SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 2)
Under the Securities Exchange Act of 1934
OfficeMax, Inc.
(Name of Issuer)
Common Shares, without par value
(Title of Class of Securities)
67622M 10 8
(CUSIP Number)
Nancie W. LaDuke
Kmart Corporation, International Headquarters
3100 West Big Beaver Road
Troy, MI 48084-3163
(810) 643-1792
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
July 25, 1995
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the
subject of this Schedule 13D and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check the following
box: ( ).
Check the following box if a fee is being paid with the
statement: ( ).
(A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial
ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial
ownership of five percent or less of such class.) (See
Rule 13d-7.)
Schedule 13D
CUSIP No. 67622M 10 8
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Kmart Corporation; I.R.S. Identification No. 38-0729500
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) ( )
(b) ( )
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
Not applicable.
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ( )
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
(7) SOLE VOTING POWER
39,507(1)
(8) SHARED VOTING POWER
None
NUMBER OF
SHARES (9) SOLE DISPOSITIVE POWER
BENEFICIALLY 39,507(1)
OWNED BY
EACH REPORTING (10) SHARED DISPOSITIVE POWER
PERSON None
WITH
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
39,507(1)
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
( )
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
Less than 1%.
(14) TYPE OF REPORTING PERSON
CO
(1) All such shares are subject to the terms of
the Intercompany Agreement, dated November 9,
1994 by and between the Company and Kmart.
This Amendment No. 2 to a statement on
Schedule 13D filed by Kmart Corporation, a Michigan
corporation ("Kmart"), relates to the common shares,
without par value (the "Common Shares"), of OfficeMax,
Inc., an Ohio corporation (the "Company"). Unless
otherwise indicated, information in this Amendment No.
2 has been adjusted to reflect a 3-for-2 split of the
Common Shares effected in the form of a dividend paid
on July 12, 1995 (the "Share Split").
Item 2. Identity and Background.
Item 2 is hereby amended by restating
Schedule I in its entirety as attached hereto and
incorporated herein by reference.
Item 4. Purpose of Transaction.
Item 4 is hereby amended in its entirety to
read as follows:
On July 25, 1995, Kmart completed the sale of
18,803,526 Common Shares to a syndicate of underwriters
represented by Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co. Incorporated, Dean
Witter Reynolds Inc., McDonald & Company Securities,
Inc., William Blair & Company, Morgan Stanley & Co.
International Limited and Dean Witter International
Ltd. (the "Disposition").
As a result of the Disposition, Kmart owns
39,507 Common Shares. Under the terms of the
Intercompany Agreement dated as of November 9, 1994
(the "Intercompany Agreement"), between the Company and
Kmart, all of such remaining Common Shares are issuable
to certain employees of the Company upon the exercise
of options granted by the Company under Option
Cancellation and Amendment Agreements, dated as of
November 15, 1991, between the Company and each of such
employees (the "Option Agreements"). Such shares are
held by the Company's transfer agent pending exercise
of options which expire in 1998 and which have an
exercise price of $6.01 per share.
Except as disclosed above, Kmart does not
have any plans or proposals which relate to or would
result in any of the matters described in paragraphs
(a) through (j) of Item 4 of Schedule 13D.
Item 5. Interests in Securities of the Issuer.
Item 5(a) is hereby amended in its entirety
to read as follows:
(a) Kmart owns beneficially and of
record 39,507 Common Shares representing less than 1%
of the total number of Common Shares outstanding. Such
shares are required to be delivered to the Company,
pursuant to the terms of the Intercompany Agreement,
upon exercise of options granted by the Company to
certain employees under the Option Agreements. Except
as set forth in Schedule II hereto, which Schedule is
incorporated herein by reference, to the knowledge of
Kmart, no executive officer or director of Kmart
beneficially owns any Common Shares.
Item 5(b) is hereby amended in its entirety
to read as follows:
(b) Kmart has the sole power to vote,
or to direct the vote, and the sole power to dispose
of, or to direct the disposition of, all 39,507 Common
Shares beneficially owned by it.
Item 5(c) is hereby amended to add the
following:
On July 25, 1995, Kmart completed the sale of
18,803,526 Common Shares to a syndicate of underwriters
represented by Donaldson, Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co. Incorporated, Dean
Witter Reynolds Inc., McDonald & Company Securities,
Inc., William Blair & Company, Morgan Stanley & Co.
International Limited and Dean Witter International
Ltd. at a price of $19.155 per share.
Item 5(e) is hereby added read as as follows:
As a result of the Disposition, on July 25,
1995, Kmart ceased to beneficially own in excess of 5%
of the Common Shares.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of
the Issuer.
Item 6 is hereby amended to add the following:
In connection with the Disposition, Kmart
entered into the Underwriting Agreement, dated July 19,
1995, by and among Kmart, the Company, Donaldson,
Lufkin & Jenrette Securities Corporation, Morgan
Stanley & Co., Dean Witter Reynolds, Inc., McDonald &
Company Securities, Inc., William Blair & Company,
Morgan Stanley & Co. International Limited and Dean
Witter International Ltd. (the "Underwriting
Agreement"). The Underwriting Agreement provided,
among other things, for sale by Kmart of 18,803,526
Common Shares to the underwriters named therein at a
price of $19.155, which represented an underwriting
discount of $.72 per share.
Item 7. Material to be Filed as Exhibits.
Exhibit No. Description
11 Underwriting Agreement, dated July
19, 1995, by and among OfficeMax,
Inc., Kmart Corporation, Donaldson,
Lufkin & Jenrette Securities
Corporation, Morgan Stanley & Co.
Incorporated, Dean Witter Reynolds,
Inc., McDonald & Company
Securities, Inc., William Blair &
Company, Morgan Stanley & Co.
International Limited and Dean
Witter International Ltd.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information
set forth in this statement is true, complete and
correct.
KMART CORPORATION
By: /s/ Nancie W. LaDuke
Nancie W. LaDuke
Vice President and
Secretary
Dated: July 28, 1995
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
KMART CORPORATION
The names, business addresses and present principal
occupations of the directors and executive officers of Kmart
are set forth below. If no business address is given, the
director's or officer's business address is 3100 West Big
Beaver Road, Troy, Michigan 48084. The business address of
each of the directors of Kmart is also the business address of
such director's employer, if any. All directors and officers
listed below are citizens of the United States.
Kmart Directors:
Names and Business Present Principal
Addresses Occupation of Employment
Lilyan H. Affinito Former Vice Chairman of the
599 Lexington Avenue, 23rd Fl. Board of Maxxam Group, Inc.
New York, NY 10022
Floyd Hall Chairman of the Board,
3100 West Big Beaver Road President and Chief Executive
Troy, MI 48084 Officer of Kmart Corporation
Joseph A. Califano, Jr. Chairman and President of Center on
152 West 57th Street, Addiction and Substance Abuse
12th Fl. at Columbia University
New York, NY 10019
Richard G. Cline Chairman and Chief Executive Officer
1844 Ferry Road of NICOR, Inc.
Naperville, IL 60563-9600
Willie D. Davis President of All Pro Broadcasting,
161 North LaBrea Avenue Inc.
Inglewood, CA 90301
Enrique C. Falla Executive Vice President and Chief
2030 Dow Center Financial Officer of The Dow
Midland, MI 48674 Chemical Company
Joseph P. Flannery Chairman of the Board, President and
70 Great Hill Road Chief Executive Office of Uniroyal
Naugatuck, CT 06770 Holding, Inc.
David B. Harper President of David B. Harper
Management Co., Inc.
