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EXHIBIT 1.1
CHAMPIONSHIP AUTO RACING TEAMS, INC.
(A DELAWARE CORPORATION)
5,000,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
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UNDERWRITING AGREEMENT
January __, 1997
XXXXXXXXX & COMPANY, INC.
X.X. XXXXXXX & SONS, INC.
As Representatives of
the Several Underwriters
c/o Jefferies & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Dear Sirs:
Championship Auto Racing Teams, Inc., a Delaware corporation (the
"Company"), and certain selling Stockholders named in Schedule II hereto (the
"Selling Stockholders") hereby confirm their agreement with you, as
representatives (the "Representatives") of the underwriters named in Schedule I
hereto (the "Underwriters"), with respect to the issuance and sale by the
Company of an aggregate of 4,333,000 shares (the "Primary Shares") and the sale
by the Selling Stockholders of [667,000] shares (the "Stockholder Shares") of
the Company's common stock, par value $.01 per share (the "Common Stock"), and
the purchase of the Primary Shares and the Stockholder Shares by the
Underwriters, acting severally and not jointly. The Company also has agreed to
sell up to 750,000 shares (the "Option Shares") of Common Stock to cover
over-allotments, if any. The Primary Shares, the Stockholder Shares and the
Option Shares are hereinafter collectively referred to as the "Shares."
The Company and the Underwriters agree that up to _______ shares of the
Primary Shares to be purchased by the Underwriters (the "Reserved Shares") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company, as part of the
distribution of the Shares by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the National
Association of Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. To the extent that such Reserved Shares are not
orally confirmed for purchase by such eligible employees
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and persons having business relationships with the Company by the end of the
first business day after the date of this Agreement, such Reserved Shares may be
offered to the public as part of the public offering contemplated hereby.
You have advised us that you desire to purchase the Shares and that you
propose to make a public offering of the Shares as soon as you deem advisable
after the Registration Statement referred to below becomes effective upon the
terms set forth in the Prospectus referred to below.
The terms that follow, when used in this Agreement, shall have the
meanings indicated. The term "the Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in Section 1(a)(i) below and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits Rule
430A Information (as defined below). "Registration Statement" shall mean the
registration statement referred to in Section 1(a)(i) below, as amended at the
Representation Date (as defined below) (or, if not effective at the
Representation Date, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto becomes effective prior to the
Closing Date (as defined in Section 2 hereof), shall also mean such registration
statement as so amended. Such term shall include Rule 430A Information deemed to
be included therein at the Effective Date as provided by Rule 430A (as defined
below). If the Company files an additional registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) (defined below) (the
"Additional Registration Statement"), all references in this Underwriting
Agreement to "Registration Statement" shall mean the Additional Registration
Statement, as amended at the Effective Date, including the contents of the
initial registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the Additional Registration
Statement as of its effective time pursuant to Rule 430A(b). The prospectus
constituting a part of the Registration Statement (including the Rule 430A
Information), as from time to time amended or supplemented, is hereinafter
referred to as the "Prospectus", except that if any revised prospectus shall be
provided to the Underwriters by the Company that differs from the prospectus on
file at the Securities and Exchange Commission (the "Commission") at the
Effective Date (whether or not such revised prospectus is required to be filed
by the Company pursuant to Rule 424 of the Act Regulations), the term
"Prospectus" shall refer to each such revised prospectus from and after the time
it is first provided to the Underwriters for such use. "Rule 158", "Rule 415",
"Rule 424", "Rule 430A", "Rule 462" and "Regulation S-K" refer to such rules or
regulation under the Securities Act of 1933, as amended (the "Act"; and the
rules and regulations under the Act, the "Act Regulations"). "Rule 430A
Information" means information with respect to the Shares and the offering
thereof permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A. "Exchange Act" refers to the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Underwriters as of the
date hereof (such date being referred to as the "Representation Date") and as of
the Closing Date, as follows:
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(i) the Company meets the requirements for use of Form S-1
under the Act and has filed with the Commission a registration
statement on such Form (Registration No. 333-_______), including a
related preliminary prospectus, and one or more amendments thereto,
including the related preliminary prospectus, each of which has
previously been furnished to the Underwriters, for the registration
under the Act of the offering and sale of the Shares. Such registration
statement and any post-effective amendment thereto, each in the form
heretofore delivered to you, have been declared effective by the
Commission in such form. No other document with respect to such
registration statement has heretofore been filed with the Commission
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission. The Company will file with
the Commission (A) prior to effectiveness of such registration
statement, a further amendment to such registration statement
(including the form of final prospectus), (B) after effectiveness of
such registration statement, if applicable, an Additional Registration
Statement pursuant to Rule 462(b) or (C) after effectiveness of such
registration statement or such Additional Registration Statement, a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4) or
Rule 434 of the Act Regulations. The Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information in the case of clause
(C)) required by the Act and the Act Regulations to be included in the
Prospectus with respect to the Shares and the offering thereof. As
filed, such amendment and form of final Prospectus, or such final
Prospectus, shall contain all Rule 430A Information, together with all
other such required information, with respect to the Shares and the
offering thereof and, except to the extent the Underwriters shall agree
in writing to a modification, shall be in all substantive respects in
the form furnished to the Underwriters prior to the date hereof;
(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 Act
Regulations, and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the
Selling Stockholders or the Underwriters through Jefferies & Company,
Inc. expressly for use therein;
(iii) on the Effective Date, the Representation Date and the
Closing Date, the Registration Statement did and will, and when the
Prospectus is first filed (if required) in accordance with Rule 424(b)
the Prospectus will, comply in all material respects with the
applicable requirements of the Act and the Act Regulations and the
Exchange Act; on the Effective Date, the Representation Date and the
Closing Date, the Registration Statement did not 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 in order to make the
statements therein not misleading; and, on the Effective Date, the
Representation Date and the Closing Date, and
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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on the date of any filing pursuant to Rule 424(b), the Prospectus did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; 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 or on behalf of the
Selling Stockholders or the Underwriters through Jefferies & Company,
Inc. expressly for use therein. The Company agrees that the only
information provided in writing by or on behalf of the Underwriters to
the Company, expressly for use in the Registration Statement or the
Prospectus, is that information contained in [the table and the second,
fifth, sixth and eighth paragraphs following the table] in the section
of the Prospectus entitled "Underwriting" and the last paragraph on the
cover page of the Prospectus;
(iv) the Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction where
the nature or location of its properties (owned or leased) or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify would not have a
Material Adverse Effect. As used herein, the term "Material Adverse
Effect" shall mean an adverse effect on the financial condition,
business, prospects, properties, net worth or results of operations of
the Company or its Subsidiaries (as hereinafter defined) that would be,
singly or in the aggregate, material to the Company and the
Subsidiaries, taken as a whole, whether or not occurring in the
ordinary course of business (a "Material Adverse Effect");
(v) the only significant subsidiaries (as defined in the Act
