THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES INC.
Class A Common Stock
(par value $.01 per share)
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Underwriting Agreement
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May [ ], 2000
▇▇▇▇▇▇▇, Sachs & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
▇.▇. ▇▇▇▇▇▇ Securities Inc.,
As representatives of the several Underwriters
named in Schedule I hereto
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Certain stockholders of The ▇▇▇▇▇ ▇▇▇▇▇▇ Companies Inc., a Delaware
corporation (the "Company"), named in Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 10,000,000 shares (the "Firm Shares"), and at the election of the
Underwriters, up to 1,500,000 additional shares (the "Optional Shares") of Class
A Common Stock, par value $.01 per share ("Stock"), of the Company. The Firm
Shares and the Optional Shares that the Underwriters elect to purchase pursuant
to Section 2 hereof are herein collectively called the "Shares".
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-37370)
(the "Initial Registration Statement") in respect of the Shares has
been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, but including all documents
incorporated by reference in the prospectus contained therein,
furnished to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the
Initial Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration
Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and including (i) the information contained in the
form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective or such
part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement and the 462(b) Registration Statement, if any, at the time
such part of each such registration statement became effective, each as
amended at the time such part of each such registration statement
became effective, are hereinafter collectively called the "Registration
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement.
(ii) No order preventing or suspending the use of any
Preliminary Prospectus has been issued 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 of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein;
(iii) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein
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not misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and the Registration Statement and any amendment thereto do
not and will not, as of the applicable effective date, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and the Prospectus does not, and as amended or
supplemented will not, as of the applicable filing date, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
capital stock (other than pursuant to employee stock option plans and
employment agreements in each case existing on the date of this
Agreement) or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries taken as a
whole, in each case, otherwise than as set forth or contemplated in the
Prospectus;
(vi) The Company and its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title
to all personal property owned by them, in each case free and clear of
all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries or such as do not
and would not, individually or in the aggregate, have a material
adverse effect on the business, prospects, operations, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"); and any real property
and buildings held under lease by the Company and its subsidiaries are
held by them under
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valid, subsisting and enforceable leases with such exceptions as are
not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its subsidiaries
or such as do not and would not, individually or in the aggregate, have
a Material Adverse Effect;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except where failure to
be so qualified would not have a Material Adverse Effect; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, except where failure to be in such good
standing would not have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable and conform to the description of the Stock
contained in the Prospectus; and all of the issued shares of capital
stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except
for directors' qualifying shares and as disclosed in the Prospectus)
are owned directly or indirectly by the Company (except for minority
interests in certain subsidiaries of the Company, as set forth on
Schedule III attached hereto), free and clear of all liens,
encumbrances, equities or claims;
(ix) The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties, except for foreign and
state securities and Blue Sky laws, and except for breaches, violations
or defaults (other than any relating to the Certificate of
Incorporation or By-laws of the Company) that would not, individually
or in the aggregate, have a Material Adverse Effect or in the aggregate
impair the Company's ability to consummate the transactions herein
contemplated; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement except the registration
under the Act of the Shares, the registration under the Exchange Act of
the Stock and such consents, approvals, authorizations, registrations
or qualifications as may be required under state or foreign securities
or Blue Sky laws in connection with the purchase and distribution of
the Shares by the Underwriters;
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(x) Neither the Company nor any of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., Aramis
Inc., Clinique Laboratories, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ International, Inc.,
▇▇▇▇▇ ▇▇▇▇▇▇ Cosmetics Ltd., Clinique Laboratories K.K., ▇▇▇▇▇ ▇▇▇▇▇▇
K.K., ▇▇▇▇▇ ▇▇▇▇▇▇ N.V. and ▇▇▇▇▇ ▇▇▇▇▇▇ A.G. Lachen (each, a
"Principal Subsidiary" and collectively, the "Principal Subsidiaries")
is in violation of its Certificate of Incorporation or By-laws and
neither the Company nor any of its subsidiaries is in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound,
which default would have a Material Adverse Effect;
(xi) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms of the Stock, and under the caption
"Certain Relationships and Related Transactions" set forth in the
Company's proxy statement dated September 30, 1999 and incorporated by
reference into the Company's Annual Report on Form 10-K for the year
ended June 30, 1999, insofar as they purport to summarize the
provisions of the laws, documents and transactions referred to therein
for purposes of complying with the requirements of Form S-3, are
accurate and correct in all material respects;