F. James McDonald Retired President and Chief Operating
Officer of General Motors
Corporation
J. Richard Munro Chairman of the Executive Committee of
300 First Stamford Place Time Warner Inc.
Stamford, CT 06902
Donald S. Perkins Retired Chairman of the Board of Jewel
100 North Riverside Plaza Companies, Inc.
Suite 1700
Chicago, IL 60606
Lawrence Perlman Chairman & Chief Executive Officer of
8100 34th Avenue South Ceridian Corporation
Minneapolis, MN 56425-1640
Gloria M. Shatto President, Berry College
610 Mount Berry Station
Mount Berry, GA 30149
James O. Welch, Jr Retired Vice Chairman, RJR Nabisco,
200 Dr. Forest Avenue Inc./Chairman, Nabisco Brands, Inc.
East Hanover, NJ 07936
Kmart Officers:
F. Hall Chairman, President and Chief
Executive Officer
C. Chinni Executive Vice President,
Merchandising
R.J. Floto Executive Vice President and
President, Super Kmart Centers
D.W. Keeble Executive Vice President, Store
Operations
T.F. Murasky Executive Vice President and Chief
Financial Officer
A.N. Palizzi Executive Vice President, General
Counsel
M.P. Rich Executive Vice President, Strategic
Planning, Finance and Administration
K.W. Watson Executive Vice President, Marketing
and Product Development
F.M. Comins, Jr. Senior Vice President, Executive and
Organization Resources
P.J. Hueber Senior Vice President, Sales and
Operations
A.R. Mauro Senior Vice President, Distribution
and Transportation
V.G. Rago Senior Vice President, Chief
Information Officer
M.L. Skiles Senior Vice President, Corporate
Facilities
W.D. Underwood Senior Vice President, Vender and
Product Development
T.W. Watkins Senior Vice President, International
Retailing
D.V. Carter Vice President, Food, Super Kmart
Centers
J.P. Churilla Vice President and Treasurer
J.E. Ford Vice President, Eastern Region
M. Fortune Vice President, General Merchandise
Manager - Womens Apparel and Fashion
Accessories
A.A. Giancamilli Vice President, General Merchandise
Manager - Consumables and
Commodities
G.W. Gryson, Jr. Vice President, Midwestern Region
G.K. Habeck Vice President, Advertising
S.M. Kahle Vice President, Corporate Affairs
C.B. Kearse Vice President, General Merchandise
Manager - Mens and Childrens
N.W. LaDuke Vice President and Secretary
M.T. Macik Vice President, Human Resources --
U.S. Kmart Stores
D.R. Marsico Vice President, Super Kmart Centers
D.M. Meissner Vice President, Western Region
T.M. Nielsen Vice President, Human Resources --
International
P.J. Palmer Vice President, Labor Relations and
Assistant General Counsel
W.H. Parker Vice President and General Merchandise
Manager - Home Decor
S.M. Szymanski Vice President, Accounting and Finance
J.S. Valenti Vice President, Southern Region
SCHEDULE II
COMMON SHARES BENEFICIALLY OWNED
BY THE DIRECTORS AND EXECUTIVE
OFFICERS OF KMART CORPORATION
The name of each Kmart director and executive
officer who beneficially owns Common Shares and the
number of Common Shares such director or executive
officer beneficially owns are set forth below. To the
knowledge of Kmart, the directors and executive officers
named below have sole voting and investment power with
respect to all shares beneficially owned by them. None
of the directors or executive officers set forth below
owns 1% or more of the Common Shares outstanding.
Number of Common
Names Shares Beneficially Owned
Kmart Directors:
Lilyan M. Affinito 1,500
Enrique C. Falla 1,500
P. James McDonald 4,500
Gloria M. Shatto 750
Kmart Officers:
T.F. Murasky 7,500
A.N. Palizzi 16,396
F.M. Comins, Jr. 1,350
T.W. Watkins 3,000
J.E. Ford 300
D.R. Marsico 150
EXHIBIT INDEX
Exhibit Number Description
11 Underwriting Agreement, dated July 19, 1995, by and
among OfficeMax, Inc., Kmart Corporation, Donaldson,
Lufkin & Jenrette Securities Corporation, Morgan
Stanley & Co. Incorporated, Dean Witter Reynolds,
Inc., McDonald & Company Securities, Inc., William
Blair & company, Morgan Stanley & Co. International
Limited and Dean Witter International Ltd.
21,352,500 Shares
OFFICEMAX, INC.
Common Shares
UNDERWRITING AGREEMENT
July 19, 1995
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
DEAN WITTER REYNOLDS INC.
McDONALD & COMPANY SECURITIES, INC.
WILLIAM BLAIR & COMPANY
As representatives of the
several U.S. underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
DEAN WITTER INTERNATIONAL LTD.
McDONALD & COMPANY SECURITIES, INC.
WILLIAM BLAIR & COMPANY
As representatives of the
several international
managers named in Schedule
II hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
Jupiter House
Trinton Court
14 Finsbury Square
London EC2A 1BR, England
Dear Sirs and Mesdames:
OfficeMax, Inc., an Ohio corporation (the
"Company"), proposes to issue and sell to the several
Underwriters (as defined below) an aggregate of 2,548,974
of its Common Shares, without par value ("Common
Shares"), and Kmart Corporation, a Michigan corporation
(the "Selling Shareholder"), proposes to sell to the
several Underwriters an aggregate of 18,803,526 Common
Shares. The 2,548,974 Common Shares to be issued and
sold by the Company are hereinafter called the Company
Shares. The 18,803,526 Common Shares to be sold by the
Selling Shareholder are hereinafter called the
Shareholder Shares. The Company Shares and the
Shareholder Shares are hereinafter called the Firm
Shares.
It is understood that, subject to the
conditions hereinafter stated, 2,039,180 Company Shares
(the "U.S. Company Shares") and 15,042,820 Shareholder
Shares (the "U.S. Shareholder Shares," and together with
the U.S. Company Shares, the "U.S. Firm Shares") will be
sold to the several U.S. Underwriters named in Schedule I
hereto (the "U.S. Underwriters") in connection with the
offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons
(as such terms are defined in the Agreement Between U.S.
Underwriters and International Managers of even date
herewith), and 509,794 Company Shares (the "International
Company Shares") and 3,760,706 Shareholder Shares (the
"International Shareholder Shares," and together with the
International Company Shares, the "International Shares")
will be sold to the several International Managers named
in Schedule II hereto (the "International Managers") in
connection with the offering and sale of such
International Shares outside the United States and Canada
to persons other than United States and Canadian Persons.
Donaldson, Lufkin & Jenrette Securities Corporation,
Morgan Stanley & Co. Incorporated, Dean Witter Reynolds
Inc., McDonald & Company Securities, Inc., and William
Blair & Company shall act as representatives (the "U.S.
Representatives") of the several U.S. Underwriters, and
Donaldson Lufkin & Jenrette Securities Corporation,
Morgan Stanley & Co. International Limited, Dean Witter
International Ltd., McDonald & Company Securities, Inc.,
and William Blair & Company shall act as representatives
(the "International Representatives") of the several
International Managers. The U.S. Underwriters and the
International Managers are hereinafter collectively
referred to as the Underwriters.
The Company also proposes to sell to the
several U.S. Underwriters not more than an additional
3,202,875 Common Shares (the "Additional Shares"), if
requested by the U.S. Underwriters as provided in Section
2 hereof. The Firm Shares and the Additional Shares are
herein collectively called the Shares. The Company and
the Selling Shareholder are hereinafter collectively
referred to as the Sellers.
1. Registration Statement and Prospectus.
The Company has prepared and filed with the Securities
and Exchange Commission (the "Commission") in accordance
with the provisions of the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
thereunder (collectively called the "Act"), a
registration statement on Form S-1 (File No. 33-93890)
including a prospectus relating to the Shares, which may
be amended. The registration statement contains two
prospectuses to be used in connection with the offering
and sale of the Shares: the U.S. prospectus, to be used
in connection with the offering and sale of Shares in the
United States and Canada to United States and Canadian
Persons, and the international prospectus, to be used in
connection with the offering and sale of Shares outside
the United States and Canada to persons other than United
States and Canadian Persons. The international
prospectus is identical to the U.S. prospectus except for
the outside front and back cover pages and the
"Underwriting" sections. If the Company has elected not
to rely on Rule 430A under the Act, the Company will
prepare and promptly file an amendment to the
registration statement containing amended prospectuses
or, if the Company has elected to rely on Rule 430A, it
will prepare and timely file prospectuses pursuant to
Rule 424(b) under the Act that disclose the information
previously omitted from the prospectus in reliance on
Rule 430A. The registration statement as amended at the
time when it becomes effective, including a registration
statement (if any) filed pursuant to Rule 462(b) under
the Act increasing the size of offering registered under
the Act, including information (if any) deemed to be part
of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 434 under the
Act, is hereinafter referred to as the Registration
Statement; and the U.S. prospectus and the international
prospectus (including any prospectus subject to
completion meeting the requirements of Rule 434(b) under
the Act provided by the Company with any term sheet
meeting the requirements of Rule 434(b) as the prospectus
provided to meet the requirements of Section 10(a) of the
Act) in the respective forms first used to confirm sales
of Shares are hereinafter referred to as the Prospectus.
