DRAFT 5/18/99
THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES INC.
Class A Common Stock
(par value $.01 per share)
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Underwriting Agreement
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May , 1999
▇▇▇▇▇▇▇, 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 3,301,000 shares (the "Firm Shares"), and at the election of the
Underwriters, up to 495,150 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".
It is understood that, on April 26, 1999, the board of directors of the
Company approved a two-for-one stock split (the "Stock Split") in the form of a
100% stock dividend (the "Stock Split Dividend") on all of the Company's Class A
Common Stock and Class B Common Stock (collectively, the "Common Stock"), such
Stock Split Dividend payable on June 2, 1999 to all holders of record of shares
of the Common Stock at the close of business on May 10, 1999. It is understood
and agreed that, unless otherwise expressly indicated herein, the number of
Shares and the price at which they will be sold have not been adjusted for the
Stock Split but the terms "Firm Shares", "Optional Shares" and "Shares" include
the shares of Stock outstanding on the date hereof to be sold hereunder and the
shares of Stock to be received by the Selling Stockholders in connection with
the Stock Split Dividend (the "Stock Split Shares") on the shares of Stock to be
sold hereunder.
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. 333-77977) (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, 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
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the 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
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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 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
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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 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
4
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;
(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, 1998 and incorporated by reference into the
Company's Annual Report on Form 10-K for the year ended June 30, 1998,
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
5
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 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 each of the ▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust and the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Trust (each as defined below) only, 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;
(ii) With respect to LAL Family Partners L.P. only, 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;
(iii) With respect to each of The 4003 Corporation and The 4202
Corporation only, 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;
(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, if such Selling Stockholder's
name on Schedule II hereto is followed by an asterisk, 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, if such
Selling Stockholder's name on Schedule II hereto is followed by an
asterisk, 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
6
Power of Attorney, if applicable, 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, if such Selling Stockholder's name on Schedule II hereto is
followed by an asterisk, 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 each of LAL Family Partners L.P., the ▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust and the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust only, 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 Stockholder is subject,
nor, in the case of each of The 4003 Corporation and 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;
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(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 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 (except
for certificates representing certain Stock Split Shares, which
certificates will be deposited with the Custodian pursuant to the Custody
Agreement immediately upon distribution by the transfer agent of the Stock
(the "Transfer Agent") thereof) have been deposited with and are being held
by the Custodian. If such Selling Stockholder's name on Schedule II hereto
is followed by an asterisk, 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) Such Selling Stockholder has duly executed and delivered
irrevocable instructions (the "Transfer Instructions") to the Transfer
Agent with respect to the delivery of Stock Split Shares.
(xiii) The Shares represented by the certificates held, or to be held,
in custody for such Selling Stockholder under the Custody Agreement and
the Stock Split Shares subject to the Transfer Instructions are
subject to the interests of the Underwriters hereunder; the arrangements
made by such Selling Stockholder for such custody, the instructions given
pursuant to the Transfer Instructions 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 the Selling Stockholder hereunder
shall not be terminated by operation of law, whether by the death or
8
incapacity of such Selling Stockholder if an individual or, in the case of
an estate or trust, by the death or incapacity of any executor or trustee
or the termination of such 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 individual Selling Stockholder
or 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 (including the Stock Split 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, the Custody Agreement and the Transfer
Instructions; 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 the
Selling 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 495,150 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
9
Attorneys-in-Fact otherwise agree in writing, earlier than two or later than
ten business days after the date of such notice.
If the Time of Delivery (as defined in Section 4(a) hereof) of the Firm
Shares or the Optional Shares is after June 2, 1999, then the purchase price per
share set forth in clause (a) of this Section 2 and the number of Firm Shares or
Optional Shares, as the case may be, to be purchased by the Underwriters
pursuant to this Section 2 will be adjusted to reflect the Stock Split. The
Selling Stockholders agree that they will immediately deposit with the
Custodian, upon receipt thereof, any certificates representing the Stock Split
Shares relating to the Shares held by the Custodian.
