EXHIBIT 1.1
CHAMPION INTERNATIONAL CORPORATION
Common Stock
(par value $.50 per share)
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Underwriting Agreement
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June 26, 1995
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Loews Corporation, a Delaware corporation (the "Selling Stockholder"), a
shareholder of Champion International Corporation, a New York corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
sell to Goldman, Sachs & Co. (the "Underwriters") an aggregate of 5,000,000
shares (the "Firm Shares") and, at the election of the Underwriters, up to
500,000 additional shares (the "Optional Shares") of Common Stock, par value
$.50 per share ("Stock") of the Company (the Firm Shares and the Optional
Shares which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Shares").
1. (a) The Company represents and warrants to, and agrees with, the
Underwriters that:
(i) A registration statement on Form S-3 (File No. 33-52123) in
respect of the Shares has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
the other Underwriters, have been declared effective by the Commission in
such form; no other document with respect to such registration statement
or document incorporated by reference therein has heretofore been filed
with the Commission; and no stop order suspending the effectiveness of
such registration statement has been issued and no proceeding for that
purpose has been initiated or, to the best of the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in such
registration statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), is hereinafter called a
"Preliminary Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including (i) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to be
part of the registration statement at the time it was declared effective
and (ii) the documents incorporated by reference in the prospectus
contained in the registration statement at the time such part of the
registration statement became effective, each as amended at the time such
part of the registration statement became effective, are hereinafter
collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus,
as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that
is incorporated by reference in the Registration Statement);
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein or by a Selling
Stockholder expressly for use therein;
(iii) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein or by a Selling Stockholder
expressly for use therein;
(v) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, which in either case is
material to the Company and its subsidiaries (taken as a whole),
otherwise than as set forth or contemplated in the Prospectus; and, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus, there have not been any changes material to
the
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Company and its subsidiaries (taken as a whole) in the capital stock, the
sum of notes payable, current installments of long-term debt and
long-term secured debt, unsecured debt obligations, lease obligations,
timber cutting obligations and other obligations of the Companies or any
of its subsidiaries or any material adverse change in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries (taken as a
whole), otherwise than as set forth or contemplated in the Prospectus;
(vi) The Company and each subsidiary of the Company which is a
significant subsidiary as defined in Rule 405 of Regulation C under the
Act (each a "significant subsidiary") have been duly incorporated and are
validly existing as corporations in good standing under the laws of their
respective jurisdictions of incorporation, with power and authority
(corporate and other) to own their respective properties and conduct
their respective businesses as described in the Prospectus;
(vii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description of the Stock contained in
the Prospectus; and all of the issued shares of capital stock of each
significant subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares, shares of Weldwood of Canada Limited held
by the chairman thereof and subject to forfeiture in accordance with
certain earn-out provisions and except as set forth in the Prospectus)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(viii)The compliance by the Company with all of the provisions of
this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of the Company or any of its subsidiaries pursuant to
the terms of, any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Restated Certificate of
Incorporation, as amended, or By-laws of the Company or any statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for sale of the Shares or the consummation
by the Company of the transactions contemplated by this Agreement, except
the registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(ix) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, are accurate, complete and fair;
(x) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on the consolidated
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries (taken as a whole); and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others; and
(xi) Arthur Andersen LLP, who have examined certain financial
statements of the Company and its subsidiaries, are, to the best of the
Company's knowledge, independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder.
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(b)The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary on
the part of the Selling Stockholder for the execution and delivery by the
Selling Stockholder of this Agreement, and for the sale and delivery of
the Shares to be sold by the Selling Stockholder hereunder, have been
obtained, except such as may be required under the Act and under state
securities or Blue Sky laws in connection with the purchase and
distribution of such Shares by the Underwrtiers; and the Selling
Stockholder has full right, power and authority to enter into this
Agreement, to sell, assign, transfer and deliver the Shares to be sold by
the Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by the Selling Stockholder
hereunder and the compliance by the Selling Stockholder with all of the
provisions of this Agreement applicable to the Selling Stockholder, the
consummation by the Selling Stockholder of the transactions herein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Selling Stockholder or any statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Selling Stockholder or the property of the Selling
Stockholder;
(iii) The Selling Stockholder has, and immediately prior to the Time
of Delivery (as defined in Section 4 hereof) the Selling Stockholder will
have, good and valid title to the Shares to be sold by the Selling
Stockholder hereunder, free and clear of all liens, encumbrances,
equities or claims; and, upon delivery of such Shares and payment
therefor pursuant hereto, good and valid title to such Shares, free and
clear of all liens, encumbrances, equities or claims, will pass to the
Underwriters;
(iv) During the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the Prospectus, not
to offer, sell contract to sell or otherwise dispose of any securities of
the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock
option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of
this Agreement), without your prior written consent, except (i) as
provided hereunder and (ii) at any time during such period after the
closing price of the Stock on the New York Stock Exchange has exceeded
$57.45 per share;
(v) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares;
(vi) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by the
Selling Stockholder expressly for use therein, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and any
further amendments or supplements to the Registration Statement and the
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; and
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(vii)In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the Time of Delivery (as hereinafter defined) a properly completed and
executed United States Treasury Department Form W-9 (or other applicable
form or statement specified by Treasury Department regulations in lieu
thereof).
