Exhibit 1.1
7,400,000 Shares
Crown Cork & Seal Company, Inc.
COMMON STOCK
($5.00 PAR VALUE)
U.S. UNDERWRITING AGREEMENT
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October __, 1996
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
c/o Lazard Freres & Co. LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
SECTION 1. Introductory. Compagnie Generale d'Industrie et de
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Participations, a societe anonyme organized under the laws of the Republic of
France ("CGIP"), and Sofiservice, a societe anonyme organized under the laws of
the Republic of France and a wholly owned subsidiary of CGIP ("Sofiservice" and,
together with CGIP, the "Selling Stockholders"), propose to sell to the several
Underwriters named in Schedule I hereto (the "U.S. Underwriters"), for whom
Lazard Freres & Co. LLC, CS First Boston Corporation and Salomon Brothers Inc
are acting as representatives (the "U.S. Representatives"), an aggregate of
7,400,000 shares (the "U.S. Firm Shares") of Common Stock, par value $5.00 per
share (the "Common Stock"), of Crown Cork & Seal Company, Inc. (the "Company"),
each Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name in Schedule II hereto. CGIP also proposes to sell to the
U.S. Underwriters, upon the terms and conditions set forth in Section 4 hereof,
up to an additional 1,387,500 shares of Common Stock (the "Additional Shares").
The U.S. Firm Shares and the Additional Shares are hereinafter sometimes
collectively referred to as the "U.S. Shares".
It is understood that the Company and the Selling Stockholders are
concurrently entering into an international underwriting agreement dated the
date hereof (the "International Underwriting Agreement") in which the Selling
Stockholders propose to sell to
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the several Underwriters named therein (the "International Underwriters") for
whom Lazard Capital Markets, CS First Boston Limited and Salomon Brothers
International Limited are acting as representatives (the "International
Representatives") an aggregate of 1,850,000 shares (the "International Shares")
of the Company's Common Stock. The respective closings under this Agreement and
the International Underwriting Agreement are hereby expressly made conditional
on one another.
The U.S. Shares and the International Shares are herein collectively
referred to as the "Shares". The U.S. Underwriters and the International
Underwriters are herein collectively referred to as the "Underwriters".
It is further understood that the U.S. Representatives on behalf of
the U.S. Underwriters and the International Representatives on behalf of the
International Underwriters have entered into an agreement of even date herewith
(the "Agreement Among U.S. and International Underwriters"), contemplating the
coordination of certain transactions among the U.S. and International Under-
writers and that, pursuant thereto and subject to the conditions set forth
therein, the U.S. Underwriters may purchase from or sell to the International
Underwriters a portion of the U.S. Shares and the International Underwriters may
purchase from or sell to the U.S. Underwriters a portion of the International
Shares. Any such purchases or sales shall be governed by the Agreement Among
U.S. and International Underwriters and not by the terms of this Agreement.
It is further understood that the Company and the Selling Stock-
holders are concurrently entering into an underwriting agreement dated the
date hereof (the "Preferred Underwriting Agreement") in which the Selling
Stockholders propose to sell to the several Underwriters named therein (the
"Preferred Underwriters") an aggregate of 3,000,000 shares (the "Preferred Firm
Shares") of the Company's 4.5% Convertible Preferred Stock, par value $41.8875
per share (the "Preferred Stock"). In addition, CGIP has agreed to sell to the
Preferred Underwriters, upon the terms and conditions set forth in the Preferred
Underwriting Agreement, up to an additional 450,000 shares of Preferred Stock
(the "Preferred Additional Shares" and, collectively with the Preferred Firm
Shares, the "Preferred Shares"). The respective closings under this Agreement
and the International Underwriting Agreement, on the one hand, and the Preferred
Underwriting Agreement, on the other hand, are not conditional on one another.
The Company and the Selling Stockholders hereby agree with the U.S.
Underwriters as follows (it being understood and agreed that the obligations set
forth herein are several in nature, unless expressly stated to the contrary):
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SECTION 2. Representations, Warranties and Agreements of the Company.
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The Company represents and warrants to, and agrees with, (i) the several U.S.
Underwriters and (ii) in the case of clauses (a), (b), (c), (j) and (n) and the
second sentence of clause (g) below only, the Selling Stockholders (it being
understood and agreed that such representations and warranties to the Selling
Stockholders are being made solely in connection with the sale of the Shares
under this Agreement and the International Underwriting Agreement and subject
to the last sentence of Section 9(a)), that:
(a) The Company meets the registrant requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on Form S-3 (File No. 333-12787), including forms of prospectuses
relating to the Shares, has been filed by the Company pursuant to the Act
with the Securities and Exchange Commission (the "Commission"). The Com-
pany may have filed one or more amendments thereto, including the related
Preliminary Prospectuses (as defined below), each of which (other than
documents incorporated by reference therein) has previously been furnished
to you. The Company will file with the Commission either (i) prior to
effectiveness of such registration statement, a further amendment to such
registration statement (including the forms of final prospectuses relating
to the Shares) or (ii) after effectiveness of such registration statement,
final prospectuses relating to the Shares in accordance with Rules 430A and
424(b)(1) or (4) under the Act. In the case of clause (ii), the Company has
included or shall include in such registration statement, as amended at the
Effective Time (as defined below), all information (other than information
permitted to be omitted from such registration statement when it becomes
effective pursuant to Rule 430A ("Rule 430A Information")) required by the
Act and the rules and regulations thereunder (the "Rules and Regulations")
to be included in the final prospectuses with respect to the Shares and the
offering thereof. As filed, such amendment and forms of final prospectuses,
or such final prospectuses, shall contain all Rule 430A Information,
together with all other such required information, with respect to the
Shares and the offering thereof, and, except to the extent you shall agree
in writing to a modification (which shall not be unreasonably withheld or
delayed), shall be in all substantive respects in the form furnished to you
prior to the execution of this Agreement or, to the extent not in such
form, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectuses) as
the Company has advised the U.S. Representatives, prior to the execution of
this Agreement, will be included or made therein. For purposes of this
Agreement, "Effective Time" means the time as of which such registration
statement or the most recent post-effective amendment thereto, if any, was
or is declared effective by the Commission and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Effective Date" means the date of the Effective Time.
The registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S. prospectus
relating to the U.S. Shares and the international prospectus relating to
the International Shares. The international prospectus is identical to the
U.S. prospectus, except the international prospectus
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contains different front and back cover pages and different descriptions
of the plan of distribution (contained under the caption "Underwriting"
in each of the U.S. and international prospectus). Such registration
statement, as amended at the Effective Time, including incorporated
documents, exhibits and financial statements, and including all Rule 430A
Information, if any, and, any post-effective amendment thereto that becomes
effective prior to the Closing Date (as defined below) is hereinafter
referred to as the "Registration Statement", and the U.S. prospectus
relating to the U.S. Shares and the international prospectus relating to
the International Shares in the forms first filed with the Commission
pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the
Act or, if no such filing is required, as included in the Registration
Statement, are hereinafter referred to as the "U.S. Prospectus" and the
"International Prospectus", respectively, and collectively as the
"Prospectuses". Any preliminary prospectus relating to the U.S. Shares or
the International Shares included in such Registration Statement or filed
pursuant to Rule 424(a) under the Act is hereinafter referred to as a "U.S.
