EXHIBIT 1.1
AMERICAN REPROGRAPHICS COMPANY
COMMON STOCK
UNDERWRITING AGREEMENT
______________, 2005
Goldman, Sachs & Co.,
J.P. Morgan Securities Inc.,
Credit Suisse First Boston LLC,
Robert W. Baird & Co. Incorporated,
CIBC World Markets Corp.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004,
and
c/o J.P. Morgan Securities Inc.,
277 Park Avenue,
New York, New York 10172.
Ladies and Gentlemen:
American Reprographics Company, a Delaware corporation (the "Company"),
which will be the parent of American Reprographics Holdings, L.L.C., a
California limited liability company (the "LLC"), proposes, subject to the terms
and conditions stated herein, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of 7,666,667 shares of
Common Stock, $0.001 par value ("Stock"), of the Company and the stockholders of
the Company upon the consummation of the Reorganization (as defined below) named
in Schedule II hereto (the "Selling Stockholders") propose, subject to the terms
and conditions stated herein, to sell to the Underwriters an aggregate of
5,683,333 shares and, at the election of the Underwriters, up to 2,002,500
additional shares of Stock. The aggregate of 13,350,000 shares to be sold by the
Company and the Selling Stockholders is herein called the "Firm Shares" and the
aggregate of 2,002,500 additional shares to be sold by the Selling Stockholders
is herein called the "Optional Shares". The Firm Shares and the Optional Shares
that 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,
each of the Underwriters that:
(i) A registration statement on Form S-1 (File No. 333-119788) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto, to you for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
document with respect to the Initial Registration Statement has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or, to
the best of Company's knowledge, threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and including 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 Initial Registration
Statement at the time it was declared effective, each as amended at the
time such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Prospectus";
(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 in the preparation of the answers therein to Items 7 and
11(m) of Form S-1;
(iii) 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 in the preparation
of the answers therein to Items 7 and 11(m) of Form S-1;
(iv) The transactions described in the Prospectus under the heading
"Reorganization" (the "Reorganization") have been duly authorized by all
necessary corporate or company action on the part of each of the Company
and the LLC and by the members and managers of the LLC; and the
Reorganization will not conflict with or result in a breach or violation
of any of
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the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company, the LLC or any of their subsidiaries is a party or
by which the Company, the LLC or any of their subsidiaries is bound or to
which any of the property or assets of the Company, the LLC or any of
their subsidiaries is subject, other than any default that would not,
individually or in the aggregate, have a Material Adverse Effect (as
defined below), 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 of any court or
governmental agency or body having jurisdiction over the Company, the LLC
or any of their 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 the
consummation by the Company and the LLC and by the members and managers of
the LLC of the Reorganization, except for such consents as shall have been
obtained prior to the effectiveness of the Reorganization;
(v) None of the Company, the LLC or any of their subsidiaries has
sustained since the date of the latest audited financial statements
included 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, 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 has not been
any change in the equity or long-term debt of the Company, the LLC or any
of their subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, securityholders' equity
or results of operations of the Company, the LLC and their subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus;
(vi) The Company, the LLC and their subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value
of such property and do not materially interfere with the use made of such
property by the Company, the LLC and their subsidiaries; and any real
property and buildings held under lease by the Company, the LLC and their
subsidiaries are held by them under valid, subsisting and enforceable
leases with such exceptions as are not material and do not materially
interfere with the use made of such real property and buildings by the
Company, the LLC and their subsidiaries;
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
and the LLC has been duly organized and is validly existing as a limited
liability company under the laws of the State of California, in each case
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation or limited liability company for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(viii) Each "significant subsidiary" (as such term is defined in Rule
1-02 of Regulation S-X promulgated under the Act) of the Company and the
LLC as of the date of this Agreement is listed on Annex III (each, a
"Significant Subsidiary" and collectively, the "Significant
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Subsidiaries"); each Significant Subsidiary has been duly organized and is
validly existing as a corporation or other business entity in good
standing under the laws of its jurisdiction of organization, with power
and authority (corporate or other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation or other business entity for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction;
(ix) Each of the Company and the LLC has an authorized capitalization
as set forth in the Prospectus, and all of the issued shares of capital
stock of the Company, including, at the time of the Reorganization, the