(xii) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect; and, to the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(xiii) There are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not so described or filed;
(xiv) Each of the Company and its subsidiaries owns or has
rights to adequate foreign and domestic patents, patent licenses,
trademarks, service marks, trade names, inventions, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") necessary to
carry on their respective businesses as of the date hereof, and neither
the Company nor any of its subsidiaries is aware that it would
interfere with, infringe upon or otherwise come into conflict with any
Intellectual Property rights of third parties as a result of the
operation of the business of the Company or any subsidiary as of the
date hereof that, individually or in the aggregate, if subject to an
unfavorable decision, ruling or finding would have a Material Adverse
Effect;
(xv) Except as disclosed in the Prospectus, there are no holders
of securities (debt or equity) of the Company or any of its
subsidiaries, or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the
Company or any of its subsidiaries, who have the right to request the
Company or any of its subsidiaries to register securities held by them
under the Act;
(xvi) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment
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company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(xvii) The Stock is listed on the New York Stock Exchange; and
(xviii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(b) Each of the Selling Stockholders severally and not jointly, solely
with respect to himself, herself or itself, represents and warrants to, and
agrees with, each of the Underwriters and the Company that:
(i) With respect to The 4202 Corporation, such Selling
Stockholder has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and has the power and authority to own and sell its
property and to conduct its business;
(ii) With respect to the LAL Trust (as defined in Section 7(d)),
such Selling Stockholder has been duly created, is validly existing as
a trust under the laws of the jurisdiction of its organization and has
the power and authority to own and sell its property and to conduct its
business;
(iii) With respect to LAL Family Partners L.P., such Selling
Stockholder has been duly formed, is validly existing as a limited
partnership under the laws of the State of California and has the power
and authority to own and sell its property and to conduct its business;
(iv) No consent, approval, authorization or order of any court
or governmental agency or body is required to be obtained by such
Selling Stockholder for the execution and delivery by such Selling
Stockholder of this Agreement, the Custody Agreement and the Power of
Attorney hereinafter referred to and for the sale and delivery by such
Selling Stockholder of the Shares to be sold by such Selling
Stockholder hereunder, except such as have been obtained, the
registration of the sale of such Shares under the Act, the registration
under the Exchange Act of the Stock, and such as may be required under
foreign and state securities and Blue Sky Laws; and such Selling
Stockholder has full right, power and authority to enter into this
Agreement, the Custody Agreement and the Power of Attorney and to sell,
assign, transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder (subject to the Custody Agreement, the Power of
Attorney and the Stockholders' Agreement, dated November 22, 1995, as
amended, among certain Lauder Family Members (as defined in the
Registration Statement));
(v) The sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the obligations of such Selling Stockholder under this
Agreement, the Custody Agreement and the Power of Attorney and the
consummation by such Selling Stockholder of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
(A) in the case of the LAL Family Partners L.P and the LAL Trust, the
constitutive documents of such Selling Stockholder, or (B) under any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound, or to which any of the property or
assets of such Selling
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Stockholder is subject, nor, in the case of The 4202 Corporation, will
such action result in any violation of the provisions of its
certificate of incorporation or by-laws, nor will such action result in
any violation of the provisions of any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder, except that such Selling Stockholder makes no
representation under this paragraph as to the registration or filing
requirements or disclosure provisions of the securities laws of the
United States or the securities or Blue Sky laws of any other
jurisdiction;
(vi) Such Selling Stockholder has, and immediately prior to
First Time of Delivery (as defined in Section 4 hereof) of such Shares
by such Selling Stockholder, such Selling Stockholder will have, good
and valid title to the Shares to be sold by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or
claims; and, upon delivery of the Shares to be sold by such Selling
Stockholder hereunder and payment therefor pursuant hereto, good and
valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will be transferred by such Selling Stockholder to
the several Underwriters;
(vii) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectus, such Selling Stockholder will not offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any Stock
or securities of the Company that are substantially similar to the
Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, Stock or any such substantially similar securities (other than
dispositions among Lauder Family Members or pursuant to employee stock
option plans and employment agreements in each case existing on, or
upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement, provided that
this provision shall continue to apply with respect to the securities
received upon such conversion or exchange) without your prior written
consent;
(viii) 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;
(ix) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act and the rules and regulations of the
Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
(x) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or
at the First Time of Delivery of Shares by such Selling Stockholder a
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properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof);
(xi) Such Selling Stockholder has duly executed and delivered a
custody agreement appointing ChaseMellon Shareholder Services, L.L.C.