Preliminary Prospectus" or an "International Preliminary Prospectus",
respectively, and collectively as "Preliminary Prospectuses". Any
reference herein to the Registration Statement, a Preliminary Prospectus or
the Prospectuses shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934 (the "Exchange Act")
on or before the Effective Time of the Registration Statement or the issue
date of such Preliminary Prospectus or the Prospectuses, as the case may
be, and references to information being "included", "contained" or "set
forth in" any such document (or similar expressions) shall be similarly
construed; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectuses shall be deemed to refer to and include the
filing of any document under the Exchange Act after the Effective Time of
the Registration Statement, or the issue date of any Preliminary Prospectus
or the Prospectuses, as the case may be, deemed to be incorporated therein
by reference.
(b) At the Effective Time, the Registration Statement did or will,
and when the Prospectuses are first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 4), the
Prospectuses (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; at the Effective Time, the Registration Statement did not or
will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time, the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Prospectuses (and any supplements thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply
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to information contained in or omitted from the Registration Statement or
the Prospectuses (or any supplement thereto) in reliance upon and in
conformity with the Underwriters' Information or the Selling Stockholders'
Information (as defined in Section 9(a)).
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that
purpose shall have been instituted or threatened by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
the Underwriters' Information or the Selling Stockholders' Information.
(d) The historical consolidated financial statements included in
the Registration Statement and the Prospectuses (and any amendment or
supplement thereto) present fairly in all material respects the xxxxxxx-
dated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations, the
statements of their cash flows and the changes in their financial position
for the periods specified; such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as described in the
notes to such financial statements); and the supporting schedules, if any,
included in the Registration Statement present fairly in all material
respects the information required to be stated therein. The pro forma
financial statements included in the Registration Statement and the
Prospectuses (and any amendment or supplement thereto) have been prepared
on a basis consistent with such historical financial statements (except as
described in such pro forma financial statements), include all material
adjustments to the historical financial data required to reflect the
transactions to which pro forma effect is given, give effect to assumptions
made on a reasonable basis, and present fairly in all material respects on
a pro forma basis the estimated consolidated financial position and results
of operations of the Company and its consolidated subsidiaries assuming
that such transactions had occurred on the date specified therein.
(e) There has not been sustained since the date of the latest audited
financial statements included in the Prospectuses any material adverse
change in the financial condition, results of operations or business of the
Company and its subsidiaries considered as a whole (a "Material Adverse
Effect"), except as set forth in the Prospectuses.
(f) The Company and each of its subsidiaries have been duly
incorporated and are validly existing in good standing under the laws of
their respective
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jurisdictions of organization with power and authority to own, lease and
operate their properties and conduct their businesses as described in the
Registration Statement and the Prospectuses; and each of them is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which it owns or leases properties or in
which the conduct of its business requires such qualification, except to
the extent that any such failure to be so qualified or be in good standing
would not, individually or in the aggregate, have a Material Adverse
Effect.
(g) The Company has an authorized capitalization as set forth in the
Prospectuses, and all shares of capital stock of the Company outstanding,
including the Shares, have been duly authorized, are validly issued, fully
paid and non-assessable, and conform in all material respects to the
description thereof contained in the Prospectuses. The sale of the Shares
is not subject to pre-emptive or other similar rights or restrictions on
transfer created by the Company under the Company's articles of incorpo-
ration or bylaws, under applicable law or under any agreement to which the
Company is a party or of which the Company has actual knowledge (other than
those imposed by the Act, the Rules and Regulations, foreign securities
laws or state securities or Blue Sky laws and other than restrictions on
transfers contained in that certain Shareholders Agreement, dated February
22, 1996, between the Company and CGIP (the "Shareholders Agreement") which
have been fully waived or satisfied); and the Shares are duly listed and
admitted for trading on the New York Stock Exchange (the "NYSE").
(h) All of the issued and outstanding capital stock of each material
subsidiary of the Company listed on Schedule III hereto has been duly
authorized and validly issued and is fully paid and non-assessable, and,
except as set forth in the Prospectuses, all the issued and outstanding
capital stock of each such material subsidiary is owned, directly or
through subsidiaries, by the Company, free and clear of any pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien"), except for
any such Liens that would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is in violation
of its or any of their charters or by-laws or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any of
them or their properties may be bound, except any violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) No consent, approval, authorization, order, registration, filing
or qualification by or on behalf of the Company or any of its subsidiaries
of or with any court or governmental authority or agency or of the NYSE is
required for the sale of
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the Shares or the consummation of the transactions contemplated by this
Agreement and the International Underwriting Agreement, except such as may
be required under the Act, the Rules and Regulations or state securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters; and the execution and delivery of this Agree-
ment and the International Underwriting Agreement, and the consummation of
transactions contemplated herein and therein will not (i) conflict with or
constitute a breach of any of the terms or provisions of, or default under,
or result in the creation or imposition of any Lien upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
that is material to the Company and its subsidiaries taken as a whole, (ii)
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of the Company or any of its
subsidiaries or (iii) result in any violation of any law, administrative
regulation or administrative or court decree or order applicable to the
Company, any of its material subsidiaries or their respective property.
(k) The Company and its subsidiaries are in compliance with all
laws and regulations applicable to them and their respective properties
and possess all certificates, authorities or permits issued by, and have
made all filings with, the appropriate state, local, Federal or foreign
regulatory agencies or bodies necessary or desirable to conduct the
business now operated by them, except where noncompliance with such laws
or regulations or the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation, termination or modification of
any such certificate, authority, permit or filing, other than any such
revocation, termination or modification that would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Except as described in the Prospectuses, there are no actions,
suits or proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its subsidiaries,
or to which any of their respective properties is subject, which, (i) if
adversely determined, would, individually or in the aggregate, result in
any Material Adverse Effect or (ii) questions the validity of this
Agreement or any action taken or required to be taken pursuant hereto.
(m) Each of the Company and its subsidiaries has good and marketable
title to all real and personal property owned by it, in each case free and
clear of any Lien, except (i) such as are referred to in the Prospectuses
or (ii) such as would not, individually or in the aggregate, have a
Material Adverse Effect; and any real
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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 would not, individually or in the aggregate, have a Material
Adverse Effect.
(n) This Agreement has been duly authorized, executed and delivered
by the Company.
(o) Other than the Shareholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities under the Registration Statement.
(p) Except as set forth in the Prospectuses under the caption
"Underwriting", neither the Company nor, to the Company's knowledge, any
of its officers or directors or any of their respective affiliates is a
member of, or is associated or affiliated with a member of, the National
Association of Securities Dealers, Inc. ("NASD").
