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EXHIBIT 1.1
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CARAUSTAR INDUSTRIES, INC.
(a North Carolina corporation)
UNDERWRITING AGREEMENT
May 26, 1999
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TABLE OF CONTENTS
Page
SECTION 1. Representations and Warranties..................................................................3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY.....................................................3
(b) OFFICER'S CERTIFICATES...........................................................................13
SECTION 2. Sale and Delivery to Underwriters; Closing.....................................................13
(a) UNDERWRITTEN SECURITIES..........................................................................13
(b) OPTION UNDERWRITTEN SECURITIES...................................................................14
(c) PAYMENT..........................................................................................14
(d) DENOMINATIONS; REGISTRATION......................................................................15
SECTION 3. Covenants of the Company.......................................................................15
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS...................................15
(b) FILING OF AMENDMENTS.............................................................................15
(c) DELIVERY OF REGISTRATION STATEMENTS..............................................................16
(d) DELIVERY OF PROSPECTUSES.........................................................................16
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS........................................................16
(f) BLUE SKY QUALIFICATIONS..........................................................................17
(g) EARNINGS STATEMENT...............................................................................17
(h) REPORTS TO SECURITYHOLDERS.......................................................................17
(i) USE OF PROCEEDS..................................................................................17
(j) LISTING..........................................................................................17
(k) RESTRICTION ON SALE OF SECURITIES................................................................17
(l) REPORTING REQUIREMENTS...........................................................................18
SECTION 4. Payment of Expenses............................................................................18
(a) EXPENSES.........................................................................................18
(b) TERMINATION OF AGREEMENT.........................................................................18
SECTION 5. Conditions of Underwriters' Obligations........................................................19
(a) EFFECTIVENESS OF REGISTRATION STATEMENT..........................................................19
(b) OPINION OF COUNSEL FOR COMPANY...................................................................19
(c) OPINION OF COUNSEL FOR UNDERWRITERS..............................................................19
(d) OFFICERS' CERTIFICATE............................................................................20
(e) ACCOUNTANT'S COMFORT LETTER......................................................................20
(f) BRING-DOWN COMFORT LETTER........................................................................20
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(g) RATINGS..........................................................................................20
(h) APPROVAL OF LISTING..............................................................................21
(i) NO OBJECTION.....................................................................................21
(j) LOCK-UP ARRANGEMENTS.............................................................................21
(k) OVER-ALLOTMENT OPTION............................................................................21
(l) ADDITIONAL DOCUMENTS.............................................................................22
(m) TERMINATION OF TERMS AGREEMENT...................................................................22
SECTION 6. Indemnification................................................................................22
(a) INDEMNIFICATION OF UNDERWRITERS..................................................................22
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS...............................................23
(c) ACTIONS AGAINST PARTIES; NOTIFICATION............................................................23
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE...............................................24
SECTION 7. Contribution...................................................................................25
SECTION 8. Representations, Warranties and Agreements To Survive Delivery.................................26
SECTION 9. Termination....................................................................................26
(a) UNDERWRITING AGREEMENT...........................................................................26
(b) TERMINATION; GENERAL.............................................................................27
(c) LIABILITIES......................................................................................27
SECTION 10. Default by One or More of the Underwriters....................................................27
SECTION 11. Notices.......................................................................................28
SECTION 12. Parties.......................................................................................29
SECTION 13. Governing Law and Time........................................................................29
SECTION 14. Effect of Headings............................................................................29
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CARAUSTAR INDUSTRIES, INC.
(a North Carolina corporation)
Debt Securities
UNDERWRITING AGREEMENT
May 26, 1999
To the Representative of the
several Underwriters named in the
Terms Agreement
hereinafter described
Ladies and Gentlemen:
Caraustar Industries, Inc., a North Carolina corporation (the
"Company"), proposes to issue and sell up to $300,000,000 aggregate initial
public offering price of its debt securities (the "Debt Securities"), from time
to time, in or pursuant to one or more offerings on terms to be determined at
the time of sale.
The Debt Securities will be issued in one or more series under an
indenture, dated as of June 1, 1999 (the "Indenture"), between the Company and
The Bank of New York, as trustee (the "Trustee"). Each series of Debt Securities
may vary, as applicable, as to title, aggregate principal amount, rank, interest
rate or formula and timing of payments thereof, stated maturity date, redemption
and/or payment provisions, sinking fund requirements, guarantors and any other
variable terms established by or pursuant to the applicable Indenture. As used
herein, "Securities" shall mean the Debt Securities initially issuable by the
Company.
Whenever the Company determines to make an offering of Securities, the
Company will enter into an agreement (each, a "Terms Agreement") providing for
the sale of such Securities to, and the purchase and offering thereof by, the
underwriters named in the applicable Terms Agreement (the "Underwriters," which
term shall include any Underwriter substituted pursuant to Section 10 hereof),
for whom the firm (or firms) designated as representative of the Underwriters of
such Underwritten Securities in the Terms Agreement relating thereto will act as
representative (the "Representative"). The Terms Agreement relating to the
offering of Securities shall specify the aggregate principal amount, as the case
may be, of Securities to be initially issued (the "Initial Underwritten
Securities"), the name of each Underwriter participating in such offering
(subject to substitution as provided in Section 10 hereof) and the name of any
Underwriter(s) acting as co-manager in connection with such offering, the
aggregate principal amount, as the case may be, of Initial Underwritten
Securities which each such Underwriter severally agrees to purchase, whether
such offering is on a fixed or variable price basis and, if on
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a fixed price basis, the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters, the form, time,
date and place of delivery and payment of the Initial Underwritten Securities
and any other material variable terms of the Initial Underwritten Securities. In
addition, if applicable, such Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase additional
Securities to cover over-allotments, if any, and the number or aggregate
principal amount, as the case may be, of Securities subject to such option (the
"Option Underwritten Securities"). As used herein, the term "Underwritten
Securities" shall include the Initial Underwritten Securities and all or any
portion of any Option Underwritten Securities. The Terms Agreement, which shall
be substantially in the form of EXHIBIT A hereto, may take the form of an
exchange of any standard form of written telecommunication between the Company
and the Representative, acting for itself and, if applicable, as representative
of any other Underwriters. Each offering of Underwritten Securities will be
governed by this Underwriting Agreement, as supplemented by the applicable Terms
Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-65555) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"), and the Company has filed such post-effective amendments
thereto as may be required prior to the execution of the applicable Terms
Agreement. Such registration statement (as so amended, if applicable) has been
declared effective by the Commission and each Indenture has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such
registration statement (as so amended, if applicable), including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement;" and the final prospectus and the final prospectus
supplement relating to the offering of the Underwritten Securities, in the form
first furnished to the Underwriters by the Company for use in connection with
the offering of the Underwritten Securities, are collectively referred to herein
as the "Prospectus;" PROVIDED, HOWEVER, that all references to the "Registration
Statement" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; PROVIDED FURTHER, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then, after such filing,
all references to "Registration Statement" shall also be deemed to include the
Rule 462(b) Registration Statement; and PROVIDED FURTHER, that if the Company
elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the form first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references in
this Underwriting Agreement to the date of the Prospectus shall mean the date of
the Term Sheet. A
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"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of the
applicable Terms Agreement. For purposes of this Underwriting Agreement, all
references to (i) the Registration Statement, Prospectus, Term Sheet or
preliminary prospectus or to any amendment or supplement to any of the foregoing
shall be deemed to include any copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇"), (ii) the
Indenture shall be deemed to include, as applicable, any indenture supplemental
thereto, and (iii) the Representative shall be deemed to include, as applicable,
all such Representatives if there shall be more than one Representative.