as custodian (the "Custodian"), for the Shares being sold by such
Selling Stockholder (the "Custody Agreement"), and certificates in
negotiable form representing all of the Shares to be sold by such
Selling Stockholder hereunder) have been deposited with and are being
held by the Custodian. Such Selling Stockholder has duly executed and
delivered a Power of Attorney in the form heretofore furnished to you
(the "Power of Attorney"), appointing the person(s) indicated in
Schedule II hereto as such Selling Stockholder's attorney(s)-in-fact
(the "Attorney-in-Fact") with authority to authorize the delivery of
the Shares to be sold by such Selling Stockholder hereunder and
otherwise to act on behalf of such Selling Stockholder in connection
with the transactions contemplated by this Agreement to the extent set
forth in the Power of Attorney; and
(xii) The Shares represented by the certificates held, or to be
held, in custody for such Selling Stockholder under the Custody
Agreement are subject to the interests of the Underwriters hereunder;
the arrangements made by such Selling Stockholder for such custody and
the appointment by such Selling Stockholder of the Attorneys-in-Fact by
the Power of Attorney, are to that extent irrevocable; the obligations
of such Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any executor or
trustee or the termination of such estate or trust, in the case of an
estate or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of
any other event; if any such executor or trustee should die or become
incapacitated, or if any such estate or trust should be terminated, or
if any such partnership or corporation should be dissolved, or if any
other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by
or on behalf of such Selling Stockholder in accordance with the terms
and conditions of this Agreement and the Custody Agreement; and actions
taken by the Attorneys-in-Fact pursuant to the Power of Attorney shall
be as valid as if such death, incapacity, termination, dissolution or
other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received
notice of such death, incapacity, termination, dissolution or other
event.
2. Subject to the terms and conditions herein set forth, (a) each of
the Selling Stockholders agrees, severally and not jointly, to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from each of the Selling Stockholders, at a purchase price
per share of $[ ], the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number of
Firm Shares to be sold by each of the Selling Stockholders as set forth opposite
their respective names in Schedule II hereto by a fraction, the numerator of
which is the aggregate number of Firm Shares to be purchased by such Underwriter
as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from all of the Selling Stockholders hereunder and (b)
in the event and to the extent that the Underwriters shall exercise the election
to purchase Optional Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling
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Stockholders, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a
fraction the numerator of which is the maximum number of Optional Shares which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 1,500,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares shall be made in proportion to the maximum number of
Optional Shares to be sold by each Selling Stockholder as set forth in Schedule
II hereto. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Attorneys-in-Fact, given within a period of 30
calendar days after the date of this Agreement and setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by you but in no event earlier than
the First Time of Delivery (as defined in Section 4 hereof) or, unless you and
the Attorneys-in-Fact otherwise agree in writing, earlier than two or later than
ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder in
definitive form, and in such authorized denominations and registered in such
names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight hours' prior
notice to the Selling Stockholders, shall be delivered by or on behalf of the
Selling Stockholders to ▇▇▇▇▇▇▇, Sachs & Co., for the account of such
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer, payable to the order of each of the Selling
Stockholders, in Federal (same day) funds. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to each Time of Delivery with respect
thereto at the office of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or The Depository Trust Company or
its designated custodian, as the case may be (the "Designated Office"). The time
and date of such delivery and payment shall be (i) with respect to the Firm
Shares, 9:30 a.m., New York City time, on [ ], 2000 or such other time and date
as ▇▇▇▇▇▇▇, Sachs & Co. and the Selling Stockholders may agree upon in writing,
and (ii) with respect to the Optional Shares, 9:30 a.m., New York City time, on
the date specified by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in the written notice given by
▇▇▇▇▇▇▇, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(j) hereof, will be delivered at the offices
of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
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10153 (the "Closing Location"), and the Shares will be delivered at the
Designated Office, all at each Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., New York City time, on the New York Business Day
next preceding each Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the last Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or Prospectus, of
the suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of this Agreement,
and the Company shall at the time of filing either pay to the Commission the
filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
(c) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process, or take any action that would subject the Company to any
tax, in any jurisdiction;
(d) Prior to 12:00 noon, New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to use its
best efforts to furnish the Underwriters with copies of the Prospectus in New
York City in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the
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offering or sale of the Shares and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such
period to amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(e) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule
158);
(f) During the period beginning from the date hereof and continuing to
and including the date 90 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any Stock or securities of the Company that are substantially similar to the
Shares, including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans and employment agreements, in each case, existing on, or upon the
conversion or exchange of convertible or exchangeable securities outstanding as
of, the date of this Agreement), or to file any registration statement with the
Commission under the Act relating to any such securities without your prior
written consent;
(g) To make available to its stockholders as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, to
make available to its stockholders as soon as practicable after the end of each
of the first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail; and
(h) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the
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extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally or to the Commission).
6. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) each Selling
Stockholder will pay or cause to be paid a pro rata share (based on the number
of Shares to be sold by such Selling Stockholder hereunder) of the following:
(i) the filing fees and fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky
Memorandum, closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Shares; (iii) all expenses in connection with the qualification of the Shares
for offering and sale under state securities laws as provided in Section 5(c)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
and (iv) the filing fees incident to, and the fees and disbursements of counsel
for the Underwriters in connection with, securing any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; and (b) the Company will pay or cause to be paid: (i) the cost of
preparing stock certificates; (ii) the cost and charges of any transfer agent or
registrar; and (iii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section 6; and (c) such Selling Stockholder will pay or cause to be paid
all costs and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section 6, including (i) any fees and expenses of counsel for such Selling
Stockholder, (ii) such Selling Stockholder's pro rata share of the fees and
expenses of the Attorney-in-Fact and (iii) all expenses and taxes incident to
the sale and delivery of the Shares to be sold by such Selling Stockholder to
the Underwriters hereunder. In connection with clause (iii) of the preceding
sentence, ▇▇▇▇▇▇▇, Sachs & Co. agrees to pay New York State stock transfer tax,
and each of the Selling Stockholders agrees to reimburse ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
for associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that, except as provided in this Section 6, and Sections 8 and 11
hereof, the Underwriters will pay all of their own costs and expenses, including
the fees of their counsel, stock transfer taxes on resale of any of the Shares
by them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and the Selling Stockholders herein are, at and as of such Time of
Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no
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proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, shall have furnished to you such opinion or opinions (a draft of
each such opinion is attached as Annex II(a) hereto), dated such Time of
Delivery, with respect to the matters covered in paragraphs (i), (vi), (ix)
(including with respect to the caption "Underwriting") and (xii) of subsection
(c) below as well as such other related matters as you may reasonably request,
and such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Weil, Gotshal & ▇▇▇▇▇▇, LLP, counsel for the Company, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(b) hereto), dated such Time of Delivery, in form and substance
reasonably satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the Shares
conform to the description of the Stock contained in the
Prospectus;
(iii) The Company is duly qualified to transact business
and in good standing under the laws of each other jurisdiction
where it owns or leases properties or conducts any business so
as to require such qualification, except where the failure to be
in good standing would not have a Material Adverse Effect (such
counsel being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided
that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions and
certificates);
(iv) Each of the Principal Subsidiaries which is
incorporated in the United States ("U.S. Principal
Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; and, to the best of such
counsel's knowledge, all of the issued shares of capital stock
of each U.S. Principal Subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and
are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances or claims;
(v) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending or overtly threatened against the Company or
any of its subsidiaries or involving the Company or any of its
subsidiaries or any property of the Company or any of its
subsidiaries which would be required to be disclosed in the
Prospectus;
(vi) This Agreement has been duly authorized, executed
and delivered by the Company;
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(vii) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of
its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, and
that is material to the Company and its subsidiaries taken as a
whole, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any New York, Delaware corporate or Federal law, rule
or regulation (other than foreign and state securities or Blue
Sky laws, as to which such counsel expresses no opinion, and
other than Federal securities laws, as to which such counsel
expresses no opinion except as otherwise set forth herein), or
any judgment, writ, injunction, decree, order or ruling of any
court or governmental authority binding on the Company of which
such counsel is aware;
(viii)No consent, approval, authorization, order,
registration or qualification of or with any New York, Delaware
corporate or Federal governmental authority is required for the
consummation by the Company of the transactions contemplated by
this Agreement, except the registration under the Act of the
Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
or foreign securities or Blue Sky laws as to which such counsel
need express no opinion (it being understood that the opinion
may be limited to those consents, approvals, authorizations,
orders, registrations or qualifications that, in such counsel's
experience, are normally applicable to the transactions of the
type contemplated by this Agreement);
(ix) The statements set forth in the Prospectus under the
caption "Description of Capital Stock", insofar as they purport
to constitute a summary of the terms of the Stock, are accurate
and correct in all material respects;
(x) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act;
(xi) The documents incorporated by reference in the
Prospectus (other than the financial statements and related
notes, the financial statement schedules and other financial and
accounting data therein, as to which such counsel need express
no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the
Exchange Act, as applicable and the rules and regulations of the
Commission thereunder; and
(xii) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related notes, the financial statement schedules
and other financial and accounting data included in the
Registration Statement or Prospectus, as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder.