Regulations) of the Company are the subsidiaries listed on Schedule III
hereto (the "Subsidiaries"). Each of the Subsidiaries is a corporation,
or in the case of CART Licensed Products, L.P. ("CLP"), a partnership,
duly organized and validly existing in good standing under the laws of
its jurisdiction of incorporation or organization with full corporate
or partnership power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and in the Prospectus, and is duly registered and qualified
to conduct its business and is in good standing in each jurisdiction
where the nature or location of its properties (owned or leased) or the
conduct of its business requires such registration or qualification,
except where the failure so to register or qualify would not have a
Material Adverse Effect;
(vi) each of the Company and the Subsidiaries has all
necessary authorizations, approvals, orders, licenses, rights-of-way,
operating rights, easements, certificates and permits of and from, and
has made all declarations and filings with, all regulatory or
governmental officials and bodies, all self-regulatory organizations
and all courts and other tribunals ("Permits"), to own or lease its
respective properties and to conduct its respective businesses
described in the Prospectus and the Registration Statement, except
where failure to have obtained or made the same would not have a
Material Adverse
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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Effect, and neither the Company nor any of the Subsidiaries has
received any notice of proceedings relating to the revocation or
modification of any such Permits; each of the Company and the
Subsidiaries has fulfilled and performed all its current material
obligations with respect to such Permits and no event has occurred that
allows, or after notice or lapse of time, or both, would allow,
revocation or termination thereof or result in any other material
impairment of the rights of the holder of any such Permit; and each of
the Company and the Subsidiaries is in compliance with all applicable
laws, rules, regulations, orders and consents, the violation of which
would have a Material Adverse Effect. The property and business of each
of the Company and the Subsidiaries conform in all material respects to
the descriptions thereof contained in the Prospectus and the
Registration Statement;
(vii) the Company has the authorized capitalization set forth
in the Prospectus under the heading "Description of Capital Stock,";
all of the Company's outstanding capital stock has been duly
authorized, validly issued and is fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights; and the
capitalization of the Company conforms to the descriptions thereof and
the statements made with respect thereto in the Registration Statement
and the Prospectus as of the date set forth therein. There are no
outstanding securities convertible into or exchangeable for, and no
outstanding options, warrants or other rights to purchase, any shares
of the capital stock of the Company, nor any agreements or commitments
to issue any of the same, except as described in the Registration
Statement and the Prospectus, and there are no restrictions upon the
voting or transfer of, any capital stock of the Company pursuant to the
Company's Certificate of Incorporation or Bylaws, or any agreement or
other instrument to which the Company is a party, except as described
in the Registration Statement and the Prospectus;
(viii) all the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and are validly issued,
fully paid and nonassessable and were not issued in violation of or
subject to any preemptive or similar rights. Except as otherwise set
forth in the Registration Statement and the Prospectus, there are no
outstanding securities convertible into or exchangeable for, and no
outstanding options, warrants or other rights to purchase, any shares
of the capital stock of any of the Subsidiaries, nor any agreements or
commitments to issue any of the same, and except as otherwise set forth
in the Registration Statement and the Prospectus, all outstanding
shares of capital stock and partnership interests of the Subsidiaries
are owned by the Company, directly or indirectly through another
Subsidiaries, free and clear of any security interests, liens,
encumbrances, equities or other claims;
(ix) each of the Company and the Subsidiaries has good and
indefeasible title to all real property and good and marketable title
to all personal property owned by it, including those properties
described in the Registration Statement and Prospectus, in each case
free and clear of all liens, charges, encumbrances and restrictions,
except such as are described in the Registration Statement and
Prospectus. Each of the Company and the Subsidiaries has valid,
subsisting and enforceable leases for the properties described in the
Registration Statement and the Prospectus as leased by it with such
exceptions as are described in the Registration Statement and the
Prospectus;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(x) the Company has all requisite power and authority to enter
into this Agreement and to carry out the provisions and conditions
hereof, and to issue and deliver the Shares to the Underwriters as
provided herein. This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) the Shares to be issued and sold by the Company have been
duly and validly authorized for issuance by the Company, and the
Company has full corporate power and authority to issue, sell and
deliver the Shares; and, when such Shares are issued and delivered
against payment therefor as provided by this Agreement, the Shares will
have been validly issued, fully paid and nonassessable, will conform to
the description of the Shares contained in the Prospectus under the
heading "Description of Capital Stock," and the issuance of such Shares
will not be subject to any preemptive or similar rights;
(xii) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and the Subsidiaries, are
independent accountants with respect to the Company and the
Subsidiaries as required by the Act and the rules and regulations of
the Commission thereunder;
(xiii) the consolidated financial statements and related notes
and schedules included in the Registration Statement, the Preliminary
Prospectus and the Prospectus present fairly the financial position of
the Company and the Subsidiaries, on the basis stated in the
Registration Statement, as of the respective dates thereof and the
consolidated statement of income and consolidated balance sheet of the
Company and the Subsidiaries, for the respective periods covered
thereby; and such financial statements and the related schedules and
notes have been prepared in conformity with U.S. generally accepted
accounting principles ("U.S. GAAP") applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in
the Registration Statement, the Preliminary Prospectus and the
Prospectus. The selected consolidated financial data included in the
Registration Statement, the Preliminary Prospectus and the Prospectus
presents fairly the information shown therein and has been compiled on
a basis consistent with that of the audited financial statements of the
Company included therein. The pro forma consolidated financial
information in the Registration Statement, the Preliminary Prospectus
and the Prospectus complies in all material respects with the
applicable accounting requirements of Article 11 of Regulation S-X
promulgated by the Commission and presents fairly the information shown
therein; the assumptions used in the preparation thereof are reasonable
and the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein. No other financial
statements or schedules of the Company and the Subsidiaries are
required by the Exchange Act, the Act or the Act Regulations to be
included in the Registration Statement, the Preliminary Prospectus or
the Prospectus;
(xiv) neither the Company, any of the Subsidiaries nor CLP is
in violation of its charter or bylaws or other organizational
documents. Neither the Company, any of the Subsidiaries nor CLP is, nor
with the passage of time or the giving of notice or both would be, in
violation of any law, ordinance, administrative or governmental rule or
regulation
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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applicable to the Company, any of the Subsidiaries or CLP, or of any
judgment, order or decree of any court or governmental agency or body
or of any arbitrator having jurisdiction over the Company, any of the
Subsidiaries or CLP, or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
mortgage, loan agreement, note, bond, debenture, credit agreement or
any other evidence of indebtedness or in any agreement, contract,
indenture, lease or other instrument to which the Company, any of the
Subsidiaries or CLP is a party or by which any of them may be bound, or
to which any of the property or assets of the Company, any of the
Subsidiaries or CLP is subject;
(xv) there is no agreement, contract, indenture, lease or
other document or instrument that is required to be described in the
Registration Statement or Prospectus or to be filed as an exhibit to
the Registration Statement that is not described or filed as required;
(xvi) except for the Selling Stockholders, no person has any
right to the registration of any security of the Company by reason of
the filing of the Registration Statement with the Commission or the