shares to be issued as part of the Reorganization, have been or will be
duly and validly authorized and issued, are or will be fully paid and
non-assessable and conform or will conform to the description of the Stock
contained in the Prospectus; and all of the issued shares of capital stock
or other equity securities, as applicable, of the LLC and each subsidiary
of the Company and the LLC have been duly and validly authorized and
issued, are fully paid and non-assessable in the case of capital stock and
(except for directors' qualifying shares) are owned directly or indirectly
by the Company or the LLC, as applicable, free and clear of all liens,
encumbrances, equities or claims;
(x) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable and will conform
to the description of the Stock contained in the Prospectus;
(xi) The issue and sale of the Shares to be sold by the Company and
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
to which the Company, the LLC or any of their subsidiaries is a party or
will be a party after the Reorganization or by which the Company, the LLC
or any of their subsidiaries is bound or will be bound after the
Reorganization or to which any of the property or assets of the Company,
the LLC or any of their subsidiaries is subject or will be subject after
the Reorganization other than any conflict, breach, violation or default
that, individually or in the aggregate, would not affect the validity of
the Shares and would not have a material adverse effect on the
consolidated financial position, securityholders' equity or results of
operations of the Company, the LLC and their subsidiaries, taken as a
whole (a "Material Adverse Effect"), 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 of
any court or governmental agency or body having jurisdiction over the
Company, the LLC or any of their 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 the issue and 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, and except where the
failure to obtain any such consent, approval, authorization, order,
registration or
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qualification would not, individually or in the aggregate, affect the
validity of the Shares and would not have a Material Adverse Effect;
(xii) None of the Company, the LLC or any of their subsidiaries is in
violation of its Certificate of Incorporation or By-laws or Operating
Agreement, as applicable, or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of
its properties may be bound, other than any default that would not,
individually or in the aggregate, have a Material Adverse Effect;
(xiii) 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 and under the caption "Underwriting",
insofar as they purport to describe the provisions of the laws (other than
the laws of any foreign jurisdiction) and documents referred to therein,
are accurate and complete in all material respects;
(xiv) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, the LLC or any of
their subsidiaries is a party or of which any property of the Company, the
LLC or any of their subsidiaries is the subject which, if determined
adversely to the Company, the LLC or any of their subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xv) To the Company's knowledge, there has been no storage,
generation, transportation, handling, treatment, disposal, discharge,
emission, or other release of any kind of toxic or other wastes or other
hazardous substances by, due to, or caused by the Company, the LLC or any
of their subsidiaries upon any of the property now or previously owned or
leased by the Company, the LLC or any of their subsidiaries, or upon any
other property, in violation of any statute or any ordinance, rule,
regulation, order, judgment, decree or permit or which would, under any
statute or any ordinance, rule (including rule of common law), regulation,
order judgment, decree or permit, give rise to any liability, except for
any violation or liability which would not individually or in the
aggregate have a Material Adverse Effect; there has been no disposal,
discharge, emission or other release of any kind onto such property or
into the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the Company,
the LLC or any of their subsidiaries has knowledge, except for any such
disposal, discharge, emission, or other release of any kind which would
not individually or in the aggregate have a Material Adverse Effect;
(xvi) Each of the Company, the LLC and their subsidiaries owns or
possesses, or can acquire on reasonable terms, all intellectual property
rights necessary for the conduct of its business as currently carried on
and as currently proposed to be carried on as described in the Prospectus
(collectively, the "Intellectual Property"), except where the failure to
own or possess, or be able to acquire, such Intellectual Property would
not have a Material Adverse Effect; except as described in the Prospectus,
(i) no third parties have received any material rights to any such
Intellectual Property from the Company, the LLC or any of their
subsidiaries, other than licenses granted in the ordinary course of
business; (ii) to the Company's knowledge, there is no infringement by
third parties of any such Intellectual
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Property; (iii) there is no pending or, to the Company's knowledge,
threatened action, suit, proceeding or claim by others challenging the
Company's, the LLC's or any of their subsidiaries' rights in or to, or the
enforceability, validity or scope of, any such Intellectual Property; and
(iv) to the Company's knowledge, none of the technology employed by the
Company, the LLC or any of their subsidiaries has been obtained or is
being used by the Company, the LLC or any of their subsidiaries in
violation of the rights of any other person;
(xvii) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rules 13a-15 and 15d-15 under
the Securities Exchange Act of 1934); such disclosure controls and
procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the Company's
