EXHIBIT 1.1
DB Draft of October 7, 1996
$225,000,000
▇▇▇▇ GRAPHIC SYSTEMS, INC.
___% Senior Subordinated Notes Due 2006
UNDERWRITING AGREEMENT
__________ __, 1996
CS FIRST BOSTON CORPORATION
BT SECURITIES CORPORATION
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, N.Y. 10055
Dear Sirs:
1. Introductory. ▇▇▇▇ Graphic Systems, Inc., a Delaware corporation
("▇▇▇▇" or the "Company"), proposes to issue and sell $225,000,000 principal
amount of its ___% Senior Subordinated Notes Due 2006 (the "Notes") to CS First
Boston Corporation ("CS First Boston") and BT Securities Corporation (together
with CS First Boston, the "Underwriters"). The Notes are to be issued under an
indenture, dated as of _____________ __, 1996 (the "Indenture"), between ▇▇▇▇
and The Bank of New York, as trustee (the"Trustee").
The proceeds from the offering of the Notes will provide a portion of the
funding for the acquisition (the "Acquisition") by ▇▇▇▇ of the Graphic Systems
business unit from Rockwell International Corporation ("Rockwell") pursuant to a
Stock and Asset Purchase Agreement, dated as of April 26, 1996, and as amended
on July 18, 1996 (the "Purchase Agreement"). The purchase price for the
Acquisition will consist of $552.5 million in cash, subject to certain
adjustments, and 47,500 shares of preferred stock (the "Holdings Preferred
Stock") of GGS Holdings, Inc. ("Holdings"). Simultaneously with the closing of
the Acquisition, Holdings will raise $116.5 million of equity financing,
comprised of $111.5 million in cash from the sale of common stock, par value
$0.01 per share, of Holdings (the "Holdings Common Stock") to the Stonington
Capital Appreciation Fund, L.P. (the "Fund"), $1.0 million in cash from the sale
of Holdings Common Stock (the "Equity Private Placement") to an affiliate of a
limited partner of the Fund, and approximately $4.0 million in cash from the
sale of Holdings Common Stock to members of the Company's management (the
"Management Placement"). Holdings will finance approximately $2.0 million of the
Management Placement. Holdings will simultaneously therewith contribute all such
amounts to ▇▇▇▇ in exchange for all of the capital stock of ▇▇▇▇. In addition,
Holdings will also grant to certain members of the Board of Directors of
Holdings 7,500 shares of nonvoting common stock of Holdings. Contemporaneously
with the Acquisition, ▇▇▇▇ and certain of its subsidiaries will enter into a
bank credit agreement (the "Credit Agreement") with a syndicate of lenders named
therein to provide term and revolving credit facilities aggregating $225 million
and, pursuant to a Loan Portfolio Purchase Agreement (the "Portfolio Purchase
Agreement") with Bankers Trust Commercial Corporation ("BTCC"), ▇▇▇▇ will sell
a portfolio of notes receivable issued in connection with customer financing
provided by the Graphic Systems business unit of Rockwell to purchasers of its
products. The Company's obligations under the Credit Agreement will be secured
by security interests in all of the capital stock of the Company and certain of
its subsidiaries and substantially all of the future assets of the Company and
its subsidiaries pursuant to a security agreement being entered into in
connecting with the Credit Agreement (the "Security Agreement").
For purposes of this Agreement, the offering of the Notes, the
Acquisition, the Management Placement, the Equity Private Placement and the
transactions contemplated by the Indenture, the Credit Agreement, the Portfolio
Purchase Agreement, the Security Agreement and this Agreement are referred to
collectively as the "Transactions". For purposes of this Agreement, all
references to ▇▇▇▇ and its subsidiaries assume the consummation of, and shall
give effect to, the Transactions.
▇▇▇▇ hereby agrees with the Underwriters as follows:
2. Representations and Warranties. ▇▇▇▇ represents and warrants to, and
agrees with, the Underwriters that:
(i) A registration statement (No. 333-08421) relating to the Notes,
including a form of prospectus, has been filed with the Securities and
Exchange Commission (the "Commission") and either (i) has been declared
effective under the Securities Act of 1933 (the "Act") and is not proposed
to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If such registration statement ("initial
registration statement") has been declared effective, either (i) an
additional registration statement ("additional registration statement")
relating to the Notes may have been filed with the Commission pursuant to
Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Notes all have been
duly registered under the Act pursuant to the initial registration
statement and, if applicable, the additional registration statement or
(ii) such an additional registration statement is proposed to be filed
with the Commission pursuant to Rule 462(b) and will become effective upon
filing pursuant to such Rule and upon such filing the Notes will all have
been duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If ▇▇▇▇ does not
propose to amend the initial registration statement or if an additional
registration statement has been filed and ▇▇▇▇ does not propose to amend
it, and if any post-effective amendment to either such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any) to each
such registration statement has been declared effective by the Commission
or has become effective upon filing pursuant to Rule 462(c) ("Rule
462(c)") under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, "Effective Time"
with respect to the initial registration statement or, if filed prior to
the execution and delivery of this Agreement, the additional registration
statement means (i) if ▇▇▇▇ has advised the Underwriters that they do not
propose to amend such registration statement, the date and time as of
which such registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (ii) if ▇▇▇▇ has advised
the Underwriters that they propose to file an amendment or post-effective
amendment to such registration statement, the date and time as of which
such registration statement, as amended by such amendment or
post-effective amendment, as the case may be, is declared effective by the
Commission. If an additional registration statement has not been filed
prior to the execution and delivery of this Agreement but ▇▇▇▇ has advised
the Underwriters that they propose to file one, "Effective Time" with
respect to such additional registration statement means the date and time
as of which such registration statement is filed and becomes effective
pursuant to Rule 462(b). "Effective Date" with respect to the initial
registration statement or the additional registration statement (if any)
means the date of the Effective Time thereof. The initial registration
statement, as amended at its Effective Time,
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including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional registration
statement pursuant to the General Instructions of the Form on which it is
filed and including all information (if any) deemed to be a part of the
initial registration statement as of its Effective Time pursuant to Rule
430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the
"Initial Registration Statement". The additional registration statement,
as amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including all
information (if any) deemed to be a part of the additional registration
statement as of its Effective Time pursuant to Rule 430A(b), is
hereinafter referred to as the "Additional Registration Statement". The
Initial Registration Statement and the Additional Registration Statement
are herein referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus
relating to the Notes, as first filed with the Commission pursuant to and
in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, is
hereinafter referred to as the "Prospectus". No document has been or will
be prepared or distributed in reliance on Rule 434 under the Act. No stop
order suspending the effectiveness of such Registration Statement or any
part thereof has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of ▇▇▇▇, threatened by the Commission.