2. Agreements to Sell and Purchase. The
Company hereby agrees to issue and sell the U.S. Company
Shares, and the Selling Shareholder hereby agrees to sell
the U.S. Shareholder Shares, to the several U.S.
Underwriters, and each of the U.S. Underwriters, upon the
basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions,
agrees, severally and not jointly, to purchase from the
Company and the Selling Shareholder at a price per share
of $19.155 (the "Purchase Price"), the respective number
of U.S. Company Shares and U.S. Shareholder Shares set
forth in Schedule I hereto opposite the name of such U.S.
Underwriter.
The Company hereby agrees to issue and sell the
International Company Shares, and the Selling Shareholder
hereby agrees to sell the International Shareholder
Shares, to the International Managers named in Schedule
II hereto, and each of the International Managers, upon
the basis of the representations and warranties contained
in this Agreement, and subject to its terms and
conditions, agrees, severally and not jointly, to
purchase from the Company and the Selling Shareholder at
the Purchase Price the respective number of International
Company Shares and International Shareholder Shares set
forth opposite the name of such International Manager in
Schedule II hereto.
On the basis of the representations and
warranties contained in this Agreement, and subject to
its terms and conditions, the Company agrees to sell to
the U.S. Underwriters the Additional Shares and the U.S.
Underwriters shall have the right to purchase, severally
and not jointly, up to 3,202,875 Additional Shares from
the Company at the Purchase Price. Additional Shares may
be purchased solely for the purpose of covering
over-allotments made in connection with the offering of
the Firm Shares. The U.S. Underwriters may exercise
their right to purchase Additional Shares in whole or in
part from time to time by giving written notice thereof
to the Company within 30 days after the date of the is
Agreement. The U.S. Representatives shall give any such
notice on behalf of the U.S. Underwriters and such notice
shall specify the aggregate number of Additional Shares
to be purchased pursuant to such exercise and the date
for payment and delivery thereof. The date specified in
any such notice shall be a business day (i) no earlier
than the Closing Date (as hereinafter defined), (ii) no
later than ten business days after such notice has been
given and (iii) no earlier than two business days after
such notice has been given. If any Additional Shares are
to be purchased, each U.S. Underwriter, severally and not
jointly, agrees to purchase from the Company the number
of Additional Shares (subject to such adjustments to
eliminate fractional shares as the U.S. Representatives
may determine) which bears the same proportion to the
total number of Additional Shares to be purchased from
the Company as the number of U.S. Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears
to the total number of U.S. Firm Shares.
The Selling Shareholder hereby agrees not to
offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any common shares of
the Company or any securities convertible into or
exercisable or exchangeable for such common shares or in
any other manner transfer all or a portion of the
economic consequences associated with the ownership of
any such common shares, except to the Underwriters
pursuant to this Agreement, for a period of 120 days
after the date of the Prospectus without the prior
written consent of Donaldson, Lufkin & Jenrette
Securities Corporation. Notwithstanding the foregoing,
during that period the Selling Shareholder may (i) sell
or transfer Common Shares or any securities convertible
into or exercisable or exchangeable for Common Shares
held by it to any person in a transaction not involving a
public offering, provided that as a condition to that
sale or transfer that purchaser or transferee, as
applicable, agrees to be bound by the limitations
described in the first sentence of this paragraph, and
(ii) sell Common Shares to persons exercising options
granted pursuant to the Company's 1988 Share Option
Agreements. The Company hereby agrees, and the Company
shall concurrently with the execution of this Agreement
deliver an agreement executed by Michael Feuer pursuant
to which he agrees, not to offer, sell, contract to sell,
grant any option to purchase or otherwise dispose of any
common shares of the Company or any securities
convertible into or exercisable or exchangeable for such
common shares or in any other manner transfer all or a
portion of the economic consequences associated with the
ownership of any such common shares, for a period of 90
days (in the case of the Company) or 180 days (in the
case of Mr. Feuer) after the date of the Prospectus
without the prior written consent of Donaldson, Lufkin &
Jenrette Securities Corporation. Notwithstanding the
foregoing, during such period (i) the Company may issue,
offer, sell, contract to sell or otherwise dispose of
Common Shares or grant share options pursuant to any of
the Company's director compensation or employee benefit
plans that are described in the Company's November 2,
1994 prospectus and in effect as of the Closing Date,
(ii) the Company may issue its Common Shares upon the
exercise of an option or warrant or the conversion of a
security outstanding on the date hereof, and (iii) Mr.
Feuer may sell or transfer Common Shares or any
securities convertible into or exercisable or
exchangeable for Common Shares held by him to any person
in a transaction not involving a public offering,
provided that as a condition to that sale or transfer
that purchaser or transferee, as applicable, agrees to be
bound by the limitations described in the immediately
preceding sentence.
3. Terms of Public Offering. The Sellers are
advised by you that the Underwriters propose (i) to make
a public offering of their respective portions of the
Shares as soon after the effective date of the
Registration Statement as in your judgment is advisable
and (ii) initially to offer the Shares upon the terms set
forth in the Prospectus. Any allocation of the Shares
described in the Prospectus as having been reserved for
sale to certain individuals, including employees of the
Company and the Selling Shareholder and members of their
families, shall be made in accordance with timely
instructions jointly delivered by the Company and the
Selling Shareholder to Donaldson, Lufkin & Jenrette
Securities Corporation.
Each U.S. Underwriter hereby makes to and with
the Sellers the representations and agreements of such
U.S. Underwriter contained in the fifth paragraph of
Section 3 of the Agreement Between U.S. Underwriters and
International Managers of even date herewith, attached
hereto as Annex I and incorporated herein by reference.
Each International Manager hereby makes to and with the
Sellers the representations and agreements of such
International Manager contained in the seventh, eighth,
ninth and tenth paragraphs of Section 3 of such
Agreement, attached hereto as Annex II and incorporated
herein by reference.
4. Delivery and Payment. Delivery to the
Underwriters of and payment for the Firm Shares shall be
made at 10:00 A.M., New York City time, on the third or
fourth business day, unless otherwise permitted by the
Commission pursuant to Rule 15c6-1 of the Securities
Exchange Act of 1934 ("Exchange Act")(the "Closing Date")
following the date of the initial public offering, at
such place as the U.S. Representatives, the Company and
the Selling Shareholder shall agree. The Closing Date
and the location of delivery of and the form of payment
for the Firm Shares may be varied by agreement between
you and the Company.
Delivery to the Underwriters of and payment for
any Additional Shares to be purchased by the Underwriters
shall be made at such place as the U.S. Representatives
and the Company shall agree at 10:00 A.M., New York City
time, on the date specified in the applicable exercise
notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the
location of delivery of and the form of payment for such
Additional Shares may be varied by agreement between the
U.S. Representatives and the Company.
Certificates for the Shares shall be registered
in such names and issued in such denominations as you
shall request in writing not later than two full business
days prior to the Closing Date or an Option Closing Date,
as the case may be. Such certificates shall be made
available to you for inspection not later than 9:30 A.M.,
New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case
may be. Certificates in definitive form evidencing the
Shares shall be delivered to you on the Closing Date or
an Option Closing Date, as the case may be, with any
transfer taxes thereon duly paid by the respective
Sellers, for the respective accounts of the several
Underwriters, against payment of the Purchase Price
therefor by certified or official bank checks payable in
New York Clearing House funds to the order of the
applicable Seller.
5. Agreements of the Company. The Company
agrees with you:
(a) If the registration statement has not
become effective prior to the time of execution of
this Agreement, to use its best efforts to cause the
registration statement, and any amendments thereof,
to become effective and, if a filing under Rule
424(b) under the Act is required, to cause the
Prospectus to be filed, or transmitted for filing,
with the Commission pursuant to Rule 424(b).