All references in this Underwriting Agreement to financial statements
and schedules and other information which is "contained," "included," "referred
to" or "stated" (or other references of like import) in the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the Registration Statement, Prospectus or
preliminary prospectus, as the case may be; and all references in this
Underwriting Agreement to amendments or supplements to the Registration
Statement, Prospectus or preliminary prospectus shall be deemed to mean and
include the filing of any document under the 1934 Act which is incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be.
SECTION 1. Representations and Warranties.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to the Representative, as of the date hereof, and to
each Underwriter named in the applicable Terms Agreement, as of the date
thereof, as of the Closing Time (as defined below) and, if applicable, as of
each Date of Delivery (as defined below) (in each case, a "Representation
Date"), as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with. In addition, the Indenture has been duly
qualified under the 1939 Act. At the respective times the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective
amendments thereto became effective and at each Representation Date, the
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Registration Statement, the Rule 462(b) Registration Statement and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations") and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. At
the date of the Prospectus, at the Closing Time and at each Date of Delivery, if
any, the Prospectus and any amendments and supplements thereto did not and will
not include an 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. If the Company elects
to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with
the requirements of Rule 434. Notwithstanding the foregoing, the representations
and warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through the Representative expressly for use in the Registration
Statement or Prospectus. Each preliminary prospectus and the prospectus filed as
part of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied
when so filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with the offering of Underwritten Securities will, at the time of
such delivery, be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the Prospectus
(including the filing of the Company's most recent Annual Report on Form 10-K
with the Commission (the "Annual Report on Form 10-K")), at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations") and, when
read together with the other information in the Prospectus, at the date of the
Prospectus, at the Closing Time and at each Date of Delivery, if any, did not
and will not include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules thereto included in the
Registration Statement and the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(iv) FINANCIAL STATEMENTS. The financial statements of the Company
included in the Registration Statement and the Prospectus, together with the
related schedules and notes, as well as those financial statements, schedules
and notes of any other entity included therein, present fairly the financial
position of the Company and its consolidated Subsidiaries (as defined
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below), or such other entity, as the case may be, at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company and
its consolidated Subsidiaries, or such other entity, as the case may be, for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the Prospectus,
if any, present fairly the information shown therein and have been compiled on a
basis consistent with that of the audited financial statements included in the
Registration Statement and the Prospectus. In addition, any pro forma financial
statements of the Company and its Subsidiaries and the related notes thereto
included in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no material
adverse change in the condition (financial or otherwise), earnings, assets,
properties, operations, business affairs or business prospects of the Company
and its Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company or any of its Subsidiaries, other
than those in the ordinary course of business, which are material with respect
to the Company and its Subsidiaries considered as one enterprise, and (C) except
for regular dividends on the Company's common stock or preferred stock, in
amounts per share that are consistent with past practice, there has been no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the state of North Carolina and has corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Prospectus and to enter into and perform its obligations under, or as
contemplated under, this Underwriting Agreement and the applicable Terms
Agreement. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect.
(vii) GOOD STANDING OF SUBSIDIARIES. Each Subsidiary of the Company
(each, a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly
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existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing would not result
in a Material Adverse Effect. Except as otherwise stated in the Registration
Statement and the Prospectus, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and is validly issued, fully paid
and non-assessable and is owned by the Company, directly or through
Subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity. None of the outstanding shares of capital stock of
any Subsidiary was issued in violation of preemptive or other similar rights of
any securityholder of such Subsidiary.
(viii) CAPITALIZATION. If the Prospectus contains a "Capitalization"
section, the authorized, issued and outstanding shares of capital stock of the
Company is, to the extent set forth in such section as of March 31, 1999, as set
forth in the column entitled "Actual" under such section (except for subsequent
issuances or repurchases thereof, if any, (A) contemplated under this
Underwriting Agreement, (B) pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus, (C) pursuant to the exercise of
convertible securities or options referred to in the Prospectus, or (D) which
are not material). The shares of capital stock of the Company have been duly
authorized and validly issued by the Company and are fully paid and
non-assessable; and none of such shares of capital stock was issued in violation
of preemptive or other similar rights of any securityholder of the Company.
(ix) AUTHORIZATION OF THIS UNDERWRITING AGREEMENT AND TERMS
AGREEMENT. This Underwriting Agreement has been, and the applicable Terms
Agreement as of the date thereof will have been, duly authorized, executed and
delivered by the Company.
(x) AUTHORIZATION OF DEBT SECURITIES. The Underwritten Securities
have been, or as of the date of such Terms Agreement will have been, duly
authorized by the Company for issuance and sale pursuant to this Underwriting
Agreement and such Terms Agreement. Such Underwritten Securities, when issued
and authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such Terms
Agreement, will constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms. Such
Underwritten Securities will be in the form contemplated by, and each registered
holder thereof is entitled to the benefits of, the applicable Indenture.
(xi) AUTHORIZATION OF THE INDENTURE. The Indenture has been, or
prior to the issuance of the Debt Securities thereunder will have been, duly
authorized, executed and delivered by the Company and, upon such authorization,
execution and delivery, will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms.
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(xii) EMPLOYEE BENEFITS MATTERS. Each employee benefit plan of the
Company intended to be qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended (or any successor code or statute) (the "Internal
Revenue Code") has heretofore been determined by the Internal Revenue Service to
so qualify, and each trust created thereunder has heretofore been determined by
the Internal Revenue Service to so qualify, and each trust created thereunder
has heretofore been determined by the Internal Revenue Service to be exempt from
tax under the provisions of Section 501(a) of the Internal Revenue Code, and
nothing has occurred since the date of the most recent determination that would
cause any such employee plan or trust to fail to qualify under Section 401(a) or
501(a) of the Internal Revenue Code. Both before and after giving effect to the
offering of the Debt Securities, no ERISA Events have occurred or are reasonably
expected to occur which, individually or in the aggregate, resulted in or might
reasonably be expected to result in a liability of the Company or any of its
Subsidiaries or any of their respective ERISA Affiliates which would have a
Material Adverse Effect. Except as is required to be stated in the Prospectus
and as so stated therein, no defined benefit plan (or any other employee benefit
plan that is subject to Section 412 of the Internal Revenue Code) maintained by
the Company, its Subsidiaries and their respective ERISA Affiliates has incurred
any accumulated funding deficiency, as defined in Section 412 of the Internal
Revenue Code.