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 May , 1999 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(k) hereof, will be delivered at the offices of Weil,
Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (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:
10
(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 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
11
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 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
12
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 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 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), (vii), (x) (including with
respect to the caption "Underwriting") and (xiii) 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;
13
(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 Stock Split has been duly authorized by all necessary
corporate action and the Stock Split Shares have been duly and validly
authorized and, when issued in the Stock Split, will be duly and
validly issued and fully paid and non-assessable.
(iv) 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);
(v) 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;
(vi) 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;
(vii) This Agreement has been duly authorized, executed and
delivered by the Company;
(viii)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
14
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;
(ix) 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);
(x) 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;
(xi) 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;
(xii) 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
(xiii)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.
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
15
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 they express 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 LAL Family Partners L.P., shall
have furnished to you their written opinion (a draft of such opinion is attached
as Annex II(c) 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 and the Custody Agreement (and, if such Selling
Stockholder's name on Schedule II hereto is followed by an asterisk,
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, if such Selling Stockholder's
name on Schedule II hereto is followed by an asterisk, the Power of
Attorney) and the Transfer Instructions have been duly executed and
delivered by such Selling Stockholder and constitute valid and binding
agreements 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, if
such Selling Stockholder's name on Schedule II hereto is followed by an
asterisk, the Power of Attorney) and the Transfer Instructions 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
16
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 if such Selling Stockholder's name on
Schedule II hereto is followed by an asterisk, the Power of Attorney)
and the Transfer Instructions 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
(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, 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;
(e) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇, each in his capacity as a Selling Stockholder, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex II(d)
hereto), with respect to each of the Selling Stockholders for whom they are
acting as counsel, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
17
(i) The Custody Agreement (and, if such Selling Stockholder's name
on Schedule II hereto is followed by an asterisk, the Power of
Attorney) and the Transfer Instructions have been duly executed and
delivered by such Selling Stockholder and constitute valid and binding
agreements of such Selling Stockholder enforceable in accordance with
their terms;
(ii) 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, if
such Selling Stockholder's name on Schedule II hereto is followed by an
asterisk, the Power of Attorney) and the Transfer Instructions 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;
(iii) 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, if such
Selling Stockholder's name on Schedule II hereto is followed by an
asterisk, the Power of Attorney) and the Transfer Instructions 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, 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);
(iv) 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
(v) 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
18
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, the corporate laws of the State of Delaware and the federal laws of
the United States, and in rendering the opinion in subparagraph (v) 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) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ as
trustee of the separate share trust f/b/o ▇▇▇▇ ▇. ▇▇▇▇▇▇, u/a/d December 15,
1976, created by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as grantor, (the "▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust") and
(ii) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as trustees of the separate share
trust f/b/o ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, u/a/d December 15, 1976, created by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, as grantor, (the "▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust"), shall have furnished to you
their written opinion (a draft of each such opinion is attached as Annex II(e)
hereto) with respect to each of the Selling Stockholders for whom they are
acting as counsel, 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 and
the Custody Agreement (and, if such Selling Stockholder's name on
Schedule II hereto is followed by an asterisk, 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, if such Selling Stockholder's
name on Schedule II hereto is followed by an asterisk, the Power of
Attorney) and the Transfer Instructions 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 Agreement and the Custody Agreement
(and if such Selling Stockholder's name on Schedule II hereto is
followed by an asterisk, the Power of Attorney) and the Transfer
Instructions 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 statute or order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over such
19
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 if such Selling Stockholder's name on
Schedule II hereto is followed by an asterisk, the Power of Attorney)
and the Transfer Instructions 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) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to The 4003 Corporation, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(f) hereto) with respect to such Selling Stockholders, dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The 4003 Corporation 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 this