principal executive officer and principal financial officer by others
within those entities, and such disclosure controls and procedures are or
will be effective in all material respects to perform the functions for
which they were established; the Company has taken all necessary actions
to ensure that the Company's auditors and the Audit Committee of the Board
of Directors will be timely advised of (i) any significant deficiencies in
the design or operation of internal controls which could adversely affect
the Company's ability to record, process, summarize, and report financial
data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal controls; and the Company has taken all necessary actions to
ensure that any material weaknesses in internal controls will be
identified for the Company's auditors;
(xviii) The Company has taken all necessary actions to ensure that,
upon and at all times after the effectiveness of the Registration
Statement, it and its directors and officers (in their capacities as such)
will be in compliance in all material respects with all applicable
provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations
promulgated thereunder or implementing the provisions thereof (the
"Sarbanes-Oxley Act") that are then in effect for the Company and is
actively taking steps to ensure that it and its directors and officers (in
their capacities as such) will be in compliance in all material respects
with other applicable provisions of the Sarbanes-Oxley Act not currently
in effect upon and at all times after the effectiveness of such
provisions;
(xix) The Company is and will be in compliance in all material
respects with all applicable corporate governance requirements set forth
in the Listed Company Manual of the Exchange (as defined below) that are
currently in effect and is actively taking steps to ensure that it will be
in compliance with other applicable corporate governance requirements not
currently in effect upon and at all times after the effectiveness of such
requirements;
(xx) The Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company", as such term is
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"); and
(xxi) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the LLC and its subsidiaries, are independent public
accountants, and Ernst & Young LLP, who had certified certain financial
statements of the LLC and its subsidiaries, were independent public
accountants during all relevant periods, as required by the Act and the
rules and regulations of the Commission thereunder.
(b) Each of the Selling Stockholders severally, and not jointly,
represents and warrants to, and agrees with, each of the Underwriters and the
Company that:
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(i) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement
and the Power of Attorney and the Custody Agreement hereinafter referred
to, and for the sale and delivery of the Shares to be sold by such Selling
Stockholder hereunder, have been obtained (except that no representation
or warranty is made with respect to registration under the Act of the
Shares or with respect to any 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, but no implication is intended that such
registration or such consents, approvals, etc. have not been obtained);
and such Selling Stockholder has full right, power and authority to enter
into this Agreement, the Power-of-Attorney and the Custody Agreement and
to sell, assign, transfer and deliver the Shares to be sold by such
Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Power of Attorney and the Custody
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by
which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, other than any conflict,
breach, violation or default that would not, individually or in the
aggregate, affect the validity of the Shares and would not have a Material
Adverse Effect, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws, the Partnership
Agreement, the Operating Agreement or other organizational document, as
applicable, of such Selling Stockholder or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such Selling
Stockholder;
(iii) Upon consummation of the Reorganization, and immediately prior
to each Time of Delivery (as defined in Section 4 hereof), such Selling
Stockholder will have good and valid title to the Shares to be sold by
such 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 several Underwriters;
(iv) During the period beginning from the date hereof and continuing
to and including the date specified in the form of lock-up agreement
attached hereto as Annex IV (the "Lock-Up Period"), not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Shares
or any units of the LLC, 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 or units of
the LLC (in each case, except as permitted by such form of lock-up
agreement), without the prior written consent of Goldman, Sachs & Co. and
J.P. Morgan Securities Inc.;
(v) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares;
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(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 such
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;
(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, such Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof);
(viii) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Stockholder hereunder have been placed in
custody under a Custody Agreement, in the form heretofore furnished to you
(the "Custody Agreement"), duly executed and delivered by such Selling
Stockholder to Mellon Investor Services L.L.C., as custodian (the
"Custodian"), and such Selling Stockholder has duly executed and delivered
a Power of Attorney, in the form heretofore furnished to you (the "Power
of Attorney"), appointing the persons indicated in Schedule II hereto, and
each of them, as such Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement
on behalf of such Selling Stockholder, to determine the purchase price to