As used herein, the following terms shall have the respective
meaning ascribed to each below:
"Employee Pension Benefit Plan" means any "employee pension
benefit plan" as defined in Section 3(2) of ERISA (i) which is, or, at
any time within the five calendar years immediately preceding the date
hereof, was at any time, sponsored, maintained or contributed to by the
Company or its Subsidiaries or any of their respective ERISA Affiliates
or (ii) with respect to which any of the Company or its Subsidiaries
retains any liability, including any potential joint and several
liability as a result of an affiliation with an ERISA Affiliate or a
party that would be an ERISA Affiliate except for the fact the
affiliation ceased more than five calendar years prior to the date
hereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder and any successor statute, regulations and
rulings.
"ERISA Affiliate" of any person, means (i) any corporation
which is, or was at any time within the five calendar years immediately
preceding the date hereof, a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which that person is, or was at any time within the
five calendar years immediately preceding the date hereof, a member;
(ii) any trade or business (whether or not incorporated) which is, or
was at any time within the five calendar years immediately preceding
the date hereof, a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal
Revenue Code of which that
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person is, or was at any time within the five calendar years
immediately preceding the date hereof, a member; and (iii) any member
of an affiliated service group within the meaning of Section 414(m) or
(o) of the Internal Revenue Code of which that person, any corporation
described in clause (i) above, or any trade business described in
clause (ii) above is, or was at any time within the five calendar years
immediately preceding the date hereof, a member.
"ERISA Event" means (i) the withdrawal by the Company or any
of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by the Company or any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from
any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (ii)
the occurrence of an act or omission which could reasonably be expected
to give rise to the imposition on the Company or any of its
Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 406, 409, 502(i) or 502(l) of ERISA in
respect of any Employee Pension Benefit Plan; or (iii) receipt from the
Internal Revenue Service of notice of the failure of any Employee
Pension Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any
Employee Pension Benefit Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which any of the Company, its
Subsidiaries or any of their respective ERISA Affiliates is making or
accruing an obligation to make contributions, or has within any of the
preceding five years made or accrued an obligation to make
contributions.
(xiii) DESCRIPTION OF THE UNDERWRITTEN SECURITIES AND INDENTURE. The
Underwritten Securities being sold pursuant to the applicable Terms Agreement
and the Indenture, as of the date of the Prospectus, will conform in all
material respects to the statements relating thereto contained in the Prospectus
and will be in substantially the form filed or incorporated by reference, as the
case may be, as an exhibit to the Registration Statement.
(xiv) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws 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 or
credit 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
Subsidiary
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is subject (collectively, "Agreements and Instruments"), except for such
defaults that would not result in a Material Adverse Effect. The execution,
delivery and performance of this Underwriting Agreement, the applicable Terms
Agreement and the Indenture, and any other agreement or instrument entered into
or issued or to be entered into or issued by the Company in connection with the
transactions contemplated hereby or thereby or in the Registration Statement and
the Prospectus and the consummation of the transactions contemplated herein and
in the Registration Statement and the Prospectus (including the issuance and
sale of the Underwritten Securities and the use of the proceeds from the sale of
the Underwritten Securities as described under the caption "Use of Proceeds")
and compliance by the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any assets, property or operations of the Company or
any of its Subsidiaries pursuant to, any Agreements and Instruments nor will
such action result in any violation of the provisions of the charter or by-laws
of the Company or any of its Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Subsidiaries or any of their assets, properties or
operations except, in each case other than with respect to the charter or
by-laws of the Company or any of its Subsidiaries, for such conflicts, breaches,
defaults, Repayment Events, liens, charges, encumbrances, or violations that
would not result in a Material Adverse Effect. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its Subsidiaries.
(xv) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees
of the Company or any of its Subsidiaries exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its or any Subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xvi) ABSENCE OF PROCEEDINGS. There is not pending or threatened any
action, suit, proceeding, inquiry or investigation before or brought by any
court or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company threatened, against or affecting the Company or any
of its Subsidiaries which is required to be disclosed in the Registration
Statement and the Prospectus (other than as stated therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the consummation of
the transactions contemplated under this Underwriting Agreement, the applicable
Terms Agreement or the Indenture or the performance by the Company of its
obligations hereunder and thereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any of its Subsidiaries is a
party or of which any of their respective assets, properties or operations is
the subject which are
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not described in the Registration Statement and the Prospectus, including
ordinary routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xvii) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the Prospectus
or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
(xviii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or foreign,
is necessary or required for the performance by the Company of its obligations
under this Underwriting Agreement or the applicable Terms Agreement or in
connection with the transactions contemplated under this Underwriting Agreement,
such Terms Agreement or any applicable Indenture, except such as have been
already obtained or as may be required under state securities laws.
(xix) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and neither
the Company nor any of its Subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its Subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, singly or in the aggregate, would result
in a Material Adverse Effect.
(xx) POSSESSION OF LICENSES AND PERMITS. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, and the Company and its Subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to possess or comply would not, singly or
in the aggregate, result in a Material Adverse Effect. All of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not result in a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
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(xxi) TITLE TO PROPERTY. The Company and its Subsidiaries have good
and marketable title to all real property owned by the Company and its
Subsidiaries and good title to all other properties owned by them, in each case,
free and clear of all mortgages, pledges, liens, security interests, claims,
restrictions or encumbrances of any kind, except (A) as otherwise stated in the
Registration Statement and the Prospectus or (B) those which do not, singly or
in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its Subsidiaries. All of the leases and subleases material to
the business of the Company and its Subsidiaries considered as one enterprise,
and under which the Company or any of its Subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any of its Subsidiaries has received any notice of any material
claim of any sort that has been asserted by anyone adverse to the rights of the
Company or any of its Subsidiaries under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or such
Subsidiary to the continued possession of the leased or subleased premises under
any such lease or sublease.
(xxii) [Intentionally omitted.]
(xxiii) INVESTMENT COMPANY ACT. Neither the Company nor any of its
Subsidiaries is, and upon the issuance and sale of the Underwritten Securities
as herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(xxiv) ENVIRONMENTAL LAWS. Except as otherwise stated in the
Registration Statement and the Prospectus and except as would not, singly or in
the aggregate, result in a Material Adverse Effect, (A) neither the Company nor
any of its Subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common law or
any judicial or administrative interpretation thereof including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company and
its Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its Subsidiaries and (D) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for
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clean-up or remediation, or an action, suit or proceeding by any private party
or governmental body or agency, against or affecting the Company or any of its
Subsidiaries relating to Hazardous Materials or any Environmental Laws.