consummation of the transactions contemplated hereby, which right has
not been waived or lapsed;
(xvii) other than as set forth in the Registration Statement
and the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of the Subsidiaries is a party or
of which any property of the Company or any of the Subsidiaries is the
subject; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by any court or governmental
agency or body or any stock exchange authorities ("Governmental
Agency") or threatened by others;
(xviii) 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");
(xix) except as disclosed in the Registration Statement and
the Prospectus, the Company and each of the Subsidiaries owns or
possesses, has applied for or can acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, knowhow
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "Patent and
Proprietary Rights") presently employed by it in connection with the
business now operated by it, except where the failure to apply for or
acquire any such Patent and Proprietary Rights would not, singly or in
the aggregate, result in a Material Adverse Effect, and neither the
Company nor any of the Subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Patent and Proprietary Rights, or of any
facts which would render any Patent and Proprietary Rights invalid or
inadequate to protect the interests of the Company therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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finding) or invalidity or inadequacy, singly or in the aggregate, could
have a Material Adverse Effect;
(xx) as of the date of the Prospectus, neither the Company nor
any of the Subsidiaries currently is planning any probable acquisitions
for which disclosure of pro forma financial information would be
required by the Act;
(xxi) except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), since the
respective dates as of which information is given therein (or any
amendment or supplement thereto), (A) neither the Company nor any of
the Subsidiaries (1) has issued any securities other than in connection
with the exercise of any outstanding options, (2) incurred any material
liability or obligations, direct or contingent, for borrowed money, (3)
entered into any transaction, not in the ordinary course of business,
that is material to the Company and the Subsidiaries, taken as a whole,
(4) entered into any transaction with an affiliate of the Company (as
the term "affiliate" is defined in Rule 405 of the Act Regulations)
that would otherwise be required to be disclosed in the Prospectus or
the Registration Statement, or (5) declared or paid any dividend on its
capital stock, or made any other distribution to its equity holders and
(B) there has not been any change in the capital stock or any increase
in long-term debt of the Company and the Subsidiaries or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
prospects, current or future consolidated financial position,
stockholders' equity or results of operations of the Company and the
Subsidiaries, taken as a whole. Neither the Company nor any of the
Subsidiaries has sustained since the date of the latest audited
financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any organized
labor dispute or court or governmental action, order or decree, except
as otherwise set forth or contemplated in the Registration Statement
and the Prospectus;
(xxii) each of the Company and the Subsidiaries, directly or
indirectly, maintains insurance covering its properties, operations,
personnel and businesses, and in the Company's reasonable judgment,
such insurance provides coverage against such losses and risks as is
adequate in accordance with customary industry practice to protect the
Company and its businesses. Neither the Company nor any of the
Subsidiaries has received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures
will have to be made in order to continue such insurance, and all such
insurance is outstanding and duly in force;
(xxiii) the Company has not distributed and, prior to the
later to occur of (A) the Closing Date and (B) completion of the
distribution of the Shares, will not distribute without your prior
consent any offering material in connection with the offering and sale
of the Shares other than the Registration Statement, the Prospectus or
other materials, if any, permitted by the Act;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(xxiv) prior to the Closing Date, the Shares will be duly
authorized for listing on the [New York Stock Exchange] upon official
notice of issuance;
(xxv) neither the Company nor any Subsidiaries is involved in
any labor dispute or, to the knowledge of the Company, is any dispute
threatened;
(xxvi) neither the Company nor any Subsidiaries nor, to the
best of its knowledge, any employee or agent of the Company or any
Subsidiaries, has made any payment of funds of the Company or any
Subsidiaries or received or retained any funds of a character required
to be disclosed in the Prospectus;
(xxvii) each of the Company and the Subsidiaries has filed (or
have obtained extensions thereto) all federal, state and local or
foreign tax returns that are required to be filed, which returns are
complete and correct in all material respects, and have paid all taxes
shown on such returns and all assessments with respect thereto to the
extent that the same have become due, except those taxes that are being
contested or protested in good faith by the Company or its
Subsidiaries;
(xxviii) except for the shares of capital stock of the
Subsidiaries, neither the Company nor any of the Subsidiaries owns any
shares of stock or any other securities of any corporation or has any
equity interest in any firm, partnership, association or other entity
other than as reflected in the consolidated financial statements
included in the Registration Statement and the Prospectus;
(xxix) neither the execution or delivery of this Agreement,
the offer, issuance, sale or delivery of the Shares nor the
consummation by the Company of the terms of this Agreement (A) requires
the consent, approval, authorization or order of any court or
governmental agency or body except such as have been obtained under the
Act or as may be required under state securities or "blue sky" laws of
any jurisdiction in connection with the purchase and distribution of
the Shares by the Underwriters or such as may be required by the NASD,
(B) will conflict with, result in a breach of, or constitute a default
under the terms of any indenture, agreement, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which
any of them or any of their respective properties may be bound, or will
result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of the Subsidiaries
pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them may be bound or to which any of
the property or assets of any of them is subject, (C) will conflict
with or violate any law, order, statute, regulation, consent or
memorandum of understanding applicable to the Company or any of the
Subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company or
any of the Subsidiaries, or (D) will conflict with or violate the
charter or bylaws or other organizational documents of the Company or
any of the Subsidiaries;
(xxx) the Company has not taken, directly or indirectly, any
action designed to cause or result in or that has constituted or that
might reasonably be expected to constitute,
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the stabilization or manipulation of the price of the shares of Common
Stock to facilitate the sale or resale of the Shares;
(xxxi) 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 Common Stock, and under the
captions "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources,"
"Management," and "Certain Relationships and Related Transactions,"
insofar as they purport to describe the provisions of the laws,
agreements, contracts, indentures, leases or other documents or
instruments referred to therein, are accurate and fair summaries of the
material and relevant provisions thereof;
(xxxii) each of the persons identified by the Company to the
Underwriters to receive Reserved Shares is a citizen of the United
States and currently is a resident of one of the United States;
(xxxiii) each of the Company and the Subsidiaries (A) are in
compliance with any and all applicable federal, state, local and
foreign laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (B) have received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their business and (C) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or approvals or failure
to comply with the terms and conditions of such permits, licenses or
approvals would not have a Material Adverse Effect;
(xxxiv) there are no costs or liabilities, to the Company's
knowledge after due inquiry, associated with the effect of
Environmental Laws on the business, operations and properties of the
Company and its Subsidiaries that would have a Material Adverse Effect;
and
(b) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, the Underwriters as of the Representation Date and as of
the Closing Date, as follows:
(i) the sale of the Shares to be sold by such Selling
Stockholder hereunder and the compliance by such Selling Stockholder
with all of the provisions of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any statute, 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 will such action result in any violation of the provisions
