Exhibit 1.3
3,000,000 Shares
Crown Cork & Seal Company, Inc.
CONVERTIBLE PREFERRED STOCK
($41.8875 PAR VALUE)
UNDERWRITING AGREEMENT
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October __, 1996
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
c/o Lazard Freres & Co. LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
SECTION 1. Introductory. Compagnie Generale d'Industrie et de
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Participations, a societe anonyme organized under the laws of the Republic of
France ("CGIP"), and Sofiservice, a societe anonyme organized under the laws of
the Republic of France and a wholly owned subsidiary of CGIP ("Sofiservice" and,
together with CGIP, the "Selling Stockholders"), propose to sell to Lazard
Freres & Co. LLC, CS First Boston Corporation and Salomon Brothers Inc (the
"Underwriters") an aggregate of 3,000,000 shares (the "Firm Shares") of
Convertible Preferred Stock, par value $41.8875 per share (the "Convertible
Preferred Stock"), of Crown Cork & Seal Company, Inc. (the "Company"), each
Selling Stockholder selling the amount set forth opposite such Selling
Stockholder's name in Schedule II hereto. The Selling Stockholders also propose
to sell to the Underwriters, upon the terms and conditions set forth in Section
4 hereof, up to an additional 450,000 shares of Convertible Preferred Stock (the
"Additional Shares"), each Selling Stockholder selling the amount set forth
opposite such Selling Stockholder's name in Schedule II hereto. The Firm Shares
and the Additional Shares are hereinafter sometimes collectively referred to as
the "Shares".
It is understood that the Company and the Selling Stockholders are
concurrently entering into underwriting agreements dated the date hereof (the
"U.S. Common
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Stock Underwriting Agreement" and the "International Common Stock Underwriting
Agreement") in which the Selling Stockholders propose to sell to the several
Underwriters named therein (the "U.S. Common Stock Underwriters" and the
"International Common Stock Underwriters") an aggregate of 9,250,000 shares (the
"Common Firm Shares") of the Company's Common Stock, par value $5.00 per share
(the "Common Stock"). In addition, CGIP has agreed to sell to the U.S. Common
Stock Underwriters, upon the terms and conditions set forth in the U.S. Common
Stock Underwriting Agreement, up to an additional 1,387,500 shares of Common
Stock (the "Common Additional Shares" and, collectively with the Common Firm
Shares, the "Common Shares"). The respective closings under this Agreement, the
U.S. Common Stock Underwriting Agreement and the International Common Stock
Underwriting Agreement are not conditional on one another.
The Company and the Selling Stockholders hereby agree with the
Underwriters as follows (it being understood and agreed that the obligations set
forth herein are several in nature, unless expressly stated to the contrary):
SECTION 2. Representations, Warranties and Agreements of the Company.
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The Company represents and warrants to, and agrees with, (i) the several
Underwriters and (ii) in the case of clauses (a), (b), (c), (j) and (n) and the
second sentence of clause (g) below only, the Selling Stockholders (it being
understood and agreed that such representations and warranties to the Selling
Stockholders are being made solely in connection with the sale of the Shares
under this Agreement and subject to the last sentence of Section 9(a)), that:
(a) The Company meets the registrant requirements for use of Form S-3
under the Securities Act of 1933, as amended (the "Act"). A registration
statement on Form S-3 (File No. 333-12787), including a form of prospectus
relating to the Shares, has been filed by the Company pursuant to the Act
with the Securities and Exchange Commission (the "Commission"). The
Company may have filed one or more amendments thereto, including the
related Preliminary Prospectus (as defined below), each of which (other
than documents incorporated by reference therein) has previously been
furnished to you. The Company will file with the Commission either (i)
prior to effectiveness of such registration statement, a further amendment
to such registration statement (including the form of final prospectus
relating to the Shares) or (ii) after effectiveness of such registration
statement, a final prospectus relating to the Shares in accordance with
Rules 430A and 424(b)(1) or (4) under the Act. In the case of clause (ii),
the Company has included or shall include in such registration statement,
as amended at the Effective Time (as defined below), all information (other
than information permitted to be omitted from such registration statement
when it becomes effective pursuant to Rule 430A ("Rule 430A Information"))
required by the Act and the rules and regulations thereunder (the "Rules
and Regulations") to be included in the final 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
you shall
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agree in writing to a modification (which shall not be unreasonably
withheld or delayed), shall be in all substantive respects in the form
furnished to you prior to the execution of this Agreement or, to the extent
not in such form, shall contain only such specific additional information
and other changes (beyond that contained in the latest Preliminary
Prospectus) as the Company has advised the Underwriters, prior to the
execution of this Agreement, will be included or made therein. For
purposes of this Agreement, "Effective Time" means the time as of which
such registration statement or the most recent post-effective amendment
thereto, if any, was or is declared effective by the Commission and each
date after the date hereof on which a document incorporated by reference in
the Registration Statement is filed. "Effective Date" means the date of
the Effective Time. The registration statement contains a prospectus to be
used in connection with the offering and sale of the Shares. Such
registration statement, as amended at the Effective Time, including
incorporated documents, exhibits and financial statements, and including
all Rule 430A Information, if any, and, any post-effective amendment
thereto that becomes effective prior to the Closing Date (as defined below)
is hereinafter referred to as the "Registration Statement", and the
prospectus relating to the Shares in the form first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)")
under the Act or, if no such filing is required, as included in the
Registration Statement is hereinafter referred to as the "Prospectus". Any
preliminary prospecus relating to the Shares included in such Registration
Statement or filed pursuant to Rule 424(a) under the Act is hereinafter
referred to as a "Preliminary Prospectus". Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the
Securities Exchange Act of 1934 (the "Exchange Act") on or before the
Effective Time of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
references to information being "included", "contained" or "set forth in"
any such document (or similar expressions) shall be similarly construed;
and any reference herein to the terms "amend", "amendment" or "supplement"
with respect to the Registration Statement, any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Time of the
Registration Statement, or the issue date of any Preliminary Prospectus or
the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) At the Effective Time, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined in Section 4), the
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the Rules and
Regulations; at the Effective Time, the Registration Statement did not or
will not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time, the
Prospectus, if not filed
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pursuant to Rule 424(b), did not or will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date, the Prospectus (and any
supplements thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to information
contained in or omitted from the Registration Statement or the Prospectus
(or any supplement thereto) in reliance upon and in conformity with the
Underwriters' Information or the Selling Stockholders' Information (as
defined in Section 9(a)).
(c) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and no proceedings for that
purpose shall have been instituted or threatened by the Commission, and
each Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
the Underwriters' Information or the Selling Stockholders' Information.