(ii) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act, the Trust Indenture Act of 1939 ("Trust Indenture
Act") and the rules and regulations of the Commission ("Rules and
Regulations") and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) on the
Effective Date of the Additional Registration Statement (if any), each
Registration Statement conformed, or will conform, in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations and did not include, or will not include, any untrue statement
of a material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) on the date of this Agreement,
the Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement each conforms,
and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if
no such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, and on the
Closing Date (as hereinafter defined) each Registration Statement and the
Prospectus, each as amended or supplemented, will conform, in all respects
to the requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement: (A) on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus, each as
amended or supplemented, will conform in all material respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed and (B) on the Closing Date, the Initial Registration Statement
and the Prospectus will conform in all material respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the
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Prospectus based upon written information furnished to ▇▇▇▇ by any
Underwriter specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 7(b).
(iii) ▇▇▇▇ has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus. ▇▇▇▇ is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified could not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the
financial condition, business, properties or results of operations of ▇▇▇▇
and its subsidiaries taken as a whole (a "Material Adverse Effect").
(iv) The only direct and indirect subsidiaries of ▇▇▇▇ are listed on
Schedule B hereto. Each subsidiary of ▇▇▇▇ has been duly incorporated and
is a validly existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with corporate power and authority to
own, lease and operate its properties and conduct its business as
described in the Prospectus; and each subsidiary of ▇▇▇▇ is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification, except where the failure to
be so qualified could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary of ▇▇▇▇ has been duly
authorized and validly issued and is fully paid and nonassessable; all of
the capital stock of ▇▇▇▇ is owned by Holdings free from liens,
encumbrances and defects; and all of the capital stock of each subsidiary
of ▇▇▇▇ is owned by ▇▇▇▇, directly or through subsidiaries, free from
liens, encumbrances and defects, except pursuant to the Security
Agreement.
(v) The Indenture has been duly authorized and, if the Effective
Time of a Registration Statement is prior to the execution and delivery of
this Agreement, has been or otherwise upon such Effective Time will be
duly qualified under the Trust Indenture Act; the Notes have been duly
authorized; when the Notes are delivered and paid for pursuant to this
Agreement on the Closing Date, the Indenture will have been duly executed
and delivered and such Notes will be entitled to the benefits of the
Indenture and will have been duly executed, authenticated, issued and
delivered, and the Indenture and the Notes will constitute valid and
legally binding obligations of ▇▇▇▇ enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles. The Indenture and the Notes conform in all material aspects to
the descriptions thereof contained in the Prospectus.
(vi) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between ▇▇▇▇ and any person that would give
rise to a valid claim against ▇▇▇▇ or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with the
Transactions.
(vii) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between ▇▇▇▇ and any person granting such
person the right to require ▇▇▇▇ to file a registration statement under
the Act with respect to any securities of ▇▇▇▇ owned or to be owned by
such person or to require ▇▇▇▇ to include such securities in the
securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by ▇▇▇▇ under the Act.
(viii) Except as disclosed in the Prospectus, no consent, approval,
authorization, or order of, or filing with, or notice to, any third party
or any governmental agency or body or any court
4
is required for the consummation of the Transactions, except such as have
been obtained and made and such as may be required with respect to the
offering of the Notes under state securities laws and except for such
consents, approvals, authorizations, orders, filings or notices which, if
not obtained or made, could not reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the consummation of the
Transactions.
(ix) The execution, delivery and performance of the Indenture, the
Purchase Agreement, the Credit Agreement, the Portfolio Purchase
Agreement, this Agreement or any other document governing any of the
Transactions, and the consummation of the Transactions, including, without
limitation, the issuance and sale of the Notes and compliance with the
terms and provisions thereof, will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over ▇▇▇▇ or any
subsidiary of ▇▇▇▇ or any of their properties, assets or operations, or
any agreement or instrument to which ▇▇▇▇ or any such subsidiary is a
party or by which ▇▇▇▇ or any such subsidiary is bound or to which any of
the properties of ▇▇▇▇ or any such subsidiary is subject, or the charter
or by-laws of ▇▇▇▇ or any such subsidiary. ▇▇▇▇ has full power and
authority to authorize, issue and sell the Notes, as contemplated by this
Agreement and the Indenture.
(x) The Purchase Agreement has been duly authorized, executed and
delivered and constitutes a valid and legally binding obligation of the
parties thereto, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The Purchase Agreement
conforms in all material respects to the description thereof contained in
the Prospectus.
(xi) The Credit Agreement and the Portfolio Purchase Agreement have
each been duly authorized by ▇▇▇▇ and its subsidiaries, and upon execution
and delivery thereof will be duly executed and delivered and will each
constitute a valid and legally binding obligation of ▇▇▇▇ and its
subsidiaries, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles. The Credit Agreement
and the Portfolio Purchase Agreement conform in all material respects to
the descriptions thereof contained in the Prospectus.
(xii) This Agreement has been duly authorized, executed and
delivered by ▇▇▇▇.