be paid by the Underwriters to the Selling Stockholders as provided in
Section 2 hereof, to authorize the delivery of the Shares to be sold by
such Selling Stockholder hereunder and otherwise to act on behalf of such
Selling Stockholder in connection with the transactions contemplated by
this Agreement and the Custody Agreement; and
(ix) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such
Selling Stockholder for such custody, and the appointment by such Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of any individual Selling Stockholder or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or
the termination of such estate or trust, or in the case of a limited
liability company, partnership or corporation, by the dissolution of such
limited liability company, partnership or corporation, or by the
occurrence of any other event; if any individual Selling Stockholder or
any such executor or trustee should die or become incapacitated, or if any
such estate or trust should be terminated, or if any such limited
liability company, partnership or corporation should be dissolved, or if
any other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or
on behalf of the Selling Stockholders in accordance with the terms and
conditions of this Agreement and of the Custody Agreements; and actions
taken by the Attorneys-in-Fact pursuant to the Powers of Attorney shall be
as valid as if such death, incapacity, termination, dissolution or other
event
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had not occurred, regardless of whether or not the Custodian, the
Attorneys-in-Fact, or any of them, shall have received notice of such
death, incapacity, termination, dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Stockholders,
at a purchase price per share of $[ ], the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Shares to be sold by the Company and each of the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and all of the Selling Stockholders hereunder and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, each of the Selling Stockholders agrees,
severally and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, 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 (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a
fraction the numerator of which is the maximum number of Optional Shares which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 2,002,500 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares, provided that
the purchase price per Optional Share shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and payable on
the Firm Shares but not payable on the Optional Shares. Any such election to
purchase Optional Shares shall be made in proportion to the maximum number of
Optional Shares to be sold by each Selling Stockholder as set forth in Schedule
II hereto. Any such election to purchase Optional Shares may be exercised only
by written notice from Goldman, Sachs & Co. and J.P. Morgan Securities Inc. to
the Attorneys-in-Fact, given within a period of 30 calendar days after the date
of this Agreement and setting forth the aggregate number of Optional Shares to
be purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several 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 each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as Goldman, Sachs & Co. may request upon at least forty-eight
hours' prior notice to the Company and the Selling Stockholders shall be
delivered by or on behalf of the Company and the Selling Stockholders to
Goldman, Sachs & Co.,
9
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company and [the Custodian] [each of the Selling
Stockholders], as their interests may appear, to Goldman, Sachs & Co. at least
forty-eight hours in advance. 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][Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004] (the "Designated Office"). The time
and date of such delivery and payment shall be, with respect to the Firm Shares,
9:30 a.m., New York City time, on [ ], 2005 or such other time and date as
Goldman, Sachs & Co., J.P. Morgan Securities Inc., the Company and the Selling
Stockholders may agree upon in writing, and, with respect to the Optional
Shares, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs &
Co. and J.P. Morgan Securities Inc. in the written notice given by Goldman,
Sachs & Co. and J.P. Morgan Securities Inc. of the Underwriters' election to
purchase such Optional Shares, or such other time and date as Goldman, Sachs &
Co., J.P. Morgan Securities Inc., the Company and the Selling Stockholders may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each 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(m) hereof, will be delivered at the offices of Hanson,
Bridgett, Marcus, Vlahos & Rudy, LLP, 333 Market Street, Suite 2100, San
Francisco, California 94105 (the "Closing Location"), and the Shares will be
delivered at the Designated Office, all at such Time of Delivery. A meeting will
be held at the Closing Location at 4:00 p.m., New York City time, on the New
York Business Day next preceding such 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 each of 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 make no
further amendment or any supplement to the Registration Statement or
Prospectus 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 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
10
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 reasonably 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, 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;
(c) Prior to 3:00 p.m., New York City time, on the New York Business
Day next succeeding the date of this Agreement and from time to time, to
furnish the Underwriters with written and electronic copies of the
Prospectus in New York City in such quantities as you may 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 in order to comply with the
Act, to notify you and upon your request to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many written