(xxv) REGISTRATION RIGHTS. There are no holders of securities (debt
or equity) of the Company or holders of rights (including, without limitation,
preemptive rights), warrants or options to obtain securities of the Company, who
have the right to request the Company to register securities held by them under
the 1933 Act, other than holders who have waived or will not have such rights
for a specified period to be agreed upon among the Company and the Underwriters,
and have waived their rights with respect to the inclusion of their securities
in the Registration Statement.
(xxvi) ACCOUNTING CONTROLS. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxvii) COMPLIANCE WITH APPLICABLE LAW. The Company has complied in
all material respects with all material federal, state, local, foreign and
similar statutes, laws, ordinances, rules, regulations, orders, writs,
injunctions, judgements, and decrees applicable to the Company or any of its
Subsidiaries or to any of the Company's or its Subsidiary's properties or
assets, or with respect to any of the Company's or its Subsidiary's officers,
directors, employees or agents in their capacity as such ("Applicable Laws").
None of the Company or any of its Subsidiaries has received any written notice
or other written communication from any Governmental Authority or arbitrator
regarding any violation by the Company of, or a failure on the part of the
Company to comply with any Applicable Laws, other than any such violation or
failure to comply which would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect.
(xxviii) TAX RETURNS. All material Tax Returns required to be filed by
the Company and each of its Subsidiaries in any jurisdiction have been filed,
and all material Taxes (whether or not actually shown on such Tax Returns) for
which any of them is directly or indirectly liable or to which any of their
respective properties or assets are subject have been paid other than Taxes
being contested in good faith and for which adequate reserves have been
established in accordance with GAAP. All such Tax Returns are true, correct and
complete in all material respects and set forth with material accuracy all items
to the extent required to be reflected or included in such Tax Returns by any
applicable federal, state, local or foreign Tax law, statute, rule, regulation,
judgment, order, writ or decree of any government, government instrumentality or
court. There is no material proposed Tax assessment against the Company or any
of its
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Subsidiaries, and, to the best knowledge of the Company, there is no
basis for such assessment, except for contested claims. As used herein, the
following terms shall have the respective meanings given to them below:
"Tax Return" means a report, return or other information
(including any amendments) required to be supplied to a governmental
entity with respect to Taxes including, where permitted or required,
combined or consolidated returns for any group of entities that
includes the Company or any of its Subsidiaries.
"Taxes" means all taxes however denominated, including any
interest or penalties that may become payable in respect thereof,
imposed by any federal, state, local or foreign government or any
agency or political subdivision of any such government, which taxes
shall include all income taxes (including, but not limited to, United
States federal income taxes and state income taxes), payroll and
employee withholding taxes, unemployment insurance, social security,
sales and use taxes, excise taxes, franchise taxes, gross receipts
taxes, occupation taxes, real and personal property taxes, stamp taxes,
transfer taxes, withholding taxes, workers' compensation, and other
obligations of the same or similar nature.
(xxix) INSURANCE. Each of the Company and its Subsidiaries is insured
(including in each case self-insurance and reinsurance) by insurers of
recognized financial responsibility against such losses and risks and in such
amounts and covering such risks as management reasonably believes are prudent
and customary in the businesses in which it is engaged and all such insurance is
in full force and effect; neither the Company nor any of its Subsidiaries has
within the last 3 years been refused any insurance coverage sought or applied
for; and neither the Company nor any of its Subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business; except in the case of each of the
foregoing as would not have a Material Adverse Effect.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer
of the Company or any of its Subsidiaries and delivered to any Underwriter or to
counsel for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate
and, unless subsequently amended or supplemented, at each Representation Date
subsequent thereto.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING
(a) UNDERWRITTEN SECURITIES. The several commitments of the
Underwriters to purchase the Underwritten Securities pursuant to the applicable
Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be subject to the
terms and conditions herein set forth.
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(b) OPTION UNDERWRITTEN SECURITIES. In addition, subject to the
terms and conditions herein set forth, the Company may grant, if so provided in
the applicable Terms Agreement, an option to the Underwriters, severally and not
jointly, to purchase up to the number or aggregate principal amount, as the case
may be, of the Option Underwritten Securities set forth therein at a price per
Option Underwritten Security equal to the price per Initial Underwritten
Security. Such option, if granted, will expire 30 days after the date of such
Terms Agreement, and may be exercised in whole or in part from time to time only
for the purpose of covering over-allotments which may be made in connection with
the offering and distribution of the Initial Underwritten Securities upon notice
by the Representative to the Company setting forth the aggregate principal
amount, as the case may be, of Option Underwritten Securities as to which the
several Underwriters are then exercising the option and the time, date and place
of payment and delivery for such Option Underwritten Securities. Any such time
and date of payment and delivery (each, a "Date of Delivery") shall be
determined by the Representative, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, unless otherwise agreed upon by the Representative and the
Company. If the option is exercised as to all or any portion of the Option
Underwritten Securities, each of the Underwriters, severally and not jointly,
will purchase that proportion of the total number or aggregate principal amount,
as the case may be, of Option Underwritten Securities then being purchased which
the number or aggregate principal amount, as the case may be, of Initial
Underwritten Securities each such Underwriter has severally agreed to purchase
as set forth in such Terms Agreement bears to the aggregate principal amount, as
the case may be, of Initial Underwritten Securities, subject to such adjustments
as the Representative in its discretion shall make to eliminate any sales or
purchases of a fractional number or aggregate principal amount, as the case may
be, of Option Underwritten Securities.
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Underwritten Securities shall be made at the
offices of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, Charlotte, North Carolina, or at
such other place as shall be agreed upon by the Representative and the Company,
at 10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern time) on any given day) business day after the date of the
applicable Terms Agreement (unless postponed in accordance with the provisions
of Section 10 hereof), or such other time not later than ten business days after
such date as shall be agreed upon by the Representative and the Company (such
time and date of payment and delivery being herein called "Closing Time"). In
addition, in the event that the Underwriters have exercised their option, if
any, to purchase any or all of the Option Underwritten Securities, payment of
the purchase price for, and delivery of such Option Underwritten Securities,
shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Representative and the Company, on the relevant Date of
Delivery as specified in the notice from the Representative to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representative for the
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respective accounts of the Underwriters of the Underwritten Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Underwritten Securities which it has
severally agreed to purchase. The Representative, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for the Underwritten Securities to be purchased by
any Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. The Underwritten Securities shall
be in such denominations and registered in such names as the Representative may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The Underwritten Securities will
be made available for examination and packaging by the Representative in
Charlotte, North Carolina not later than 9:00 A.M. (Eastern time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. COVENANTS OF THE COMPANY.