SECTION 3. Representations, Warranties and Agreements of the Selling
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Stockholders. Each Selling Stockholder, jointly and severally, represents and
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warrants to, and agrees with, (i) the several U.S. Underwriters and (ii) the
Company (it being understood and agreed that such representations and warranties
to the Company are being made solely in connection with the sale of the Shares
under this Agreement and the International Underwriting Agreement and subject to
the last sentence of Section 9(b)), that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder.
(b) Such Selling Stockholder has the legal right and power to execute
and deliver this Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided in this Agree-
ment and the International Underwriting Agreement, and no such action will
result in any violation or breach of the provisions of the charter or by-
laws or other organizational documents of such Selling Stockholder or any
agreement or other instrument binding upon such Selling Stockholder
(including the restrictions on transfer contained in the Shareholders
Agreement, which have been fully waived or satisfied) or any law,
administrative regulation or administrative or court decree or order
applicable to such Selling Stockholder; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
court or governmental authority or agency or of the NYSE is required for
the consummation of the transactions contemplated by this Agreement and the
International Underwriting Agreement in connection with the sale of the
Shares by such Selling Stockholder, except such as may be required under
the
9
Act, the Rules and Regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters.
(c) Such Selling Stockholder has, and will deliver to the Under-
writers upon payment therefor good and marketable title to the Shares
to be sold by such Selling Stockholder, free and clear of any Lien.
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(e) At the Effective Time, the Selling Stockholders' Information
contained in the Registration Statement did not or will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
in the Selling Stockholders' Information not misleading; and, at the
Effective Time, the Selling Stockholders' Information contained in the
Prospectuses, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Selling Stockholders' Information contained in the Prospectuses
(and any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements in the Selling Stockholders' Information, in the light of
the circumstances under which they were made, not misleading.
(f) There are no contracts, agreements or understandings between the
Selling Stockholders and any person that would give rise to a valid claim
against the Selling Stockholders or any Underwriter for a brokerage
commission, finder's fee or other like payment.
SECTION 4. Purchase, Sale and Delivery of U.S. Shares. On the basis
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of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, each Selling Stockholder,
severally and not jointly, hereby agrees to sell to the U.S. Underwriters, and
each U.S. Underwriter agrees, severally and not jointly, to purchase from such
Selling Stockholder, at a purchase price of $______ per U.S. Share (the
"purchase price per U.S. Share"), the respective number of U.S. Firm Shares
(subject to adjustment by the U.S. Representatives to eliminate fractions) that
bear the same proportion to the number of U.S. Firm Shares to be sold by such
Selling Stockholder as the number of U.S. Firm Shares set forth opposite the
name of such U.S. Underwriter in Schedule I hereto bears to the total number of
U.S. Firm Shares.
The obligations of the Selling Stockholders hereunder to sell the U.S.
Firm Shares, and the obligations of the U.S. Underwriters to purchase the U.S.
Firm Shares, are
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subject to the closing of the sale and purchase of the International Shares
pursuant to the International Underwriting Agreement.
CGIP hereby agrees to sell to the U.S. Underwriters and, on the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the U.S. Underwriters shall have
the right to purchase, severally and not jointly, from CGIP, pursuant to an
option to be exercised in the 30-day period commencing on the date of this
Agreement, up to 1,387,500 Additional Shares at the purchase price per U.S.
Share. Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the U.S. Firm Shares
and the International Shares. If any Additional Shares are to be purchased,
each U.S. Underwriter agrees, severally and not jointly, to purchase from CGIP
that proportion of the total number of Additional Shares (subject to adjustment
by the U.S. Representatives to eliminate fractions) to be purchased from CGIP
as the number of U.S. Firm Shares set forth opposite the name of such U.S.
Underwriter in Schedule I hereto bears to the total number of U.S. Firm Shares.
Each Selling Stockholder will deliver the U.S. Firm Shares to be
purchased by the U.S. Underwriters to the U.S. Representatives for the accounts
of the U.S. Underwriters, against payment of the purchase price therefor by wire
transfer of same day funds to an account specified in writing by such Selling
Stockholder. Payment for the U.S. Firm Shares shall be made at the offices of
Cravath, Swaine & Xxxxx at 10:00 A.M., New York Time, on _____________, 1996 or
at such other place or time not later than seven full business days thereafter
as the U.S. Representatives and the Selling Stockholders determine (the "Initial
Closing Date").
CGIP will deliver the Additional Shares to be purchased by the U.S.
Underwriters to the U.S. Representatives for the accounts of the U.S. Under-
writers, against payment of the purchase price therefor by wire transfer of
same day funds to an account specified in writing by CGIP, at the offices of
Cravath, Swaine & Xxxxx on such date and at such time (the "Option Closing
Date"), as shall be specified in the notice from Lazard Freres & Co. LLC to
CGIP exercising the option to purchase the Additional Shares. The Option
Closing Date may be the same as the Initial Closing Date but shall in no event
be earlier than the Initial Closing Date nor earlier than two nor later than ten
business days after the giving of the notice hereinafter referred to. Such
notice may be given, by letter or by telecopy or other facsimile transmission or
by telephone (if subsequently confirmed in writing), to CGIP at any time within
30 days after the date of this Agreement. The Option Closing Date may be varied
by agreement between the U.S. Representatives and CGIP. The Initial Closing Date
and the Option Closing Date are herein collectively referred to as the "Closing
Date."
The certificates for all the U.S. Firm Shares and the Additional
Shares so to be delivered will be in such denominations and registered in such
names as the U.S. Representatives request two full business days prior to the
Initial Closing Date or the Option Closing Date, as the case may be, and will be
made available at the offices of Lazard Freres & Co. LLC, New York, New York or,
upon your request, through the facilities of The
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Depository Trust Company, for checking and packaging at least one full business
day prior to the Initial Closing Date or the Option Closing Date, as the case
may be.
Each Selling Stockholder will not, without the prior written consent
of the U.S. Representatives, offer, sell, pledge or otherwise dispose of, any
shares of capital stock of the Company or any securities convertible into or
exercisable or exchangeable for such capital stock or any rights to purchase or
acquire such capital stock, for a period of one year after the date of this
Agreement; provided, however, that the foregoing restriction shall not apply to
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(i) the sale of the Shares to be sold hereunder and under the International
Underwriting Agreement, (ii) the sale of the Preferred Shares to be sold under
the Preferred Underwriting Agreement, (iii) any conversion of shares of
Preferred Stock into shares of Common Stock pursuant to the terms of the
Preferred Stock and (iv) any disposition of any shares of Common Stock or
Preferred Stock pursuant to a bona fide pledge or grant of a security interest
to a major brokerage firm or financial institution to secure bona fide
indebtedness, or the sale of such shares upon foreclosure on such pledge,
provided that each purchaser of such shares upon foreclosure agrees to be bound
--------
by the provisions of this paragraph.