of the charter or bylaws of such Selling Stockholder if such Selling
Stockholder is a corporation, the Partnership Agreement of such Selling
Stockholder
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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if such Selling Stockholder is a partnership; or any applicable 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;
(ii) the Selling Stockholders now have, and on the Closing
Date will have, valid title to the Shares to be sold by the Selling
Stockholders pursuant to this Agreement, free and clear of any security
interests, liens, encumbrances, equities or other claims, including,
without limitation, any restrictions or transfer (except for
restrictions imposed by applicable federal or state securities laws)
other than as specified on the certificate(s) representing such Shares,
and, upon delivery of and payment for such Shares hereunder, the
several Underwriters will acquire valid title to such Shares free and
clear of any adverse claims, assuming that the Underwriters have
acquired such Shares for value, in good faith and without notice of any
adverse claim;
(iii) this Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholders;
(iv) the Selling Stockholders have not taken, directly or
indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares, except for
the lock-up arrangements described herein and in the Prospectus;
(v) each Preliminary Prospectus that has been distributed by
the Underwriters or the Company to prospective investors and the
Prospectus, insofar as they include or reflect information with respect
to such Selling Stockholder, has conformed in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein not misleading in light of the circumstances under
which they were made; and neither the Registration Statement nor the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus), nor any amendment or supplement thereto,
insofar as they include or reflect information with respect to such
Selling Stockholder, will include 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;
(vi) such Selling Stockholder is not aware that any of the
representations or warranties the Company set forth in Section 2(a)
above is untrue or inaccurate in any material respect;
(vii) all stock transfer or other taxes (other than income
taxes), if any, that are required to be paid in connection with the
sale and transfer of the Stockholder Shares proposed to be sold by such
Selling Stockholder to the several Underwriters pursuant to this
Agreement will be fully paid or provided for by such Selling
Stockholder;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(viii) no consent, approval, authorization or order of, or any
filing with, any court or governmental agency or body is required for
the consummation by such Selling Stockholder of the transactions on its
part contemplated in this Agreement, the Power of Attorney or the
Custody Agreement, except as may be required under the Act or state
securities or "blue sky" laws or similar laws in applicable foreign
jurisdictions;
(ix) other than as permitted by the Act and the rules and
regulations of the Commission thereunder, such Selling Stockholder has
not distributed and will not distribute any preliminary prospectus, the
Prospectus or any other offering material in connection with the
offering and sale of the Stockholder Shares proposed to be sold by the
Selling Stockholder;
(x) during the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder, any 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, Common Stock or any such substantially
similar securities (other than pursuant to employee stock option or
benefit plans existing on the date of this Agreement), without the
prior written consent of the Underwriters;
(xi) 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 (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof);
(xii) certificates in negotiable form representing all of the
Shares to be sold by such Selling Stockholder hereunder have been
placed in custody under a Custody Agreement, in the form heretofore
furnished to you (the "Custody Agreement"), duly executed and delivered
by such Selling Stockholder to Xxxxx X. Xxxxxxxxxxx, as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and
delivered a Power of Attorney, in the form heretofore furnished to you
(the "Power of Attorney"), appointing Xxxxx X. Xxxxxxxxxxx as such
Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact") with
authority to execute and deliver this Agreement on behalf of such
Selling Stockholder, to determine the purchase price to be paid by the
Underwriters to the Selling Stockholders as provided in Section 2
hereof, 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 and the Custody Agreement; and
(xiii) the Shares represented by the certificates held in
custody for such Selling Stockholder under the Custody Agreement are
subject to the interests of the Underwriters hereunder; the
arrangements made by such Selling Stockholder for such custody, and the
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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appointment by such Selling Stockholder of the Attorney-in-Fact by the
Power of Attorney, are to that extent irrevocable; the obligations of
the Selling Stockholders hereunder shall not be terminated by operation
of law, whether by the death or incapacity of any individual Selling
Stockholder 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 hereunder, certificates
representing the Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of
this Agreement and of the Custody Agreements; and actions taken by the
Attorney-in-Fact pursuant to the Powers 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
Attorney-in-Fact, or either of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
Any certificate signed by any officer of the Company or the Selling
Stockholders delivered to the Underwriters or to counsel for the Underwriters
pursuant to the terms of this Agreement shall be deemed a representation and
warranty by the Company or the Selling Stockholders, as the case may be, to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriters; Closing.
(a) Subject to the terms and conditions set forth herein, and subject
to adjustments as you may determine to avoid fractional shares:
(i) the Company agrees to sell to each Underwriter, severally
and not jointly, and, on the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, each Underwriter, severally and not jointly, agrees
to purchase from the Company, at a purchase price of per share (the
"Initial Price"), the aggregate number of Primary Shares that bears
that same proportion to the aggregate number of Primary Shares to be
issued and sold by the Company as the number of Primary Shares set
forth opposite the name of such Underwriter in Schedule I (or such
number of Primary Shares increased as provided in Section 9 hereof)
bears to the aggregate number of Primary Shares to be sold by the
Company and the Selling Stockholders. The Company will have no
obligation to sell to the Underwriters any of such Primary Shares that
are being issued and sold by the Company hereunder unless the
Underwriters purchase all of the Primary Shares hereunder; and
(ii) the Selling Stockholders agree, severally and not
jointly, to sell to each Underwriter, severally and not jointly, and,
on the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, each Underwriter,
severally and not jointly, agrees to purchase from the Selling
Stockholders at the Initial Price, the aggregate
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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number of Stockholder Shares that bears the same proportion to the
aggregate number of Stockholder Shares to be sold by the Selling
Stockholder as the number of Stockholder Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of
Stockholder Shares increased as provided in Section 9 hereof) bears to
the aggregate number of Stockholder Shares to be sold by the Company
and the Selling Stockholders, and the Selling Stockholders will have no
obligation to sell to the Underwriters any of the Stockholders Shares
to be sold by the Selling Stockholders hereunder unless the
Underwriters purchase all of such Stockholder Shares hereunder.
(b) The Company grants to the Underwriters an option to purchase all or
any part of the Option Shares at the Initial Price. Option Shares shall be
purchased from the Company, severally and not jointly, for the accounts of the
Underwriters in proportion to the number of Primary Shares set forth in Schedule
I hereto opposite the name of such Underwriter. Such option may be exercised
only to cover over-allotments in the sale of the Primary Shares and the
Stockholder Shares by the Underwriters and may be exercised in whole or in part
at any time on or before 12:00 noon, New York City time, on the business day
before the Primary Shares Closing Date (as hereinafter defined), and only once
thereafter within 30 days after the date of the Prospectus, in each case upon
written or telegraphic notice, or oral or telephonic notice confirmed by written
or facsimile notice, by the Underwriters to the Company no later than 12:00
noon, New York City time, on the business day before the Primary Shares Closing
Date or at least two business days before the Option Shares Closing Date (as
hereinafter defined), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Primary Shares
Closing Date) of such purchase.