The Company covenants with the Representative and with each Underwriter
participating in the offering of Underwritten Securities, as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION
REQUESTS. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the
1933 Act Regulations, if and as applicable, and will notify the Representative
immediately, and confirm the notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any comments from
the Commission, (iii) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Underwritten Securities for offering or
sale in any jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424 and will take such steps as it deems necessary to ascertain
promptly whether any Prospectus transmitted for filing under Rule 424 was
received for filing by the Commission and, in the event that it was not, it will
promptly file the Prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representative
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b) of the 1933 Act Regulations),
any Term Sheet or any amendment,
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supplement or revision to either the prospectus included in the Registration
Statement at the time it became effective or to the Prospectus, whether pursuant
to the 1933 Act, the 1934 Act or otherwise, will furnish the Representative with
copies of any such documents a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file or use any such document to
which the Representative or counsel for the Underwriters shall reasonably
object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished
or will deliver to the Representative and counsel for the Underwriters, without
charge, signed or conformed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed or conformed copies of all
consents and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. Copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUSES. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus as such Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of the
Underwritten Securities as contemplated in this Underwriting Agreement and the
applicable Terms Agreement and in the Registration Statement and the Prospectus.
If at any time when the Prospectus is required by the 1933 Act or the 1934 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement in order that the Registration Statement will not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
or to amend or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any
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such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters, without charge, such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Underwritten
Securities for offering and sale under the applicable securities laws of such
states and other jurisdictions (domestic or foreign) as the Representative may
designate and to maintain such qualifications in effect for a period of not less
than one year from the date of the applicable Terms Agreement; PROVIDED,
HOWEVER, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a broker or
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Underwritten Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not less than one year
from the date of such Terms Agreement.
(g) EARNINGS STATEMENT. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally available
to its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.
(h) REPORTS TO SECURITYHOLDERS. Through its fiscal year ending in
1999, the Company will deliver to the Representative copies of all reports or
other communications (financial or otherwise) made to securityholders of the
Company.
(i) USE OF PROCEEDS. The Company will use the net proceeds
received by it from the sale of the Underwritten Securities in the manner
specified in the Prospectus under "Use of Proceeds."
(j) LISTING. The Company will use its best efforts to effect the
listing of the Underwritten Securities, prior to the Closing Time, on any
national securities exchange or quotation system if and as specified in the
applicable Terms Agreement.
(k) RESTRICTION ON SALE OF SECURITIES. Between the date of the
applicable Terms Agreement and the Closing Time or such other date specified in
such Terms Agreement, the Company will not, without the prior written consent of
the Representative, directly or indirectly, issue, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, the securities specified in
such Terms Agreement.
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(l) REPORTING REQUIREMENTS. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Underwriting Agreement or the
applicable Terms Agreement, including (i) the preparation, printing and filing
of the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Underwriting Agreement, any Terms
Agreement, any agreement among underwriters, the Indenture and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Underwritten Securities, (iii) the preparation,
issuance and delivery of the Underwritten Securities to the Underwriters,
including any transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Underwritten Securities to the Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors or agents (including transfer agents and registrars), as well as the
reasonable fees and disbursements of any Trustees and their respective counsel,
(v) the qualification of the Underwritten Securities under state securities laws
in accordance with the provisions of Section 3(f) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation, printing and
delivery of the Blue Sky Survey and any Legal Investment Survey, and any
amendment thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, any Term Sheet, and the Prospectus and any
amendments or supplements thereto, (vii) the fees charged by nationally
recognized statistical rating organizations for the rating of the Underwritten
Securities, if applicable, (viii) the fees and expenses incurred with respect to
the listing of the Underwritten Securities, if applicable, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review, if any, by the National Association
of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the
Underwritten Securities and (x) the fees and expenses of any Underwriter acting
in the capacity of a "qualified independent underwriter" (as defined in the
bylaws of the NASD), if applicable. It is understood, however, that except as
provided in this Section 4, and in Sections 6 and 7 hereof, the Underwriters
will be responsible for all their own costs and expenses, including the fees of
their counsel, any transfer taxes on the Underwritten Securities upon resale by
them and all other expenses incurred by them in connection with any offering of
the Underwritten Securities made by the Underwriters.
(b) TERMINATION OF AGREEMENT. If the applicable Terms Agreement is
terminated by the Representative in accordance with the provisions of Section 5
or Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all
of their out-of-pocket expenses reasonably incurred by the Underwriters in
connection with preparations for the
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purchase, sale and delivery of Underwritten Securities pursuant to the
applicable Terms Agreement, including the reasonable fees and disbursements of
counsel for the Underwriters, but the Company shall then be under no further
liability to any Underwriter with respect to such Underwritten Securities except
as provided in Sections 4(a), 6 and 7 hereof.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any of its Subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been initiated or be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing information
relating to the description of the Underwritten Securities, the specific method
of distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters, to the
effect set forth in EXHIBIT B hereto.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, with respect to the matters set forth in clauses (1), (6), (7),
(8), (10), (11) (solely as to the information in the Prospectus under
"Description of Notes" and "Description of Capital Stock," if any, or any
caption purporting to describe any such Securities), (17), (18) and the
penultimate paragraph of EXHIBIT B hereto. In giving such opinion, such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
laws of the State of New York and the federal laws of the United States, upon
the opinions of counsel satisfactory to the Representative. Such counsel may
also
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state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company and
its Subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, there shall not have
been, since the date of the applicable Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its Subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of Closing Time, to the effect that (i) there has been
no such material adverse change, (ii) the representations and warranties in
Section 1 are true and correct with the same force and effect as though
expressly made at and as of the Closing Time, (iii) the Company has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of
the applicable Terms Agreement, the Representative shall have received from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (and, if necessary, any other independent certified public
accountants of any Subsidiary of the Company or of any business acquired by the
Company for which financial statements are, or are required to be, included in
the Registration Statement) a letter dated such date, in form and substance
satisfactory to the Representative, together with signed or reproduced copies of
such letter for each of the other Underwriters, including matters such as those
set forth in Annex I hereto and containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus and to such further effect as
the Representative may reasonably request.
(f) BRING-DOWN COMFORT LETTER. At the Closing Time, the
Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (and, if necessary,
any other independent certified public accountants of any Subsidiary of the
Company or of any business acquired by the Company for which financial
statements are, or are required to be, included in the Registration Statement) a
letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section 5, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Time.
(g) RATINGS. At Closing Time and at any relevant Date of Delivery,
the Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization," as defined by the Commission for
purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in
the applicable Terms Agreement, and the Company shall
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have delivered to the Representative a letter, dated as of such date, from each
such rating organization, or other evidence satisfactory to the Representative,
confirming that the Underwritten Securities have such rating. Since the time of
execution of such Terms Agreement, there shall not have occurred a downgrading
in the rating assigned to the Underwritten Securities or any of the Company's
other securities by any such rating organization, and no such rating
organization shall have publicly announced that it has under surveillance or
review its rating of the Underwritten Securities or any of the Company's other
securities.