(b) To advise you promptly and, if requested
by you, to confirm such advice in writing, (i) when
the Registration Statement has become effective and
when any post-effective amendment to it becomes
effective, (ii) of any request by the Commission for
amendments to the Registration Statement or
amendments or supplements to the Prospectus or for
additional information, (iii) of the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement or of
the suspension of qualification of the Shares for
offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, and
(iv) of the happening of any event during the period
referred to in paragraph (e) below which makes any
statement of a material fact made in the
Registration Statement or the Prospectus untrue or
which requires the making of any additions to or
changes in the Registration Statement or the
Prospectus in order to make the statements therein
not misleading (in the case of the Prospectus, in
the light of the circumstances when it is to be
delivered to a purchaser). If at any time the
Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the
Company will make every reasonable effort to obtain
the withdrawal or lifting of such order at the
earliest possible time.
(c) To furnish to you, without charge, six
signed copies of the Registration Statement as first
filed with the Commission and of each amendment to
it, including all exhibits, and to furnish to you
and each Underwriter designated by you such number
of conformed copies of the Registration Statement as
so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to
the Registration Statement, whether before or after
the time when it becomes effective, or to make any
amendment or supplement to the Prospectus (including
the issuance of any term sheet within the meaning of
Rule 434) of which you shall not previously have
been advised or to which you shall reasonably
object; and to prepare and file with the Commission,
promptly upon your reasonable request, any amendment
to the Registration Statement or supplement to the
Prospectus (including the issuance of any term sheet
within the meaning of Rule 434) which may be
necessary or advisable in connection with the
distribution of the Shares by you, and to use its
best efforts to cause the same to become promptly
effective.
(e) Promptly after the Registration Statement
becomes effective, and from time to time thereafter
for such period prior to the expiration of nine
months after the date of the Prospectus as in the
opinion of counsel for the Underwriters a prospectus
is required by law to be delivered in connection
with sales by an Underwriter or a dealer, to furnish
to each Underwriter and dealer as many copies of the
Prospectus (and of any amendment or supplement to
the Prospectus) as such Underwriter or dealer may
reasonably request.
(f) If during the period specified in
paragraph (e) any event shall occur as a result of
which, in the opinion of counsel for the
Underwriters it becomes necessary to amend or
supplement the Prospectus in order to make the
statements therein, in the light of the
circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with
any law, forthwith to prepare and file with the
Commission an appropriate amendment or supplement to
the Prospectus so that the statements in the
Prospectus, as so amended or supplemented, will not
in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus
will comply with law, and to furnish to each
Underwriter and to such dealers as you shall
specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(g) Prior to any public offering of the
Shares, to cooperate with you and counsel for the
Underwriters in connection with the registration or
qualification of the Shares for offer and sale by
the several Underwriters and by dealers under the
state securities or Blue Sky laws of such
jurisdictions as you may request, to continue such
qualification in effect so long as required for
distribution of the Shares and to file such consents
to service of process or other documents as may be
necessary in order to effect such registration or
qualification; provided, that the Company shall not
be required to register or qualify as a foreign
corporation or as a dealer in securities where it is
not now so qualified or to file a general consent to
service of process or take any other action which
would subject it to the service of process in suits
or to taxation, other than as to matters and
transactions relating to the offer and sale of the
Shares in each jurisdiction in which the Shares have
been qualified as provided above.
(h) To make generally available to its
shareholders (within the meaning of Section 11(a) of
the Act and Rule 158 thereunder) as soon as
reasonably practicable an earnings statement
covering a period of at least twelve months after
the effective date of the Registration Statement
(but in no event commencing later than 90 days after
such date) which shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(i) During the period of three years after the
date of this Agreement, (i) to mail as soon as
reasonably practicable after the end of each fiscal
year to the record holders of its Common Shares a
financial report of the Company and its subsidiaries
on a consolidated basis, such financial reports to
include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of
cash flows and a consolidated statement of
shareholders' equity as of the end of and for such
fiscal year, together with comparable information as
of the end of and for the preceding year, audited by
independent certified public accountants, and (ii)
to mail and make generally available as soon as
reasonably practicable after the end of each
quarterly period (except for the last quarterly
period of each fiscal year) to such holders, a
condensed consolidated balance sheet, a condensed
consolidated statement of operations and a condensed
consolidated statement of cash flows as of the end
of and for such period, and for the period from the
beginning of such year to the close of such
quarterly period, together with comparable
information for the corresponding periods of the
preceding year.
(j) During the period referred to in paragraph
(i), to furnish to you as soon as available a copy
of each report or other publicly available
information of the Company mailed to the holders of
Common Shares or filed with the Commission and such
other publicly available information concerning the
Company and its subsidiaries as you may reasonably
request.
(k) To use its best efforts to have the Common
Shares approved for listing on The New York Stock
Exchange and to consult with Donaldson, Lufkin &
Jenrette Securities Corporation prior to making any
decision to discontinue that listing at any time
within five years after the effective date of the
Registration Statement.
(l) To use its best efforts to do and perform
all things required or necessary to be done and
performed under this Agreement by the Company prior
to the Closing Date or any Option Closing Date, as
the case may be, and to satisfy all conditions
precedent to the delivery of the Shares.
(m) To immediately notify you of any change in
the information referred to in paragraph 7(f) below,
at any time during the period described in paragraph
5(e) hereof.
6. Representations and Warranties of the
Company. The Company represents and warrants to each
Underwriter that:
(a) No stop order suspending the effectiveness
of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or,
to the knowledge of the Company, threatened by the
Commission.
(b) (i) Each part of the Registration
Statement, when such part became effective (or, if
the registration statement is not effective at the
time of execution of this Agreement, when it becomes
effective), did not contain (or will not contain, as
the case may be) and each such part, as hereafter
amended or supplemented, if applicable, will not
contain, any 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, (ii) the Registration Statement and
the Prospectus comply (or, if the registration
statement is not effective at the time of execution
of this Agreement, when the Registration Statement
becomes effective the Registration Statement will
comply) and, as hereafter amended or supplemented,
if applicable, will comply, in all material respects
with the Act and (iii) the Prospectus does not
contain and, as hereafter amended or supplemented,
if applicable, will not contain, any untrue
statement of a material fact or omit to state a
material fact necessary to make the statements
therein, in the light of the circumstances under
which they were made, not misleading, except that
the representations and warranties set forth in this
paragraph (b) do not apply to statements or
omissions in the Registration Statement or the
Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by
or on behalf of such Underwriter through you
expressly for use therein.
(c) Any term sheet and prospectus subject to
completion provided by the Company to the
Underwriters for use in connection with the offering
and sale of the Shares pursuant to Rule 434 under
the Act together are not materially different from
the prospectus included in the Registration
Statement.
(d) Each preliminary prospectus filed as part
of the registration statement as originally filed or
as part of any amendment thereto, or filed pursuant
to Rule 424 under the Act, and each registration
statement filed pursuant to Rule 462(b) under the
Act, if any, complied when so filed in all material
respects with the Act; 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, except that the
representations and warranties set forth in this
paragraph (c) do not apply to statements and
omissions in any preliminary prospectus based upon
information relating to any Underwriter furnished to
the Company in writing by or on behalf of any
Underwriter through you expressly for use therein.
(e) The Company and each of its subsidiaries
has been duly incorporated, is validly existing as a
corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate
power and authority to carry on its business as it
is currently being conducted and to own, lease and
operate its properties, and each is duly qualified
and is in good standing as a foreign corporation
authorized to do business in each jurisdiction in
which the nature of its business or its ownership or
leasing of property requires such qualification,
except where the failure to be so qualified or to be
in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as
a whole.
(f) Except as otherwise set forth in the
Prospectus, all of the outstanding capital stock or
shares of, and any other ownership interests in,
each of the Company's subsidiaries, are owned by the
Company, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any
nature.
(g) All the outstanding capital shares of the
Company (including the Shares to be sold by the
Selling Shareholder) have been duly authorized and
validly issued and are fully paid, non-assessable
and not subject to any preemptive or similar rights;
and the Shares to be issued and sold by the Company
hereunder have been duly authorized and, when issued
and delivered to the Underwriters against payment
therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and
the issuance of such Shares will not be subject to
any preemptive or similar rights.