(d) The historical consolidated financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) present fairly in all material respects the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations, the statements of their cash
flows and the changes in their financial position for the periods
specified; such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
during the periods involved (except as described in the notes to such
financial statements); and the supporting schedules, if any, included in
the Registration Statement present fairly in all material respects the
information required to be stated therein. The pro forma financial
statements included in the Registration Statement and the Prospectus (and
any amendment or supplement thereto) have been prepared on a basis
consistent with such historical financial statements (except as described
in such pro forma financial statements), include all material adjustments
to the historical financial data required to reflect the transactions to
which pro forma effect is given, give effect to assumptions made on a
reasonable basis, and present fairly in all material respects on a pro
forma basis the estimated consolidated financial position and results of
operations of the Company and its consolidated subsidiaries assuming that
such transactions had occurred on the date specified therein.
(e) There has not been sustained since the date of the latest audited
financial statements included in the Prospectus any material adverse change
in the financial condition, results of operations or business of the
Company and its subsidiaries
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considered as a whole (a "Material Adverse Effect"), except as set forth in
the Prospectus.
(f) The Company and each of its subsidiaries have been duly
incorporated and are validly existing in good standing under the laws of
their respective jurisdictions of organization with power and authority to
own, lease and operate their properties and conduct their businesses as
described in the Registration Statement and the Prospectus; and each of
them is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which it owns or leases properties
or in which the conduct of its business requires such qualification, except
to the extent that any such failure to be so qualified or be in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect.
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all shares of capital stock of the Company outstanding,
including the Shares, have been duly authorized, are validly issued, fully
paid and non-assessable, and conform in all material respects to the
description thereof contained in the Prospectus. The sale of the Shares is
not subject to pre-emptive or other similar rights or restrictions on
transfer created by the Company under the Company's articles of
incorporation or bylaws, under applicable law or under any agreement to
which the Company is a party or of which the Company has actual knowledge
(other than those imposed by the Act, the Rules and Regulations, foreign
securities laws or state securities or Blue Sky laws and other than
restrictions on transfers contained in that certain Shareholders Agreement,
dated February 22, 1996, between the Company and CGIP (the "Shareholders
Agreement") which have been fully waived or satisfied); and the Shares are
duly listed and admitted for trading on the New York Stock Exchange (the
"NYSE").
(h) All of the issued and outstanding capital stock of each material
subsidiary of the Company listed on Schedule III hereto has been duly
authorized and validly issued and is fully paid and non-assessable, and,
except as set forth in the Prospectus, all the issued and outstanding
capital stock of each such material subsidiary is owned, directly or
through subsidiaries, by the Company, free and clear of any pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien"), except for
any such Liens that would not, individually or in the aggregate, have a
Material Adverse Effect.
(i) Neither the Company nor any of its subsidiaries is in violation
of its or any of their charters or by-laws or other organizational
documents or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement or
instrument to which it or any of them is a party or by which it or any of
them or their properties may be bound, except any violations or defaults
that would not, individually or in the aggregate, have a Material Adverse
Effect.
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(j) No consent, approval, authorization, order, registration, filing
or qualification by or on behalf of the Company or any of its subsidiaries
of or with any court or governmental authority or agency or of the NYSE is
required for the sale of the Shares or the consummation of the transactions
contemplated by this Agreement, except such as may be required under the
Act, the Rules and Regulations or state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriters; the execution and delivery of this Agreement, and the
consummation of the transactions contemplated herein will not (i) conflict
with or constitute a breach of any of the terms or provisions of, or
default under, or result in the creation or imposition of any Lien upon any
property or assets of the Company or any of its subsidiaries pursuant to,
any contract, indenture, mortgage, deed of trust, loan agreement, note,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject that is material to the Company and its
subsidiaries taken as a whole, (ii) result in any violation or breach of
the provisions of the charter or by-laws or other organizational documents
of the Company or any of its subsidiaries or (iii) result in any violation
of any law, administrative regulation or administrative or court decree or
order applicable to the Company, any of its material subsidiaries or their
respective property.
(k) The Company and its subsidiaries are in compliance with all laws
and regulations applicable to them and their respective properties and
possess all certificates, authorities or permits issued by, and have made
all filings with, the appropriate state, local, Federal or foreign
regulatory agencies or bodies necessary or desirable to conduct the
business now operated by them, except where noncompliance with such laws or
regulations or the failure to possess or make the same would not,
individually or in the aggregate, have a Material Adverse Effect, and
neither the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation, termination or modification of any
such certificate, authority, permit or filing, other than any such
revocation, termination or modification that would not, individually or in
the aggregate, have a Material Adverse Effect.
(l) Except as described in the Prospectus, there are no actions,
suits or proceedings before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its subsidiaries,
or to which any of their respective properties is subject, which, (i) if
adversely determined, would, individually or in the aggregate, result in
any Material Adverse Effect or (ii) questions the validity of this
Agreement or any action taken or required to be taken pursuant hereto.
(m) Each of the Company and its subsidiaries has good and marketable
title to all real and personal property owned by it, in each case free and
clear of any ▇▇▇▇,
▇
except (i) such as are referred to in the Prospectus or (ii) such as would
not, individually or in the aggregate, have a Material Adverse Effect; and
any real property and buildings held under lease by the Company and its
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as would not, individually or in the aggregate,
have a Material Adverse Effect.
(n) This Agreement has been duly authorized, executed and delivered
by the Company.
(o) Other than the Shareholders Agreement, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities under the Registration Statement.
(p) Except as set forth in the Prospectus under the caption
"Underwriting", neither the Company nor, to the Company's knowledge, any of
its officers or directors or any of their respective affiliates is a
member of, or is associated or affiliated with a member of, the National
Association of Securities Dealers, Inc. ("NASD").
SECTION 3. Representations, Warranties and Agreements of the Selling
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Stockholders. Each Selling Stockholder, jointly and severally, represents and
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warrants to, and agrees with, (i) the several Underwriters and (ii) the Company
(it being understood and agreed that such representations and warranties to the
Company are being made solely in connection with the sale of the Shares under
this Agreement and subject to the last sentence of Section 9(b)), that:
(a) This Agreement has been duly authorized, executed and delivered
by or on behalf of such Selling Stockholder.
(b) Such Selling Stockholder has the legal right and power to execute
and deliver this Agreement and to sell, transfer and deliver the Shares to
be sold by such Selling Stockholder in the manner provided in this
Agreement, and no such action will result in any violation or breach of the
provisions of the charter or by-laws or other organizational documents of
such Selling Stockholder or any agreement or other instrument binding upon
such Selling Stockholder (including the restrictions on transfer contained
in the Shareholders Agreement, which have been fully waived or satisfied)
or any law, administrative regulation or administrative or court decree or
order applicable to such Selling Stockholder; and no consent, approval,
authorization, order, registration, filing or qualification of or with any
court or governmental authority or agency or of the NYSE is required for
the consummation of the transactions contemplated by this Agreement in
connection with the sale of the Shares by such Selling Stockholder, except
such as may be required under the Act, the Rules
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and Regulations or state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(c) Such Selling Stockholder has, and will deliver to the
Underwriters upon payment therefor good and marketable title to the Shares
to be sold by such Selling Stockholder, free and clear of any Lien.