(xiii) ▇▇▇▇ and its subsidiaries have good and marketable title to
all real properties and all other properties and assets owned by them, in
each case free from liens, encumbrances and defects and ▇▇▇▇ and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions thereto or defaults thereunder, in
each case except as are described in the Prospectus and except as could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xiv) ▇▇▇▇ and its subsidiaries possess adequate certificates,
authorizations, licenses or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings (or is aware of any facts
that would be expected to result in such proceeding) relating to the
revocation or modification of any such certificate, authorization, license
or permit that, if determined adversely to ▇▇▇▇ or any of its
subsidiaries, could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect. Each of ▇▇▇▇ and its
subsidiaries are in compliance with their respective obligations under
such certificates, authorizations, licenses or permits and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination of such
5
certificates, authorizations, licenses or permits or violation of such
laws or regulations, except for such non-compliance and events as could
not reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
(xv) No labor dispute with the employees of ▇▇▇▇ or any subsidiary
exists or, to the knowledge of ▇▇▇▇, is imminent and ▇▇▇▇ is not aware of
any existing or imminent labor disturbance by the employees of their
principal suppliers or customers that could reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect.
(xvi) ▇▇▇▇ owns or has obtained valid and enforceable licenses for
the U.S. and foreign patents, patent applications, inventions, technology,
processes, trademarks, trademark registrations, service marks, service
mark registrations, trade names, copyrights, computer software, trade
secrets and proprietary or other intellectual property rights
(collectively, the "Intellectual Property") owned, sold or used by or
licensed to it or by it or necessary for the conduct of its business (the
"▇▇▇▇ Intellectual Property"). Except as disclosed in the Prospectus and
except as could not reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect, (i) there are no rights of
third parties to any ▇▇▇▇ Intellectual Property; (ii) there is no pending
or, to the knowledge of ▇▇▇▇, threatened action, suit, proceeding or claim
by others challenging the rights of ▇▇▇▇ in or to any ▇▇▇▇ Intellectual
Property; (iii) there is no pending or, to the knowledge of ▇▇▇▇,
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property; (iv) there is no
pending or, to the knowledge of ▇▇▇▇, threatened action, suit, proceeding
or claim by others that ▇▇▇▇ or the business are currently or heretofore
conducted infringes or otherwise violates Intellectual Property of others;
and (v) all registrations for and grants relating to ▇▇▇▇ Intellectual
Property are valid and in force.
(xvii) Except as described in the Prospectus and except as could not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, the properties, assets and operations of each of
▇▇▇▇ and its subsidiaries are in compliance with all applicable federal,
state, local and foreign laws, rules and regulations, orders, decrees,
judgments, permits and licenses relating to public and worker health and
safety, and to the protection and clean-up of the natural environment and
to the protection or preservation of natural resources and of plant and
animal species, and activities or conditions related thereto, including,
without limitation, those relating to the production, extraction,
processing, manufacturing, generation, handling, disposal, transportation
or release of hazardous materials (collectively, "Environmental Laws").
With respect to such properties, assets and operations, including any
previously owned, leased or operated properties, assets or operations,
there are no past, present or, to the best knowledge of ▇▇▇▇, reasonably
anticipated future events, conditions, circumstances, activities,
practices, incidents, actions or plans of ▇▇▇▇ or any of its subsidiaries
that may interfere with or prevent compliance or continued compliance with
applicable Environmental Laws in a manner that could reasonably be
expected to, individually or in the aggregate, have a Material Adverse
Effect. Except as described in the Prospectus and except as could not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, none of ▇▇▇▇ or any of its subsidiaries is the
subject of any federal, state, local or foreign investigation, and none of
▇▇▇▇ or any of its subsidiaries has received any notice or claim (or is
aware of any facts that would form a reasonable basis for any claim), nor
entered into any negotiations or agreements with any third party, relating
to any liability or potential liability or remedial action or potential
remedial action under Environmental Laws, nor are there any pending,
reasonably anticipated or, to the knowledge of ▇▇▇▇, threatened actions,
suits or proceedings against or affecting ▇▇▇▇, any of its subsidiaries or
its properties, assets or operations, in connection with any such
Environmental Laws. The term "hazardous materials" shall mean those
substances that are regulated by or form the basis for liability under any
applicable Environmental Laws.
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(xviii) ▇▇▇▇ and its subsidiaries have filed on a timely basis all
material federal, state, local and foreign tax returns required to be
filed, such returns are complete and correct in all material respects, and
all material taxes shown by such returns or otherwise assessed that are
due and payable have been paid, except such taxes as are being contested
in good faith and as to which adequate reserves have been provided. The
charges, accruals and reserves on the books of ▇▇▇▇ and its subsidiaries
in respect of any tax liability for any year not finally determined are
adequate to meet any assessments or reassessments for additional taxes;
and there has been no tax deficiency asserted and, to the knowledge of
▇▇▇▇, no tax deficiency might be asserted or threatened against ▇▇▇▇ or
any subsidiary that could reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect.
(xix) Each "employee benefit plan" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), in
which employees of ▇▇▇▇ or any of its subsidiaries participate or as to
which ▇▇▇▇ or any subsidiary has any liability (the "ERISA Plans") is in
compliance in all material respects with the applicable provisions of
ERISA and the Internal Revenue Code of 1986, as amended (the "Code").
Neither ▇▇▇▇ nor any of its subsidiaries has any liability with respect to
the ERISA Plans, nor does ▇▇▇▇ expect that any such liability will be
incurred, that could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect. The value of the aggregate
vested and nonvested benefit liabilities under each of the ERISA Plans
that is subject to Section 412 of the Code, determined as of the end of
such ERISA Plan's most recent ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most
recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such ERISA Plan allocable to such benefit
liabilities. Neither ▇▇▇▇ nor any subsidiary has any material liability,
whether or not contingent, with respect to any ERISA Plan that provides
post-retirement welfare benefits. The descriptions of ▇▇▇▇' stock option,
stock bonus and other stock plans or arrangements, and the options or
other rights granted and exercised thereunder, set forth in the Prospectus
are accurate in all material respects.
(xx) ▇▇▇▇ and its subsidiaries maintain a system of internal
accounting controls sufficient for purposes of the prevention or detection
of errors or irregularities in amounts that could be expected to be
material to ▇▇▇▇' combined financial statements and the recording of
transactions so as to permit the preparation of such combined financial
statements in conformity with generally accepted accounting principles.