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In addition, such counsel shall state that it has participated in
conferences with directors, officers and other representatives of the Company,
various of the Selling Stockholders, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, at which conferences the
contents of the Registration Statement and the Prospectus and related matters
were discussed, and, although such counsel has not independently verified and is
not passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
Prospectus, except to the extent specified in subsection (ix) of this Section
7(c), no facts have come to such counsel's attention which leads such counsel to
believe that the Registration Statement (including any documents incorporated by
reference therein), on the effective date thereof (or, in the case of documents
incorporated by reference, when such documents became effective or were filed),
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading or that the Prospectus, on the date thereof or on the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or
necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel expresses no view with respect to the financial statements and
related notes, the financial statement schedules and the other financial and
accounting data included in the Registration Statement or Prospectus); and they
do not know of any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or described as required.
In rendering such opinion, such counsel may state that it expresses no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the corporate laws of the State of Delaware and the federal laws of
the United States;
(d) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as trustee
of The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Charitable Trust f/b/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and charitable
organizations, u/a/d May 18, 2000, created by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as grantor,
(the "LAL Trust"), shall have furnished to you their written opinion (a draft of
which is attached as Annex II(c) hereto) with respect to such Selling
Stockholder, dated such Time of Delivery, in form and substance satisfactory to
you, to the effect that:
(i) Such Selling Stockholder validly exists as a trust
under, and is governed by, the laws of the State of New York;
and the trustee of such Selling Stockholder has the requisite
power and authority, on behalf of such Selling Stockholder, to
enter into this Agreement, the Custody Agreement and the Power
of Attorney, and to consummate the transactions contemplated
hereby and thereby in connection with the Shares to be sold by
such Selling Stockholder under this Agreement;
(ii) The Custody Agreement and the Power of Attorney have
been duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(iii) This Agreement has been duly executed and delivered
by such Selling Stockholder; and the sale by such Selling
Stockholder of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with
all of the obligations of such Selling Stockholder under this
-15-
Agreement, the Custody Agreement and the Power of Attorney and
the consummation by such Selling Stockholder of the transactions
herein and therein contemplated will not conflict with or result
in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such action result in any violation of the provisions of
any New York, Delaware corporate or Federal statute or order,
rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over such
Selling Stockholder or the property of such Selling Stockholder,
except that such counsel need not express any opinion as to
compliance with the registration or filing requirements or
disclosure provisions of the securities laws of the United
States or the securities or Blue Sky laws of any other
jurisdiction;
(iv) No consent, approval, authorization or order of any
New York, Delaware corporate or Federal governmental agency or
body is required to be obtained by such Selling Stockholder for
the consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, the Custody Agreement and the
Power of Attorney in connection with the Shares to be sold by
such Selling Stockholder hereunder, except such as have been
duly obtained and are in full force and effect, the registration
of the Shares under the Act, the registration of the Stock under
the Exchange Act and such as may be required under state or
foreign securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters (as
to which such counsel need express no opinion) (it being
understood that the opinion may be limited to those consents,
approvals, authorizations, orders, registrations or
qualifications that, in such counsel's experience, are normally
applicable to the transactions of the type contemplated by this
Agreement);
(v) Such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement; and
(vi) Assuming that the Underwriters purchase the Shares
to be delivered at such Time of Delivery for value and without
notice of any adverse claim as such terms are used in Section
8-105 of the Uniform Commercial Code as currently in effect in
the State of New York (the "New York UCC"), the delivery of
certificates representing such Shares either registered in the
name of the Underwriters or effectively endorsed to the
Underwriters or in blank will pass to the Underwriters all
rights that such Selling Stockholder has in such Shares, free of
all adverse claims as such term is used in Section 8-105 of the
New York UCC.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States and in rendering its opinion
in subparagraph (vi) such counsel may rely upon a certificate of such Selling
Stockholder in respect of matters of fact as to ownership of, and liens,
encumbrances, equities or claims on the Shares sold by such Selling Stockholder,
provided that such counsel shall state that they believe that both you and they
are justified in relying upon such certificate;
-16-
(e) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to LAL Family Partners L.P.,
shall have furnished to you their written opinion (a draft of such opinion is
attached as Annex II(d) hereto) with respect to such Selling Stockholder, dated
such Time of Delivery, in form and substance reasonably satisfactory to you, to
the effect that:
(i) Such Selling Stockholder validly exists as a limited
partnership under, and is governed by, the laws of the State of
California; and has the requisite power and authority to enter
into this Agreement, the Custody Agreement and the Power of
Attorney, and to consummate the transactions contemplated hereby
and thereby in connection with the Shares to be sold by such
Selling Stockholder under this Agreement;
(ii) The Custody Agreement has been duly executed and
delivered by such Selling Stockholder and constitutes the valid