SECTION 5. Offering by U.S. Underwriters. After the Registration
-----------------------------
Statement becomes effective, the several U.S. Underwriters will offer the U.S.
Shares for sale to the public on the terms and conditions as set forth in the
U.S. Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
------------------------
agrees with the several U.S. Underwriters and the Selling Stockholders that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectuses with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable, and
with the U.S. Representatives' consent, subparagraph (4)) of Rule 424(b)
within the time period prescribed by such rule. The Company will advise
the U.S. Representatives promptly of any proposal to amend or supplement
the Registration Statement as filed, or the Prospectuses, and will not
effect such amendment or supplement or filing without the U.S.
Representatives' consent (which shall not be unreasonably withheld or
delayed). The Company will also advise the U.S. Representatives promptly
after the Company receives notice of the effectiveness of the Registration
Statement (if the Effective Time is subsequent to the execution and
delivery of this Agreement), of the filing and effectiveness of any
amendment or supplement to the Registration Statement or the Prospectuses,
and of the issuance by the Commission of any stop order in respect of the
Registration Statement or of any order preventing or suspending the use of
any Preliminary Prospectus or any prospectus relating to the Shares or the
initiation of proceedings for any such purpose, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, or of any
request by the Commission to amend or supplement the Registration Statement
or the Prospectuses or for additional
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information and will use its best efforts to prevent the issuance of any
such stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or any prospectus relating to the Shares or
suspending any such qualification and to obtain as soon as possible its
lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectuses as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it is necessary at any
time to amend or supplement the Prospectuses or the Registration Statement
to comply with the Act, the Rules and Regulations or any other law, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 6, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance and will notify the U.S. Representatives
and, upon their request, prepare and furnish without charge to each U.S.
Underwriter, each Selling Stockholder (except as provided below) and to any
dealer in securities as many copies as the U.S. Representatives may from
time to time reasonably request, of amended Prospectuses or any supplement
to the Prospectuses complying with Section 10(a) of the Act which will
correct such statement or omission or effect such compliance, it being
understood and agreed that the Selling Stockholders will pay all costs and
expenses incident to the preparation, printing, filing and distribution of
any such amendment or supplement.
(c) The Company will make generally available to the Company's
security holders as soon as practicable, but in any event not later than 18
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement that satisfies the
provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(d) The Company will deliver to each of the U.S. Representatives as
many conformed copies of the Registration Statement (as originally filed)
and of each amendment thereto (including exhibits filed therewith and
documents incorporated therein by reference) and copies of the Preliminary
Prospectuses and the Prospectuses as the U.S. Representatives may
reasonably request and will also deliver to the U.S. Representatives a
conformed copy of the Registration Statement and each amendment thereto
(including exhibits filed therewith and documents incorporated therein by
reference) for each of the U.S. Underwriters.
(e) The Company will take such action as the U.S. Representatives may
reasonably request, in cooperation with the U.S. Representatives to qualify
the Shares for offering and sale under the applicable securities laws of
such states and other
13
jurisdictions of the United States as the U.S. Representatives may
designate, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Shares; provided, however, that
-------- -------
in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it shall not
then be qualified, or to execute a general consent to service of process in
any jurisdiction in which such a consent has not been previously filed, or
subject itself to taxation in any jurisdiction wherein it would not
otherwise be subject to tax but for the requirements of this paragraph.
The Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
(f) The Company agrees that neither it nor any of its directors or
the principal executive officers set forth in Item 10 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 will,
without the prior written consent of the U.S. Representatives, offer, sell
or otherwise dispose of, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or any rights to purchase or acquire such capital stock, for a period
of 90 days after the date of this Agreement; provided, however, that the
-------- -------
foregoing restriction shall not apply to any issuances or sales (a) in
connection with stock option, savings, benefit or compensation plans or
dividend reinvestment plans in existence on the date of this Agreement or
the conversion or exchange of convertible or exchangeable securities of the
Company, (b) in connection with a merger or other combination with, or
exchange offer for shares of, or acquisition of assets of, another entity,
(c) required in the Company's judgment to prevent termination of the
Standstill Period (as defined in the Shareholders Agreement) or (d) by such
directors and officers of up to 300,000 shares of capital stock in the
aggregate; provided, further, that (i) in the case of clauses (b), (c) and
(d) above, the Company shall give the U.S. Underwriters at least 2 Business
Days' prior written notice of such issuance or sale and (ii) in the case of
clauses (b) and (c) above, the recipients of any such securities shall
agree to be bound by the provisions of this paragraph.
SECTION 7. Conditions of the Obligations of the U.S. Underwriters.
------------------------------------------------------
The obligations of the several U.S. Underwriters to purchase and pay for
the U.S. Firm Shares on the Initial Closing Date will be subject (i) to the
provisions of Section 11 herein, (ii) in the case of representations and
warranties qualified as to materiality, to the accuracy of such representa-
tions and warranties in all respects, and in the case of representations and
warranties not so qualified, to the accuracy of such representations and
warranties in all material respects, in each case on the part of the Company
and the Selling Stockholders herein as of the date hereof and as of the Initial
Closing Date with the same force and effect as if made as of that date, (iii) to
the accuracy of the statements of Company officers and Selling Stockholder
officers made in any certificates furnished pursuant to the provisions hereof,
(iv)
14
to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and (v) to the following additional conditions
precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than
(i) 6:00 p.m. New York City time on the date of determination of the
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon New York City time on the
business day following the day on which the offering price was determined
if such determination occurred after 3:00 p.m. New York City time on such
date. If the Effective Time is prior to the execution and delivery of this
Agreement, the Company shall have filed the Prospectuses with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the Rules and Regulations and in accordance
with Section 6(a) hereof. In either case, prior to the Initial Closing
Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened by the Commission; and the Company shall
have complied with all requests for additional information on the part of
the Commission to the U.S. Representatives' reasonable satisfaction.
(b) The Underwriters shall have received an opinion of Dechert Price
& Xxxxxx, counsel for the Company, dated the Initial Closing Date, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania; and the Company has the corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Prospectuses.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby do not
(a) conflict with or result in a violation of any of the provisions of
the articles of incorporation or bylaws of the Company, (b) conflict
with or violate in any material respect any Pennsylvania, New York or
United States Federal law, rule or regulation, or, to such counsel's
knowledge, any order, judgment or decree known to such counsel that
is applicable to the Company or by which any property or asset of the
Company or any of its subsidiaries is or may be bound (other than
Federal or state securities or blue sky laws, other anti-fraud laws
and fraudulent transfer laws and bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, as to which such counsel
need not express any opinion) or (c) to such counsel's knowledge,
result in a material breach of any of the
15
terms or provisions of, or constitute a default under, any material
loan or credit agreement, indenture, deed of trust, mortgage, note or
other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which any of them
or any of its properties or assets is or may be bound.