(h) APPROVAL OF LISTING. At Closing Time, the Underwritten
Securities shall have been approved for listing, subject only to official notice
of issuance, if any, as specified in the applicable Terms Agreement.
(i) NO OBJECTION. If the Registration Statement or an offering of
Underwritten Securities has been filed with the NASD for review, the NASD shall
not have raised any objection with respect to the fairness and reasonableness of
the underwriting terms and arrangements.
(j) LOCK-UP ARRANGEMENTS. On the date of the applicable Terms
Agreement, the Representative shall have received, in form and substance
satisfactory to it, each lock-up agreement, if any, specified in such Terms
Agreement as being required to be delivered by the persons listed therein.
(k) OVER-ALLOTMENT OPTION. In the event that the Underwriters are
granted an over-allotment option by the Company in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any of its Subsidiaries hereunder shall
be true and correct as of each Date of Delivery, and, at the relevant Date of
Delivery, the Representative shall have received:
(i) A certificate, dated such Date of Delivery, of the President or a
Vice President of the Company and the chief financial officer or chief
accounting officer of the Company, confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
(ii) The favorable opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.A.,
counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Underwritten Securities and otherwise to the same effect as the
opinion required by Section 5(b) hereof.
(iii) The favorable opinion of McGuire, Woods, Battle & ▇▇▇▇▇▇ LLP,
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Underwritten Securities and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
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(iv) A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (and such other accountants) in
form and substance satisfactory to the Representative and dated such
Date of Delivery, substantially in the same form and substance as the
letter furnished to the Representative pursuant to Section 5(f) hereof,
except that the "specified date" on the letter furnished pursuant to
this paragraph shall be a date not more than three business days prior
to such Date of Delivery.
(l) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Underwritten Securities
as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Underwritten Securities as herein contemplated
shall be satisfactory in form and substance to the Representative and counsel
for the Underwriters.
(m) TERMINATION OF TERMS AGREEMENT. If any condition specified in
this Section 5 shall not have been fulfilled when and as required to be
fulfilled, the applicable Terms Agreement (or, with respect to the Underwriters'
exercise of any applicable over-allotment option for the purchase of Option
Underwritten Securities on a Date of Delivery after the Closing Time, the
obligations of the Underwriters to purchase the Option Underwritten Securities
on such Date of Delivery) may be terminated by the Representative by notice to
the Company at any time at or prior to the Closing Time (or such Date of
Delivery, as applicable), and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof,
if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make
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the statements therein, in the light of the circumstances under which
they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; PROVIDED that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Representative),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representative expressly for use
in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action
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commenced against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of any such
action; PROVIDED, HOWEVER, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. The indemnifying party shall be entitled to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the indemnified
party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest in the reasonable judgment of the indemnified party,
(ii) the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall have authorized the indemnified party to
employ separate counsel at the expense of the indemnifying party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its
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written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and of the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of such Securities as set forth on such
cover.
The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities 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 any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Underwriting Agreement or the applicable Terms Agreement or in certificates of
officers of the Company submitted pursuant hereto or thereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any Underwriter or controlling person, or by or on behalf of the
Company, and shall survive delivery of and payment for the Underwritten
Securities.
SECTION 9. TERMINATION.
(a) UNDERWRITING AGREEMENT. This Underwriting Agreement (excluding
the applicable Terms Agreement) may be terminated for any reason at any time by
the Company or
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by the Representative upon the giving of 30 days' prior written notice of such
termination to the other party hereto.
(b) TERMINATION; GENERAL. The Representative may terminate the
applicable Terms Agreement, by notice to the Company, at any time at or prior to
the Closing Time or any relevant Date of Delivery, if (i) there has been, since
the time of execution of this Agreement or since the respective dates as of
which information is given in the Prospectus, any material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or (ii) there has
occurred, since the execution of the applicable Terms Agreement, any material
adverse change in the financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or there has occurred any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable to
market the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) trading in any securities of the Company has
been suspended or materially limited by the Commission or any national
securities exchange or quotation system on which the Company's common stock is
listed or quoted, or if trading generally on the New York Stock Exchange or the
American Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) a banking moratorium has been declared by Federal, New York,
or North Carolina authorities or, if the Underwritten Securities include Debt
Securities denominated or payable in, or indexed to, one or more foreign or
composite currencies, by the relevant authorities in the related foreign country
or countries, or (v) there is any downgrading in the rating accorded the
Underwritten Securities by any "nationally recognized statistical rating
organization" as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act or if any such rating organization shall have
publicly announced that it has placed any of such Underwritten Securities on
what is commonly termed a "watch list" for possible downgrading.
(c) LIABILITIES. If this Underwriting Agreement or the applicable
Terms Agreement is terminated pursuant to this Section 9, such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 shall survive
such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS.
If one or more of the Underwriters shall fail at the Closing Time or
the relevant Date of Delivery, as the case may be, to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then the Representative shall have the
right, within 24 hours thereafter, to make arrangements for one
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or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representative shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities does not exceed 10% of the number or aggregate
principal amount, as the case may be, of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations under such Terms Agreement
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number or aggregate principal amount, as the case may be, of
Defaulted Securities exceeds 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased
on such date pursuant to such Terms Agreement, such Terms Agreement
(or, with respect to the Underwriters' exercise of any applicable
over-allotment option for the purchase of Option Underwritten
Securities on a Date of Delivery after the Closing Time, the
obligations of the Underwriters to purchase, and the Company to sell,
such Option Underwritten Securities on such Date of Delivery) shall
terminate without liability on the part of any non-defaulting
Underwriter or on the part of the Company, except for the expenses to
be borne by the Company and the Underwriters as provided in Section 4
and the indemnification and contribution provisions in Sections 6 and 7
hereof.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a
termination of the applicable Terms Agreement or (ii) in the case of a Date of
Delivery after the Closing Time, a termination of the obligations of the
Underwriters and the Company with respect to the related Option Underwritten
Securities, as the case may be, either the Representative or the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as
the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or the Prospectus or in any other
documents or arrangements.
SECTION 11. 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 address of the Representative as set forth
in the Terms Agreement; notices to the Company shall be directed to the Company
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of Chief Financial
Officer.
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SECTION 12. PARTIES. This Underwriting Agreement and the applicable
Terms Agreement shall each inure to the benefit of and be binding upon the
Company, the Representative and, upon execution of such Terms Agreement, any
other Underwriters and their respective successors. Nothing expressed or
mentioned in this Underwriting Agreement or such Terms Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Underwriting Agreement or such Terms Agreement or
any provision herein or therein contained. This Underwriting Agreement and such
Terms Agreement and all conditions and provisions hereof and thereof are
intended to be for the sole and exclusive benefit of the parties hereto and
thereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Underwritten
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this Underwriting Agreement, along with all counterparts, will become a binding
agreement between the Representative and the Company in accordance with its
terms.