(c) Payment of the purchase prices for, and delivery of, the Primary
Shares and the Stockholders Shares to be purchased by the Underwriters shall be
made at the offices of Xxxxxxxxx & Company, Inc., 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as shall be agreed upon by the Underwriters
and the Company, at 10:00 A.M., New York City time, on the third or fourth
business day following the date of the Registration Statement becomes effective
(or, if the Company elected to rely upon Rule 430A, the fourth business day
after the date of execution of this Agreement), or such other time not later
than ten business days after such date as shall be agreed upon by the
Underwriters and the Company ( such time and date of payment and delivery being
herein called the "Primary Shares Closing Date"). Payment shall be made to the
Company and the Selling Stockholders, as the case may be, by wire transfer in
same day funds payable to the order of the Company or the Selling Stockholders,
as applicable, against delivery to the Underwriters of the Primary Shares or
Stockholder Shares.
(d) Payment of the purchase price for, and delivery of, the Option
Shares to be purchased by the Underwriters shall be made at the office as set
forth above or at such other place as shall be agreed upon by the Underwriters
and the Company at the time and on the date (which may be the same as, but in no
event shall be earlier than, the Primary Shares Closing Date) specified in the
notice referred to in Section 2(b) (such time and date of delivery and payment
being herein called the "Option Shares Closing Date"). The Primary Shares
Closing Date and the Option Shares Closing Date are called, individually, the
"Closing Date" and together, the "Closing Dates." Payment shall be made to the
Company by wire transfer in same day funds payable to the order of the Company
against delivery to the Underwriters of the Option Shares.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(e) Certificates representing the Shares shall be issued in such
denominations and registered in such names as the Underwriters may request in
writing at least two business days before the Primary Shares Closing Date or, in
the case of Option Shares, on the day of notice of exercise of the option as
described in Section 2(b). The certificates representing the Shares will be made
available for examination and packaging by the Underwriters not later than 1:00
P.M., New York City time, on the last business day prior to the Primary Shares
Closing Date (or the Option Shares Closing Date in the case of the Option
Shares) at such place as is designated by the Underwriters.
SECTION 3. Covenants of the Company. The Company covenants with each of the
Underwriters as follows:
(a) the Company will use its best efforts to cause the Registration
Statement, if not effective at the Representation Date, and any amendment
thereof, to become effective, as promptly as possible after the filing thereof.
The Company will not file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus to which the Underwriters shall
reasonably object in writing after a reasonable opportunity to review such
amendment or supplement. Subject to the foregoing sentences in this clause (a),
if the Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Prospectus or supplement to the Prospectus is otherwise
required under Rule 424(b), the Company will cause the Prospectus, properly
completed, or such supplement thereto to be filed with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Underwriters of such timely filing.
The Company will promptly advise the Underwriters (i) when the Registration
Statement, if not effective at the Representation Date, and any amendment
thereto, shall have become effective, (ii) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (iii) when any amendment to the Registration Statement
shall have been filed or become effective, (iv) of any request by the Commission
for any amendment of the Registration Statement or supplement to any Prospectus
or for any additional information, (v) of the receipt by the Company of any
notification of, or if the Company otherwise has knowledge of, the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the lifting
thereof;
(b) if, at any time when a prospectus relating to the Shares is
required to be delivered under the Act or the Act Regulations, any event occurs
as a result of which the Prospectus as then amended or supplemented would
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,
in the light of the circumstances under which they were made, not misleading, or
if it shall be necessary to amend the Registration Statement or amend or
supplement the Prospectus to comply with the Act or the Act Regulations, the
Company promptly will prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 3, an amendment or supplement
that will correct such statement or omission or effect such compliance;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(c) the Company consents to the use of the Prospectus in accordance
with the provisions of the Act and with the securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the Act to be delivered in connection with the sales by any
Underwriter or dealer. The Company will comply with all requirements imposed
upon it by the Act, as now and hereafter amended, so far as necessary to permit
the continuance of sales of or dealing in the Shares in accordance with the
provisions hereof and the Prospectus;
(d) as soon as practicable, but in any event not later than eighteen
months after the Effective Date, the Company will make generally available to
its security holders and to the Underwriters a consolidated earnings statement
or statements of the Company and the Subsidiaries covering a twelve-month period
beginning after the Effective Date that will satisfy the provisions of Section
11(a) of the Act and Rule 158 under the Act Regulations;
(e) the Company will furnish to the Representatives, without charge,
four signed copies of the Registration Statement (including exhibits thereto and
all documents incorporated by referenced therein) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, or the Act
Regulations, as many copies of the Prospectus and all amendments and supplements
thereto as the Underwriters may reasonably request;
(f) during the period of five years hereafter, the Company will furnish
to you, as soon as practicable after the end of each fiscal year, a copy of its
annual report to Stockholders for such year; and the Company will furnish to you
(i) as soon as available, a copy of each report or definitive proxy statement of
the Company filed with the Commission under the Exchange Act or mailed to the
Stockholders, and (ii) from time to time, such other information concerning the
Company as you may reasonably request, provided that prior to the Company's
furnishing any such other information that is non-public, you shall enter into
an agreement, in such form as the Company shall reasonably request, with respect
to the confidentiality of such information;
(g) the Company will not, and will cause each of its executive officers
and directors to enter into agreements with the Underwriters in the form set
forth in Annex A hereto to the effect that they will not, during the period
beginning from the date hereof and continuing to and including the date 180 days
after the date of the Prospectus, offer, sell, contract to sell or otherwise
dispose of, except as provided hereunder, any 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, Common Stock or any such substantially similar securities (other than
pursuant to employee stock incentive plans existing on, or upon the conversion
or exchange of convertible or exchangeable securities outstanding as of, the
date of this Agreement, or in connection with the acquisition of any business or
property so long as the recipient of any Common Stock shall agree not to resell
such Common Stock during the 180 day period), without the prior written consent
of Xxxxxxxxx & Company, Inc.;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(h) the Company will comply with all the provisions of any undertakings
contained in the Registration Statement;
(i) the Company will apply the net proceeds from the offering and sale
of the Shares to be sold by the Company in accordance with the description set
forth in the "Use of Proceeds" section of the Prospectus;
(j) the Company will cooperate with the Underwriters and their counsel
in connection with endeavoring to obtain and maintain the qualification or
registration, or exemption from qualification, of the Shares for offer and sale
under the applicable securities laws of such states and other jurisdictions of
the United States as the Underwriters may designate; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject it to
taxation or general service of process in any jurisdiction where it is not now
so subject;
(k) the Company will not take, and will cause each of the Subsidiaries
to not take, directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company or
facilitate the sale or resale or the Shares;
(l) the Company will cause the Shares to be duly listed on the [New
York Stock Exchange];
(m) the Company hereby agrees that it will ensure that the Reserved
Shares will be restricted as required by the NASD or the NASD rules from sale,
transfer, assignment, pledge or hypothecation for a period of three months
following the date of this Agreement. The Underwriters will notify the Company
as to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Shares, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release; and
(n) the Company will comply with the reporting requirements of Rule 463
of the Act Regulations.