(d) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(e) At the Effective Time, the Selling Stockholders' Information
contained in the Registration Statement did not or will not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
in the Selling Stockholders' Information not misleading; and, at the
Effective Time, the Selling Stockholders' Information contained in the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date,
the Selling Stockholders' Information contained in the Prospectus (and any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements in the Selling Stockholders' Information, in the light of the
circumstances under which they were made, not misleading.
(f) There are no contracts, agreements or understandings between the
Selling Stockholders and any person that would give rise to a valid claim
against the Selling Stockholders or any Underwriter for a brokerage
commission, finder's fee or other like payment.
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis of the
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representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, each Selling Stockholder, severally and
not jointly, hereby agrees to sell to the Underwriters, and each Underwriter
agrees, severally and not jointly, to purchase from such Selling Stockholder, at
a purchase price of $______ per Share (the "purchase price per Share"), the
respective number of Firm Shares (subject to adjustment by Lazard Freres & Co.
LLC to eliminate fractions) that bear the same proportion to the number of Firm
Shares to be sold by such Selling Stockholder as the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto bears to the
total number of Firm Shares.
CGIP hereby agrees to sell to the Underwriters and, on the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Underwriters shall have the right
to purchase, severally and
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not jointly, from CGIP, pursuant to an option to be exercised in the 30-day
period commencing on the date of this Agreement, up to 450,000 Additional Shares
at the purchase price per Share. Additional Shares may be purchased solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase from CGIP that proportion of the
total number of Additional Shares (subject to adjustment by Lazard Freres & Co.
LLC to eliminate fractions) to be purchased from CGIP as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto
bears to the total number of Firm Shares.
Each Selling Stockholder will deliver the Firm Shares to the
Underwriters, against payment of the purchase price therefor by wire transfer of
same day funds to an account specified in writing by such Selling Stockholder.
Payment for the Firm Shares shall be made at the offices of Cravath, Swaine &
▇▇▇▇▇ at 10:00 A.M., New York Time, on _____________, 1996 or at such other
place or time not later than seven full business days thereafter as the
Underwriters and the Selling Stockholders determine (the "Initial Closing
Date").
CGIP will deliver the Additional Shares to the Underwriters, against
payment of the purchase price therefor by wire transfer of same day funds to an
account specified in writing by CGIP, at the offices of Cravath, Swaine & ▇▇▇▇▇
on such date and at such time (the "Option Closing Date"), as shall be specified
in the notice from Lazard Freres & Co. LLC to CGIP exercising the option to
purchase the Additional Shares. The Option Closing Date may be the same as the
Initial Closing Date but shall in no event be earlier than the Initial Closing
Date nor earlier than two nor later than ten business days after the giving of
the notice hereinafter referred to. Such notice may be given, by letter or by
telecopy or other facsimile transmission or by telephone (if subsequently
confirmed in writing), to CGIP at any time within 30 days after the date of this
Agreement. The Option Closing Date may be varied by agreement between the
Underwriters and CGIP. The Initial Closing Date and the Option Closing Date are
herein collectively referred to as the "Closing Date."
The certificates for all the Firm Shares and the Additional Shares so
to be delivered will be in such denominations and registered in such names as
the Underwriters request two full business days prior to the Initial Closing
Date or the Option Closing Date, as the case may be, and will be made available
at the offices of Lazard Freres & Co. LLC, New York, New York or, upon your
request, through the facilities of The Depository Trust Company, for checking
and packaging at least one full business day prior to the Initial Closing Date
or the Option Closing Date, as the case may be.
Each Selling Stockholder will not, without the prior written consent
of the Underwriters, offer, sell, pledge or otherwise dispose of any shares of
capital stock of the Company or any securities convertible into or exercisable
or exchangeable for such capital stock or any rights to purchase or acquire such
capital stock, for a period of one year after the date of this Agreement;
provided, however, that the foregoing restriction shall not apply to
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(i) the sale of the Shares to be sold hereunder, (ii) the sale of the Common
Shares to be sold under the U.S. Common Stock Underwriting Agreement and the
International Common Stock Underwriting Agreement, (iii) any conversion of
shares of Preferred Stock into shares of Common Stock pursuant to the terms of
the Preferred Stock and (iv) any disposition of any shares of Common Stock or
Preferred Stock pursuant to a bona fide pledge or grant of a security interest
to a major brokerage firm or financial institution to secure bona fide
indebtedness, or the sale of such shares upon foreclosure on such pledge,
provided that each purchaser of such shares upon foreclosure agrees to be bound
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by the provisions of this paragraph.
SECTION 5. Offering by Underwriters. After the Registration
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Statement becomes effective, the several Underwriters will offer the Shares for
sale to the public on the terms and conditions as set forth in the Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
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agrees with the several Underwriters and the Selling Stockholders that:
(a) If the Effective Time is prior to the execution and delivery of
this Agreement, the Company will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) (or, if applicable, and
with the Underwriters' consent, subparagraph (4)) of Rule 424(b) within the
time period prescribed by such rule. The Company will advise the
Underwriters promptly of any proposal to amend or supplement the
Registration Statement as filed, or the Prospectus, and will not effect
such amendment or supplement or filing without the Underwriters' consent
(which shall not be unreasonably withheld or delayed). The Company will
also advise the Underwriters promptly after the Company receives notice of
the effectiveness of the Registration Statement (if the Effective Time is
subsequent to the execution and delivery of this Agreement), of the filing
and effectiveness of any amendment or supplement to the Registration
Statement or the Prospectus, and of the issuance by the Commission of any
stop order in respect of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or any
prospectus relating to the Shares or the initiation of proceedings for any
such purpose, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, or of any request by the Commission to
amend or supplement the Registration Statement or the Prospectus or for
additional information and will use its best efforts to prevent the
issuance of any such stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or any prospectus relating to the
Shares or suspending any such qualification and to obtain as soon as
possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of
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the circumstances under which they were made, not misleading, or if it is
necessary at any time to amend or supplement the Prospectus or the
Registration Statement to comply with the Act, the Rules and Regulations or
any other law, the Company promptly will prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
6, an amendment or supplement which will correct such statement or omission
or an amendment which will effect such compliance and will notify the
Underwriters and, upon their request, prepare and furnish without charge to
each Underwriter, each Selling Stockholder (except as provided below) and
to any dealer in securities as many copies as the Underwriters may from
time to time reasonably request, of the amended Prospectus or any
supplement to the Prospectus complying with Section 10(a) of the Act which
will correct such statement or omission or effect such compliance, it being
understood and agreed that the Selling Stockholders will pay all costs and
expenses incident to the preparation, printing, filing and distribution of
any such amendment or supplement.