(xxi) (A) Neither ▇▇▇▇ nor any of its subsidiaries is in violation
of its charter or by-laws, (B) neither ▇▇▇▇ nor any of its subsidiaries is
in violation of any applicable law, ordinance, administrative or
governmental rule or regulation, or any order, decree or judgment of any
court or governmental agency or body having jurisdiction over ▇▇▇▇ or any
of its subsidiaries and (C) no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event
of default exists, or upon the consummation of the Transactions will
exist, under any indenture, mortgage, loan agreement, note, lease, permit,
license or other agreement or instrument to which ▇▇▇▇ or any of its
subsidiaries is a party or to which any of the properties, assets or
operations of ▇▇▇▇ or any such subsidiary is subject, except, in the case
of clauses (B) and (C), for such violations and defaults that could not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect. There are no statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statements or the Prospectus or to be filed as an exhibit to the
Registration Statements that are not described or filed as required.
(xxii) ▇▇▇▇ and its subsidiaries carry or are entitled to the
benefits of insurance in such amounts and covering such risks as is
generally maintained by companies of established repute engaged in the
same or similar business, and all such insurance is in full force and
effect.
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(xxiii) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting ▇▇▇▇, any of its
subsidiaries or any of their respective properties, assets or operations
that, if determined adversely to ▇▇▇▇ or any of its subsidiaries, could
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect, or could materially and adversely affect the
ability of ▇▇▇▇ to perform its obligations under the Indenture, this
Agreement, or any other document governing any of the Transactions, or
which are otherwise material in the context of the Transactions; and no
such actions, suits or proceedings are threatened or, to the knowledge of
▇▇▇▇, contemplated.
(xxiv) The financial statements included in each Registration
Statement and the Prospectus comply with the requirements of the Act and
the Rules and Regulations, present fairly the financial position of ▇▇▇▇
and its combined subsidiaries as of the dates shown and the results of
operations and cash flows of ▇▇▇▇ and its combined subsidiaries for the
periods shown, and such financial statements have been prepared in
conformity with the generally accepted accounting principles in the United
States applied on a consistent basis; the assumptions used in preparing
the pro forma financial statements included in each Registration Statement
and the Prospectus provide a reasonable basis for presenting the
significant effects directly attributable to the Transactions or events
described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments to the corresponding historical
financial statement amounts. The other financial information and
statistical data set forth in the Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited combined financial statements included in the
Registration Statements.
(xxv) Since the dates as of which information is given in the
Registration Statements and the Prospectus, (i) neither ▇▇▇▇ nor any of
its subsidiaries has incurred any material liability or obligation
(indirect, direct or contingent) or entered into any material verbal or
written agreement or other transaction that is not in the ordinary course
of business and that could reasonably be expected to result in a material
reduction in the future earnings of ▇▇▇▇ and its subsidiaries; (ii)
neither ▇▇▇▇ nor any of its subsidiaries has sustained any material loss
or interference with its business or properties from fire, flood,
windstorm, accident or other calamity (whether or not covered by
insurance); (iii) there has been no change, except as contemplated by the
Prospectus, in the indebtedness of ▇▇▇▇ and no change in the capital stock
of ▇▇▇▇ and no dividend or distribution of any kind declared, paid or made
by ▇▇▇▇ on any class of its capital stock; and (iv) there has been no
development or event having or that could reasonably be expected to have a
Material Adverse Effect.
(xxvi) ▇▇▇▇ is not and, after giving effect to the consummation of
the Transactions, will not be an "investment company" or an entity
controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended and the rules and regulations
promulgated thereunder.
(xxvii) Neither ▇▇▇▇ nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes and ▇▇▇▇ agrees to
comply with such Section if prior to the completion of the distribution of
the Notes they or any of their affiliates commence doing such business.
(xxviii) The accountants reporting upon the audited financial
statements and schedules included in the Registration Statements and the
Prospectus are independent public accountants as required by the Act and
the Rules and Regulations.
3. Purchase, Sale and Delivery of Notes. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, (i) ▇▇▇▇ agrees to sell
8
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from ▇▇▇▇, at a purchase price of _____% of the principal amount
thereof plus accrued interest from ________ ___, 1996 to the Closing Date, the
respective principal amounts of Notes set forth opposite the names of the
Underwriters in Schedule A hereto.
▇▇▇▇ will deliver the Notes to the Underwriters against payment of the
purchase price therefor in Federal (same day) funds by wire transfer to an
account previously designated to CS First Boston by ▇▇▇▇ at a bank acceptable to
CS First Boston at the offices of _____________ at _______ A.M., New York time,
on __________ ___, 1996, or at such other time not later than seven full
business days thereafter as CS First Boston and ▇▇▇▇ determine, such time being
herein referred to as the "Closing Date". The Notes so to be delivered will be
in definitive fully registered form, in such denominations and registered in
such names as CS First Boston requests and will be made available for checking
and packaging at the above offices of ________________________ at least 24 hours
prior to the Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Notes for sale to the public as set forth in the
Prospectus.
5. Certain Agreements of ▇▇▇▇. ▇▇▇▇ jointly and severally agrees with the
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, ▇▇▇▇ will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CS First
Boston, subparagraph (4)) of Rule 424(b) not later than the earlier of (A)
the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date of
the Initial Registration Statement. ▇▇▇▇ will advise CS First Boston
promptly of any such filing pursuant to Rule 424(b). If the Effective Time
of the Initial Registration Statement is prior to the execution and
delivery of this Agreement and an additional registration statement is
necessary to register a portion of the Notes under the Act but the
Effective Time thereof has not occurred as of such execution and delivery,
▇▇▇▇ will file the additional registration statement or, if filed, will
file a post-effective amendment thereto with the Commission pursuant to
and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, on or prior to the
time the Prospectus is printed and distributed to any Underwriter, or will
make such filing at such later date as shall have been consented to by CS
First Boston.