property and to conduct its business;
20
(ii) The Custody Agreement (and, if such Selling Stockholder's
name on Schedule II hereto is followed by an asterisk, the Power of
Attorney) and the Transfer Instructions 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 Agreement and the Custody Agreement
(and if such Selling Stockholder's name on Schedule II hereto is
followed by an asterisk, the Power of Attorney) and the Transfer
Instructions 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 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 if such Selling Stockholder's name on
Schedule II hereto is followed by an asterisk, the Power of Attorney)
and the Transfer Instructions 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
21
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;
(h) Debevoise & ▇▇▇▇▇▇▇▇, counsel to The 4202 Corporation, shall have
furnished to you their written opinion (a draft of such opinion is attached as
Annex II(g) hereto) with respect to such Selling Stockholders, dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The 4202 Corporation 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;
(ii) The Custody Agreement (and, if such Selling Stockholder's
name on Schedule II hereto is followed by an asterisk, the Power of
Attorney) and the Transfer Instructions 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 Agreement and the Custody Agreement
(and if such Selling Stockholder's name on Schedule II hereto is
followed by an asterisk, the Power of Attorney) and the Transfer
Instructions 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 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;
22
(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 if such Selling Stockholder's name on
Schedule II hereto is followed by an asterisk, the Power of Attorney)
and the Transfer Instructions 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;
(i) 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);
(j) (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 Prospectus any loss or interference with its
business from fire, explosion, flood or other
23
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;
(k) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange (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;
(l) 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)(vii) hereof in form and
substance satisfactory to you;
(m) 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 (j) of this Section 7, and as to such
other matters as you may reasonably request;
(n) 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;
(o) 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; and
(p) The Transfer Instructions shall be in full force and effect as of the
Time of Delivery.
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) arise out of or are based
upon an untrue statement or alleged untrue statement of a material
24
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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & 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, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to,
25
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 Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
26
(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 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
27
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 ▇▇▇▇▇▇▇, Sachs & 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 such Selling Stockholder made or given by any
or all of the Attorneys-in-Fact for such 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such 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 as the Underwriters may reasonably
request in order to evidence or effectuate the delivery to the Underwriters of
the Stock Split Shares as contemplated hereby and to otherwise carry out
28
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.
29
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 such 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:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
LAL FAMILY PARTNERS L.P.
By:
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Partner
30
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ AS TRUSTEE OF THE
SEPARATE SHARE TRUST F/B/O ▇▇▇▇ ▇.
▇▇▇▇▇▇, U/A/D DECEMBER 15, 1976, CREATED
BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, AS GRANTOR
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
AS TRUSTEES OF THE SEPARATE SHARE TRUST
F/B/O ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, U/A/D DECEMBER
15, 1976, CREATED BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
AS GRANTOR
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
31
THE 4202 CORPORATION
By:
-----------------------------------
Name:
Title:
THE 4003 CORPORATION
By:
-----------------------------------
Name:
Title:
32
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: -------------------------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
33
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............................ 3,301,000 495,100
-------------------------------------------- ================= =================
(a) The number of Shares indicated are on a pre-Stock Split basis. In the
event the Time of Delivery of such Shares is after June 2, 1999, then
the number of Shares indicated will be adjusted to reflect the Stock
Split.
34
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*:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇(a)...............
▇▇▇▇ ▇. ▇▇▇▇▇▇(a)..................
LAL Family Partners L.P.(a)........
▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust(a)............
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust(a).........
The 4003 Corporation(a)............
The 4202 Corporation(b)............
----------------- -----------------
Total.............................. 3,301,000 495,150
================= =================
(a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, LAL Family Partners L.P., the ▇▇▇▇
▇. ▇▇▇▇▇▇ Trust, the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Trust and The 4003 Corporation
are represented by Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(b) The 4202 Corporation is represented by Debevoise & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(c) The number of Shares indicated are on a pre-Stock Split basis. In the
event the Time of Delivery of such Shares is after June 2, 1999, then
the number of Shares indicated will be adjusted to reflect the Stock
Split.
* Attorneys-in-Fact for each Selling Stockholder: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
35
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)
36