(c) The Company will make generally available to the Company's
security holders as soon as practicable, but in any event not later than 18
months after the effective date of the Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement that satisfies the
provisions of Section 11(a) of the Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(d) The Company will deliver to each of the Underwriters as many
conformed copies of the Registration Statement (as originally filed) and of
each amendment thereto (including exhibits filed therewith and documents
incorporated therein by reference) and copies of the Preliminary Prospectus
and the Prospectus as the Underwriters may reasonably request.
(e) The Company will take such action as the Underwriters may
reasonably request, in cooperation with the Underwriters to qualify the
Shares for offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the Underwriters may
designate, and will maintain such qualifications in effect for as long as
may be required for the distribution of the Shares; provided, however, that
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in no event shall the Company be obligated in connection therewith to
qualify as a foreign corporation in any jurisdiction in which it shall not
then be qualified, or to execute a general consent to service of process in
any jurisdiction in which such a consent has not been previously filed, or
subject itself to taxation in any jurisdiction wherein it would not
otherwise be subject to tax but for the requirements of this paragraph.
The Company will file such statements and reports as may be required by the
laws of each jurisdiction in which the Shares have been qualified as above
provided.
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(f) The Company agrees that neither it nor any of its directors or
the principal executive officers set forth in Item 10 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 will,
without the prior written consent of the Underwriters, offer, sell, or
otherwise dispose of, any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital
stock or any rights to purchase or acquire such capital stock, for a period
of 90 days after the date of this Agreement; provided, however, that the
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foregoing restriction shall not apply to any issuances or sales (a) in
connection with stock option, savings, benefit or compensation plans or
dividend reinvestment plans in existence on the date of this Agreement or
the conversion or exchange of convertible or exchangeable securities of the
Company, (b) in connection with a merger or other combination with, or
exchange offer for shares of, or acquisition of assets of, another entity,
(c) required in the Company's judgment to prevent termination of the
Standstill Period (as defined in the Shareholders Agreement), or (d) by
such directors and officers of up to 300,000 shares of capital stock in the
aggregate; provided, further, that (i) in the case of clauses (b), (c) and
-------- -------
(d) above, the Company shall give the Underwriters at least 2 Business
Days' prior written notice of such issuance or sale and (ii) in the case of
clauses (b) and (c) above, the recipients of any such securities shall
agree to be bound by the provisions of this paragraph.
SECTION 7. Conditions of the Obligations of the Underwriters. The
-------------------------------------------------
obligations of the several Underwriters to purchase and pay for the Firm Shares
on the Initial Closing Date will be subject (i) to the provisions of Section 11
herein, (ii) in the case of representations and warranties qualified as to
materiality, to the accuracy of such representations and warranties in all
respects, and in the case of representations and warranties not so qualified, to
the accuracy of such representations and warranties in all material respects, in
each case on the part of the Company and the Selling Stockholders herein as of
the date hereof and as of the Initial Closing Date with the same force and
effect as if made as of that date, (iii) to the accuracy of the statements of
Company officers and Selling Stockholder officers made in any certificates
furnished pursuant to the provisions hereof, (iv) to the performance by the
Company and the Selling Stockholders of their respective obligations hereunder
and (v) to the following additional conditions precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than
(i) 6:00 p.m. New York City time on the date of determination of the
offering price, if such determination occurred at or prior to 3:00 p.m. New
York City time on such date or (ii) 12:00 noon New York City time on the
business day following the day on which the offering price was determined
if such determination occurred after 3:00 p.m. New York City time on such
date. If the Effective Time is prior to the execution and delivery of this
Agreement, the Company shall have filed the Prospectus with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
13
such filing by the Rules and Regulations and in accordance with Section
6(a) hereof. In either case, prior to the Initial Closing Date no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted
or threatened by the Commission; and the Company shall have complied with
all requests for additional information on the part of the Commission to
the Underwriters' reasonable satisfaction.
(b) The Underwriters shall have received an opinion of Dechert Price
& ▇▇▇▇▇▇, counsel for the Company, dated the Initial Closing Date, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania; and the Company has the corporate power and authority
necessary to own or hold its properties and to conduct the business in
which it is engaged as described in the Prospectus.
(ii) This Agreement has been duly authorized, executed and
delivered by the Company.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby do not
(a) conflict with or result in a violation of any of the provisions of
the articles of incorporation or bylaws of the Company, (b) conflict
with or violate in any material respect any Pennsylvania, New York or
United States Federal law, rule or regulation, or, to such counsel's
knowledge, any order, judgment or decree known to such counsel that
is applicable to the Company or by which any property or asset of the
Company or any of its subsidiaries is or may be bound (other than
Federal or state securities or blue sky laws, other anti-fraud laws
and fraudulent transfer laws and bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, as to which such counsel
need not express any opinion) or (c) to such counsel's knowledge,
result in a material breach of any of the terms or provisions of, or
constitute a default under, any material loan or credit agreement,
indenture, deed of trust, mortgage, note or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which any of them or any of its
properties or assets is or may be bound.
(iv) No consent, approval, authorization or other action by or
filing with any Pennsylvania, New York or United States Federal
governmental agency or body or Pennsylvania, New York or United States
Federal court having jurisdiction over the Company or any of its
properties is required to be obtained by the Company in connection
with the execution and delivery of this Agreement by the Company or
the consummation of the transactions contemplated hereby, except
filings and
14
other actions required under the Act and the Rules and Regulations and
state securities and blue sky laws, as to which such counsel need not
express any opinion.
(v) The Company has an authorized capitalization as set forth in
the Prospectus; the Shares have been duly and validly authorized and
have been duly and validly issued, and are fully paid and
nonassessable; the Shares conform in all material respects to the
description thereof in the Prospectus.
(vi) The Registration Statement was declared effective under the
Act as of the date and time specified in such opinion, and, to the
knowledge of such counsel, no stop order has been issued and no
proceeding for that purpose is pending or threatened by the
Commission.