and electronic 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 written
and electronic 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
through the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to
the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive, 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 the prior written
consent of Goldman, Sachs & Co. and J.P. Morgan Securities Inc.;
11
(f) To furnish to its stockholders as soon as practicable after the
end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' 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), to
make available to its stockholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you and, upon the request from any
other Underwriter, to such Underwriter, copies of all reports or other
communications (financial or other) furnished to stockholders, and to
deliver to you and any such Underwriter (i) 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; and (ii) such additional
non-confidential information concerning the business and financial
condition of the Company as you may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission), but nothing
in this provision shall require delivery of documents that are available
through the EDGAR system of the Commission;
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement in the manner specified in the Prospectus under
the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance,
the Shares on the New York Stock Exchange (the "Exchange");
(j) To file with the Commission such information on Form 10-Q or Form
10-K as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall
file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act; and
(l) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however, that
the License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or transferred.
6. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that: (a) the Company will
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
12
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, 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 (not to exceed $10,000); (iv) all fees and expenses in
connection with listing the Shares on the Exchange; (v) the filing fees incident
to, and the reasonable fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the cost
of preparing stock certificates; (vii) the cost and charges of any transfer
agent or registrar and the fees and expenses of the Attorneys-in-fact and the
Custodian; and (viii) all other costs and expenses incident to the performance
of its obligations hereunder which are not otherwise specifically provided for
in this Section; and (b) such Selling Stockholder will pay or cause to be paid:
(i) any fees and expenses of counsel for such Selling Stockholder (other than
the fees and expenses of Hanson, Bridgett, Marcus, Vlahos & Rudy, LLP, which
shall be paid by the Company), and (ii) all expenses and taxes incident to the
sale and delivery of the Shares to be sold by such Selling Stockholder to the
Underwriters hereunder. In connection with clause (b) of the preceding sentence,
Goldman, Sachs & Co. agrees to pay New York State stock transfer tax, and the
Selling Stockholders agree 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. Notwithstanding any provision to
the contrary herein, the fees and expenses of Schiff Hardin LLP, counsel for ARC
Acquisition Co., LLC, CHS Associates IV and Paige Walsh (collectively, the "CHS
Parties"), shall be paid by the Company. It is understood, however, that except
as provided above, the Company shall bear, and the Selling Stockholders shall
not be required to pay or to reimburse the Company for, the cost of any other
matters not directly relating to the sale and purchase of the Shares pursuant to
this Agreement, and that, except as provided in this Section, and Sections 8 and
11 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, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders 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; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by
10:00 p.m., Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or 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 LLP, counsel for the Underwriters, shall have
furnished to you such written opinion or opinions (a draft of each such
opinion is attached as Annex II (a)
13
hereto), dated such Time of Delivery, with respect to certain 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) Hanson, Bridgett, Marcus, Vlahos, & Rudy LLP, counsel for the
Company, shall have furnished to you their written opinion, dated such
Time of Delivery, in the form attached as Annex II(b)(i) hereto; and (ii)
Orrick, Herrington & Sutcliffe LLP, counsel for the Company, shall have
furnished to you their written opinion, dated such Time of Delivery, in
the form attached as Annex II(b)(ii) hereto;
(d) (i) Schiff Hardin LLP, counsel for the CHS Parties, shall have
furnished to you their written opinion, dated such Time of Delivery, in
the form attached as Annex II(c)(i) hereto; and (ii) the respective
counsel for each of the Selling Stockholders other than the CHS Parties,
as indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel, dated such Time of Delivery, in the form
attached as Annex II(c)(ii) hereto;
(e) (i) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, with respect to certain financial
statements and other financial information contained in the Prospectus
(the executed copy of the letter delivered by PricewaterhouseCoopers LLP
prior to the execution of this Agreement is attached as Annex I(a) hereto
and a draft of the form of letter to be delivered by
PricewaterhouseCoopers LLP on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto); and (ii) on the date of the Prospectus at
a time prior to the execution of this Agreement, Ernst & Young LLP shall
have furnished to you a letter, dated the date of the Prospectus, in form
and substance satisfactory to you, with respect to certain financial
statements and other financial information contained in the Prospectus