(b) ▇▇▇▇ will advise CS First Boston promptly of any proposal to
amend or supplement the initial or any additional registration statement
as filed or the related prospectus or the Initial Registration Statement,
the Additional Registration Statement (if any) or the Prospectus and will
not effect such amendment or supplementation without CS First Boston's
consent; and ▇▇▇▇ will also advise CS First Boston promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or the Prospectus
and of the institution by the Commission of any stop order proceedings in
respect of a Registration Statement and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, ▇▇▇▇ will promptly notify CS
First Boston of such event and will promptly prepare and file with the
Commission, at its own expense, an
9
amendment or supplement which will correct such statement or omission or
an amendment which will effect such compliance. Neither CS First Boston's
consent to, nor the Underwriters' delivery of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), ▇▇▇▇ will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of ▇▇▇▇' or Holdings' fiscal year, as
the case may be, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) ▇▇▇▇ will furnish to the Underwriters copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Notes is required to be delivered under the Act
in connection with sales by any Underwriter or dealer, the Prospectus and
all amendments and supplements to such documents, in each case in such
quantities as the Underwriters request. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other documents
shall be so furnished as soon as available. ▇▇▇▇ will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) ▇▇▇▇ will arrange for the qualification of the Notes for sale
and the determination of their eligibility for investment under the laws
of such jurisdictions as CS First Boston designates and will continue such
qualifications in effect so long as required for the distribution.
(g) So long as any of the Notes are outstanding, ▇▇▇▇ will furnish
to CS First Boston and, upon request, to the other Underwriter, as soon as
practicable after the end of each fiscal year, a copy of any annual report
to stockholders for such year; and ▇▇▇▇ will furnish to CS First Boston
(i) as soon as available, a copy of each report and any definitive proxy
statement of ▇▇▇▇ or Holdings, as the case may be, filed with the
Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information
concerning ▇▇▇▇ as CS First Boston may reasonably request.
(h) ▇▇▇▇ will pay all expenses incident to the performance of its
obligations under this Agreement and will reimburse the Underwriters (if
and to the extent incurred by them) for any filing fees and other expenses
(including fees and disbursements of counsel) incurred by them in
connection with qualification of the Notes for sale and determination of
their eligibility for investment under the laws of such jurisdictions as
CS First Boston designates and the printing of memoranda relating thereto,
for any fees charged by investment rating agencies for the rating of the
Notes, for the filing fee of the NASD relating to the Notes (including the
fees and disbursements of counsel relating thereto), for any travel
expenses of ▇▇▇▇' officers and employees and any other expenses of ▇▇▇▇ in
connection with attending or hosting meetings with prospective purchasers
of the Notes and for expenses incurred in distributing preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto) to the Underwriters.
(i) For a period of 180 days after the date of the Prospectus,
neither ▇▇▇▇ nor any of its subsidiaries will offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any United
States dollar-denominated debt securities issued or guaranteed by ▇▇▇▇ or
any of its subsidiaries and having a maturity of more than one year from
the date of issue or publicly disclose
10
the intention to make any such offer, sale, pledge or disposal, without
the prior written consent of CS First Boston (which consent shall not be
unreasonably withheld).
(j) ▇▇▇▇ will do and perform all things required to be done and
performed under this Agreement by it that are within its control prior to
or after the Closing Date and to use all reasonable efforts to satisfy all
conditions precedent on its part to the delivery of the Notes.
6. Conditions of the Obligations of the Underwriters. The obligations of
the Underwriters to purchase and pay for any of the Notes on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of ▇▇▇▇ herein, to the accuracy of the statements of officers of ▇▇▇▇ made
pursuant to the provisions hereof, to the performance by ▇▇▇▇ of its obligations
hereunder and to the following additional conditions precedent:
(a) The Underwriters shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and stating
to the effect that:
(i) in their opinion the balance sheet of ▇▇▇▇ audited by them
and included in the Registration Statements complies as to form in
all material respects with the applicable accounting requirements of
the Act and the related Rules and Regulations;
(ii) on the basis of procedures specified in such letter,
nothing came to their attention that caused them to believe that, at
the date of the latest available balance sheet of ▇▇▇▇ read by such
accountants, and at a subsequent specified date not more than three
days prior to the date of this Agreement, there was any change in
the capital stock, increase in long term debt or decreases in total
assets or stockholders' equity, as compared with amounts shown on
the latest balance sheet of ▇▇▇▇ included in the Prospectus.
(iii) (A) they have read the pro forma financial statements
and other pro forma financial information included in the
Registration Statements (collectively, the "Pro Forma Information");
(B) they have made inquiries of certain officials of the
Company who have responsibility for financial and accounting
matters about the basis for the pro forma adjustments;
(C) they have proved the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the Pro Forma Information; and
(D) on the basis of such procedures, and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe
that the Pro Forma Information does not comply in all material
respects with the applicable accounting requirements of
Regulation S-X or that the Pro Forma Information included in
the Registration Statements has not been properly compiled and
that the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of those
statements; and
11
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements with the
results obtained from inquiries, a reading of general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in
such letter.
For purposes of this subsection and subsections (b) and (c) below, (i) if
the Effective Time of the Initial Registration Statement is subsequent to
the execution and delivery of this Agreement, "Registration Statements"
shall mean the initial registration statement as proposed to be amended by
the amendment or post-effective amendment to be filed shortly prior to its
Effective Time, (ii) if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement but the
Effective Time of the Additional Registration Statement is subsequent to
such execution and delivery, "Registration Statements" shall mean the
Initial Registration Statement and the Additional Registration Statement
as proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration
Statements.
(b) The Underwriters shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of Deloitte & Touche LLP confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder and stating
to the effect that:
(i) in their opinion the financial statements and schedules of
Rockwell Graphic Systems, a business unit of Rockwell International
Corporation ("RGS"), audited by them and included in the
Registration Statements comply as to form in all material respects
with the applicable accounting requirements of the Act and the
related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements of RGS included in the Registration Statements;
(iii) on the basis of the review referred to in clause (i)
above, a reading of the latest available interim financial
statements of RGS, inquiries of officials of RGS who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements of RGS included
in the Registration Statements do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations or
any material modifications should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheet
read by such accountants, and at a subsequent specified date
not more than three days prior to the date of this Agreement,
there was any change in stockholders' equity or any
12
increase in short-term indebtedness or long-term debt or any
decrease in consolidated net current assets or total assets of
RGS and its consolidated subsidiaries, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants, and at a subsequent specified date not more than
three days prior to the date of this Agreement, there were any
decreases, as compared with the corresponding period of the
previous year and with the period of corresponding length
ended the date of the latest income statement included in the
Prospectus, in consolidated revenues, or net operating income,
or in the total or per share amounts of consolidated income
before extraordinary items or net income,
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements with the
results obtained from inquiries, a reading of general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in
such letter.