(iv) No consent, approval, authorization or other action by or
filing with any Pennsylvania, New York or United States Federal
governmental agency or body or Pennsylvania, New York or United States
Federal court having jurisdiction over the Company or any of its
properties is required to be obtained by the Company in connection
with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby, except
filings and other actions required under the Act and the Rules and
Regulations and state securities and blue sky laws, as to which such
counsel need not express any opinion.
(v) The Company has an authorized capitalization as set forth in
the Prospectuses; the Shares have been duly and validly authorized and
have been duly and validly issued, and are fully paid and
nonassessable; the Shares conform in all material respects to the
description thereof in the Prospectuses.
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, and, to the
knowledge of such counsel, no stop order has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) The statements set forth or referred to in the
Prospectuses under the headings "Description of Capital Stock--
General", "Description of Capital Stock--Common Stock", "Description
of Capital Stock--Preferred Stock" and "Certain United States Federal
Tax Considerations for Non-U.S. Holders of Capital Stock" and in the
Registration Statement under Item 15, insofar as such statements
constitute a summary of the legal matters or documents referred to
therein fairly present the information called for with respect to such
legal matters or documents.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (i) the Registration Statement and the Prospectuses and any
further amendments or supplements thereto made by the Company prior to the
Initial Closing Date (other than the financial statements (including pro forma
financial statements and notes to financial statements
or pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectuses, as to which such counsel need
express no belief) appear on their face to be appropriately responsive in all
material respects to the requirements of the Act and the Rules and Regulations
and (ii) such counsel participated in conferences with officers and
representatives of the Company, Price Waterhouse LLP, the Underwriters, the
Selling Stockholders and Cravath, Swaine & Xxxxx in connection with the
preparation of the Registration Statement, and based on the foregoing and
without assuming responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or making any independent
check or verification thereof (and relying as to factual matters upon the
statements of officers and other representatives of the Company, the Selling
Stockholders and others), no facts have come to the attention of such counsel
which lead them to believe that (I) the Registration Statement, as of the
Effective Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading (other than the information omitted
therefrom in reliance on Rule 430A), or (II) any of the Prospectuses as amended
or supplemented, as of its date and as of each Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that such counsel need not express a belief as to any financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules, and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectuses.
(c) The Underwriters shall also have received from Xxxxxxx X.
Xxxxxxxxxxxx, Executive Vice President, Secretary and General Counsel of the
Company, an opinion, dated the Initial Closing Date, to the effect that:
(i) Each of the Company and its material subsidiaries listed
on Schedule III hereto is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement; and each of
the Company and such material subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
property requires such qualification, except to the extent that the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
made by the Company for the execution and delivery of this Agreement
by the Company or the consummation of the transactions contemplated
hereby, except such as
have been obtained or made under the Act and such as may be required
under state securities and blue sky laws.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby will not
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body of any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or
the articles of incorporation or bylaws of the Company or any such
subsidiary; and to the best of such counsel's knowledge, neither the
Company nor any of its material subsidiaries is in violation of its
articles or incorporation or bylaws, or in material default under any
material agreement, indenture or instrument.
(iv) Except as disclosed in or incorporated by reference in the
Registration Statement, there is no action, suit or proceeding which
has been served upon the Company or any of its subsidiaries or of
which any of their properties or assets is the subject that is now
pending, or to such counsel's knowledge, overtly threatened, against
or affecting the Company or any of its subsidiaries or any of their
properties or assets that, if adversely determined, would have a
material adverse effect on the Company or its subsidiaries, taken as a
whole; and such counsel is not aware of any material contracts or
other material documents or legal or governmental proceedings which
are required to be filed as exhibits to the Registration Statement by
the Act or the Exchange Act which have not been so filed.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (a) each document filed by the Company under the Exchange Act
and incorporated by reference in the Registration Statement and each amendment
or supplement thereto, as of their respective dates or as of the date of any
such amendment or supplement thereto, (other than the financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from such
documents, as to which such counsel need not express an opinion) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and (b) no facts
have come to the attention of such counsel which lead
him to believe that (I) the Registration Statement, as of the Effective Date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading (other than the information omitted therefrom in reliance
on Rule 430A), or (II) any of the Prospectuses as amended or supplemented, as of
its date and as of each Closing Date, contains any untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
counsel need not express a belief as to any financial statements (including pro
forma financial statements and notes to financial statements or pro forma
financial statements) and related schedules, and other financial, accounting or
statistical information included in or excluded from the Registration Statement
or the Prospectuses.
(d) You shall have received an opinion of Xxxxxxxx & Xxxxxxxx,
special counsel for the Selling Stockholders, dated the Initial Closing
Date, that:
(i) All regulatory consents, authorizations, approvals and
filings required to be made or obtained by the Selling Stockholders
under the Federal laws of the United States and the laws of the State
of New York for the sale and delivery of the Shares by the Selling
Stockholders to the Underwriters have been obtained or made.
(ii) Insofar as New York law is concerned, upon delivery of and
payment for the Shares to be sold to the Underwriters in the State of
New York pursuant to this Agreement, the Underwriters will have
acquired the Shares free of any adverse claim within the meaning of
Section 8-302 of the New York Uniform Commercial Code (the "Code").
(iii) The execution and delivery by the Selling Stockholders of
this Agreement and the sale by the Selling Stockholders of the Shares
in accordance with this Agreement will not violate any existing
Federal law of the United States or law of the State of New York.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the State of New York.
(e) You shall have received an opinion of Michel Renault, General
Counsel of CGIP, dated the Initial Closing Date, that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholders.
19
(ii) The sale of the Shares to be sold by the Selling
Stockholders as contemplated by this Agreement and the execution
delivery and performance of this Agreement by the Selling Stockholders
will not conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which it may be bound (including the
restrictions contained in the Shareholders Agreement, which have been
fully waived or satisfied), nor will such action result in any
violation or breach of the provisions of the statuts of such Selling
Stockholder or any law or administrative regulation or administrative
or court decree or order of any court or governmental authority or
agency known by such counsel to be applicable to such Selling
Stockholder.
(iii) No consent, approval, authorization, order, filing,
registration or qualification of or with any court or governmental
authority or agency is required for the sale of the Shares by the
Selling Stockholders as contemplated by this Agreement (except such
counsel need express no opinion as to any necessary qualification
under the securities laws of any foreign country).
(iv) The Selling Stockholders have full right, power and
authority to sell, assign, transfer and deliver, or to cause to be
sold, assigned, transferred and delivered, the Shares to be sold by
the Selling Stockholders to the Underwriters.
(v) The sale of the Shares as contemplated by this Agreement
is not subject to any untracted restrictions on transfer, except the
restrictions on transfers contained in the Shareholders Agreement,
which have been fully waived or satisfied.
(vi) Upon delivery of the Shares to the Underwriters, and
payment therefor by the Underwriters pursuant to this Agreement, good
and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the Republic of France. The foregoing
opinion does not address compliance by the Underwriters with foreign securities
laws with respect to resales of the Shares in France.
(f) The Underwriters shall have received from Cravath, Swaine &
Xxxxx, counsel for the Underwriters, an opinion, dated the Initial Closing
Date, with respect to such matters as the U.S. Representatives may
reasonably request.