Very truly yours,
CARAUSTAR INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Pres. and CEO
CONFIRMED AND ACCEPTED,
as of the date first above written:
BANC OF AMERICA SECURITIES LLC
BT ALEX. ▇▇▇▇▇ INCORPORATED
As Representatives of the several Underwriters
By: BANC OF AMERICA SECURITIES LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
Authorized Signatory
34
EXHIBIT A
CARAUSTAR INDUSTRIES, INC.
(a North Carolina corporation)
Debt Securities
TERMS AGREEMENT
, 1999
--------- ---
To: Caraustar Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We understand that Caraustar Industries, Inc., a North Carolina
corporation (the "Company"), proposes to issue and sell $[__________] aggregate
principal amount of its debt securities (the "Debt Securities") (such securities
also being hereinafter referred to as the "[Initial] Underwritten Securities").
Subject to the terms and conditions set forth or incorporated by reference
herein, we [the underwriters named below (the "Underwriters")] offer to
purchase, severally and not jointly, the principal amount of Underwritten
Securities [opposite their names set forth below] at the purchase price set
forth below [, and a proportionate share of Option Underwritten Securities set
forth below, to the extent any are purchased].
Principal Amount
Underwriter of [Initial] Underwritten Securities
--------------- --------------------------------------------
Total
-------------------
[$]
===================
The Underwritten Securities shall have the following terms:
Title:
Rank:
Ratings:
35
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Defeasance provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering: initial public offering price: [__]% of the
principal amount, plus accrued interest, if any, or amortized original
issue discount, if any, from ________________.
Purchase price: ___% of principal amount, plus accrued interest, if
any, or amortized original issue discount, if any, from ____________.
Form:
Other terms and conditions:
Closing date and location:
Additional co-managers, if any:
All of the provisions contained in the document attached as Annex I
hereto entitled "Caraustar Industries, Inc.--Debt Securities--Underwriting
Agreement" are hereby incorporated by reference in their entirety herein and
shall be deemed to be a part of this Terms Agreement to the same extent as if
such provisions had been set forth in full herein. Terms defined in such
document are used herein as therein defined.
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ________________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
[NAME OF REPRESENTATIVE]
By:
-------------------------------
Authorized Signatory
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[Acting on behalf of itself and the other named Underwriters.]
Accepted:
CARAUSTAR INDUSTRIES, INC.
By:
-------------------------------
Name:
Title:
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EXHIBIT B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(1) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of North Carolina.
(2) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under, or as
contemplated under, the Underwriting Agreement and the applicable Terms
Agreement.
(3) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each of the jurisdictions set forth
on Schedule A hereto, and to the best of our knowledge is so qualified and in
good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or be in good
standing in such other jurisdiction would not result in a Material Adverse
Effect.
(4) Each Subsidiary set forth on Schedule B hereto has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure to so qualify or
be in good standing would not result in a Material Adverse Effect. Except as
otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding capital stock of each Subsidiary has been duly authorized
and is validly issued, fully paid and non-assessable and, to the best of our
knowledge, is owned by the Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity. To the best of our knowledge, none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive or similar
rights of any securityholder of such Subsidiary.
(5) The authorized, issued and outstanding shares of capital stock
of the Company as of March 31, 1999 are as set forth in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances
thereof, if any, (A) contemplated under the Underwriting Agreement, (B) pursuant
to reservations, agreements or employee benefit plans referred to in the
Prospectus, (C) pursuant to the exercise of convertible securities or options
referred to in the Prospectus, or (D) which are not material). The shares of
capital stock of the Company have been duly authorized and validly issued by the
Company and are fully paid and non-assessable, and none of such shares of
capital stock was issued in violation of preemptive or other similar rights of
any securityholder of the Company.
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(6) The Underwriting Agreement and the applicable Terms Agreement
have been duly authorized, executed and delivered by the Company.
(7) The Underwritten Securities have been duly authorized by the
Company for issuance and sale pursuant to the Underwriting Agreement and the
applicable Terms Agreement. The Underwritten Securities, when issued and
authenticated in the manner provided for in the Indenture and delivered against
payment of the consideration therefor specified in such Terms Agreement, will
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. Such Underwritten Securities will be in the form
contemplated by, and each registered holder thereof is entitled to the benefits
of, the Indenture.
(8) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming due authorization, execution and delivery thereof
by the Trustee) constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
(9) [Intentionally omitted.]
(10) The Underwritten Securities being sold pursuant to the
applicable Terms Agreement conform in all material respects to the statements
relating thereto contained in the Prospectus and are in substantially the form
filed or incorporated by reference, as the case may be, as an exhibit to the
Registration Statement.
(11) The information in the Prospectus under "Description of Debt
Securities," "Description of Notes" and "Description of Capital Stock," if any,
or any caption purporting to describe any such Securities, and "Certain Federal
Income Tax Considerations," if any, and in the Registration Statement under Item
15, to the extent that it constitutes matters of law, summaries of legal
matters, the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all material respects.
(12) To the best of our knowledge, (i) neither the Company nor any
of its Subsidiaries is in violation of its charter or by-laws and (ii) no
default by the Company or any of its Subsidiaries exists in the due performance
or observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(13) The execution, delivery and performance of the Underwriting
Agreement, the
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applicable Terms Agreement and the Indenture and any other agreement or
instrument entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated in the Registration Statement
and the Prospectus and the consummation of the transactions contemplated in the
Underwriting Agreement and such Terms Agreement and in the Registration
Statement and the Prospectus (including the issuance and sale of the
Underwritten Securities and the use of the proceeds from the sale of the
Underwritten Securities as described under the caption "Use Of Proceeds") and
compliance by the Company with its obligations thereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any other agreement or instrument, known to us, 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 assets, properties or operations of the Company or any of
its Subsidiaries is subject, except for such conflicts, breaches, defaults,
events or liens, charges or encumbrances that would not result in a Material
Adverse Effect, nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree,
known to us, of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its Subsidiaries or any
of their assets, properties or operations.
(14) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any of its Subsidiaries thereof is a party or to which the assets,
properties or operations of the Company or any of its Subsidiaries thereof is
subject, before or by any court or governmental agency or body, domestic or
foreign, which might reasonably be expected to result in a Material Adverse
Effect or which might reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated under the Underwriting
Agreement, the applicable Terms Agreement or the Indenture or the performance by
the Company of its obligations thereunder.
(15) To the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(16) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are not
described as required.