(c) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CS First Boston. If the Effective Time of the Additional Registration
Statement (if any) is not prior to the execution and delivery of this
Agreement, such Effective Time shall have occurred not later than 10:00
P.M., New York time, on the date of this Agreement or, if earlier, the
time the Prospectus is printed and distributed to any Underwriter, or
shall have occurred at such later date as shall have been consented to by
CS First Boston. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with
the Rules and Regulations and Section 5(a) of this Agreement. Prior to the
Closing Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or, to the knowledge of ▇▇▇▇ or the Underwriters,
shall be contemplated by the Commission.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the financial condition, business,
properties or results of operations of ▇▇▇▇ or any of its subsidiaries
which, in the judgment of a majority in interest of the Underwriters
including CS First Boston, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for any of the Notes; (ii) any
downgrading in the rating of any debt securities or preferred stock of
▇▇▇▇ by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities or preferred stock of ▇▇▇▇ (other than
an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of
13
minimum prices for trading on such exchange, or any suspension of trading
of any securities of ▇▇▇▇ on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including CS
First Boston, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for any of
the Notes.
(e) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, counsel for ▇▇▇▇, to the
effect that:
(i) ▇▇▇▇ has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus;
(ii) The Indenture has been duly authorized, executed and
delivered and has been duly qualified under the Trust Indenture Act;
the Notes, when duly authenticated by the Trustee in accordance with
the terms of the Indenture and when paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will have been duly authorized,
executed, authenticated, issued and delivered; and the Indenture and
the Notes will constitute valid and legally binding obligations of
▇▇▇▇, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iii) To the knowledge of such counsel, except as disclosed in
the Prospectus and except as provided in connection with the Equity
Private Placement and the Management Placement, there are no
contracts, agreements or understandings between ▇▇▇▇ and any person
granting such person the right to require ▇▇▇▇ to file a
registration statement under the Act with respect to any securities
of ▇▇▇▇ owned or to be owned by such person or to require ▇▇▇▇ to
include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by ▇▇▇▇ under the
Act;
(iv) To the knowledge of such counsel, except as disclosed in
the Prospectus, no consent, approval, authorization, or order of, or
filing with, or notice to, any governmental agency or body of the
United States, any state of the United States or any political
subdivision thereof or any court of the United States, any state of
the United States or any political subdivision thereof is required
for the consummation of the offering of the Notes and the
transactions contemplated by the Credit Agreement, except such as
have been obtained and made and such as may be required with respect
to the offering of the Notes under state securities laws;
(v) None of the execution, delivery and performance of the
Indenture, the Purchase Agreement, the Credit Agreement, the
Portfolio Purchase Agreement and this Agreement, and the
consummation of the transactions contemplated thereby, will conflict
with the charter or by-laws of ▇▇▇▇;
(vi) The Purchase Agreement has been duly authorized, executed
and delivered by ▇▇▇▇ and constitutes a valid and legally binding
obligation of ▇▇▇▇, enforceable in
14
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles;
(vii) The Credit Agreement and Portfolio Purchase Agreement
have each been duly authorized, and upon consummation of the
Acquisition will have been duly executed and delivered and will each
constitute a valid and legally binding obligation of ▇▇▇▇,
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(viii) This Agreement has been duly authorized, executed and
delivered by ▇▇▇▇;
(ix) ▇▇▇▇ is not and, after giving effect to the consummation
of the Transactions, will not be an "investment company" or an
entity controlled by an investment company as such terms are defined
in the Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder;
(x) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the knowledge of such
counsel, no stop order suspending the effectiveness of a
Registration Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, as amended or supplemented, comply as to form in all
material respects with the requirements of the Act and the Rules and
Regulations (except for the financial statements and related
schedules and notes or other financial or statistical data contained
therein). No facts have come to such counsel's attention to lead
such counsel to believe that a Registration Statement, as of its
effective date, contained any untrue statement of a material fact or
omitted to state any 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, as of its issue
date or as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion as to the
financial statements and related schedules and notes or other
financial or statistical data contained in the Registration
Statements or the Prospectus); and
(xi) The Indenture and the Notes conform in all material
respects to the descriptions thereof contained in the Prospectus;
and the description in the Prospectus of United States federal
income tax matters under the heading "Certain Federal Income Tax
Consequences" in all material respects accurately and fairly
presents the information required to be shown;
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of Delaware and New York, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (reasonably satisfactory to Underwriters' counsel) of
other counsel reasonably acceptable to the Underwriters' counsel, familiar
with the applicable laws, provided that
15
such other opinion or opinions are delivered to the Underwriters and such
reliance is expressly authorized therein; and (B) as to matters of fact,
to the extent such counsel deems proper, on certificates of responsible
officers of the Company and certificates or other written statements of
officials of jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company. With respect to the
matters to be covered in the last sentence of subparagraph (x) above
counsel may state that their opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus, as amended or supplemented, and discussions with
representatives of the Company and its auditors in which such counsel and
the Underwriters and their counsel participated but is without independent
check or verification except as specified. Such counsel may further state
that such counsel have not verified, and are not passing upon and do not
assume any responsibility for, the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the Prospectus,
except as provided in subparagraph (xi) above.