and binding agreement of such Selling Stockholder enforceable in
accordance with their terms;
(iii) This Agreement has been duly executed and delivered
by or on behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and the
compliance by such Selling Stockholder with all of the
obligations of such Selling Stockholder under this Agreement and
the Custody Agreement and the Power of Attorney and the
consummation by such Selling Stockholder of the transactions
herein and therein contemplated will not conflict with or result
in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such action result in any violation of the provisions of
any New York, Delaware corporate or Federal law, rule or
regulation known to such counsel (other than foreign and state
securities or Blue Sky laws, as to which such counsel expresses
no opinion, and other than Federal securities laws, as to which
such counsel expresses no opinion except as otherwise set forth
herein), or any judgment, writ, injunction, decree, order or
ruling of any court or governmental authority binding on such
Selling Stockholder of which such counsel is aware;
(iv) No consent, approval, authorization or order of any
New York, Delaware corporate or Federal governmental agency or
body is required to be obtained by such Selling Stockholder for
the consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, the Custody Agreement and the
Power of Attorney or, in connection with the Shares to be sold
by such Selling Stockholder hereunder, except such as have been
duly obtained and are in full force and effect, the registration
of the Shares under the Act and such as may be required under
state or foreign securities or Blue Sky laws in connection with
the purchase and distribution of such Shares by the Underwriters
(as to which such counsel need express no opinion) (it being
understood that the opinion may be limited to those consents,
approvals, authorizations, orders, registrations or
qualifications that, in such counsel's experience, are normally
applicable to the transactions of the type contemplated by this
Agreement);
(v) Such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement; and
-17-
(vi) Assuming that the Underwriters purchase the Shares
to be delivered at such Time of Delivery for value and without
notice of any adverse claim as such terms are used in Section
8-105 of the Uniform Commercial Code as currently in effect in
the State of New York (the "New York UCC"), the delivery of
certificates representing such Shares either registered in the
name of the Underwriters or effectively endorsed to the
Underwriters or in blank will pass to the Underwriters all
rights that such Selling Stockholder has in such Shares, free of
all adverse claims as such term is used in Section 8-105 of the
New York UCC.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the laws of the
State of New York and, to the extent applicable to the opinion, the laws of the
State of California, the corporate laws of the State of Delaware and the federal
laws of the United States, and in rendering the opinion in subparagraph (vi)
such counsel may rely upon a certificate of such Selling Stockholder in respect
of matters of fact as to ownership of, and liens, encumbrances, equities or
claims on the Shares sold by such Selling Stockholder, provided that such
counsel shall state that they believe that both you and they are justified in
relying upon such certificate;
(f) Debevoise & ▇▇▇▇▇▇▇▇, counsel to The 4202 Corporation, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(e) hereto) with respect to such Selling Stockholder, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) Such Selling Stockholder has been duly incorporated
and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has the power and
authority to own and sell its property and to conduct its
business; and has the requisite power and authority to enter
into this Agreement, the Custody Agreement and the Power of
Attorney, and to consummate the transactions contemplated hereby
and thereby in connection with the Shares to be sold by such
Selling Stockholder under this Agreement;
(ii) The Custody Agreement and the Power of Attorney have
been duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such Selling
Stockholder in accordance with their terms;
(iii) This Agreement has been duly executed and delivered
by or on behalf of such Selling Stockholder; and the sale of the
Shares to be sold by such Selling Stockholder hereunder and the
compliance by the Selling Stockholder with all of the
obligations of such Selling Stockholder under this Agreement,
the Custody Agreement and the Power of Attorney and the
consummation by such Selling Stockholder of the transactions
herein and therein contemplated will not conflict with or result
in a breach or violation of any terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known to
such counsel to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, nor
will such action result in any violation of the provisions of
its certificate of incorporation or by-laws or any New York,
Delaware corporate or Federal statute or order, rule or
regulation known to such counsel of any court or governmental
agency or body having jurisdiction over such Selling Stockholder
or the property of such Selling Stockholder, except that such
counsel need not express any opinion as to
-18-
compliance with the registration or filing requirements or
disclosure provisions of the securities laws of the United
States or the securities or Blue Sky laws of any other
jurisdiction;
(iv) No consent, approval, authorization or order of any
New York, Delaware corporate or Federal governmental agency or
body is required to be obtained by such Selling Stockholder for
the consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, the Custody Agreement and the
Power of Attorney in connection with the Shares to be sold by
such Selling Stockholder hereunder, except such as have been
duly obtained and are in full force and effect, the registration
of the Shares under the Act, the registration of the Stock under
the Exchange Act and such as may be required under state or
foreign securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters;
(as to which such counsel need express no opinion) (it being
understood that the opinion may be limited to those consents,
approvals, authorizations, orders, registrations or
qualifications that, in such counsel's experience, are normally
applicable to the transactions of the type contemplated by this
Agreement);
(v) Such Selling Stockholder has full right, power and
authority to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement; and
(vi) Assuming that the Underwriters purchase the Shares
to be delivered at such Time of Delivery for value and without
notice of any adverse claim as such terms are used in Section
