratorium or other
similar laws now or
16
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or law, and the
discretion of the court before which any proceeding therefor may be
brought; and (iii) the unenforceability under certain circumstances under
law or court decisions of provisions providing for the indemnification of
or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy.
Such opinion shall be rendered to the Representatives at the request
of the Company and shall so state therein.
(d) The Representatives shall have received on the Closing Date an
opinion, dated the Closing Date, of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice
President, Chief Legal and Administrative Officer and Secretary of the
Company, to the effect that:
(i) to the best of such counsel's knowledge, (a) there is no
action, suit or proceeding before or by any court or governmental
agency or body pending against the Company or any Subsidiary or any of
their respective properties that is required to be described in the
Registration Statement or Prospectus which is not so described as
required and (b) there is no contract or other document required to be
described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement or incorporated therein
which is not so described, filed or incorporated as required, it being
understood that such counsel need not express any opinion as to the
financial statements, notes or schedules or other financial data
included therein;
(ii)to such counsel's knowledge, the execution and delivery of
the Underwriting Agreement and the Indenture by the Company does not
violate any order of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and
(iii)to such counsel's knowledge, all of the outstanding capital
stock of each of the Subsidiaries is owned of record, directly by the
Company or by a subsidiary of the Company, either directly or
indirectly, free and clear of any security interest, claim, lien or
encumbrance,
17
other than any security interests which may be described in the
Prospectus; to such counsel's knowledge, there are no outstanding
rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity
interest in any Subsidiary, except as may be described in the
Prospectus.
Such counsel shall also state that such counsel has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company, and
representatives of the Underwriters and their counsel, at which the
contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon, and
does not assume any responsibility for, the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus and has not made any independent check or verification thereof,
during the course of such participation (relying as to materiality to the
extent deemed appropriate upon the statements of officers and other
representatives of the Company), no facts came to such counsel's attention
that caused such counsel to believe that the Registration Statement, at the
time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or that the
Prospectus, as of its date or as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that such counsel
shall express no belief with respect to the financial statements, schedules
and other financial and statistical data included in the Registration
Statement or the Prospectus.
(e) The Underwriters shall have received on the Closing Date an
opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, dated the Closing Date, covering the matters referred to in
Sections 5(c)(iii), 5(c)(v) and 5(c)(vi) (but only as to the statements in
the Prospectus under "Description of the Notes," "Description of Capital
Stock" and "Underwriters") and the second paragraph of Section 5(c) above.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated
18
the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from Deloitte & Touche LLP,
independent public accountants, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
PROVIDED that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other dispositions
of shares of Common Stock or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing
Date.
(h) The several obligations of the Underwriters to purchase
Additional Securities hereunder are subject to the delivery to the
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company, the
due authorization and issuance of the Additional Securities and other
matters related to the issuance of the Additional Securities.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, 6 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to
19
file with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses
you will furnish to the Company) to which Securities may have been sold by
you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements
in the Prospectus as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earnings statement covering the
twelve-month period ending ________, 1998 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Securities under the Securities Act and
all other fees or expenses in connection with the preparation and filing of
the Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing
costs associated therewith, and
20
the mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii)
the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Securities under
state securities laws and all expenses in connection with the qualification
of the Securities for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements
of counsel to the Underwriters incurred in connection with the review and
qualification of the offering of the Securities by the National Association
of Securities Dealers, Inc., including any counsel fees incurred on behalf
of or disbursements by Bear, ▇▇▇▇▇▇▇ & Co. Inc. in its capacity as
"qualified independent underwriter", (v) all fees and expenses in
connection with the preparation and filing of the registration statement on
Form 8-A relating to the Common Stock and all costs and expenses incident
to listing the Securities on the NYSE, (vi) the cost of printing
certificates representing the Securities, (vii) the costs and charges of
any transfer agent, registrar or depositary, (viii) the costs and expenses
of the Company relating to investor presentations on any "road show"
undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided
in this Section, Section 7 entitled "Indemnity and Contribution," and the
last paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers they may make.
21
(g) The Company has reserved and will continue to reserve, as long as
any Securities are outstanding, a sufficient number of Shares for issuance
upon conversion of the Securities.
(h) The Company will not voluntarily claim and will actively resist
any attempts to claim, the benefit of any usury laws against holders of the
Securities.
7. INDEMNITY AND CONTRIBUTION. (a) (i) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; PROVIDED, HOWEVER,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Securities, or any person controlling such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) was not sent or given by or on behalf of
such Underwriter to such person, if required by law so to have been delivered,
at or prior to the written confirmation of the sale of the Securities to such
person, and if the Prospectus (as so amended or supplemented) would have cured
the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 6(a)
hereof.