(f) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel of ▇▇▇▇, to the
effect that:
(i) ▇▇▇▇ is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so
qualified could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect; each subsidiary of
▇▇▇▇ has been duly incorporated and is a validly existing
corporation in good standing under the laws of the jurisdiction of
its incorporation, with corporate power and authority to own, lease
and operate its properties and conduct its business as described in
the Prospectus; and each subsidiary of ▇▇▇▇ is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where
the failure to be so qualified could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect;
all of the issued and outstanding capital stock of each subsidiary
of ▇▇▇▇ has been duly authorized and validly issued and is fully
paid and nonassessable; all of the capital stock of ▇▇▇▇ is owned by
Holdings free from liens, encumbrances and defects, except as
described in the Prospectus and except pursuant to the Security
Agreement; and the capital stock of each subsidiary of ▇▇▇▇ is owned
by ▇▇▇▇, directly or through subsidiaries, free from liens,
encumbrances and defects, except as described in the Prospectus and
except pursuant to the Security Agreement;
(ii) ▇▇▇▇ and its subsidiaries possess adequate certificates,
authorizations or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them and have not received any notice of proceedings (or is aware of
any facts that would be expected to result in such proceeding)
relating to the revocation or modification of any such certificate,
authorization or permit that, if determined adversely to ▇▇▇▇ or any
of its subsidiaries, could reasonably be expected to, individually
or in the aggregate, have a Material Adverse Effect. ▇▇▇▇ and its
subsidiaries are in compliance with their respective obligations
under such certificates, authorizations or permits and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination of such certificates, authorizations or
permits or violation of such laws or regulations, except for such
non-compliance and events as could not reasonably be expected to,
individually or in the aggregate, have a Material Adverse Effect;
(iii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting ▇▇▇▇ any
of its subsidiaries or any of their respective
16
properties, assets or operations that, if determined adversely to
▇▇▇▇ or any of its subsidiaries, could, individually or in the
aggregate, have a Material Adverse Effect, or could reasonably be
expected to materially and adversely affect the ability of ▇▇▇▇ to
perform its obligations under the Indenture, this Agreement or any
other document governing any of the Transactions, or which are
otherwise material in the context of the Transactions; to the
knowledge of such counsel, no such actions, suits or proceedings are
threatened or contemplated;
(iv) To knowledge of such counsel, the execution, delivery and
performance of the Indenture, the Purchase Agreement, the Credit
Agreement, the Portfolio Purchase Agreement and this Agreement, and
the consummation of the Transactions, including, without limitation,
the issuance and sale of the Notes and compliance with the terms and
provisions thereof, will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, or
(except such as have been obtained and made and such as may be
required with respect to the offering of the Notes under state
securities laws) require the consent, approval, authorization or
order of, or filing with, or notice to, any person, entity, agency
or body under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over ▇▇▇▇ or any subsidiary of ▇▇▇▇ or any of
their properties, assets or operations, or any agreement or
instrument to which ▇▇▇▇ or any such subsidiary is a party or by
which ▇▇▇▇ or any such subsidiary is bound or to which any of the
properties of ▇▇▇▇ or any such subsidiary is subject in each case
except as could not reasonably be expected to, individually or in
the aggregate, have a Material Adverse Effect or have a material
adverse effect or the consummation of any of the Transactions, or
the charter or by-laws of ▇▇▇▇ or any such subsidiary; and ▇▇▇▇ has
full power and authority to authorize, issue and sell the Notes, as
contemplated by this Agreement and the Indenture;
(v) The descriptions in the Registration Statements and
Prospectus of statutes, regulations, legal and governmental
proceedings and contracts and other documents (other than those set
forth under the heading "Description of Notes," "Description of New
Bank Credit Agreement," "Description of Sale of Customer Notes" and
"Description of Certain Federal Income Tax Consequences") are
accurate in all material respects and fairly present the information
required to be shown; and such counsel do not know of any material
statutes, regulations, legal or governmental proceedings required to
be described in a Registration Statement or the Prospectus which are
not described as required or of any material contracts or documents
of a character required to be described in a Registration Statement
or the Prospectus or to be filed as exhibits to a Registration
Statement which are not described and filed as required.
(vi) No facts have come to such counsel's attention to lead
such counsel to believe that a Registration Statement, as of its
effective date or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any 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, as of its issue date or as of the Closing Date,
contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need
express no opinion as to the financial statements and related
schedules and notes or other financial and statistical data
contained in the Registration Statements or the Prospectus).
In rendering his opinion as aforesaid, such counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel as to
the laws of Japan, France and the United Kingdom, provided that (x) each
such local counsel is acceptable to the Underwriters, (y) such reliance is
expressly authorized by each opinion so relied upon and a copy of each
such opinion is delivered
17
to the Underwriters and is in form and substance satisfactory to the
Underwriters and (z) counsel shall state in his opinion that he believes
that such counsel and the Underwriters are justified in relying thereon.
(g) The Underwriters shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to Rockwell International
Corporation, and such opinions of foreign counsel, dated the Closing Date,
as are delivered pursuant to Section 10(c) of the Purchase Agreement, in
each case substantially to the effect set forth in such Section 10(c) and
addressed to the Underwriters or accompanied by letters stating that the
Underwriters are entitled to rely upon such opinions as if addressed to
the Underwriters.
(h) The Underwriters shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the validity of the Notes, the Registration
Statements, the Prospectus and other related matters as the Underwriters
may require, and ▇▇▇▇ shall have furnished to such counsel such documents
as they request for the purpose of enabling them to pass upon such
matters.
(i) The Underwriters shall have received a certificate, dated the
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of ▇▇▇▇ in which such officers, to the
best of their knowledge after reasonable investigation, shall state that:
the representations and warranties of ▇▇▇▇ in this Agreement are true and
correct; ▇▇▇▇ has complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder at or
prior to the Closing Date; no stop order suspending the effectiveness of
any Registration Statement has been issued and no proceedings for that
purpose have been instituted or are contemplated by the Commission; the
Additional Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule
462(b), including payment of the applicable filing fee in accordance with
Rule 111(a) or (b) under the Act, prior to the time the Prospectus was
printed and distributed to any Underwriter; they have carefully examined
the Registration Statements and the Prospectus and neither any
Registration Statement nor the Prospectus, as amended or supplemented, (i)
as of their respective effective or issue times, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (ii) as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
and, subsequent to the dates as of which information is given in the
Registration Statements and the Prospectus, there has been no Material
Adverse Effect, nor any development or event involving a prospective
Material Adverse Effect, except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(j) The Underwriters shall have received a letter, dated the Closing
Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
(k) The Underwriters shall have received a letter, dated the Closing
Date, of Deloitte & Touche LLP which meets the requirements of subsection
(b) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
(l) At the Closing Date, the Credit Agreement shall have been
executed and delivered and be in full force and effect and all conditions
to borrowing thereunder shall have been satisfied, and ▇▇▇▇ shall have
provided to the Underwriters copies of all documents with respect thereto
as they may reasonably request.