2. Subject to the terms and conditions herein set forth, the
Selling Stockholder agrees to sell to the Underwriters, and the Underwriters
agree to purchase from the Selling Stockholder, at a purchase price per share
of $51.8206, the Firm Shares and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, the Selling Stockholder agrees to sell to the Underwriters, and
the Underwriters agree to purchase from the Selling Stockholder, at the
purchase price per share set forth in clause (a) of this Section 2, that
portion of the number of Optional Shares as to which such election shall have
been exercised.
The Selling Stockholder hereby grants to the Underwriters the right to
purchase at their election up to 500,000 Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Selling
Stockholder, not later than 5:30 p.m., New York time, on the day prior to the
Time of Delivery and setting forth the aggregate number of Optional Shares to
be purchased for delivery at the Time of Delivery.
3. Upon the authorization by you of the release of the Firm Shares, the
Underwriters propose to offer the Firm Shares for sale upon the terms and
conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by the Underwriters hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Underwriters may request upon at least forty-eight hours' prior
notice to the Selling Stockholder shall be delivered by or on behalf of the
Selling Stockholder to the Underwriters through the facilities of the
Depository Trust Company ("DTC"), for the account of the Underwriters, against
payment by or on behalf of such Underwriter of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Selling
Stockholder in New York Clearing House (next day) funds. The Company will
cause the certificates representing the Shares to be made available for
checking and packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Shares and the Optional Shares, 9:30
a.m., New York time, on June 30, 1995 or such other time and date as the
Underwriters and the Selling Stockholder may agree upon in writing. Such time
and date for delivery of the Shares is herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7(i) hereof, will be delivered at the offices of
Sullivan & Cromwell, 250 Park Avenue, New York, New York 10177 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
the Time of Delivery. A meeting will be held at the Closing Location at
2:00 p.m., New York City time, on the New York Business Day next preceding the
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by
the parties hereto. For the purposes of this Section 4, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to
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make no further amendment or any supplement to the Registration Statement
or Prospectus prior to the Time of Delivery which shall be disapproved by
you promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary Prospectus
or prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus or suspending any such
qualification, promptly to use its best efforts to obtain the withdrawal
of such order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares (but in no event shall the Company be
required to bear the expenses of such compliance after nine months after
the date of issue of any amendment or supplement to the Prospectus in
connection with the offering or sale of such Shares), provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction or to subject itself to taxation as doing business in
any such jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in
such quantities as you may from time to time reasonably request, and, if
the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time
any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such period to
amend or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify you and upon your request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3)
of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the Time of Delivery, not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any
securities of the Company that
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are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), without your
prior written consent;
(f) To furnish to its shareholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of the Company
and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; and
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to
deliver to you as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed.
6. The Company and the Selling Stockholder covenant and agree with one
another and with the Underwriters that (a) the Company and the Selling
Stockholder will, in accordance with the agreement, dated February 2, 1994,
between the Company and the Selling Stockholder (the "Registration Agreement"),
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Company's counsel and accountants in connection with the registration of
the Shares under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) the cost and charges of any transfer agent or registrar
and (v) all other costs and expenses incident to the performance of the
Company's obligations hereunder which are not otherwise specifically provided
for in this Section, (b) the Company will pay or cause to be paid the cost of
printing stock certificates to the extent required and (c) the Selling
Stockholder will pay or cause to be paid all costs and expenses incident to the
performance of the Selling Stockholder's obligations hereunder which are not
otherwise specifically provided for in this Section, including (i) any fees and
expenses of counsel for the Selling Stockholder; and (ii) all expenses and
taxes incident to the sale and delivery of the Shares to be sold by the Selling
Stockholder to the Underwriters hereunder. In connection with clause (c) of
the preceding sentence, Goldman, Sachs & Co. agrees to pay New York State stock
transfer tax, and the Selling Stockholder agrees to reimburse Goldman, Sachs &
Co. for associated carrying costs if such tax payment is not rebated on the day
of payment and for any portion of such tax payment not rebated. It is
understood, however, except as provided in this Section, and Sections 8 and 10
hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, stock transfer taxes on resale of any of
the Shares by them, and any advertising expenses connected with any offers they
may make.