8-105 of the Uniform Commercial Code as currently in effect in
the State of New York (the "New York UCC"), the delivery of
certificates representing such Shares either registered in the
name of the Underwriters or effectively endorsed to the
Underwriters or in blank will pass to the Underwriters all
rights that such Selling Stockholder has in such Shares, free of
all adverse claims as such term is used in Section 8-105 of the
New York UCC.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States and in rendering its opinion
in subparagraph (vi) such counsel may rely upon a certificate of such Selling
Stockholder in respect of matters of fact as to ownership of, and liens,
encumbrances, equities or claims on the Shares sold by such Selling Stockholder,
provided that such counsel shall state that they believe that both you and they
are justified in relying upon such certificate;
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the
-19-
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus there shall not have been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity, results of operations or Intellectual Property of the
Company and its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in Clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(i) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange (the "Exchange"); (ii) a suspension or
material limitation in trading in the Company's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(j) The Company shall have obtained and delivered to the Underwriters
executed copies of an agreement from all of the Selling Stockholders, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to the effect set forth in Subsection 1(b)(v)
hereof in form and substance satisfactory to you;
(k) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Company and of the Selling Stockholders, respectively, satisfactory to
you as to the accuracy of the representations and warranties of the Company and
the Selling Stockholders, respectively, herein at and as of such Time of
Delivery, as to the performance by the Company and the Selling Stockholders of
all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (g) of this
Section 7, and as to such other matters as you may reasonably request;
(l) The Company shall have complied with the provisions of Section 5(d)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(m) Each of the Selling Stockholders shall have delivered to the
Underwriters certificates required by Treasury Regulation section 1.1445-2(b)(2)
in order to avoid withholding of tax under Section 1445 of the Internal Revenue
Code of 1986, as amended.
8. (a) The Company and each of the Selling Stockholders, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof)
-20-
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the Selling Stockholders shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇, Sachs & Co.
expressly for use therein. Notwithstanding the provisions of this subsection
(a), no Selling Stockholder shall be required to pay an amount in excess of the
gross proceeds received by such Selling Stockholder from the Shares sold by it
hereunder.
(b) Each Underwriter will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or such Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (which shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party,
-21-
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Stockholders on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares purchased
under this Agreement (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Shares purchased under this
Agreement, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, 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 on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, each of the Selling Stockholders and each of the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The
-22-
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under
this Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company or any Selling Stockholder within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Selling Stockholders shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Shares on such terms. In the event that,
within the respective prescribed periods, you notify the Selling Stockholders
that you have so arranged for the purchase of such Shares, or the Selling
Stockholders notify you that they have so arranged for the purchase of such
Shares, you or the Selling Stockholders shall have the right to postpone such
Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, then the
Selling Stockholders shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares of
such defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Selling
Stockholders as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased exceeds one-eleventh of the aggregate number of
all of the Shares to be purchased at such Time of Delivery, or if the Selling
Stockholders shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Shares of a defaulting
Underwriter or Underwriters, then the obligations of the Underwriters to
purchase and of the Selling Stockholders to sell the Shares to be sold at such
Time of Delivery shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the
-23-
Selling Stockholders, except for the expenses to be borne by the Company and the
Selling Stockholders and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Selling Stockholders as provided herein, each of the Selling Stockholders pro
rata (based on the number of Shares to be sold by such Selling Stockholder
hereunder), will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company and
the Selling Stockholders shall then be under no further liability to any
Underwriter in respect of the Shares not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of you as the
Representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Selling Stockholder made or given by any or
all of the Attorneys-in-Fact for any Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of ▇▇▇▇▇▇▇, Sachs &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for any Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: General Counsel;
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire or
telex constituting such Questionnaire, which address will be supplied to the
Company or the Selling Stockholders by you upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. At any time and from time to time after the Time of Delivery, the
Selling Stockholders agree to cooperate with the Underwriters, and at the
request of the Underwriters, to execute and deliver any further instruments or
documents and to take all such further action
-24-
as the Underwriters may reasonably request in order to carry out the intent of
the parties hereunder with respect to the sale and delivery of the Shares to the
Underwriters.
14. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and the Selling Stockholders and, to
the extent provided in Sections 8 and 10 hereof, the officers and directors of
the Company and each person who controls the Company, any Selling Stockholder or
any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us ten counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement among each of the Underwriters, the Company
and each of the Selling Stockholders. It is understood that your acceptance of
this letter on behalf of each of the Underwriters is pursuant to the authority
set forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination upon
request, but without warranty on your part as to the authority of the signers
thereof.
-25-
Any person executing and delivering this Agreement as Attorney-in-Fact
for a Selling Stockholder represents by so doing that he has been duly appointed
as Attorney-in-Fact by the Selling Stockholder pursuant to a validly existing
and binding Power of Attorney which authorizes such Attorney-in-Fact to take
such action.
Very truly yours,
THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES INC.
By:
-------------------------------
-26-
THE 4202 CORPORATION
By:
--------------------------------------
Name:
Title:
LAL FAMILY PARTNERS L.P.
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Partner
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CHARITABLE TRUST
By:
--------------------------------------
Name:
Title: Trustee
-27-
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By:
-------------------------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
-28-
SCHEDULE I
Number of Optional
Shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased (a) Exercised (a)
----------- ------------------- -------------
▇▇▇▇▇▇▇, Sachs & Co................................................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated.........................................
▇.▇. ▇▇▇▇▇▇ Securities Inc.........................................
-------------- -------------
Total...................................................
============== =============
-29-
SCHEDULE II
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
to be Sold (c) Exercised (c)
-------------- -------------
The Selling Stockholders*:
The 4202 Corporation(a)................................
LAL Family Partners, L.P. (b)
The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Charitable Trust (b).............
-------------- -------------
Total..................................................
============== =============
(a) The 4202 Corporation is represented by Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(b) LAL Family Partners, L.P and The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Charitable Trust are
each represented by Weil, Gotshal & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
* Attorneys-in-Fact for each Selling Stockholder: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-30-
SCHEDULE III
Minority Interests of Certain Subsidiaries
Not Held Directly or Indirectly by the Company
Subsidiary Interest Held by Company
---------- ------------------------
Santo Spirito S.r.l. 80% (joint venture with Aveda distributor in Italy
that operates one Aveda store in Milan)
I.M. Cosmetics S.A. 55% (joint venture with distributor in Greece; the
subsidiary also is responsible for the Company's
business in Romania)
Aveda Limited 51% (joint venture with distributor in U.K.)
-31-
ANNEX I
FORM OF COMFORT LETTER OF
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the representatives of the Underwriters
(the "Representatives");
(iii) They have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus and/or included in the Company's
quarterly reports on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon, if any; and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form
in all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included
in the Prospectus and included or incorporated by reference in Item 6
of the Company's Annual Report on Form 10-K for the most recent fiscal
year incorporated by reference in the Prospectus agrees with the
corresponding amounts (after restatement where applicable) in the
audited consolidated financial statements for such five fiscal years
which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
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(v) They have compared the information in the
Prospectus under selected captions with the disclosure requirements of
Regulation S-K and on the basis of limited procedures specified in such
letter nothing came to their attention as a result of the foregoing
procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of
Items 301, 302, 402 and 503(d) (if applicable), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not
constituting an examination in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may
be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange
Act as it applies to Form 10-Q and the related published rules
and regulations, or (ii) any material modifications should be
made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus, for them to be in conformity with generally
accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and
any such unaudited data and items were not determined on a
basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial
statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and
any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B) were
not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments
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have not been properly applied to the historical amounts in
the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated
by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in
their report(s) included or incorporated by reference in the Prospectus
and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (vi) above, they
have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and
have found them to be in agreement.
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