(vii) The statements set forth or referred to in the Prospectus
under the headings "Description of Capital Stock--General",
"Description of Capital Stock--Common Stock", "Description of Capital
Stock--Preferred Stock" and "Certain United States Federal Tax
Considerations for Non-U.S. Holders of Capital Stock" and in the
Registration Statement under Item 15, insofar as such statements
constitute a summary of the legal matters or documents referred to
therein fairly present the information called for with respect to such
legal matters or documents.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (i) the Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to the
Initial Closing Date (other than the financial statements (including pro forma
financial statements and notes to financial statements or pro forma financial
statements) and related schedules and other financial, accounting or statistical
information included in or excluded from the Registration Statement or the
Prospectus, as to which such counsel need express no belief) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Act and the Rules and Regulations and (ii) such counsel participated in
conferences with officers and representatives of the Company, Price Waterhouse
LLP, the Underwriters, the Selling Stockholders and Cravath, Swaine & ▇▇▇▇▇ in
connection with the preparation of the Registration Statement, and based on the
foregoing and without assuming responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or making any
independent check or verification thereof (and relying as to factual matters
upon the statements of officers and other representatives of the Company, the
Selling Stockholders and others), no facts have come to the attention of such
counsel which lead them to believe that (I) the Registration Statement, as
15
of the Effective Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading (other than the information
omitted therefrom in reliance on Rule 430A), or (II) the Prospectus as amended
or supplemented, as of its date and as of each Closing Date, contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that such counsel need not express a belief as to any financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules, and other financial,
accounting or statistical information included in or excluded from the
Registration Statement or the Prospectus.
(c) The Underwriters shall also have received from ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, Executive Vice President, Secretary and General Counsel of the
Company, an opinion, dated the Initial Closing Date, to the effect that:
(i) Each of the Company and its material subsidiaries listed
on Schedule III hereto is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with corporate power and authority to own, lease and
operate its properties and to conduct its business as presently
conducted and as described in the Registration Statement; and each of
the Company and such material subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or the ownership or leasing of its
property requires such qualification, except to the extent that the
failure to be so qualified or to be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(ii) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required to be
made by the Company for the execution and delivery of this Agreement
by the Company or the consummation of the transactions contemplated
hereby, except such as have been obtained or made under the Act and
such as may be required under state securities and blue sky laws.
(iii) The execution, delivery and performance of this Agreement
by the Company and the sale of the Shares contemplated hereby will not
result in a material breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, rule,
regulation or order of any governmental agency or body of any court
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any material agreement or instrument to
which the Company or any such subsidiary is bound or to which any of
the properties of the Company or any such subsidiary is subject, or
the articles of incorporation or bylaws of the
16
Company or any such subsidiary; and to the best of such counsel's
knowledge, neither the Company nor any of its material subsidiaries is
in violation of its articles or incorporation or bylaws, or in
material default under any material agreement, indenture or
instrument.
(iv) Except as disclosed in or incorporated by reference in the
Registration Statement, there is no action, suit or proceeding which
has been served upon the Company or any of its subsidiaries or of
which any of their properties or assets is the subject that is now
pending, or to such counsel's knowledge, overtly threatened, against
or affecting the Company or any of its subsidiaries or any of their
properties or assets that, if adversely determined, would have a
material adverse effect on the Company or its subsidiaries, taken as a
whole; and such counsel is not aware of any material contracts or
other material documents or legal or governmental proceedings which
are required to be filed as exhibits to the Registration Statement by
the Act or the Exchange Act which have not been so filed.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the Commonwealth of Pennsylvania.
Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Initial Closing Date to
the effect that (a) each document filed by the Company under the Exchange Act,
and incorporated by reference in the Registration Statement and each amendment
or supplement thereto, as of their respective dates or as of the date of any
such amendment or supplement thereto, (other than the financial statements
(including pro forma financial statements and notes to financial statements or
pro forma financial statements) and related schedules and other financial,
accounting or statistical information included in or excluded from such
documents, as to which such counsel need not express an opinion) appear on their
face to be appropriately responsive in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and (b) no facts
have come to the attention of such counsel which lead him to believe that (I)
the Registration Statement, as of the Effective Date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading (other than the information omitted therefrom in reliance on Rule
430A), or (II) the Prospectus as amended or supplemented, as of its date and as
of each Closing Date, contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that such counsel need not express a belief as
to any financial statements (including pro forma financial statements and notes
to financial statements or pro forma financial statements) and related
schedules, and other financial, accounting or statistical information included
in or excluded from the Registration Statement or the Prospectus.
17
(d) You shall have received an opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel for the Selling Stockholders, dated the Initial Closing
Date, that:
(i) All regulatory consents, authorizations, approvals and
filings required to be made or obtained by the Selling Stockholders
under the Federal laws of the United States and the laws of the State
of New York for the sale and delivery of the Shares by the Selling
Stockholders to the Underwriters have been obtained or made.
(ii) Insofar as New York law is concerned, upon delivery of and
payment for the Shares to be sold to the Underwriters in the State of
New York pursuant to this Agreement, the Underwriters will have
acquired the Shares free of any adverse claim within the meaning of
Section 8-302 of the New York Uniform Commercial Code (the "Code").
(iii) The execution and delivery by the Selling Stockholders of
this Agreement and the sale by the Selling Stockholders of the Shares
in accordance with this Agreement will not violate any existing
Federal law of the United States or law of the State of New York.
In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America
and laws of the State of New York.
(e) You shall have received an opinion of Michel Renault, General
Counsel of CGIP, dated the Initial Closing Date, that:
(i) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Stockholders.
(ii) The sale of the Shares to be sold by the Selling
Stockholders as contemplated by this Agreement and the execution
delivery and performance of this Agreement by the Selling Stockholders
will not conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other
agreement or instrument known to such counsel to which such Selling
Stockholder is a party or by which it may be bound (including the
restrictions contained in the Shareholders Agreement, which have been
fully waived or satisfied), nor will such action result in any
violation or breach of the provisions of the statuts of such Selling
Stockholder or any law or administrative regulation or administrative
or court decree or order of any court or governmental authority or
agency known by such counsel to be applicable to such Selling
Stockholder.
18
(iii) No consent, approval, authorization, order, filing,
registration or qualification of or with any court or governmental
authority or agency is required for the sale of the Shares by the
Selling Stockholders as contemplated by this Agreement (except such
counsel need express no opinion as to any necessary qualification
under the securities laws of any foreign country).
(iv) The Selling Stockholders have full right, power and
authority to sell, assign, transfer and deliver, or to cause to be
sold, assigned, transferred and delivered, the Shares to be sold by
the Selling Stockholders to the Underwriters.
(v) The sale of the Shares as contemplated by this Agreement
is not subject to any contractual restrictions on transfer, except the
restrictions on transfers contained in the Shareholders Agreement,
which have been fully waived or satisfied.
(vi) Upon delivery of the Shares to the Underwriters, and
payment therefor by the Underwriters pursuant to this Agreement, good
and valid title to the Shares, free and clear of all liens,
encumbrances, equities or claims has been transferred to each of the
several Underwriters.
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the laws of the Republic of France. The foregoing
opinion does not address compliance by the Underwriters with foreign securities
laws with respect to resales of the Shares in France.
(f) The Underwriters shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel for the Underwriters, an opinion, dated the Initial Closing
Date, with respect to such matters as the Underwriters may reasonably
request.