7. The obligations of the Underwriters hereunder shall be subject,
in their discretion, to the condition that all representations and warranties
and other statements of the Company and of the Selling Stockholder herein are,
and at the Time of Delivery will be, true and correct, the condition that the
Company and the Selling Stockholder shall have performed all of its and
their obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been
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issued and no proceeding for that purpose shall have been initiated or
(to the best of the Company's knowledge) threatened by the Commission;
and all requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated the Time of Delivery,
with respect to the incorporation of the Company, the Registration
Statement, the Prospectus as amended or supplement and such other related
matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) (I) Skadden, Arps, Slate, Meagher & Flom, counsel to the
Company, shall have furnished to you their written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Company has been duly organized and is subsisting and
in good standing under the laws of the State of New York, and has
the corporate power and authority under such laws to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iv) No authorization, approval, or license of any government,
governmental instrumentality or court (other than under the Act, the
Blue Sky and securities laws of the various states, and the rules and
regulations of the NASD, as to which such counsel need not express an
opinion except as otherwise expressly set forth herein) is required
under the laws of the State of New York or the laws of the United
States, in each case, that are normally applicable to transactions of
the type provided for by this Agreement, for consummation by the
Company of the transactions contemplated by this Agreement;
(v) The statements set forth in the Prospectus under the
caption "Description of Capital Stock" and "Underwriting", to the
extent that they constitute matters of law or legal conclusions, have
been reviewed by such counsel and fairly summarize the information
required to be disclosed therein in all material respects;
(vi) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act; and
(vii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion) appeared on their face to be appropriately responsive in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder; except that in each case,
such counsel need not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, except for those referred to
in the opinion in subsection (v) of this Section 7(c) insofar as the
information provided under the caption referred to therein relates to
provsions of documents and other legal matters;
In addition, such counsel shall state that in connection
with the preparation of the Registration Statement and the Prospectus
such counsel has participated in conferences with officers and
representatives of the Company, the Selling Stockholder, inside
counsel for the Company, representatives of the independent
accountants of the Company and you at which the contents of the
Registration Statement and the Prospectus and related matters were
discussed and, although such counsel is not passing upon, and does not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement
8
or the Prospectus, on the basis of the foregoing, no facts have come
to the attention of such counsel that have led them to believe that,
as of its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) 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, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading or
that, as of the Time of Delivery, either the Registration Statement or
the Prospectus or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any amendment to
the Registration Statement required to be filed or of any contracts or
other documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated by
reference or described as required;
(II) Lawrence A. Fox, Esq., Vice President and Secretary of the
Company, shall have furnished to you his written opinion, dated the
Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of the Company and its significant subsidiaries is
qualified to do business in, and is in good standing under the laws
of, each jurisdiction in which the character of the property owned or
leased by it or the nature of the business transacted by it makes such
qualification necessary and where failure so to qualify might
materially adversely affect the business or assets of the Company and
its subsidiaries (taken as a whole) or impair their right to enforce
any material contracts against others or expose them to substantial
liabilities in any such jurisdiction;
(ii) Each significant subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is incorporated and has
the corporate power to engage in the business carried on by it, and
the Company and its subsidiaries own the outstanding capital stock of
each other subsidiary owned by them free and clear of any liens,
claims and encumbrances;
(iii) All of the issued shares of capital stock of the Company
(including the Shares) have been duly and validly authorized and
issued and are fully paid and non-assessable;
(iv) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties;
9
(v) There are no claims, actions, suits or proceedings known to
such counsel which are threatened or pending against the Company, its
subsidiaries or their properties in any court or before or by any
governmental agency or instrumentality which might reasonably be
expected to materially and adversely affect the business or financial
condition of the Company and its subsidiaries (taken as a whole),
except as set forth in or contemplated in the Prospectus;
(vi) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, appeared on their face to be
appropriately responsive in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and such counsel
has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the Act, 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, in the
case of other documents which were filed under the Exchange Act with
the Commission,an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and
In rendering the foregoing opinion, Mr. Fox may rely upon
certificates of any officer of the Company as to matters of fact as to
which such officer has knowledge and upon opinions of counsel in
jurisdictions other than New York;
(d) Barry Hirsch, Esq., Senior Vice President, Secretary and General
Counsel of the Selling Stockholder, shall have furnished to you his
written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) This Agreement has been duly executed and delivered by or
on behalf of the Selling Stockholder; and the sale of the Shares to be
sold by the Selling Stockholder hereunder and the compliance by the
Selling Stockholder with all of the provisions of this Agreement, the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound or to which any of
the property or assets of the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Selling Stockholder or
any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Selling
Stockholder or the property of the Selling Stockholder;
(ii) No consent, approval, authorization or order of any court
or governmental agency or body is required on the part of the Selling
Stockholder for the consummation of the transactions contemplated by
this Agreement in connection with the Shares to be sold by the Selling
Stockholder hereunder, except such as may be required under the Act
and under state securities or Blue Sky laws in connection with the
purchase and distribution of such Shares by the Underwriters;
(iii) Immediately prior to the Time of Delivery, the Selling
Stockholder had good and valid title to the Shares to be sold at the
Time of Delivery by the Selling Stockholder under this Agreement, free
and clear of all liens, encumbrances, equities or claims, and full
right, power and authority to sell, assign, transfer and deliver the
Shares to be sold by the Selling Stockholder hereunder; and
10
(iv) The delivery of the Shares to the Undewriters in accordance
with this this Agreement has transferred good and valid title to such
Shares to the Underwriters, free and clear of all liens, encumbrances,
equities or claims.
In rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of the Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances, equities or claims on, the Shares sold
by the Selling Stockholder, provided that such counsel shall state that both
you and such counsel are justified in relying upon such certificate;
(e) At the Time of Delivery, Arthur Andersen LLP shall have
furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex I hereto;
(f)(i)Neither the Company nor any of its subsidiaries (taken as a
whole) shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus,
and (ii) since the respective dates as of which information is given in
the Prospectus there shall not have been any change in the capital stock,
the sum of notes payable, current installments of long-term debt and long
term secured debt, unsecured debt, lease obligations, timber cutting
obligations and other obligations of he Company or any of its
subsidiaries (taken as a whole) or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries (taken as a whole),
otherwise than as set forth or contemplated in the Prospectus, the effect
of which, in any such case described in Clause (i) or (ii), is in the
judgment of the Underwriters so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus;
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities
on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York
State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner contemplated in the
Prospectus;
(h) The Shares at the Time of Delivery shall have been duly listed
on the New York Stock Exchange; and
(i) The Company and the Selling Stockholder shall have furnished or
caused to be furnished to you at the Time of Delivery certificates of
officers of the Company and of the Selling Stockholder, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholder, respectively,
herein at and as of the Time of Delivery, as to the performance by the
Company and the Selling Stockholder of all of their respective
obligations hereunder to be performed at or prior to the Time of
Delivery, and as to such other matters as you may reasonably request, and
the Company shall have furnished or caused to be furnished certificates
as to the matters set forth in subsections (a) and (f) of this Section.
8. (a) The Company will indemnify and hold harmless the Underwriters
against any losses, claims, damages or liabilities, joint or several, to which
the Underwriters may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material
11
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Underwriters for any legal or other
expenses reasonably incurred by the Underwriters in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the
Underwriters expressly for use therein.
(b) The Selling Stockholder will indemnify and hold harmless the
Underwriters against any losses, claims, damages or liabilities, joint or
several, to which the Underwriters may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Selling Stockholder expressly for use therein;
and will reimburse the Underwriters for any legal or other expenses reasonably
incurred by the Underwriters in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Selling Stockholder shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Underwriters expressly for use
therein.
(c) The Underwriters will indemnify and hold harmless the Company and
each Selling Stockholder against any losses, claims, damages or liabilities to
which the Company or the Selling Stockholder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by the Underwriters expressly for use therein; and
will reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or the Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (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
12
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.
Notwithstanding any provision hereof to the contrary, with respect to any
action or claim, no indemnifying party shall be responsible for the fees and
expenses of more than one counsel (plus any local counsel) to the indemnified
parties in circumstances in which the indemnified parties do not have
potentially conflicting defenses available. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Selling Stockholder on the one hand and the Underwriters on the
other from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and/or the Selling Stockholder on the one hand and the Underwriters on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Selling Stockholder on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Selling Stockholder bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholder on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Selling Stockholder and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this subsection
(e) were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (e). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), the Underwriters shall
not be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by them and distributed to the
public were offered to the public exceeds the amount of any damages which the
Underwriters have 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
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholder under this
Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls the Underwriters within
the meaning of the Act (provided, however, that nothing contained in
13
this Section 8 shall be deemed to imply any liability on the part of the
Selling Stockholder arising out of or based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arising out of or 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, except to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the Selling
Stockholder expressly for use therein; and the obligations of the Underwriters
under this Section 8 shall be in addition to any liability which the
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about
to become a director of the Company) and to each person, if any, who controls
the Company or the Selling Stockholder within the meaning of the Act. The
Company and the Selling Stockholder acknowledge and agree that the obligations
of the Company and the Selling Stockholder to the Underwriters under this
Section 8 shall not constitute a modification of the obligations that the
Company and the Selling Stockholder may have to one another pursuant to that
Registration Agreement.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholder and the
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of the Underwriters or any controlling person of
the Underwriters, or the Company, or any of the Selling Stockholder, or any
officer or director or controlling person of the Company, or any controlling
person of the Selling Stockholder, and shall survive delivery of and payment
for the Shares.