(h) The authorized capital shares of the
Company, including the Common Shares, conform as to
legal matters to the description thereof contained
in the Prospectus.
(i) Neither the Company nor any of its
subsidiaries is in violation of its respective
charter, by-laws or regulations or in default in the
performance of any obligation, agreement or
condition contained in any bond, debenture, note or
any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the
conduct of the business of the Company and its
subsidiaries, taken as a whole, to which the Company
or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective
property is bound.
(j) The execution, delivery and performance of
this Agreement, compliance by the Company with all
the provisions hereof and the consummation of the
transactions contemplated hereby will not require
any consent, approval, authorization or other order
of any court, regulatory body, administrative agency
or other governmental body (except such as have been
obtained or may be required under the securities or
Blue Sky laws of the various states or the
securities laws of foreign jurisdictions) and will
not conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the
charter or by-laws of the Company or any of its
subsidiaries or any agreement, indenture or other
instrument to which it or any of its subsidiaries is
a party or by which it or any of its subsidiaries or
their respective property is bound, or violate or
conflict with any laws, administrative regulations
or rulings or court decrees applicable to the
Company, any of its subsidiaries or their respective
property.
(k) Except as otherwise set forth in the
Prospectus, there are no material legal or
governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of
which any of their respective property is the
subject, and, to the best of the Company's
knowledge, no such proceedings are threatened or
contemplated. No contract or document of a
character required to be described in the
Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement is
not so described or filed as required.
(l) Neither the Company nor any of its
subsidiaries is in violation of any foreign,
federal, state or local law or regulation applicable
to the Company relating to the protection of human
health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), nor any federal
or state law applicable to the Company relating to
discrimination in the hiring, promotion or pay of
employees nor any applicable federal or state wages
and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and
regulations promulgated thereunder applicable to the
Company, nor to the Company's knowledge is there any
past violation of any law or regulation referred to
in this subsection, which in each case might result
in any material adverse change in the business,
prospects, financial condition or results of
operation of the Company and its subsidiaries, taken
as a whole.
(m) The Company and each of its subsidiaries
has such material permits, licenses, franchises and
authorizations of governmental or regulatory
authorities ("permits"), including, without
limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate its
respective properties and to conduct its business;
the Company and each of its subsidiaries has
fulfilled and performed all of its material
obligations with respect to such permits and no
event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination
thereof or results in any other material impairment
of the rights of the holder of any such permit; and,
except as described in the Prospectus, such permits
contain no restrictions that are materially
burdensome to the Company or any of its
subsidiaries.
(n) [Intentionally omitted.]
(o) Except as otherwise set forth in the
Prospectus or such as are not material to the
business, prospects, financial condition or results
of operation of the Company and its subsidiaries,
taken as a whole, the Company and each of its
subsidiaries has good and marketable title, free and
clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and
payable, to all property and assets described in the
Registration Statement as being owned by it. All
real estate leases and other material leases to
which the Company or any of its subsidiaries is a
party are valid and binding and no default has
occurred or is continuing thereunder, which might
result in any material adverse change in the
business, prospects, financial condition or results
of operation of the Company and its subsidiaries
taken as a whole, and the Company and its
subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any of
them is a party as lessee with such exceptions as do
not materially interfere with the use made by the
Company or such subsidiary.
(p) The Company and each of its subsidiaries
maintains reasonably adequate insurance for the
conduct of its business and the value of its
properties or otherwise self-insures in a manner
consistent with good industry practice.
(q) Price Waterhouse LLP are independent
public accountants with respect to the Company as
required by the Act.
(r) The consolidated financial statements and
notes thereto, together with related schedules and
notes forming part of the Registration Statement and
the Prospectus (and any amendment or supplement
thereto), present fairly the consolidated financial
position, results of operations and cash flows of
the Company and its subsidiaries on the basis stated
in the Registration Statement at the respective
dates or for the respective periods to which they
apply; such statements and related schedules and
notes have been prepared in accordance with
generally accepted accounting principles
consistently applied throughout the periods
involved, except as disclosed therein and except
that the unaudited interim financial statements are
subject to normal fiscal year-end adjustments; and
the other financial and statistical information and
data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto)
is, in all material respects, accurately presented
and prepared on a basis consistent with such
financial statements and the books and records of
the Company.
(s) The Company is not an "investment company"
within the meaning of the Investment Company Act of
1940, as amended.
(t) Except as set forth in the Prospectus, no
holder of any security of the Company has any right
to require registration of Common Shares or any
other security of the Company.
(u) The Company has complied with all
provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida).
(v) The Company and each of its subsidiaries
maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with
management's general or specific authorizations;
(ii) transactions are recorded as necessary to
permit preparation of financial statements in
conformity with generally accepted accounting
principles and to maintain asset accountability;
(iii) access to assets is permitted only in
accordance with management's general or specific
authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken
with respect to any differences.
7. Representations and Warranties of the
Selling Shareholder. The Selling Shareholder represents
and warrants to each Underwriter that:
(a) The Selling Shareholder is, and on the
Closing Date will be, the sole holder of record and
beneficial owner of the Shares to be sold by it
pursuant to this Agreement, free of all restrictions
on transfer, liens, encumbrances, security interests
and claims whatsoever other than as described in the
Prospectus or arising under this Agreement.
(b) Upon delivery of and payment for the
Shares to be sold by the Selling Shareholder
pursuant to this Agreement, the Underwriters will
receive all of the Selling Shareholder's interest in
the Shares purchased from the Selling Shareholder,
free of all restrictions on transfer, liens,
encumbrances, security interests and claims
whatsoever.
(c) The Selling Shareholder has, and on the
Closing Date will have, full legal right, power and
authority to enter into this Agreement and to sell,
assign, transfer and deliver such Shares in the
manner provided herein, and this Agreement has been
duly authorized, executed and delivered by the
Selling Shareholder and is a valid and binding
agreement of the Selling Shareholder enforceable in
accordance with its terms, except to the extent that
(i) enforcement thereof may be limited by (A)
bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law
or in equity) and (ii) the rights to indemnity and
contribution hereunder may be limited by applicable
law or public policy relating thereto.
(d) The Selling Shareholder has not taken, and
will not take, directly or indirectly, any action
designed to, 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 pursuant
to the distribution contemplated by this Agreement,
and other than as permitted by the Act, the Selling
Shareholder has not distributed and will not
distribute any prospectus or other offering material
in connection with the offering and sale of the
Shares.
(e) The execution, delivery and performance of
this Agreement by the Selling Shareholder,
compliance by the Selling Shareholder with all the
provisions hereof and the consummation of the
transactions contemplated hereby will not require
any consent, approval, authorization or other order
of any court, regulatory body, administrative agency
or other governmental body (except such as have been
obtained or such as may be required under state
securities laws or Blue Sky laws or the securities
laws of foreign jurisdictions) and will not conflict
with or constitute a breach of any of the terms or
provisions of, or a default under, organizational
documents of the Selling Shareholder, or any
agreement, indenture or other instrument to which
the Selling Shareholder is a party or by which the
Selling Shareholder or property of such Selling
Shareholder is bound, or violate or conflict with
any laws, administrative regulation or ruling or
court decree applicable to the Selling Shareholder
or property of the Selling Shareholder, except, in
each case, for such conflicts, breaches, defaults or
violations that would not have a material adverse
effect on the Selling Shareholder and that would not
impair the Selling Shareholder's ability to
consummate the transactions contemplated hereby.
(f) The parts of the Registration Statement
under the captions "Relationship With Kmart" and
"Principal and Selling Shareholders" which
specifically relate to the Selling Shareholder, do
not, and will not on the Closing Date (and any
Option Closing Date, if applicable), 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, in light
of circumstances under which they were made, not
misleading.