(g) The Underwriters shall have received from the President or any
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Initial Closing Date, in which such
officers shall state that, to the best of their knowledge and after
reasonable investigation, (i) the Registration Statement as of the
Effective Time, and the Prospectus as of the date of any filing pursuant to
Rule 424(b) and on the Closing Date, did not include any untrue statement
of a material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and since the Effective Time, no event has occurred which should have been
set forth in a supplement or amendment to the Registration Statement or the
Prospectus; (ii) there has not been, since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
change or event that would be likely to have a Material Adverse Effect,
whether or not arising in the ordinary course of business; (iii) in the
case of representations and warranties in Section 2 qualified as to
materiality, such representations and warranties are true and correct in
all respects, and in the case of
19
representations and warranties not so qualified, such representations and
warranties are true and correct in all material respects, in each case on
the part of the Company with the same force and effect as though made on
and as of the Initial Closing Date and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date; and (iv) no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(h) The Underwriters shall have received from the Selling
Stockholders a certificate, signed by the President or any Vice President
and a principal financial or accounting officer of CGIP, dated the Closing
Date, in which such officers shall state that, to the best of their
knowledge and after reasonable investigation, (i) the Selling Stockholders'
Information contained in the Registration Statement as of the Effective
Time, or in any Prospectus as of the date of any filing pursuant to Rule
424(b) and on the Closing Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and (ii) in the case of representations and warranties in Section 3
qualified as to materiality, such representations and warranties are true
and correct in all respects, and in the case of representations and
warranties not so qualified, such representations and warranties are true
and correct in all material respects, in each case on the part of the
Selling Stockholders with the same force and effect as though made on the
Initial Closing Date and the Selling Stockholders have complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Initial Closing Date.
(i) The Underwriters shall have received from Price Waterhouse LLP,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex A hereto with such variations as are
reasonably acceptable to the Underwriters.
(j) The Underwriters shall have received from Befec-Price Waterhouse,
independent public accountants, two letters, the first dated the date of
this Agreement and the other dated the Initial Closing Date, addressed to
the Board of Directors of the Company, the Underwriters and the Selling
Stockholders (with conformed copies for each of the Underwriters),
substantially in the form of Annex B hereto with such variations as are
reasonably acceptable to the Underwriters.
The several obligations of the Underwriters to purchase the Additional
Shares hereunder are subject to (i) the accuracy (A) in all material respects of
the representations and warranties of the Company and the Selling Stockholders
contained herein that are qualified as to materiality and (B) in all respects of
such representations and warranties that are not so
20
qualified, in each case as though made on and as of the Option Closing Date,
(ii) the performance by the Company and the Selling Stockholders of their
respective obligations hereunder, (iii) satisfaction on and as of the Option
Closing Date of the conditions set forth in subsections (a) to (j) of this
Section 7, inclusive (and, for purposes thereof, each reference therein to the
Initial Closing Date shall be deemed to refer to the Option Closing Date), and
(iv) the absence of circumstances on or prior to the Option Closing Date which
would permit termination of this Agreement pursuant to Section 11.
SECTION 8. Payment of Expenses. Other than the fees and expenses of
-------------------
the Company's counsel and accountants, the Selling Stockholders will pay all
costs, expenses, fees, disbursements and taxes incident to the sale of the
Shares contemplated hereby, including without limitation (i) the preparation,
printing, filing and distribution of the Registration Statement (including
financial statements and exhibits), the Prospectus, each Preliminary Prospectus
and all amendments and supplements to any of them prior to or during the period
specified in Section 6(b), (ii) the printing, reproduction and distribution of
this Agreement and all other underwriting and selling group documents by mail,
telex or other means, (iii) the registration with the Commission of the Shares,
(iv) the registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the several states and the preparation,
printing and distribution of Preliminary and Supplemental Blue Sky Memoranda and
Legal Investment Survey (including the reasonable fees and disbursements of the
Underwriters' counsel relating to the foregoing), (v) filing fees incurred in
connection with the National Association of Securities Dealers, Inc.'s review of
the offering's underwriting terms and arrangements, (vi) the fees and expenses
of the Registrar and Transfer Agent for the Shares and its counsel and (vii) the
fees and expenses of the Selling Stockholders' counsel and accountants.
If the sale of the Shares provided for herein is not consummated
because of the failure to satisfy any condition to the obligations of the
Underwriters because of any breach of any representation, warranty or covenant
of the Selling Stockholders contained in this Agreement, because of any
termination pursuant to Section 11 hereof or because of any refusal, failure or
inability of the Company or the Selling Stockholders to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any Underwriter, the Selling Stockholders shall reimburse the
21
Underwriters for all of their reasonable out-of-pocket expenses incurred in
connection with marketing and preparing for the offering of the Shares,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 9. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each of the
Underwriters and the Selling Stockholders and each person, if any, who
controls any Underwriter or any Selling Stockholder within the meaning of
either Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (or actions in
respect thereof) (including, without limiting the foregoing, the reasonable
legal and other expenses incurred in connection with investigating or
defending or preparing to defend or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action, as such
expenses are incurred), insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based on any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or any Preliminary Prospectus, or
are caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, except (i) the Company shall not be liable to any
Underwriter under the indemnity agreement in this paragraph (a) with
respect to any Preliminary Prospectus to the extent that such losses,
claims, damages, liabilities or expenses result from the fact that such
Underwriter sold Shares to a person as to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy of the
Prospectus or of the Prospectus as then amended or supplemented in any case
where such delivery is required by the Act if the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission
of a material fact contained in the Preliminary Prospectus which was
corrected in the Prospectus or in the Prospectus as then amended or
supplemented if the Company had previously furnished copies thereof to such
Underwriter and (ii) insofar as such losses, claims, damages, liabilities
or expenses arise out of or are based upon any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with (x) written information furnished to the Company by or on
behalf of the Underwriters specifically for use in the Registration
Statement, the Prospectus or any Preliminary Prospectus, it being
understood and agreed that the only such information furnished by any
Underwriter consists of (A) the last paragraph of text on the cover page of
the Prospectus (and any Preliminary Prospectus) concerning the terms of the
offering by the Underwriters, (B) the second and third paragraphs on page 3
of the Prospectus (and any Preliminary Prospectus) concerning over-
allotment and stabilization by the Underwriters and exemptions from Rules
10b-6, 10b-7 and 10b-8 under the Exchange Act and (C) the text under the
caption "Underwriting" in the Prospectus (and any Preliminary Prospectus)
concerning the terms of the offering by the Underwriters and the delivery
of Shares pursuant thereto (collectively, the "Underwriters' Information")
or (y) written information furnished to the Company by
22
or on behalf of the Selling Stockholders specifically for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus, it
being understood and agreed that the only such information furnished by any
Selling Stockholder consists of the information under the caption "Selling
Shareholders" in the Prospectus (or any Preliminary Prospectus), other than
in respect of the Company's outstanding capitalization (collectively, the
"Selling Stockholders' Information"). This indemnity agreement will be in
addition to any liability which the Company may otherwise have to the
persons referred to above in this Section 9(a). Notwithstanding anything
to the contrary in this Agreement, the Company shall not be liable to any
Selling Stockholder under the indemnity agreement in this paragraph (a) or
for any breach of any representation or warranty of the Company set forth
in Section 2 with respect to the statements in the Prospectus (or any
Preliminary Prospectus) relating to the terms and provisions of the
Shareholders Agreement (the "Shareholders Agreement Information").