Anything herein to the contrary notwithstanding, the indemnity agreement
of the Company in subsection (a) of Section 8 hereof, the representations and
warranties in subsections (a)(ii), (a)(iii) and (a)(iv) of Section 1 hereof and
any representation or warranty as to the accuracy of the Registration Statement
or the Prospectus contained in any certificate furnished by the Company
pursuant to Section 7 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein
of a controlling person or partner of the Underwriters who is a director,
officer or controlling person of the Company when the Registration Statement
has become effective, except in each case to the extent that an interest of
such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless in
the opinion of counsel for the Company the matter has been settled by
controlling precedent, the Company will, if a claim for such indemnification is
asserted, submit to a court of appropriate jurisdiction the question of whether
such interest is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
10. If for any reason the Shares are not delivered by or on behalf of the
Selling Stockholder as provided herein, the Selling Stockholder will reimburse
the Underwriters through you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares, but the Company and the Selling Stockholder shall then be under no
further liability to any Underwriter except as provided in Sections 6 and 8
hereof.
11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you at 85 Broad Street, New York, New York
10004, Attention: Registration Department; if to the Selling Stockholder shall
be delivered or sent by mail, telex or facsimile transmission to counsel for
the Selling Stockholder at 667 Madison Avenue, New York, New York 10028,
Attention: Corporate Secretary; and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the
14
Registration Statement, Attention: Secretary. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholder and, to the
extent provided in Sections 8 and 9 hereof, the officers and directors of the
Company and each person who controls the Company, the Selling Stockholder or
the Underwriters, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14.THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
15
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriters, the Company and the Selling Stockholder.
Very truly yours,
Champion International
Corporation
By: /s/ Frank Kneisel
------------------------
Name: Frank Kneisel
Title: Senior Vice President -
Finance
Loews Corporation
By: /s/ John J. Kenny
--------------------------
Name: John J. Kenny
Title: Treasurer
Accepted as of the date hereof at New York, New York
Goldman, Sachs & Co.
By: Goldman, Sachs & Co.
--------------------------------
(Goldman, Sachs & Co.)
16
ANNEX I
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the consolidated interim financial statements, selected financial data,
pro forma financial information, financial forecasts and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the Underwriters;
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the
unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Underwriters; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act
and the Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation
S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute
17
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations, or (ii) any material modifications
should be made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus, for them to be conformity with generally accepted
accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus, or the
issuance of shares of Common Stock under the Company's contingent
compensation plan) or any increase in the consolidated long-term debt,
long-term lease obligations and other contractual obligations and
timber cutting obligations (except for increases which in the
aggregate are less than $25,000,000) of the Company and its
subsidiaries, and any increases in the sum of notes payable, current
installments of long-term debt and long-term debt of the Company and
its consolidated subsidiaries (except for increases which in the
aggregate are less than $25,000,000), or, as of the end of the latest
period for which financial statements are available, there have been
any decreases in consolidated net current assets or shareholders'
equity or any increases in total current liabilities, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net
18
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the Underwriters,
or any increases in any items specified by the Underwriters, in each
case as compared with the comparable period of the preceding year and
with any other period of corresponding length specified by the
Underwriters, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described
in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Underwriters which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Underwriters or
in documents incorporated by reference in the Prospectus specified by the
Underwriters, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
The accountants shall not be required to perform any procedures that
consist solely of comparing any amounts, percentages or other financial
information and noting the agreement thereof with amounts, percentages or other
financial information appearing in or incorporated by reference in any filed
Annual Report of the Company on Form 10-K, any filed Quarterly Report of the
Company on Form 10-Q, any filed Report of the Company on Form 8-K, or any other
filed document incorporated by reference in the Registration Statement or the
Prospectus, provided that upon the request of the Underwriters an appropriate
financial officer of the Company shall certify to the Underwriters that he has
performed such comparison, noting agreement.
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