20
(g) The Underwriters shall have received from the President or any
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Initial Closing Date, in which such
officers shall state that, to the best of their knowledge and after
reasonable investigation, (i) the Registration Statement as of the
Effective Time, and the Prospectuses as of the date of any filing pursuant
to Rule 424(b) and on the Closing Date, did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and since the Effective Time, no event has occurred which
should have been set forth in a supplement or amendment to the Registration
Statement or the Prospectuses; (ii) there has not been, since the
respective dates as of which information is given in the Registration
Statement and the Prospectuses, any change or event that would be likely to
have a Material Adverse Effect, whether or not arising in the ordinary
course of business; (iii) in the case of representations and warranties in
Section 2 qualified as to materiality, such representations and warranties
are true and correct in all respects, and in the case of representations
and warranties not so qualified, such representations and warranties are
true and correct in all material respects, in each case on the part of the
Company with the same force and effect as though made on and as of the
Initial Closing Date and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Initial Closing Date; and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(h) The Underwriters shall have received from the Selling
Stockholders a certificate, signed by the President or any Vice President
and a principal financial or accounting officer of CGIP, dated the Closing
Date, in which such officers shall state that, to the best of their
knowledge and after reasonable investigation, (i) the Selling Stockholders'
Information contained in the Registration Statement as of the Effective
Time, or in any Prospectus as of the date of any filing pursuant to Rule
424(b) and on the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and (ii) in the case of representations and warranties in Section 3
qualified as to materiality, such representations and warranties are true
and correct in all respects, and in the case of representations and
warranties not so qualified, such representations and warranties are true
and correct in all material respects, in each case on the part of the
Selling Stockholders with the same force and effect as though made on the
Initial Closing Date and the Selling Stockholders have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date.
(i) The Underwriters shall have received from Price Waterhouse LLP,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of
21
the Company, the Underwriters and the Selling Stockholders (with conformed
copies for each of the Underwriters), substantially in the form of Annex A
hereto with such variations as are reasonably acceptable to the U.S.
Representatives.
(j) The Underwriters shall have received from Befec-Price Waterhouse,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex B hereto with such variations as are
reasonably acceptable to the U.S. Representatives.
The several obligations of the U.S. Underwriters to purchase the
Additional Shares hereunder are subject to (i) the accuracy (A) in all material
respects of the representations and warranties of the Company and the Selling
Stockholders contained herein that are qualified as to materiality and (B) in
all respects of such representations and warranties that are not so qualified,
in each case as though made on and as of the Option Closing Date, (ii) the
performance by the Company and the Selling Stockholders of their respective
obligations hereunder, (iii) satisfaction on and as of the Option Closing Date
of the conditions set forth in subsections (a) to (j) of this Section 7,
inclusive (and, for purposes thereof, each reference therein to the Initial
Closing Date shall be deemed to refer to the Option Closing Date), and (iv) the
absence of circumstances on or prior to the Option Closing Date which would
permit termination of this Agreement pursuant to Section 11.
SECTION 8. Payment of Expenses. Other than the fees and expenses of
-------------------
the Company's counsel and accountants, the Selling Stockholders will pay all
costs, expenses, fees, disbursements and taxes incident to the sale of the
Shares contemplated hereby and in the International Underwriting Agreement,
including without limitation (i) the preparation, printing, filing and
distribution of the Registration Statement (including financial statements and
exhibits), the Prospectuses, each Preliminary Prospectus and all amendments and
supplements to any of them prior to or during the period specified in Section
6(b), (ii) the printing, reproduction and distribution of this Agreement and the
International Underwriting Agreement, and all other underwriting and selling
group documents by mail, telex or other means, (iii) the registration with the
Commission of the Shares, (iv) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states
and the preparation, printing and distribution of Preliminary and Supplemental
Blue Sky Memoranda and Legal Investment Survey (including the reasonable fees
and disbursements of the U.S. Underwriters' counsel relating to the foregoing),
(v) filing fees incurred in connection with the National Association of
Securities Dealers, Inc.'s review of the offering's underwriting terms and
arrangements, (vi) the fees and expenses of the Registrar and Transfer Agent for
the Shares and its counsel and (vii) the fees and expenses of the Selling
Stockholders' counsel and accountants.
22
If the sale of the U.S. Shares provided for herein is not consummated
because of the failure to satisfy any condition to the obligations of the U.S.
Underwriters, because of any breach of any representation, warranty or covenant
of the Selling Stockholders contained in this Agreement, because of any
termination pursuant to Section 11 hereof or because of any refusal, failure or
inability of the Company or the Selling Stockholders to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any U.S. Underwriter, the Selling Stockholders shall reimburse the U.S.
Underwriters for all of their reasonable out-of-pocket expenses incurred in
connection with marketing and preparing for the offering of the Shares,
including the reasonable fees and disbursements of counsel for the U.S.
Underwriters.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each of the
U.S. Underwriters and the Selling Stockholders and each person, if any, who
controls any U.S. Underwriter or any Selling Stockholder within the meaning
of either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or
defending or preparing to defend or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action, as such
expenses are incurred), insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the U.S. Prospectus or any U.S. Preliminary
Prospectus, or are 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 (i) the Company shall not be
liable to any U.S. Underwriter under the indemnity agreement in this
paragraph (a) with respect to any U.S. Preliminary Prospectus to the extent
that such losses, claims, damages, liabilities or expenses result from the
fact that such U.S. Underwriter sold Shares to a person as to whom there
was not sent or given, at or prior to the written confirmation of such
sale, a copy of the U.S. Prospectus or of the U.S. Prospectus as then
amended or supplemented in any case where such delivery is required by the
Act if the loss, claim, damage or liability of such U.S. Underwriter
results from an untrue
23
statement or omission of a material fact contained in the U.S. Preliminary
Prospectus which was corrected in the U.S. Prospectus or in the U.S.
Prospectus as then amended or supplemented if the Company had previously
furnished copies thereof to such U.S. Underwriter and (ii) insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with (x) written
information furnished to the Company by or on behalf of the U.S.
Underwriters specifically for use in the Registration Statement, the U.S.
Prospectus or any U.S. Preliminary Prospectus, it being understood and
agreed that the only such information furnished by any U.S. Underwriter
consists of (A) the last paragraph of text on the cover page of the U.S.