(17) The Registration Statement has been declared effective under
the 1933 Act. Any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b). To
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act
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and, to the best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(18) The Registration Statement and the Prospectus, excluding the
documents incorporated by reference therein, and each amendment or supplement to
the Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (other
than the financial statements and supporting schedules included therein or
omitted therefrom, and each Trustee's Statement of Eligibility on Form T-1 (the
"Form T-1s"), as to which we express no opinion) complied as to form in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(19) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules therein or omitted
therefrom, as to which we express no opinion), when they were filed with the
Commission complied as to form in all material respects with the requirements of
the 1934 Act and the rules and regulations of the Commission thereunder.
(20) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, is necessary or required for the
performance by the Company of its obligations under the Underwriting Agreement
or the applicable Terms Agreement or in connection with the transactions
contemplated under the Underwriting Agreement, such Terms Agreement or the
Indenture other than under the 1933 Act, the 1933 Act Regulations, the 1939 Act
and the 1939 Act Regulations, which have been obtained, or as may be required
under state securities or blue sky laws.
(21) [Intentionally omitted.]
(22) Neither the Company nor any of its Subsidiaries is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
As counsel to the Company, we have examined various documents and
records and have participated in the preparation of and reviewed the
Registration Statement and the Prospectus, participated in discussions with
representatives of the Company and its counsel and accountants, and
representatives of the Underwriters and their counsel, and advised the Company
as to the requirements of the 1933 Act and the 1934 Act and the 1933 Act
Regulations and the 1934 Act Regulations.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any post-effective amendment thereto, including
the Rule 430A Information and Rule 434 Information (if applicable) (including
the filing of the Company's Annual Report on Form 10-K with the Commission)
(except for financial statements and schedules and other
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financial data included therein or omitted therefrom and for the Form T-1s, as
to which we make no statement), at the time such Registration Statement or any
post-effective amendment thereto became effective or at the date of the
applicable Terms Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included therein or omitted therefrom, as to which we
make no statement), at the time the Prospectus was issued, at the time any such
amended or supplemented prospectus was issued or at the Closing Time, included
or includes an untrue statement of a material fact or omitted or omits 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.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
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ANNEX I
FORM OF ACCOUNTANTS' COMFORT LETTER PURSUANT TO SECTION 5(e)
(i) We are independent public accountants with respect to the
Company within the meaning of the 1933 Act and the applicable published 1933 Act
Regulations.
(ii) In our opinion, the audited financial statements and the
related financial statement schedules included or incorporated by reference in
the Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder.
(iii) On the basis of procedures (but not an examination in
accordance with generally accepted auditing standards) consisting of a reading
of the unaudited interim consolidated financial statements of the Company for
the _____-month periods ended _________, 19___ and _________, 19___, included in
the Registration Statement and the Prospectus (the "____-month financials"), [a
reading of the latest available unaudited interim consolidated financial
statements of the Company], a reading of the minutes of all meetings of the
stockholders and directors of the Company and its Subsidiaries and the and
Committees of the Company's Board of Directors and any Subsidiary committees
since _________________, inquiries of certain officials of the Company and its
Subsidiaries responsible for financial and accounting matters, a review of
interim financial information in accordance with standards established by the
American Institute of Certified Public Accountants in Statement on Auditing
Standards No. 71, Interim Financial Information ("SAS 71"), with respect to the
_____-month financials, and such other inquiries and procedures as may be
specified in such letter, nothing came to our attention that caused us to
believe that:
(A) the _____-month financials included in the Registration
Statement and the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and the 1933 Act
Regulations applicable to unaudited interim financial statements included in
registration statements or any material modifications should be made to the
_____-month financials included in the Registration Statement and the Prospectus
for them to be in conformity with generally accepted accounting principles;
(B) at _________, 19___ and at a specified date not more than five
days prior to the date of the applicable Terms Agreement, there was any change
in the capital stock of the Company and its Subsidiaries or any decrease in the
total assets or stockholders investment of the Company and its Subsidiaries or
any increase in the notes and bonds payable and total liabilities of the Company
and its Subsidiaries, in each case as compared with amounts shown in the latest
balance sheet included in the Registration Statement and the Prospectus, except
in each case for changes, decreases or increases that the Registration Statement
and the Prospectus disclose have occurred or may occur; or
(C) for the period from _________, 19___ to _________, 19___ and
for the period from _________, 19___ to a specified date not more than five days
prior to the date of the
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applicable Terms Agreement, there was any decrease in consolidated total
revenues, operating income, or net income, in each case as compared with the
comparable period in the preceding year, except in each case for any decreases
that the Registration Statement and the Prospectus discloses have occurred or
may occur.
(iv) Based upon the procedures set forth in clause (iii) above and
a reading of the Selected Financial Data included in the Registration Statement
and the Prospectus and a reading of the financial statements from which such
data were derived, nothing came to our attention that caused us to believe that
the Selected Financial Data included in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the disclosure
requirements of Item 301 of Regulation S-K of the 1933 Act, that the amounts
included in the Selected Financial Data are not in agreement with the
corresponding amounts in the audited consolidated financial statements for the
respective periods or that the financial statements not included in the
Registration Statement and the Prospectus from which certain of such data were
derived are not in conformity with generally accepted accounting principles.
(v) We have compared the information in the Registration Statement
and the Prospectus under selected captions with the disclosure requirements of
Regulation S-K of the 1933 Act and on the basis of limited procedures specified
herein, nothing came to our attention that caused us to believe that this
information does not comply as to form in all material respects with the
disclosure requirements of Items 302, 402 and 503(d), respectively, of
Regulation S-K.
(vi) We are unable to and do not express any opinion on the Pro
Forma Financial Information (the "Pro Forma Statement") included in the
Registration Statement and the Prospectus or on the pro forma adjustments
applied to the historical amounts included in the Pro Forma Statement; however,
for purposes of this letter we have:
(A) read the Pro Forma Statement;
(B) performed an audit of the financial statements to which the
pro forma adjustments were applied;
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(C) made inquiries of certain officials of the Company who have
responsibility for financial and accounting matters about the basis for their
determination of the pro forma adjustments and whether the Pro Forma Statement
complies as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X; and
(D) proved the arithmetic accuracy of the application of the pro
forma adjustments to the historical amounts in the Pro Forma Statement; and on
the basis of such procedures and such other inquiries and procedures as
specified herein, nothing came to our attention that caused us to believe that
the Pro Forma Statement included in the Registration Statement does not comply
as to form in all material respects with the applicable requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements.
(vii) In addition to the procedures referred to in clause (ii)
above, we have performed other procedures, not constituting an audit, with
respect to certain amounts, percentages, numerical data and financial
information appearing in the Registration Statement and the Prospectus, which
are specified herein, and have compared certain of such items with, and have
found such items to be in agreement with, the accounting and financial records
of the Company.
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