SECTION 4. Covenants of the Selling Stockholders. The Selling Stockholders
covenant with each of the Underwriters as follows:
(a) the Selling Stockholders shall cooperate to the extent reasonably
necessary to cause the Registration Statement, if not effective at the
Representation Date, and any amendment thereof, to become effective, as promptly
as possible after the filing thereof;
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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(b) without prejudice to any rights the Selling Stockholders may have
against the Company, the Selling Stockholders shall pay all federal and other
taxes, if any, on the transfer or sale of the Shares being sold by the Selling
Stockholders to the Underwriters;
(c) the Selling Stockholders shall do or perform all things required to
be done or performed by the Selling Stockholders prior to the Primary Shares
Closing Date to satisfy all conditions precedent to delivery of and the payment
for the Shares to be sold by the Selling Stockholders pursuant to this
Agreement;
(d) the Selling Stockholders will not at any time, directly or
indirectly, take any action which is designed to or which constitutes or which
might reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company or facilitate the sale or resale or
the Shares; and
(e) the Selling Stockholders will advise the Representatives promptly,
and if requested by the Representatives will confirm such advice in writing, of
any change in the information relating to the Selling Stockholders contained in
the Registration Statement under the caption "Selling Stockholders."
SECTION 5. Payment of Expenses. The Company will pay, or reimburse if paid by
the Underwriters, all actual and reasonable costs and expenses incident to the
performance of the obligations of the Company and the Selling Stockholders under
this Agreement, including (i) the fees, disbursements and expenses of counsel
and accountants for the Company and the Selling Stockholders and all other
expense in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
amendments or supplements thereto, and the mailing and delivery of copies
thereof to the Underwriters and dealers, (ii) the cost of reproducing the
Agreement Among Underwriters, this Agreement, the Selling Agreement, any Dealer
Agreements, the Underwriters' Questionnaire and the Blue Sky Memorandum (in both
preliminary and final form); (iii) all expenses in connection with qualification
of the Shares for offering and sale under state securities laws as provided in
Section 3(i) hereof, including filing and registration fees and the fees,
disbursements and expenses of counsel for the Underwriters in connection with
such qualification and in connection with Blue Sky surveys; (iv) the filing fees
incident to securing any required review by the NASD; (v) the cost of preparing
stock certificates; (vi) all fees of the Company's transfer agent and registrar;
(vii) any fees for including the Shares on the [New York Stock Exchange]; [(vii)
all costs and expenses of the Underwriters, including the fees and disbursements
of counsel for the Underwriters, in connection with matters related to the
Reserved Shares which are designated by the Company for sales to employees and
others;] and (viii) all other costs and expenses incident to the performances of
its obligations hereunder that are not otherwise specifically provided for in
this Section.
[If this Agreement is terminated by the Underwriters because of any
failure or refusal on the part of the Company or the Selling Stockholders to
comply with the terms or fulfill any of the conditions of this Agreement, the
Company shall reimburse the Underwriters for all of their reasonable
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters. The Company shall not in any event be liable to
any of the Underwriters for
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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consequential damages including loss of anticipated profits from the
transactions covered by this Agreement.]
SECTION 6. Conditions of the Underwriters' Obligation. The obligation of the
Underwriters to purchase the Shares hereunder is subject to the continued
accuracy of the representations and warranties of the Company and the Selling
Stockholders herein contained, to the accuracy of the statements of the Company
and the Selling Stockholders made in any certificates pursuant to the provision
hereof, to the performance by the Company and the Selling Stockholders of its
obligations hereunder and to the following further conditions:
(a) the Registration Statement shall have come effective, and you shall
have received notice thereof, not later than 3:00 p.m., Washington D.C. time, on
the date hereof, or such later time and date as shall be approved by the
Representatives and the Company and shall remain effective at the Closing Date.
No stop order suspending the effectiveness of the Registration Statement shall
have been issued under the Act or proceedings therefor initiated or threatened
by the Commission. No order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Shares under the
securities or blue sky laws of any jurisdiction shall be in effect or
proceedings therefor initiated or threatened by the Commission or the
authorities of any such jurisdiction. If the Company has elected to rely upon
Rule 430A, the price of the Shares and any price-related or other information
previously omitted from the effective Registration Statement pursuant to Rule
430A shall have been transmitted to the Commission for filing pursuant to Rule
424(b) within the prescribed time period, and, prior to the Closing Date, the
Company shall have provided evidence satisfactory to the Underwriters of such
timely filing, or a post-effective amendment providing such information shall
have been promptly filed and declared effective in accordance with the
requirement of Rule 430A;
(b) subsequent to the execution and delivery of this Agreement, there
shall not have occurred: (i) any change, or any development involving a
prospective change, in or affecting particularly the business, prospects,
properties, condition (financial or other) or results of operations of the
Company and the Subsidiaries, taken as a whole, which, in the reasonable
judgment of the Underwriters, materially impairs the investment quality of the
Shares and constitutes a Material Adverse Effect; (ii) any material loss or
interference with the business or properties of the Company or the Subsidiaries
from fire, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, that is not set forth in the Registration
Statement and the Prospectus, if in the reasonable judgment of the Underwriters
any such development makes it impracticable or inadvisable to proceed with
completion of the sale of and payment for the Shares;
(c) on or after the date hereof there shall not have occurred any of
the following: (i) any suspension or limitation of trading in securities
generally on the New York Stock Exchange or The Nasdaq National Market, or any
setting or minimum prices for trading on such exchange or system, or any
suspension of trading of any securities of the Company on any exchange or system
or in the over-the-counter market; (ii) any banking moratorium declared by
federal or New York authorities; or (iii) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
-19-
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emergency if, in the reasonable judgment of the Underwriters, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Shares;
(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of the Subsidiaries or
any of their respective officers or directors in their capacities as such,
before or by any federal, state or local court, commission, regulatory body,
administrative agency or other governmental body, domestic or foreign, or
arbitrator, in which litigation or proceeding an unfavorable ruling, decision or
finding would have a Material Adverse Effect;
(e) the Shares to be sold by the Company and the Selling Stockholder at
such Time of Delivery shall have been duly approved for inclusion on the [New
York Stock Exchange], subject to official notice of issuance;
(f) each of the representations and warranties of the Selling
Stockholders contained herein shall be true and correct at the Closing Date, as
if made at the Closing Date, and all covenants and agreements contained herein
to be performed on the part of the Selling Stockholders, and all conditions
contained herein to be fulfilled or complied with by the Selling Stockholders at
or prior to the Closing Date, shall have been duly performed, fulfilled or
complied with, and the Representatives shall have received a certificate to such
effect and as to such other matters as the Underwriters may reasonably request,
dated the Closing Date and signed by or on behalf of the Selling Stockholders;
(g) the Underwriters shall have received an opinion from Kegler, Brown,
Hill & Xxxxxx Co., L.P.A., counsel for the Company and the Selling Stockholders,
satisfactory in form and substance to counsel for the Underwriters, dated as of
each Closing Date, to the effect set forth in Annex B;
(h) the Underwriters shall have received a favorable opinion, dated as
of each Closing Date, of Xxxxxx & Xxxxxx L.L.P., counsel for the Underwriters,
with respect to such matters as may be reasonably requested by the Underwriters,