(the executed copy of the letter delivered by Ernst & Young LLP prior to
the execution of this Agreement is attached as Annex I(c) hereto);
(f)(i) None of the Company, the LLC nor any of their subsidiaries
shall have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any 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 equity or long-term debt of the Company, the LLC or any of
their subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, securityholders' equity or results of operations of
the Company, the LLC and their subsidiaries, 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 Representatives
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
14
(g) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's or the LLC's debt securities by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act,
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, with possible negative implications, its
rating of any of the Company's or the LLC's debt securities;
(h) 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 Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the Exchange; (iii) a
general moratorium on commercial banking activities declared by either
Federal or New York or California State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
(i) The Shares at such Time of Delivery shall have been duly listed,
subject to notice of issuance, on the Exchange;
(j) The Company has obtained and delivered to the Underwriters
executed copies of an agreement from each director and officer and
securityholders of the LLC who, upon the consummation of the
Reorganization, will own substantially all other shares of the Stock, in
the form of the lock-up agreement included in Annex IV, or otherwise in
form and substance satisfactory to you (each, a "Lock-Up Agreement");
(k) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement;
(l) The Reorganization shall have become effective in all
respects; and
(m) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of
officers of the Company and of the Selling Stockholders, respectively,
satisfactory to you as to the accuracy of the representations and
warranties of the Company and the Selling Stockholders, respectively,
herein at and as of such Time of Delivery, as to the performance by the
Company and the Selling Stockholders of all of their respective
obligations hereunder to be performed at or prior to such 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 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 an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any
15
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, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter 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 any Underwriter through Goldman, Sachs & Co.
expressly for use therein.
(b) Each of the Selling Stockholders, severally, and not jointly, will:
(i) 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 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 relates to such Selling
Stockholder and, further, 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 such Selling Stockholder expressly for use therein; and (ii)
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim to the extent with respect to such written information so
furnished by such Selling Stockholder as such expenses are incurred; provided,
however, that such 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 any Underwriter
through Goldman, Sachs & Co. expressly for use therein; and provided, further,
that the liability of each such Selling Stockholder shall not exceed the product
of the number of Shares sold by such Selling Stockholder (including any Optional
Shares) and the purchase price per share set forth in Section 2 of this
Agreement.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such 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 such
Underwriter through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
16
expenses reasonably incurred by the Company or such 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 reasonably 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 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. 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 Company and the Selling Stockholders 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 the Selling Stockholders 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 Company and the Selling Stockholders 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 Company and the Selling Stockholders 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
Stockholders 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
17
statement or omission. The Company, each of the Selling Stockholders 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 (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this 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), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations 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 Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 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 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 any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of
18
Delivery, then the Company and the Selling Stockholders shall have the right to
require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
for the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
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 any Underwriter or any controlling person of any
Underwriter, or the Company or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6 and 8 hereof; but,
if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company 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 not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. and J.P. Morgan Securities Inc.
on behalf of you as the Representatives; and in all dealings with any Selling
Stockholder hereunder, you and the Company shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of such Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for such
Selling Stockholder.