8. Indemnification. (a) The Company and the
Selling Shareholder, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), from and against any and all losses,
claims, damages, liabilities and judgments caused by any
untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of the
Prospectus or any preliminary prospectus, in the light of
the circumstances under which they were made), except
insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission (i)
based upon information relating to any Underwriters
furnished in writing to the Company by or on behalf of
any Underwriter through you expressly for use therein or
(ii) made in any preliminary prospectus if a copy of the
Prospectus (as amended or supplemented, if the Company
shall timely furnish such amendment or supplement
thereto) was not sent or given by or on behalf of the
Underwriters to the person asserting any such loss, claim
or liability, if required by law so to have been sent or
given, at or prior to the written confirmation of the
sale of the Shares as required by the Act, and the
Prospectus (as so amended or supplemented, if applicable)
would have corrected in all material respects such untrue
statement or omission.
(b) In case any action shall be brought
against any Underwriter or any person controlling such
Underwriter, based upon any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment
or supplement thereto and with respect to which indemnity
may be sought against the Company or the Selling
Shareholder, such Underwriter shall promptly notify the
Company and the Selling Shareholder in writing and the
Company and the Selling Shareholder shall assume the
defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and
payment of all fees and expenses. Any Underwriter or any
such controlling person shall have the right to employ
separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the employment of such
counsel shall have been specifically authorized in
writing by the Company and the Selling Shareholder, (ii)
the Company and the Selling Shareholder shall have failed
to assume the defense and employ counsel or (iii) the
named parties to any such action (including any impleaded
parties) include both such Underwriter or such
controlling person and the Company or the Selling
Shareholder, as the case may be, and such Underwriter or
such controlling person shall have been advised by such
counsel that there may be one or more legal defenses
available to it which are different from or additional to
those available to the Company or the Selling
Shareholder, as the case may be (in which case the
Company and the Selling Shareholder shall not have the
right or obligation to assume the defense of such action
on behalf of such Underwriter or such controlling person,
it being understood, however, that the Company and the
Selling Shareholder shall not, in connection with any one
such action or separate but substantially similar or
related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable
for the fees and expenses of more than one separate firm
of attorneys (in addition to any local counsel) for all
such Underwriters and controlling persons, which firm
shall be designated in writing by Donaldson, Lufkin &
Jenrette Securities Corporation and be reasonably
acceptable to the Sellers and that all such fees and
expenses shall be reimbursed as they are incurred). A
Seller shall not be liable for any settlement of any such
action effected without the written consent of such
Seller but if settled with the written consent of such
Seller, such Seller agrees to indemnify and hold harmless
any Underwriter and any such controlling person from and
against any loss or liability by reason of such
settlement. Notwithstanding the immediately preceding
sentence, if in any action where the fees and expenses of
counsel are at the expense of the indemnifying party and
an indemnified party shall have requested in a writing
delivered by certified mail to the attention of the
officer or department of the indemnifying party
identified in Section 12 hereof that the indemnifying
party reimburse the indemnified party for such fees and
expenses of counsel as incurred, and shall have indicated
in that written request that the indemnifying party may
become liable for a proposed settlement in such action
effected without its written consent if the requested
reimbursement is not made, such indemnifying party agrees
that it shall be liable for any settlement of any action
effected without its written consent if (i) such
settlement is entered into more than 20 business days
after the receipt by such indemnifying party of the
aforesaid written request and (ii) prior to the date of
such settlement such indemnifying party shall have failed
to (A) reimburse the indemnified party in accordance with
such request for all items included therein not being
disputed in good faith by the indemnifying party, and (B)
notify the indemnified party with reasonable specificity
of the items included therein that the indemnifying party
disputes in good faith. No indemnifying party shall,
without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such
indemnified party from all liability on claims that are
the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, its officers who sign the Registration
Statement, any person controlling the Company within the
meaning of Section 15 of the Act or Section 20 of the
Exchange Act, the Selling Shareholder, its directors and
each person, if any, controlling the Selling Shareholder
within the meaning of Section 15 of the Act or Section 20
of the Exchange Act to the same extent as the foregoing
indemnity from the Sellers to each Underwriter but only
with reference to information relating to such
Underwriter furnished in writing by or on behalf of such
Underwriter through you expressly for use in the
Registration Statement, the Prospectus or any preliminary
prospectus. In case any action shall be brought against
the Company, any of its directors, any such officer or
any person controlling the Company, or the Selling
Shareholder, any of its directors or any person
controlling the Selling Shareholder based on the
Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be
sought against any Underwriter, the Underwriter shall
have the rights and duties given to the Sellers (except
that if any Seller shall have assumed the defense thereof
such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the
defense thereof but the fees and expenses of such counsel
shall be at the expense of such Underwriter), and the
Company, its directors, any such officers and any person
controlling the Company and the Selling Shareholder, its
directors and any person controlling the Selling
Shareholder shall have the rights and duties given to the
Underwriter, by Section 8(b) hereof.
(d) If the indemnification provided for in
this Section 8 is unavailable to an indemnified party in
respect of any losses, claims, damages, liabilities or
judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion
as is appropriate to reflect the relative benefits
received by the Sellers on the one hand and the
Underwriters on the other hand from the offering of the
Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but
also the relative fault of the Sellers and the
Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received
by the Sellers and the Underwriters shall be deemed to be
in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the
Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the
total price to the public of the Shares, in each case as
set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers and the
Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a
material fact relates to information supplied by the
Company, the Selling Shareholder or the Underwriters and
the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission.
The Sellers and the Underwriters agree that it
would not be just and equitable if contribution pursuant
to this Section 8(d) 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 in the immediately preceding
paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject
to the limitations set forth above, 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
Section 8, 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 to
contribute pursuant to this Section 8(d) are several in
proportion to the respective number of Shares purchased
by each of the Underwriters hereunder and not joint.
9. Conditions of Underwriters' Obligations.
The several obligations of the Underwriters to purchase
the Firm Shares under this Agreement are subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of
the Company contained in this Agreement shall be
true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing
Date.
(b) The Registration Statement shall have
become effective not later than 10:00 A.M., New York
City time, on the day following the date of this
Agreement or at such later date and time as you may
approve in writing, and at the Closing Date no stop
order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been
commenced or shall be pending before or, to the
knowledge of the Company, threatened by the
Commission.
(c)(i) Since the date of the latest balance
sheet included in the Registration Statement and the
Prospectus, there shall not have been any material
adverse change, or any development involving a
prospective material adverse change, in the
condition, financial or otherwise, or in the
earnings, affairs or business prospects, whether or
not arising in the ordinary course of business, of
the Company, (ii) since the date of the latest
balance sheet included in the Registration Statement
and the Prospectus there shall not have been any
material adverse change, or any development
involving a prospective material adverse change, in
the capital shares or in the long-term debt of the
Company from that set forth in the Registration
Statement and Prospectus, (iii) the Company and its
subsidiaries shall have no liability or obligation,
direct or contingent, which is material to the
Company and its subsidiaries, taken as a whole,
other than those reflected in the Registration
Statement and the Prospectus and (iv) on the Closing
Date you shall have received a certificate dated the
Closing Date, signed by Michael Feuer and Edward L.
Cornell, in their capacities as the Chief Executive
Officer and Chief Financial Officer of the Company,
confirming the matters set forth in paragraphs (a),
(b), and (c) of this Section 9.
(d) All the representations and warranties of
the Selling Shareholder contained in this Agreement
shall be true and correct on the Closing Date with
the same force and effect as if made on and as of
the Closing Date and you shall have received a
certificate to such effect, dated the Closing Date,
from the Selling Shareholder.
(e) You shall have received on the Closing
Date (x) an opinion (reasonably satisfactory to you
and counsel for the Underwriters), dated the Closing
Date, of Todd M. DuChene, General Counsel for the
Company, to the effect set forth in items (i)-
(xviii), below, (y) an opinion (reasonably
satisfactory to you and counsel for the
Underwriters), dated the Closing Date, of Skadden,
Arps, Slate, Meagher & Flom, counsel for the Company
and the Selling Shareholder, to the effect set forth
in items (vi), (viii), (ix), (xi), (xvi), (xviii)
and (xix), below, and (z) an opinion (reasonably
satisfactory to you and counsel for the
Underwriters), dated the Closing Date, of Anthony N.