Prospectus (and any U.S. Preliminary Prospectus) concerning the terms of
the offering by the U.S. Underwriters, (B) the second and third paragraphs
on page 3 of the U.S. Prospectus (and any U.S. Preliminary Prospectus)
concerning over-allotment and stabilization by the U.S. Underwriters and
exemptions from Rules 10b-6, 10b-7 and 10b-8 under the Exchange Act and (C)
the text under the caption "Underwriting" in the U.S. Prospectus (and any
U.S. Preliminary Prospectus) concerning the terms of the offering by the
U.S. Underwriters and the delivery of Shares pursuant thereto
(collectively, the "Underwriters' Information") or (y) written information
furnished to the Company by or on behalf of the Selling Stockholders
specifically for use in the Registration Statement, the U.S. Prospectus or
any U.S. Preliminary Prospectus, it being understood and agreed that the
only such information furnished by any Selling Stockholder consists of the
information under the caption "Selling Shareholders" in the U.S. Prospectus
(or any U.S. Preliminary Prospectus), other than in respect of the
Company's outstanding capitalization (collectively, the "Selling
Stockholders' Information"). This indemnity agreement will be in addition
to any liability which the Company may otherwise have to the persons
referred to above in this Section 9(a). Notwithstanding anything to the
contrary in this Agreement, the Company shall not be liable to any Selling
Stockholder under the indemnity agreement in this paragraph (a) or for any
breach of any representation or warranty of the Company set forth in
Section 2 with respect to the statements in the U.S. Prospectus (or any
U.S. Preliminary Prospectus) relating to the terms and provisions of the
Shareholders Agreement (the "Shareholders Agreement Information").
(b) The Selling Stockholders agree, jointly and severally, to
indemnify and hold harmless each of the U.S. Underwriters and each person,
if any, who controls any U.S. Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act and 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 such
Section, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without limiting
the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses
24
are incurred) insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based on any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or the U.S. Prospectus or any U.S. Preliminary Prospectus or are caused by
any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
but only in each case with reference to the Selling Stockholders'
Information; provided, however, that the Selling Stockholders shall not be
-------- -------
liable to any U.S. Underwriter under the indemnity agreement in this
paragraph (b) with respect to any U.S. Preliminary Prospectus to the extent
that such losses, claims, damages, liabilities or expenses result solely
from the fact that such U.S. Underwriter sold Shares to a person as to whom
there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the U.S. Prospectus or of the U.S. Prospectus as then
amended or supplemented in any case where such delivery is required by the
Act if the loss, claim, damage or liability of such U.S. Underwriter
results from an untrue statement or omission of a material fact contained
in the U.S. Preliminary Prospectus which was corrected in the U.S.
Prospectus or in the U.S. Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such U.S. Underwriter.
This indemnity agreement will be in addition to any liability which the
Selling Stockholders may otherwise have to the persons referred to above in
this Section 9(b). Notwithstanding anything to the contrary in this
Agreement, the Selling Stockholders shall not be liable to the Company
under the indemnity agreement in this paragraph (b) or for any breach of
any representation or warranty of the Selling Stockholders set forth in
Section 3 with respect to the Shareholders Agreement Information.
(c) Each U.S. Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company or
any Selling Stockholder within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act from and against any and all losses,
claims, damages and liabilities (or actions in respect thereof) (including,
without limiting the foregoing, the reasonable legal and other expenses
incurred in connection with investigating or defending or preparing to
defend or appearing as a third party witness in connection with any such
loss, claim, damage, liability or action, as such expenses are incurred)
insofar as such losses, claims, damages, liabilities and expenses arise out
of or are based on any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the U.S.
Prospectus or any U.S. Preliminary Prospectus, or are 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, but only with reference to the Underwriters' Information. This
indemnity agreement will be in addition to any liability which the U.S.
Underwriters may otherwise have to the persons referred to above in this
Section 9(c).
25
(d) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to any of the
three preceding paragraphs, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing; however, the
omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the three preceding paragraphs only to the
extent prejudiced thereby. In case any action in respect of which
indemnification may be sought hereunder shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to those available to such indemnifying
party in which event the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in connection with
retaining separate legal counsel). No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any claim or pending or threatened proceeding in respect of the
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 arising out of such claim or proceeding.
(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect
the relative fault of the Company, the Selling Stockholders and the U.S.
Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations.
26
The relative fault of the Company, the Selling Stockholders and the U.S.
Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders or by the
U.S. Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(f) The Company, each Selling Stockholder and each of the U.S.
Underwriters agree that it would not be just and equitable if contribution
pursuant to Section 9(e) were determined by pro rata allocation (even if
the U.S. Underwriters were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. 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
in the immediately preceding paragraph 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 Section 9(e), in no event shall any U.S.
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the U.S. Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of
any damages which such U.S. Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
U.S. Underwriters' obligations to contribute pursuant to Section 9(e) are
several in proportion to the respective number of U.S. Firm Shares set
forth opposite their names in Schedule I hereto and not joint.
(g) The Company, the Selling Stockholders and the U.S. Underwriters
agree that any indemnity provision contained in Section 5.5 of the
Shareholders Agreement or any other agreement between the Company on the
one
27
hand and the Selling Stockholders on the other shall be superseded for all
purposes by this Section 9 in respect of the offer and sale of the Shares.
SECTION 10. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement, or contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, including indemnity and
contribution agreements, shall remain operative and in full force and effect,
regardless of any investigation, or any statement as to the results thereof,
made by or on behalf of any U.S. Underwriter or any person controlling any U.S.
Underwriter or by or on behalf of the Company, its officers or directors or
controlling persons, or by any Selling Stockholder or any person controlling any
Selling Stockholder, and shall survive acceptance of and payment for the U.S.
Shares hereunder.
SECTION 11. Termination. This Agreement may be terminated for any
-----------
reason at any time prior to the delivery of and payment for the U.S. Shares on
the Initial Closing Date or the Option Closing Date, as the case may be, by the
U.S. Underwriters upon the giving of written notice by Lazard Freres & Co. LLC
of such termination to the Company and the Selling Stockholders, if prior to
such time (i) there has been, since the respective dates as of which information
is given in the Registration Statement and the U.S. Prospectus, any Material
Adverse Effect, whether or not arising in the ordinary course of business, (ii)
there has occurred any outbreak or escalation of major hostilities or other
national or international calamity or crisis or material adverse change in
existing national or international financial, political, economic or securities
market conditions, the effect of which is such as to make it, in the judgement
of Lazard Freres & Co. LLC, impracticable or inadvisable to market the Shares in
the manner contemplated in the Prospectuses or enforce contracts for the sale of
the Shares, or (iii) trading in the Common Stock of the Company has been
suspended by the Commission or a national securities exchange, or trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority, or
a banking moratorium has been declared by either Federal or New York
authorities. In the event of any such termination, the provisions of Section 8,
the indemnity agreement and contribution provisions set forth in Section 9, and
the provisions of Section 15 shall remain in effect and, if the U.S.
Underwriters shall have purchased any U.S. Shares on the Initial Closing Date
prior to such termination, then all representations and warranties of the
Company and the Selling Stockholders set forth in or made pursuant to this
Agreement and all obligations of the Company pursuant to Section 6 hereof shall
survive such termination.
SECTION 12. Default of U.S. Underwriters. If, on the Initial Closing
----------------------------
Date or the Option Closing Date, as the case may be, any one or more of the U.S.
Underwriters shall fail or refuse to purchase U.S. Shares that it or they have
agreed to purchase hereunder on such date, and the aggregate number of U.S.