18
(m) At the Closing Date, the Acquisition shall have been completed
as described in the Prospectus, and ▇▇▇▇ shall have provided to the
Underwriters copies of all documents with respect thereto as they may
reasonably request.
(n) At the Closing Date, the Portfolio Purchase Agreement shall have
been executed and delivered and be in full force and effect and the
transactions contemplated thereby shall have been completed as described
in the Prospectus, and ▇▇▇▇ shall have provided to the Underwriters copies
of all documents with respect thereto as they may reasonably request.
(o) At the Closing Date, the Management Placement and the Equity
Private Placement shall have been completed as described in the
Prospectus, and ▇▇▇▇ shall have provided to the Underwriters copies of all
documents with respect thereto as they may reasonably request.
(p) The Underwriters shall have received such other opinions,
certificates, letters and other documents from and on behalf of ▇▇▇▇ as CS
First Boston may reasonably request.
▇▇▇▇ will ▇▇▇▇▇▇▇ ▇▇ First Boston with such conformed copies of such opinions,
certificates, letters and documents as CS First Boston reasonably request. CS
First Boston may in its sole discretion waive on behalf of the Underwriters
compliance with any conditions to the obligations of the Underwriters hereunder.
7. Indemnification and Contribution. (a) ▇▇▇▇ will indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that ▇▇▇▇ will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to ▇▇▇▇ by any Underwriter specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless ▇▇▇▇ against any losses, claims, damages or liabilities to which ▇▇▇▇
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
▇▇▇▇ by such Underwriter specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by ▇▇▇▇ in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Underwriter consists of (i) the following
information in the Prospectus furnished on behalf of each Underwriter: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Underwriters, the last two legends on page 2, the first sentence of the
first full paragraph on page 20, the information appearing in the third
paragraph under the caption "Underwriting", the information contained
19
in the second and third sentences of the fourth paragraph under the caption
"Underwriting" and the information contained in the fifth paragraph under the
caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section or
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section or Section 9, as the
case may be, for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section or Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above (or Section 9, as the case may be), then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (or Section 9, as the case may be)
(i) in such proportion as is appropriate to reflect the relative benefits
received by ▇▇▇▇ on the one hand and the Underwriters on the other from the
offering of the Notes or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of ▇▇▇▇ on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by ▇▇▇▇ on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offerings (before deducting expenses) received by
▇▇▇▇ bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by ▇▇▇▇ or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of ▇▇▇▇ under this Section and Section 9 shall be in
addition to any liability which ▇▇▇▇ may otherwise have and shall extend, upon
the same terms and conditions, to each person, if
20
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each director of ▇▇▇▇, to each officer of
▇▇▇▇ who has signed a Registration Statement and to each person, if any, who
controls ▇▇▇▇ within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Notes hereunder and the aggregate principal amount
of Notes that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total principal amount of the Notes, CS
First Boston may make arrangements satisfactory to ▇▇▇▇ for the purchase of such
Notes by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Notes that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Notes or Units with respect to which such default or
defaults occur exceeds 10% of the total principal amount of the Notes, and
arrangements satisfactory to CS First Boston and ▇▇▇▇ for the purchase of such
Notes by other persons are not made within 36 hours after such default, this
Agreement will terminate without liability on the part of any non-defaulting
Underwriter or ▇▇▇▇, except as provided in Section 10. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
▇▇▇▇ or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
any Underwriter, ▇▇▇▇ or any of its representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Notes.
If this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Notes by the Underwriters is not consummated, ▇▇▇▇ shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of ▇▇▇▇ and the Underwriters pursuant
to Section 7 and the obligations of ▇▇▇▇ pursuant to Section 9 shall remain in
effect. If the purchase of the Notes by the Underwriters is not consummated for
any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause (iii),
(iv) or (v) of Section 6(d), ▇▇▇▇, will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Notes.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
CS First Boston at Park Avenue Plaza, New York, N.Y. 10055, Attention:
Investment Banking Department--Transactions Advisory Group, or, if sent to ▇▇▇▇,
will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
12. Representation of Underwriters. CS First Boston will act for the
Underwriters in connection with this financing, and any action under this
Agreement taken by CS First Boston will be binding upon all the Underwriters.
21
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
▇▇▇▇ hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
22
If the foregoing is in accordance with CS First Boston's understanding of
our agreement, kindly sign and return to ▇▇▇▇ the counterparts hereof, whereupon
it will become a binding agreement among ▇▇▇▇ and the Underwriters in accordance
with its terms.
Very truly yours,
▇▇▇▇ GRAPHIC SYSTEMS, INC.
By ___________________________
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the
date first above written.
CS FIRST BOSTON CORPORATION
BT SECURITIES CORPORATION
By CS FIRST BOSTON CORPORATION
By _________________________
Name:
Title:
23
SCHEDULE A
Principal
Amount of
Notes
---------
Underwriter
-----------
CS First Boston Corporation..................... $
BT Securities Corporation.......................
---------
Total $
=========
24
SCHEDULE B
Subsidiaries of ▇▇▇▇
▇▇▇▇▇▇▇▇ PMC Inc., an Illinois corporation (to be renamed after the Acquisition
Closing)
▇▇▇▇ Graphic Systems Limited, a United Kingdom Corporation
▇▇▇▇ Graphic Systems - Japan Corporation, a Japanese corporation
Rockwell Systemes Graphiques Nantes, a societe anonyme organized under the laws
of the Republic of France (to be renamed after the Acquisition closing)
25