(b) The Selling Stockholders agree, jointly and severally, to
indemnify and hold harmless each of the Underwriters and each person, if
any, who controls any Underwriter within the meaning of either Section 15
of the Act or Section 20 of the Exchange Act and the Company, its
directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company within the meaning of either such
Section, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without limiting
the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred) insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus or are caused by any omission or alleged omission to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading, but only in each case with reference
to the Selling Stockholders' Information; provided, however, that the
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Selling Stockholders shall not be liable to any Underwriter under the
indemnity agreement in this paragraph (b) with respect to any Preliminary
Prospectus to the extent that such losses, claims, damages, liabilities or
expenses result solely from the fact that such Underwriter sold Shares to a
person as to whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus or of the Prospectus
as then amended or supplemented in any case where such delivery is required
by the Act if the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained
in the Preliminary Prospectus which was corrected in the Prospectus or in
the Prospectus as then amended or supplemented if the Company had
previously furnished copies thereof to such Underwriter. This indemnity
agreement will be in addition to any liability which the Selling
Stockholders may otherwise have to the persons referred to above in this
Section 9(b). Notwithstanding anything to the contrary in
23
this Agreement, the Selling Stockholders shall not be liable to the Company
under the indemnity agreement in this paragraph (b) or for any breach of a
representation or warranty of the Selling Stockholders set forth in Section
3 with respect to the Shareholders Agreement Information.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, the Selling Stockholders, the directors of
the Company, the officers of the Company who sign the Registration
Statement and each person, if any, who controls the Company or any Selling
Stockholder within the meaning of either Section 15 of the Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages
and liabilities (or actions in respect thereof) (including, without
limiting the foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action, as such expenses are incurred) insofar as such
losses, claims, damages, liabilities and expenses arise out of or are based
on any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or are caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only with reference to
the Underwriters' Information. This indemnity agreement will be in
addition to any liability which the Underwriters may otherwise have to the
persons referred to above in this Section 9(c).
(d) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to any of the
three preceding paragraphs, such person (hereinafter called the indemnified
party) shall promptly notify the person against whom such indemnity may be
sought (hereinafter called the indemnifying party) in writing; however, the
omission to so notify the indemnifying party shall relieve the indemnifying
party from liability under the three preceding paragraphs only to the
extent prejudiced thereby. In case any action in respect of which
indemnification may be sought hereunder shall be brought against any
indemnified party and it shall notify an indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may desire, to assume the
defense thereof through counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof, other than reasonable costs
of investigation (unless such indemnified party reasonably objects to such
assumption on the grounds that there may be defenses available to it which
are different from or in addition to those available to such indemnifying
party in which event the indemnified party shall be reimbursed by the
indemnifying party for the reasonable expenses incurred in
24
connection with retaining separate legal counsel). No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any claim or pending or threatened proceeding in respect
of the indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability arising out of such claim or proceeding.
(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages,
liabilities and expenses in such proportion as is appropriate to reflect
the relative fault of the Company, the Selling Stockholders and the
Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any
other relevant equitable considerations. The relative fault of the Company,
the Selling Stockholders and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Selling
Stockholders or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company, each Selling Stockholder and each of the
Underwriters agree that it would not be just and equitable if contribution
pursuant to Section 9(e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take
25
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to in the immediately preceding paragraph shall
be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of Section 9(e), in
no event shall any Underwriter be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to Section 9(e) are several in proportion to the respective number
of Firm Shares set forth opposite their names in Schedule I hereto and not
joint.
(g) The Company, the Selling Stockholders and the Underwriters agree
that any indemnity provision contained in Section 5.5 of the Shareholders
Agreement or any other agreement between the Company on the one hand and
the Selling Stockholders on the other shall be superseded for all purposes
by this Section 9 in respect of the offer and sale of the Shares.
SECTION 10. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery. All representations, warranties and agreements contained in this
--------
Agreement, or contained in certificates of officers of the Company or the
Selling Stockholders submitted pursuant hereto, including indemnity and
contribution agreements, shall remain operative and in full force and effect,
regardless of any investigation, or any statement as to the results thereof,
made by or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Company, its officers or directors or
controlling persons, or by any Selling Stockholder or any person controlling any
Selling Stockholder, and shall survive acceptance of and payment for the Shares
hereunder.
SECTION 11. Termination. This Agreement may be terminated for any
-----------
reason at any time prior to the delivery of and payment for the Shares on the
Initial Closing Date or the Option Closing Date, as the case may be, by the
Underwriters upon the giving of written notice by Lazard Freres & Co. LLC of
such termination to the Company and the Selling Stockholders, if prior to such
time (i) there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, any Material Adverse
Effect, whether or not arising in the ordinary course of business, (ii) there
has occurred any outbreak or escalation of major hostilities or other national
or international calamity or crisis or material adverse change in existing
national or international financial, political, economic or securities market
conditions, the effect of which is such as to make it, in the judgement of
Lazard Freres & Co. LLC, impracticable or inadvisable to market the Shares in
the manner contemplated in the
26
Prospectus or enforce contracts for the sale of the Shares, or (iii) trading in
the Common Stock of the Company has been suspended by the Commission or a
national securities exchange, or trading generally on either the American Stock
Exchange or the New York Stock Exchange has been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or a banking moratorium has been
declared by either Federal or New York authorities. In the event of any such
termination, the provisions of Section 8, the indemnity agreement and
contribution provisions set forth in Section 9, and the provisions of Section 15
shall remain in effect and, if the Underwriters shall have purchased any Shares
on the Initial Closing Date prior to such termination, then all representations
and warranties of the Company and the Selling Stockholders set forth in or made
pursuant to this Agreement and all obligations of the Company pursuant to
Section 6 hereof shall survive such termination.