Shares which such defaulting U.S. Underwriter or U.S. Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of the U.S. Shares to be purchased on such date by all
28
U.S. Underwriters, the other U.S. Underwriters shall be obligated severally in
the proportions that the number of U.S. Firm Shares set forth opposite their
respective names in Schedule I bear to the aggregate number of U.S. Firm Shares
set forth opposite the names of all such non-defaulting U.S. Underwriters, or in
such other proportions as the U.S. Representatives may specify, to purchase the
U.S. Shares which such defaulting U.S. Underwriter or U.S. Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
--------
the number of U.S. Shares that any U.S. Underwriter has agreed to purchase
pursuant to Section 4 be increased pursuant to this Section 12 by an amount in
excess of one-ninth of such number of U.S. Shares without the written consent of
such U.S. Underwriter. If, on the Initial Closing Date or the Option Closing
Date, as the case may be, any U.S. Underwriter or U.S. Underwriters shall fail
or refuse to purchase U.S. Shares and the aggregate number of U.S. Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of U.S. Shares to be purchased on such date, and arrangements
satisfactory to the U.S. Representatives, the Company and the Selling
Stockholders for the purchase of such U.S. Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any nondefaulting U.S. Underwriter or the Company or the Selling
Stockholders, except for the expenses to be paid or reimbursed by the Company
pursuant to Section 8 and the respective obligations of the Company, the Selling
Stockholders and the U.S. Underwriters pursuant to Section 9; provided, however,
-------- -------
that if the U.S. Underwriters shall have purchased any U.S. Shares on the
Initial Closing Date prior to such termination, then all representations and
warranties of the Company and the Selling Stockholders set forth in or made
pursuant to this Agreement and all obligations of the Company pursuant to
Section 6 hereof shall survive such termination. In any such case either the
U.S. Representatives or the Company shall have the right to postpone the Initial
Closing Date or the Option Closing Date, as the case may be, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectuses or in any other documents or
arrangements may be effected. As used in this Agreement, the term "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter under this
Section. Any action taken under this paragraph shall not relieve any defaulting
U.S. Underwriter from liability in respect of any default of such U.S.
Underwriter under this Agreement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the U.S.
Underwriters shall be directed to the U.S. Representatives c/o Lazard Freres &
Co. LLC, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention: Syndicate
Department; notices to the Company shall be directed to it at Crown Cork & Seal
Company, Inc., 0000 Xxxxxx Xxxx, Xxxxxxxxxxxx, XX 00000, facsimile transmission
no. (000) 000-0000, Attention: Xxxx X. Xxxxxxxxxx, Executive Vice President and
Chief Financial Officer, and Xxxxxxx X. Xxxxxxxxxxxx, Executive Vice President,
Secretary and General Counsel; and notices to the Selling Stockholders shall be
directed to Compagnie Generale d'Industrie et de Participations, 00 xxx
Xxxxxxxx, 00000 Xxxxx, Xxxxxx, Attention: Michel Renault, with a copy to
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, facsimile
transmission no. (000) 000-0000, Attention: Xxxxx X. Xxxxxx.
29
SECTION 14. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Company, its directors and officers who signed the
Registration Statement, the U.S. Underwriters, the Selling Stockholders, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of U.S. Shares from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed 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.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return to us seven counterparts
hereof.
Very truly yours,
CROWN CORK & SEAL COMPANY, INC.,
By
---------------------------------
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE ET DE
PARTICIPATIONS,
By
---------------------------------
Name:
Title:
SOFISERVICE,
By
---------------------------------
Name:
Title:
31
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
By: LAZARD FRERES & CO. LLC
By:
--------------------------
Name:
Title:
Acting severally on behalf of themselves
and as U.S. Representatives
of the several U.S. Underwriters
named in Schedule I hereto.
Schedule I
----------
Number of U.S. Firm Shares
U.S. Underwriters to be Purchased
----------------- ---------------
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
__________
Total 7,400,000
==========
Schedule II
-----------
Number of Additional
--------------------
Shares to be Sold if
--------------------
Number of U.S. Firm Maximum Option
------------------- --------------
Selling Stockholder Shares to be Sold Exercised
------------------- ----------------- ---------
Compagnie Generale d'Industrie et 1,387,500
de Participations
Sofiservice 0
--------- ---------
Total 7,400,000 1,387,500
========= =========
Schedule III
------------
Material Subsidiaries
---------------------
CONSTAR International Inc.
Crown Beverage Packaging, Inc.
Schedule IV
-----------
Directors and Officers
----------------------
ANNEX A
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(i) of the U.S. Underwriting Agreement, Price
Waterhouse LLP, shall furnish letters to the Board of Directors of the Company,
the Underwriters and the Selling Stockholders 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 audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, 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 attached to such letters,
copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, 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 Board of Directors and
the committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the Prospectuses,
inquiries of officials of the Company and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the corresponding items in the unaudited consolidated financial
statements from
2
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
Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectuses
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations 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 three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (E) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter; and
(G) certain sections of the Prospectuses do not comply in all
material respects with the disclosure obligations under Regulation S-K
under the
3
Exchange Act (e.g., "Selected Consolidated Financial Information"
----
(Item 301)) if (i) the information disclosed may be obtained
directly or indirectly from the Company's accounting records and
(ii) such information can be evaluated against reasonable criteria
established by the Commission;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectuses, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the U.S. and International
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.
All capitalized terms used herein have the meanings ascribed to
them in the underwriting agreement to which this Description is annexed.
ANNEX B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the U.S. Underwriting Agreement, Befec-
Price Waterhouse, shall furnish letters to the Board of Directors of the
Company, the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect
to CarnaudMetalbox 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 audited by them and included or
incorporated by reference in the Prospectuses or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of CarnaudMetalbox for the periods
specified in such letter, as indicated in their reports attached to such
letters, copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, 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 CarnaudMetalbox and
its subsidiaries, inspection of the minute books of the Board of Directors
and the committees thereof of CarnaudMetalbox and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectuses, inquiries of officials of CarnaudMetalbox and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectuses do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectuses;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectuses do not agree
with the
2
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 Prospectuses;
(C) the unaudited financial statements which were not included in
the Prospectuses but from which were derived any unaudited condensed
financial statements referred to in paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectuses and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectuses;
(D) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of CarnaudMetalbox and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectuses, except in each case for changes,
increases or decreases which the Prospectuses disclose have occurred
or may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectuses
to the specified date referred to in paragraph (D) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectuses disclose have occurred or may occur
and which are described in such letter;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectuses and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP standards,
with respect to certain amounts, percentages and financial information
specified by the Underwriters, which are derived from the general accounting
records of CarnaudMetalbox and its subsidiaries, which appear in the
Prospectuses, or in Part II of, or in exhibits and schedules to, the
Registration
3
Statement specified by the U.S. and International Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of CarnaudMetalbox and its subsidiaries and
have found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