Palizzi, General Counsel for the Selling
Shareholder, to the effect set forth in items (vi)
and (xi) (with respect to matters relating to the
Selling Shareholder), below:
(i) the Company and each of its
subsidiaries has been duly incorporated, is
validly existing as a corporation in good
standing under the laws of its jurisdiction of
incorporation and has the corporate power and
authority required to carry on its business as
it is currently being conducted and to own,
lease and operate its properties;
(ii) the Company and each of its
subsidiaries is duly qualified and is in good
standing as a foreign corporation authorized to
do business in each jurisdiction in which the
nature of its business or its ownership or
leasing of property requires such
qualification, except where the failure to be
so qualified would not have a material adverse
effect on the Company and its subsidiaries,
taken as a whole;
(iii) except as otherwise set forth in the
Prospectus, all of the outstanding capital
stock or shares of, and other ownership
interests in, each of the Company's
subsidiaries, are owned by the Company, free
and clear of any security interest, claim,
lien, encumbrance or adverse interest of any
nature;
(iv) all the outstanding Common Shares
(including the Shares to be sold by the Selling
Shareholder) have been duly authorized and
validly issued and are fully paid,
non-assessable and not subject to any
preemptive or similar rights;
(v) the Shares to be issued and sold by the
Company hereunder have been duly authorized,
and when issued and delivered to the
Underwriters against payment therefor as
provided by this Agreement, will have been
validly issued and will be fully paid and
non-assessable, and the issuance of such Shares
is not subject to any preemptive or similar
rights;
(vi) this Agreement has been duly
authorized, executed and delivered by the
Company and the Selling Shareholder and is a
valid and binding agreement of the Company and
the Selling Shareholder enforceable in
accordance with its terms (except to the extent
that (a) enforcement thereof may be limited by
(1) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or
hereafter in effect relating to creditors'
rights generally and (2) general principles of
equity (regardless of whether enforceability is
considered in a proceeding at law or in equity)
and (b) the rights to indemnity and
contribution hereunder may be limited by
applicable law or public policy relating
thereto;
(vii) the authorized capital shares of the
Company, including the Common Shares, conform
as to legal matters to the description thereof
contained in the Prospectus;
(viii) the Registration Statement has become
effective under the Act and to the knowledge of
such counsel, no stop order suspending its
effectiveness has been issued and no
proceedings for that purpose are pending before
or threatened by the Commission;
(ix) the statements under the captions
"Relationship with Kmart", "Relationship with
Corporate Express" and "Underwriting" in the
Prospectus, insofar as such statements
constitute a summary of documents to which the
Company or the Selling Shareholder is a party,
have been reviewed by such counsel and fairly
present the information called for with respect
to such documents in all material respects; the
statements under the caption "Certain United
States Federal Tax Considerations to Non-U.S.
Shareholders" in the Prospectus, to the extent
such statements constitute matters of law or
legal conclusions, have been reviewed by such
counsel and fairly present the information
disclosed therein in all material respects; and
the statements under Items 14 and 15 of Part II
of the Registration Statement, insofar as such
statements constitute matters of law or legal
conclusions or a summary of documents referred
to therein, have been reviewed by such counsel
and fairly present the information called for
with respect to such legal matters and
documents in all material respects;
(x) neither the Company nor any of its
subsidiaries is in violation of its respective
charter, by-laws or regulations and, to the
best of such counsel's knowledge after due
inquiry, neither the Company nor any of its
subsidiaries is in default in the performance
of any obligation, agreement or condition
contained in any bond, debenture, note or any
other evidence of indebtedness or in any other
agreement, indenture or instrument material to
the conduct of the business of the Company and
its subsidiaries, taken as a whole, to which
the Company or any of its subsidiaries is a
party or by which it or any of its subsidiaries
or their respective property is bound;
(xi) (A) the execution, delivery and
performance of this Agreement by the Company
and the Selling Shareholder, compliance by the
Company and the Selling Shareholder with all
the provisions hereof and the consummation of
the transactions contemplated hereby will not
result in any violation or conflict with any of
the terms or provisions of any Applicable Laws
or Applicable Orders (it being understood that
for purposes of such opinion, (i) the term
"Applicable Laws" means those laws, rules and
regulations of the State of New York (for the
opinion to be rendered by Skadden, Arps, Slate,
Meagher & Flom), the State of Ohio (for the
opinion to be rendered by Mr. DuChene), the
state of Michigan (for the opinion to be
rendered by Mr. Palizzi), and the United States
of America that, in such counsel's experience,
are normally applicable to transactions of the
type contemplated by the Underwriting
Agreement, each as in effect on the date of
such opinion; (ii) the term "Applicable Orders"
means those judgments, orders or decrees of
Governmental Authorities (as such term is
hereinafter defined) by which the Company or
any of its subsidiaries or the Selling
Shareholder is bound, the existence of which is
actually known to such counsel or has been
specifically disclosed to such counsel in
writing; and (iii) the term "Governmental
Authorities" means any New York (for the
opinion to be rendered by Skadden, Arps, Slate,
Meagher & Flom), Ohio (for the opinion to be
rendered by Mr. DuChene), Michigan (for the
opinion to be rendered by Mr. Palizzi) or
federal executive, legislative, judicial,
administrative or regulatory body under
Applicable Laws); provided that in rendering
such opinion, such counsel need not express any
opinion with respect to (1) any securities or
Blue Sky laws of the various states or the
securities laws of foreign jurisdictions or (2)
the information contained in, or the accuracy,
completeness or correctness of, the Prospectus
or the Registration Statement or the compliance
thereof as to form with the Act and the rules
and regulations promulgated thereunder, which
matters are dealt with separately in items
(ix), (xii) and (xviii); (B) no Governmental
Approval is required for the execution,
delivery and performance of this Agreement by
the Company and the Selling Shareholder,
compliance by the Company and the Selling
Shareholder with all the provisions hereof and
the consummation of the transactions
contemplated hereby (it being understood that
for purposes of such opinion, the term
"Governmental Approval" means any consent,
approval, license, authorization or validation
of, or notice to, or filing, recording or
registration with, any Governmental Authority
pursuant to Applicable Laws); provided that in
rendering such opinion, such counsel need not
express any opinion with respect to (1) any
securities or Blue Sky laws of the various
states or the securities laws of foreign
jurisdictions or (2) such Governmental
Approvals as have been obtained under the Act,
the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder;
and (C) the execution, delivery and performance
of this Agreement by the Company and the
Selling Shareholder, compliance by the Company
and the Selling Shareholder with all the
provisions hereof and the consummation of the
transactions contemplated hereby will not
conflict with or constitute a breach of any of
the terms or provisions of, or a default under,
the charter, regulations or by-laws of the
Company or any of its subsidiaries or the
organizational documents of the Selling
Shareholder or any agreement, indenture or
other instrument material to the conduct of the
business of the Company and its subsidiaries,
taken as a whole, or to the conduct of the
business of the Selling Shareholder and its
subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries or the
Selling Shareholder is a party or by which the
Company or any of its subsidiaries or the
Selling Shareholder or their respective
properties are bound, except, with respect to
the Selling Shareholder, in each case for such
conflicts, breaches, defaults or violations
that would not have a material adverse effect
on the Selling Shareholder and that would not
impair the Selling Shareholder's ability to
consummate the transactions contemplated
hereby;
(xii) after due inquiry, such counsel does
not know of any legal or governmental
proceeding pending or threatened to which the
Company or any of its subsidiaries is a party
or to which any of their respective property is
subject which is required to be described in
the Registration Statement or the Prospectus
and is not so described, or of any contract or
other document which is required to be
described in the Registration Statement or the
Prospectus or is required to be filed as an
exhibit to the Registration Statement which is
not described or filed as required;
(xiii) to the best of such counsel's
knowledge, after due inquiry, neither the
Company nor any of its subsidiaries is in
violation of any Environmental Laws applicable
to the Company, nor any federal or state law
applicable to the Company relating to
discrimination in the hiring, promotion or pay
of employees nor any applicable federal or
state wages and hours laws, nor any provisions
of the Employee Retirement Income Security Act
or the rules and regulations promulgated
thereunder applicable to the Company, which in
each case might result in any material adverse
change in the business, prospects, financial
condition or results of operations of the
Company and its subsidiaries, taken as a whole;
(xiv) the Company and each of its
subsidiaries has such material permits,
licenses, franchises and authorizations of
governmental or regulatory authorities
("permits"), including, without limitation,
under any Environmental Laws, as are necessary
to own, lease and operate its respective
properties and to conduct its business in the
manner described in the Prospectus; to the best
of such counsel's knowledge, after due inquiry,
the Company and each of its subsidiaries has
fulfilled and performed all of its material
obligations with respect to such permits and no
event has occurred which allows, or after
notice or lapse of time would allow, revocation
or termination thereof or results in any other
material impairment of the rights of the holder
of any such permit, subject in each case to
such qualification as may be set forth in the
Prospectus; and, except as described in the
Prospectus, such permits contain no
restrictions that are materially burdensome to
the Company or any of its subsidiaries;
(xv) to the best of such counsel's
knowledge, all leases to which the Company or
any of its subsidiaries is a party are valid
and binding and no default has occurred or is
continuing thereunder, which might result in
any material adverse change in the business,
prospects, financial condition or results of
operation of the Company and its subsidiaries
taken as a whole, and the Company and its
subsidiaries enjoy peaceful and undisturbed
possession under all such leases to which any
of them is a party as lessee with such
exceptions as will not result in any material
adverse change in the business, prospects,
financial condition or results of operation of
the Company and its subsidiaries taken as a
whole.