SECTION 12. Default of Underwriters. If, on the Initial Closing Date
-----------------------
or the Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Shares that it or they have agreed
to purchase hereunder on such date, and the aggregate number of Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate number of the Shares to be
purchased on such date by all Underwriters, the other Underwriters shall be
obligated severally in the proportions that the number of Firm Shares set forth
opposite their respective names in Schedule I bear to the aggregate number of
Firm Shares set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as Lazard Freres & Co. LLC may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to Section 4 be increased pursuant to this Section 12 by an
amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Initial Closing Date or the Option
Closing Date, as the case may be, any Underwriter or Underwriters shall fail or
refuse to purchase Shares and the aggregate number of Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of
Shares to be purchased on such date, and arrangements satisfactory to the
Underwriters, the Company and the Selling Stockholders for the purchase of such
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any nondefaulting Underwriter or the
Company or the Selling Stockholders, except for the expenses to be paid or
reimbursed by the Company pursuant to Section 8 and the respective obligations
of the Company, the Selling Stockholders and the Underwriters pursuant to
Section 9; provided, however, that if the Underwriters shall have purchased any
-------- -------
Shares on the Initial Closing Date prior to such termination, then all
representations and warranties of the Company and the Selling Stockholders set
forth in or made pursuant to this Agreement and all obligations of the Company
pursuant to Section 6 hereof shall survive such termination. In any such case
either the Underwriters or the Company shall have the right to postpone the
Initial Closing Date or the Option Closing Date, as the case may be, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and in the Prospectus or
27
in any other documents or arrangements may be effected. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
SECTION 13. Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Lazard Freres & Co. LLC,
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Department;
notices to the Company shall be directed to it at Crown Cork & Seal Company,
Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, facsimile transmission no. (215)
698-7050, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Executive Vice President and Chief
Financial Officer, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Executive Vice President,
Secretary and General Counsel; and notices to the Selling Stockholders shall be
directed to Compagnie Generale d'Industrie et de Participations, ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, Attention: Michel Renault, with a copy to
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, facsimile
transmission no. (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
SECTION 14. Parties. This Agreement shall inure to the benefit of
-------
and be binding upon the Company, its directors and officers who signed the
Registration Statement, the Underwriters, the Selling Stockholders, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from any Underwriter shall
be deemed to be a successor by reason merely of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign this Agreement and return to us seven counterparts
hereof.
Very truly yours,
CROWN CORK & SEAL COMPANY, INC.,
By
--------------------------------
Name:
Title:
COMPAGNIE GENERALE D'INDUSTRIE ET DE
PARTICIPATIONS,
By
--------------------------------
Name:
Title:
SOFISERVICE,
By
--------------------------------
Name:
Title:
29
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
CS FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
By: LAZARD FRERES & CO. LLC
---------------------------
By:
---------------------------
Name:
Title:
Acting severally on behalf of
themselves as Underwriters
Schedule I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Lazard Freres & Co. LLC
CS First Boston Corporation
Salomon Brothers Inc
_________
Total 3,000,000
=========
Schedule II
-----------
Number of
Additional
Shares to be
Number of Firm Sold if Maximum
Selling Stockholder Shares to be Sold Option Exercised
------------------- ----------------- ----------------
Compagnie Generale d'Industrie
et de Participations 2,331,024 450,000
Sofiservice 668,976 0
--------- -------
Total 3,000,000 450,000
========= =======
Schedule III
------------
Material Subsidiaries
---------------------
CONSTAR International Inc.
Crown Beverage Packaging, Inc.
Schedule IV
-----------
Directors and Officers
----------------------
ANNEX A
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(i) of the Underwriting Agreement, Price
Waterhouse LLP, shall furnish letters to the Board of Directors of the Company,
the Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of the Company for the periods specified
in such letter, as indicated in their reports attached to such letters,
copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Board of Directors and
the committees thereof of the Company and its subsidiaries since the date
of the latest audited financial statements included in the 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) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations, or are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectus;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated financial
statements from
2
which such data and items were derived, and any such unaudited data
and items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
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 paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectus and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Rules and Regulations or
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in paragraph (E) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur
and which are described in such letter; and
(G) certain sections of the Prospectus do not comply in all
material respects with the disclosure obligations under Regulation S-K
under the
3
Exchange Act (e.g., "Selected Consolidated Financial Information"
(Item 301)) if (i) the information disclosed may be obtained directly
or indirectly from the Company's accounting records and (ii) such
information can be evaluated against reasonable criteria established
by the Commission;
(iv) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of the Company and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Underwriters and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.
ANNEX B
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(j) of the Underwriting Agreement, Befec-Price
Waterhouse, shall furnish letters to the Board of Directors of the Company, the
Underwriters and the Selling Stockholders to the effect that:
(i) They are independent certified public accountants with respect to
CarnaudMetalbox and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited by them and included or
incorporated by reference in the Prospectus or the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, and/or condensed financial statements derived
from audited financial statements of CarnaudMetalbox for the periods
specified in such letter, as indicated in their reports attached to such
letters, copies of which have been furnished to the Underwriters;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with U.S. GAAP, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of
the latest available interim financial statements of CarnaudMetalbox and
its subsidiaries, inspection of the minute books of the Board of Directors
and the committees thereof of CarnaudMetalbox and its subsidiaries since
the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of CarnaudMetalbox and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated balance sheets and statements of
income, cash flows and stockholders' equity included or incorporated
by reference in the 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 are not in
conformity with U.S. GAAP applied on a basis substantially consistent
with the basis for the audited consolidated balance sheets and
statements of income, cash flows and stockholders' equity included or
incorporated by reference in the Prospectus;
(B) any other unaudited income statement or cash flow statement
data and balance sheet items included in the Prospectus do not agree
with the
2
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included or incorporated by
reference in the 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 paragraph (A) and any unaudited
income statement or cash flow statement data and balance sheet items
included in the Prospectus and referred to in paragraph (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included or incorporated by
reference in the Prospectus;
(D) as of a specified date not more than three days prior to the
date of such letter, there have been any changes in the consolidated
capital stock or minority interest in consolidated subsidiaries or any
increase in the consolidated long-term debt of CarnaudMetalbox and its
subsidiaries, or any decreases in consolidated net current assets, net
assets or stockholders' equity, or any changes in any other items
specified by the Underwriters, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(E) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in paragraph (D) there were any
decreases in consolidated net sales, operating income or income before
minority interest, or the total or per share amounts of consolidated
net income, or any changes in any other items specified by the
Underwriters, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Underwriters, except in each case for decreases or
increases which the Prospectus discloses have occurred or may occur
and which are described in such letter;
(iv) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (ii) and (iii) above, they have carried out certain specified
procedures, not constituting an audit in accordance with U.S. GAAP
standards, with respect to certain amounts, percentages and financial
information specified by the Underwriters, which are derived from the
general accounting records of CarnaudMetalbox and its subsidiaries, which
appear in the Prospectus, or in Part II of, or in exhibits and schedules
to, the Registration Statement
3
specified by the Underwriters, and have compared certain of such amounts,
percentages and financial information with the accounting records of
CarnaudMetalbox and its subsidiaries and have found them to be in
agreement.
All capitalized terms used herein have the meanings ascribed to them
in the underwriting agreement to which this Description is annexed.