(ii) The Company also agrees to indemnify and hold harmless Bear,
▇▇▇▇▇▇▇ & Co. Inc. ("Bear, ▇▇▇▇▇▇▇") and each person, if any, who controls Bear,
▇▇▇▇▇▇▇ within the meaning of either Section 15 of the Securities Act, or
Section 20 of the Exchange Act, from and against any and all
22
losses, claims, damages, liabilities and judgments incurred as a result of Bear,
▇▇▇▇▇▇▇' participation as a "qualified independent underwriter" within the
meaning of Rule 2720 of the National Association of Securities Dealers' Conduct
Rules in connection with the offering of the Common Stock, except for any
losses, claims, damages, liabilities, and judgments resulting from Bear,
▇▇▇▇▇▇▇', or such controlling person's, willful misconduct.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
23
designated in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, in the case of
parties indemnified pursuant to Section 7(a), and by the Company, in the case of
parties indemnified pursuant to Section 7(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 7(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 7(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Securities. The relative fault of the
Company on the one hand and the Underwriters on the other hand 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
24
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the
respective number of Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Securities.
8. TERMINATION. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may
25
be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 8(a)(i) through 8(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate number of Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Securities to be purchased on such date, the
other Underwriters shall be obligated severally in the proportions that the
number of Firm Securities set forth opposite their respective names in Schedule
I or Schedule II bears to the aggregate number of Firm Securities set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; PROVIDED that in no event shall the number of Securities that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Securities without the written consent of such Underwriter. If, on the Closing
Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm
Securities and the aggregate number of Firm Securities with respect to which
such default occurs is more than one-tenth of the aggregate number of Firm
Securities to be purchased, and arrangements satisfactory to you and the Company
for the purchase of such Firm Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company. In any such case either you or
26
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the Option Closing Date, any Underwriter
or Underwriters shall fail or refuse to purchase Additional Securities and the
aggregate number of Additional Securities with respect to which such default
occurs is more than one-tenth of the aggregate number of Additional Securities
to be purchased, the non-defaulting Underwriters shall have the option to (i)
terminate their obligation hereunder to purchase Additional Securities or (ii)
purchase not less than the number of Additional Securities that such
non-defaulting Underwriters would have been obligated to purchase in the absence
of such default. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. HEADINGS. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
27
Very truly yours,
WORLD COLOR PRESS, INC.
By:_______________________
Name:
Title:
Accepted as of the date hereof
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇▇▇, SACHS & CO.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
BT ALEX. ▇▇▇▇▇ INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting severally on behalf of themselves
and the several Underwriters
named in Schedule I hereto.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:___________________________
Name:
Title:
28
SCHEDULE I
UNDERWRITERS
NUMBER OF
FIRM SECURITIES
UNDERWRITER TO BE PURCHASED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
BT Alex. ▇▇▇▇▇ Incorporated
Credit Suisse First Boston Corporation
[NAMES OF OTHER U.S. UNDERWRITERS]
_______________
Total Firm Securities .................... $110,000,000
===============
EXHIBIT A
[FORM OF LOCK-UP LETTER]
September , 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇, Sachs & Co.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
BT Alex. ▇▇▇▇▇ Incorporated
Credit Suisse First Boston Corporation
c/o Morgan ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
▇▇▇▇▇▇▇, Sachs International
Bear, ▇▇▇▇▇▇▇ International Limited
Bankers Trust International, plc
Credit Suisse First Boston Limited
c/o Morgan ▇▇▇▇▇▇▇ & Co. International Limited
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
England
Dear Sirs and Mesdames:
The undersigned understands that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited ("MSIL")
propose to enter into Underwriting Agreements (each an "UNDERWRITING AGREEMENT")
with World Color Press, Inc., a Delaware corporation (the "COMPANY"), providing
for the public offering (the "PUBLIC OFFERINGS") by the several Underwriters,
including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and MSIL (the "UNDERWRITERS"), of 3,500,000 shares (the
"SHARES") of the Common Stock, par value $.01 per share, of the Company (the
"COMMON STOCK") and Convertible Senior Subordinated Notes due 2007 of the
Company (the "NOTES").
To induce the Underwriters that may participate in the Public
Offerings to continue their efforts in connection with the Public Offerings, the
undersigned hereby agrees that, without the prior written consent of ▇▇▇▇▇▇
▇▇▇▇▇▇▇, on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to each of
the Public Offerings (the "PROSPECTUS"); (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (a) the sale of any Shares
to the Underwriters pursuant to the Underwriting Agreement or (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Public Offerings. In addition, the
undersigned agrees that, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Prospectus make any demand
for or exercise any right with respect to, the registration of any shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Common Stock. Notwithstanding the foregoing, in the event that the date of the
Prospectus is more than 30 days from the date hereof, the restrictions set forth
in the preceding paragraph shall terminate and be of no further effect.
Whether or not the Public Offerings actually occur depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
_________________________
(Name)
_________________________
(Address)