19
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 as the Representatives in care of Goldman, Sachs &
Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department, and J.P. Morgan Securities Inc., 277 Park Avenue, New York, New York
10172, Attention: Syndicate Desk; if to any Selling Stockholder shall be
delivered or sent by mail, telex or facsimile transmission to counsel for such
Selling Stockholder at its address set forth in Schedule II hereto; 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 Registration Statement, Attention:
Secretary; and if to the signatory to any Lock-Up Agreement shall be delivered
or sent by mail, telex or facsimile transmission in care of the Company to the
address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(d) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its Underwriters'
Questionnaire or telex constituting such Questionnaire, which address will be
supplied to the Company or the Selling Stockholders by you on request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, 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.
14. 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.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. 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.
17. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
20
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
American Reprographics Company
By:...................................
Name:
Title:
Each of the Selling Stockholders
other than the CHS Parties
By:...................................
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the above
Selling Stockholders
ARC Acquisition Co., L.L.C.
CHS Associates IV
Paige Walsh
By:...................................
Name:
Title:
As Attorney-in-Fact acting on
behalf of each of the CHS
Parties
Accepted as of the date hereof at New York, New York:
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Credit Suisse First Boston LLC
Robert W. Baird & Co. Incorporated
CIBC World Markets Corp.
By:.....................................
(Goldman, Sachs & Co.)
21
By: J.P. Morgan Securities Inc.
By:.....................................
Name:
Title:
On behalf of each of the Underwriters
22
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
Goldman, Sachs & Co........................
J.P. Morgan Securities Inc.................
Credit Suisse First Boston LLC.............
Robert W. Baird & Co. Incorporated.........
CIBC World Markets Corp....................
---------- ---------
Total................................ 13,350,000 2,002,500
========== =========
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SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
---------- ---------
The Company.................................... 7,666,667
The Selling Stockholders:
ARC Acquisition Co., L.L.C.(a).............
Micro Device, Inc. (b).....................
William Thomas (b).........................
OCB Reprographics, Inc. (b)................
Sathiyamurthy Chandramohan (b).............
Kumarakulasingam Suriyakumar (b)...........
Rahul K. Roy (b)...........................
Mark W. Legg (b)...........................
Brownies Blueprint, Inc. (b)...............
Dietrich-Post Company (b)..................
Color Expressions of California, Inc. (b)..
Ted Carlson (b)............................
Steve Gilmore (b)..........................
Patrick Duggan (b).........................
Richard Nelson (b).........................
Ken Gini (b)...............................
Jack Anderson (b)..........................
Janine Brandel (b).........................
John Coats (b).............................
Johann De Abeyesinhe (b)...................
David Dodge (b)............................
Trevor Fernando (b)........................
Dan Hagan (b)..............................
Doug McCrae (b)............................
Monita Sarthou (b).........................
Virgilio Sim (b)...........................
Noel Van Langenberg (b)....................
Laurie Williams (b)........................
CHS Associates IV, L.P. (a)................
Karl Winkelman (b).........................
Paige Walsh (a)............................
---------- ---------
Total.................................... 13,350,000 2,002,500
========== =========
- ---------
(a) This Selling Stockholder is represented by Schiff Hardin LLP and has
appointed Mr. Thomas J. Formolo and Mr. Marcus J. George, and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
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(b) This Selling Stockholder is represented by Hanson, Bridgett, Marcus, Vlahos
& Rudy, LLP and has appointed Mr. Sathiyamurthy ("Mohan") Chandramohan and Mr.
Kumarakulasingam ("Suri") Suriyakumar, and each of them, as the
Attorneys-in-Fact for such Selling Stockholder.
25