and you shall have provided such counsel with such papers and information as
they may reasonably request to enable them to provide such opinion;
(i) the conditions contained in subsections (a), (b), (d) and (e) of
this Section 6 shall have been satisfied on and as of each Closing Date and the
Company shall have furnished to the Underwriters a certificate of the Company,
signed by the President and the principal financial or accounting officer of the
Company, dated such Closing Date (A) to the effect that (i) the signers or such
certificate have carefully examined the Registration Statement, the Prospectus,
any supplement or amendment to the Prospectus, and this Agreement, (ii) that the
representations and warranties of the Company in this Agreement are true and
correct on and as of the Closing Date with the same effect as if made on the
Closing Date and (iii) the Company has complied with all the agreements and
satisfied all the conditions under this Agreement on its part to be performed or
satisfied at or
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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prior to the Closing Date and (B) as to the matters set forth in subsections
(a), (b), (d) and (e) of this Section and such other matters as the Underwriter
may reasonably request;
(j) at the Representation Date and at each Closing Date, Deloitte &
Touche LLP shall have furnished to the Underwriters and the Company and the
Selling Stockholders a letter or letters, dated respectively as of the date of
this Agreement and each Closing Date, in form and substance satisfactory to the
Underwriters, to the effect set forth in Annex C hereto;
(k) at the Representation Date, the Company shall have furnished to the
Underwriters a letter substantially in the form of Annex A hereto from each
executive officer and director of the Company and the Selling Stockholders,
addressed to the Underwriters, in which each such person agrees not to offer,
sell or contract to sell, or otherwise dispose of, directly or indirectly, or
announce an offering of, any shares of Common Stock beneficially owned by such
person or any securities convertible into, or exchangeable for, shares of Common
Stock for a period of 180 days following the date of the Prospectus without the
prior written consent of Xxxxxxxxx & Company, Inc.; and
(l) at the Closing Date, counsel for the Underwriters shall have been
furnished with such information, certificates and documents as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Shares as contemplated herein and related proceedings, or to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, or otherwise in
connection with the offering contemplated hereby; and all opinions and
certificates mentioned above or elsewhere in this Agreement shall be reasonably
satisfactory in form and substance to the Underwriters and counsel for the
Underwriters.
If any condition specified in this Section 6 shall have not been fulfilled in
all material respects when and as required to be fulfilled, this Agreement may
be terminated by the Underwriters by notice to the Company and such termination
shall be without liability of any party to any other party except as provided in
Section 5.
SECTION 7. Indemnification and Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Underwriter and its respective officers, Stockholders, employees, directors and
agents and any person who controls any Underwriter within the meaning of Section
15 of the Act or Section 20 of the Exchange Act from and against any loss
expense, damage, liability or claim (including the reasonable cost of
investigating such claim) that, jointly or severally, any such Underwriter or
any such officer, Stockholder, employee, director, agent or controlling person
may incur under the Act, the Exchange Act or otherwise, as such expenses are
incurred, insofar as such loss, expense, damage, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof) or any omission or
alleged omission to state a material fact required to be stated in such
Registration Statement or necessary to make the statements made therein not
misleading or any untrue statement or alleged untrue statement of a material
fact contained in a Prospectus (the term Prospectus for the purpose of this
Section 7 being deemed to
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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include any Preliminary Prospectus, the Prospectus, the Prospectus as amended or
supplemented and any document filed under the Exchange Act and incorporated by
reference into the Prospectus) or any omission or alleged omission therefrom of
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, the Company will not be liable in any such
case to the extent any such loss, expense, damage, liability or claim arises out
of or is based upon any untrue statement or omission or alleged untrue statement
or omission that has been made therein or omitted therefrom in reliance upon and
in conformity with the information provided in writing to the Company by or on
behalf of the Selling Stockholders or any Underwriter, expressly for use in the
Registration Statement or the Prospectus. The Company agrees that the only such
information provided in writing by or on behalf of any Underwriter to the
Company, expressly for use in the Registration Statement or the Prospectus, is
that information contained in the table and the second, fifth, sixth and eighth
paragraphs following the table in the section of the Prospectus entitled
"Underwriting" and the last paragraph on the cover page of the Prospectus. The
foregoing indemnity agreement shall be in addition to any liability that the
Company may otherwise have.
(b) The Selling Stockholders agree to indemnify, defend and hold
harmless each Underwriter and its respective officers, stockholders, employees
and directors and any person who controls any Underwriter within the meaning of
Section 15 of the Act from and against any loss, expense, liability or claim
(including the reasonable cost of investigating such claim) that, jointly or
severally, any such Underwriter or any such officer, stockholder, employee,
director or controlling person may incur under the Act, the Exchange Act or
otherwise, as such expenses are incurred, insofar as such loss, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact supplied by the Selling Stockholders
for use in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof) or any omission or alleged
omission to state a material fact required to be stated in such Registration
Statement or necessary to make the statements made therein not misleading or any
untrue statement or alleged untrue statement of a material fact contained in a
Prospectus (the term Prospectus for the purpose of this Section 7 being deemed
to include any Preliminary Prospectus, the Prospectus, the Prospectus as amended
or supplemented and any document filed under the Exchange Act and incorporated
by reference into the Prospectus) or any omission or alleged omission therefrom
of 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.
(c) Each Underwriter agrees to indemnify, defend and hold harmless the
Selling Stockholders, the Company and their respective officers, stockholders,
employees and directors and any person who controls either of them within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act from and
against any loss, expense, damage, liability or claim (including the reasonable
cost of investigating such claim) that the Selling Stockholders, the Company or
any such officer, stockholder, employee, director or controlling person may
incur under the Act, the Exchange Act or otherwise to the same extent as the
provisions of Section 7(a) above, but only insofar as such loss, expense,
damage, liability or claim arises out of or is based upon any untrue statement
or omission or alleged untrue statement or omission made in reliance or in
conformity with information relating to such Underwriter furnished in writing to
the Company by or on behalf of such Underwriter, expressly for use in the
Registration Statement or the Prospectus. The Selling
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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Stockholders and the Company agree that the only information provided in writing
by or on behalf of the Underwriters to the Company, expressly for use in the
Registration Statement or the Prospectus, is that information contained in the
table and the second, fifth, sixth and eighth paragraphs following the table in
the section of the Prospectus entitled "Underwriting" and the last paragraph on
the cover page of the Prospectus.
(d) If any action is brought against an indemnified party under this
Section 7, the indemnified party or parties shall promptly notify the
indemnifying party in writing of the institution of such action (provided that
the failure to give such notice shall not relieve the indemnifying party of any
liability that it may have pursuant to this Agreement, unless and to the extent
the indemnifying party did not otherwise learn of such action and such failure
has resulted in the forfeiture of substantive rights or defenses by the
indemnifying party) and the indemnifying party shall assume the defense of such
action, including the employment of counsel and payment of reasonable expenses.
The indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of the indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying party in
connection with the defense of such action, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to the indemnified party to
take charge of the defense of such action within a reasonable time after notice
of the institution of such action or (iii) the named parties to any such
proceeding (including any impleaded parties) include both an indemnified party
and an indemnifying party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
the named parties (in which case the indemnifying party shall not have the right
to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying party and paid as incurred; provided that the indemnifying party
shall only be responsible for the fees and expenses of one counsel for the
indemnified party or parties hereunder, in additional to any local counsel.
Anything in this paragraph to the contrary notwithstanding, the indemnifying
party shall not be liable for any settlement of any such claim or action
effected without its written consent, which consent shall not be unreasonably
withheld.
(e) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under subsection (a), (b) or (c) of this
Section 7 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) 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 hand from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Selling Stockholders on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, damages, expenses, liabilities or
claims, 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 hand shall be deemed to be in the same
proportion as the total proceeds from the offering (net of underwriting
discounts
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
-23-
24
and commissions but before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the Company and the Selling
Stockholders on the one hand and of the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company, the Selling Stockholders or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any claim or action.
(f) The Company, the Selling Stockholders and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 7(e) above. Notwithstanding the provisions of this Section 7, (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discount received by it by reason of such untrue statement or
alleged untrue statement or omission or alleged omission, (ii) no Selling
Stockholder shall be required to contribute any amount in excess of the gross
proceeds received by such Selling Stockholder from the sale of the shares
pursuant to this Agreement, and (iii) 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.
(g) In connection with the offer and sale of the Reserved Shares, the
Company agrees, promptly upon a request in writing to indemnify and hold
harmless the Underwriters from and against any and all losses, liabilities,
claims, damages and expenses incurred by them as a result of the failure of any
person or entity to whom Reserved Shares are offered to pay for and accept
delivery of Reserved Shares which, by the end of the first business day
following the date of this Agreement, were subject to a properly confirmed
agreement to purchase.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. The
respective indemnity and contribution agreements contained in Section 7, and the
covenants, representations and warranties of the Company and the Selling
Stockholders contained in this Agreement or contained in certificates of
officers of the Company and the Selling Stockholders submitted pursuant hereto,
shall remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter or
any of its respective officers, employees, directors, Stockholders, agents or
any person who controls any Underwriters, or by or on behalf of the Company or
the Selling Stockholders or any of the officers or directors or any controlling
person of the Company or the Selling Stockholders, as the case may be, and will
survive delivery of and payment for the Shares.
SECTION 9. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on either the Primary Shares
Closing Date or the Option Shares Closing Date and the aggregate number of
Shares that such defaulting Underwriter or
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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Underwriters agreed but failed to purchase does not exceed 10% of the total
number of Shares that the Underwriters are obligated to purchase on such Closing
Date, the Representatives may make arrangements satisfactory to the Company and
the Selling Stockholders for the purchase of such Shares by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Shares
that such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number of
Shares with respect to which such default or defaults occur exceeds 10% of the
total number of Shares that the Underwriters are obligated to purchase on such
Closing Date and arrangements satisfactory to the Representatives and the
Company and the Selling Stockholders for the purchase of such Shares by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter, the
Company or the Selling Stockholders, except as provided in this Section 9
(provided that if such default occurs with respect to the Option Shares after
the Primary Shares Closing Date, this Agreement will not terminate as to the
Primary Shares). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
SECTION 10. Notices. All notices and other communications hereunder will be in
writing and shall be deemed to have been duly given if mailed or transmitted by
standard form of telecommunication. Notices to the Underwriters shall be
directed to the Underwriters in care of:
Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Esq.
with a copy to: T. Xxxx Xxxxx
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
or, if sent to the Company, directed to:
Championship Auto Racing Teams, Inc.
000 Xxxx Xxx Xxxxxx Xxxx, Xxxxx 000
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
with a copy to: Xxxx X. Xxxxxx
Kegler, Brown, Hill & Xxxxxx Co., L.P.A.
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
-25-
26
or, if sent to the Selling Stockholders, directed to:
Xxxx X. Xxxxxx
Kegler, Brown, Hill & Xxxxxx Co., L.P.A.
00 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000
SECTION 11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company and the Selling Stockholders and their
respective successors and legal representatives. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to provide any person, firm
or corporation, other than the Underwriters and the Company and the Selling
Stockholders and their respective successors and legal representatives and the
controlling persons, officers, employees, directors and Stockholders referred to
in Sections 7 and 8 and their respective heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein or therein contained. This Agreement and all conditions
and provisions hereof are intended to be for the sole and exclusive benefit of
the Underwriters, the Company and the Selling Stockholders and their respective
successors and legal representatives, and such controlling persons,
Stockholders, officers and directors and their respective heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Shares from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 12. Governing Law and Time. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in such State. Specified times of day refer
to New York time, unless otherwise specified.
SECTION 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
UNDERWRITING AGREEMENT
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Company and the Underwriters in accordance with its terms.
Very truly yours,
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By:
Name:
Title:
SELLING STOCKHOLDERS
By:
Name:
Title:
As Attorney-in-Fact acting on behalf of
each of the Selling Stockholders named in
Schedule II to this Agreement
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
JEFFERIES & COMPANY, INC.
X. X. XXXXXXX & SONS, INC.
As Representatives of the Several Underwriters
JEFFERIES & COMPANY, INC.
By:
Name:
Title:
28
SCHEDULE I
NUMBER OF OPTION
TOTAL NUMBER OF FIRM SHARES TO BE PURCHASED
Underwriter SHARES TO BE PURCHASED IF MAXIMUM OPTION EXERCISED
----------- ---------------------- ---------------------------
JEFFERIES & COMPANY, INC.......................
X.X. XXXXXXX & SONS, INC.......................
29
SCHEDULE II
TOTAL NUMBER OF
NAME STOCKHOLDER SHARES TO BE SOLD
---- -----------------------------
30
SCHEDULE III
JURISDICTION OF
NAME INCORPORATION/ORGANIZATION
---- --------------------------
CART, Inc.................................................................. Michigan
CART Properties, Inc....................................................... Michigan
CART Licensed Products, Inc................................................ Michigan
CART Licensed Products, L.P................................................ Georgia
(limited partnership)
31
ANNEX A
Form of Lock-Up Agreement
32
ANNEX B
Form of Opinion of Counsel to
the Company and the Selling Stockholders
33
ANNEX C
Form of Comfort Letter
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial forecasts
and/or pro forma financial information) examined by them and included in the
Prospectus or the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American Institute of
Certified Public Accountants of the unaudited consolidated interim financial
statements, selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as indicated
in their reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus as indicated in
their reports thereon copies of which have been separately furnished to the
Representatives and on the basis of specified procedures including inquiries of
officials of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated financial
statements referred to in paragraph (vi)(A)(i) below comply as to form in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus agrees with the
corresponding amounts (after restatements where applicable) in the audited
consolidated financial statements for such five fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the basis of
limited procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
34
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company and its subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited income
statement data and balance sheet items included in the Prospectus and
referred to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Prospectus;
(D) any unaudited pro forma combined financial statements
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest financial
statements included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders' equity or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Prospectus,
35
except in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred to
in Clause (E) there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for decreases or increases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