(xvi) the Company is not an "investment
company" or a company "controlled" by an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xvii) to the best of such counsel's
knowledge, after due inquiry, no holder of any
security of the Company has any right to
require registration of Common Shares or any
other security of the Company except as set
forth in the Prospectus;
(xviii) (1) the Registration Statement
(including any registration statement filed
under Rule 462(b) of the Act, if any) at the
time it became effective and the Prospectus as
of its date and any supplement or amendment
thereto (except for the financial statements,
financial statement schedules and other
financial data included therein or omitted
therefrom and the exhibits to the Registration
Statement, as to which no opinion need be
expressed) comply as to form in all material
respects with the requirements of the Act, and
(2) no facts have come to the attention of such
counsel that have led them to believe that
(except for financial statements, financial
statement schedules and other financial data
included therein or omitted therefrom and the
exhibits to the Registration Statement, as to
which no opinion need be expressed) the
Registration Statement or the prospectus
included therein at the time the Registration
Statement became effective contained any untrue
statement of a material fact or omitted to
state a material fact required to be stated
therein or necessary to make the statements
therein not misleading, or that the Prospectus,
as amended or supplemented, if applicable
(except for financial statements, financial
statement schedules and other financial data
included therein or omitted therefrom and the
exhibits to the Registration Statement, as to
which no opinion need be expressed) contains
any untrue statement of a material fact or
omits to state a material fact necessary in
order to make the statements therein, in the
light of the circumstances under which they
were made, not misleading;
(xix) based solely on such counsel's
examination of the share records of the
Company, the Selling Shareholder is the sole
holder of record of the Shares to be sold by it
pursuant to this Agreement, and, assuming that
each U.S. Underwriter acquiring any such Shares
acquires the certificates representing those
Shares in good faith and without notice of any
adverse claim (within the meaning of the
Uniform Commercial Code provisions that govern
the Selling Shareholder's sale of Shares to the
U.S. Underwriters), upon delivery of the
certificates representing those Shares to the
person designated by the U.S. Underwriters,
registered in the name of the U.S.
Underwriters, endorsed to the U.S. Underwriters
or endorsed in blank, the U.S. Underwriters
will acquire all of the Selling Shareholder's
rights in those Shares free of any adverse
claim (within the meaning of the Uniform
Commercial Code provisions that govern the
Selling Shareholder's sale of those Shares to
the U.S. Underwriters).
In giving such opinion with respect to the
matters covered by clause (xviii) such counsel may
state that their opinion and belief are based upon
their participation in the preparation of the
Registration Statement and Prospectus and any
amendments or supplements thereto and review and
discussion of the contents thereof, but are without
independent check or verification except as
specified, and may further state that such counsel
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained
in the Registration Statement or the Prospectus
except as otherwise specifically referred to in the
opinions set forth in items (ix) and (xii) above.
In giving such opinion with respect to matters
governed other than by the federal law of the United
States and the laws of the State of Ohio, Mr.
DuChene may rely on the opinions of other counsel.
In giving such opinion (A) with respect to the
matters covered by clauses (vi) and (xi), Mr.
DuChene may limit his comments to matters relating
only to the Company, and (B) with respect to the
matters covered by clause (ix), Mr. DuChene need not
comment on the statements under the caption "Certain
United States Federal Tax Considerations to Non-U.S.
Shareholders. In giving such opinion with respect
to matters governed other than by the federal law of
the United States and the laws of the State of New
York, Skadden, Arps, Slate, Meagher & Flom may rely
on the opinions of other counsel. In giving such
opinion (A) with respect to the matters covered by
clause (vi), Skadden, Arps, Slate, Meagher & Flom
may limit its comments to matters of enforceability,
(B) with respect to the matters covered by clause
(ix), Skadden, Arps, Slate, Meagher & Flom need not
comment on the statements under the caption
"Underwriting" or the statements under Item 14 or
Item 15 of Part II of the Registration Statement,
and (C) with respect to the matters covered by
clause (xi), Skadden, Arps, Slate, Meagher & Flom
may limit its comments to the matters covered by
clauses (A) and (B) thereof. Opinions relied upon
pursuant to this paragraph shall be rendered by
counsel reasonably satisfactory to counsel for the
Underwriters and shall also be addressed to the
Underwriters. Counsel relying on any such opinion
shall state that they believe that both you and they
are justified in relying on such opinion.
The opinions of counsel described in paragraph
(e) above shall be rendered to you at the request of the
Company or the Selling Shareholder, as the case may be,
and shall so state therein.
(f) You shall have received on the Closing
Date an opinion, dated the Closing Date, of Baker &
Hostetler, counsel for the Underwriters, as to the
matters referred to in clauses (v), (vi) (but only
with respect to the Company), (vii), (viii), (ix)
(but only with respect to the statements under the
caption "Underwriting") and (xviii) of the foregoing
paragraph (e). In giving such opinion with respect
to the matters covered by clause (xviii) such
counsel may state that their opinion and belief are
based upon their participation in the preparation of
the Registration Statement and Prospectus and any
amendments or supplements thereto and review and
discussion of the contents thereof, but are without
independent check or verification except as
specified, and may further state that such counsel
does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained
in the Registration Statement or the Prospectus
except as otherwise specifically referred to in the
opinion set forth in item (ix) above.
(g) You shall have received a letter on and as
of the Closing Date, in form and substance
satisfactory to you, from Price Waterhouse LLP,
independent public accountants, with respect to the
financial statements and certain financial
information contained in the Registration Statement
and the Prospectus and substantially in the form and
substance of the letter delivered to you by Price
Waterhouse LLP on the date of this Agreement.
(h) The Company shall have delivered to you
the agreements specified in Section 2 hereof.
(i) The Company and the Selling Shareholder
shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements
herein contained and required to be performed or
complied with by the Company or the Selling
Shareholder, as applicable, at or prior to the
Closing Date.
The several obligations of the U.S. Underwriters to
purchase any Additional Shares hereunder are subject to
the delivery to the U.S. Representatives on the
applicable Option Closing Date of such documents as you
may reasonably request with respect to the good standing
of the Company, the due authorization and issuance of
such Additional Shares and other matters related to the
issuance of such Additional Shares.
10. Effective Date of Agreement and
Termination. This Agreement shall become effective upon
the later of (i) the date of execution of this Agreement
and (ii) the date on which notification of the
effectiveness of the Registration Statement has been
released by the Commission.
This Agreement may be terminated at any time
prior to the Closing Date by you by written notice to the
Sellers if any of the following has occurred: (i) since
the respective dates as of which information is given in
the Registration Statement and the Prospectus, any
adverse change or development involving a prospective
adverse change in the condition, financial or otherwise,
of the Company or any of its subsidiaries or the
earnings, affairs, or business prospects of the Company
or any of its subsidiaries, whether or not arising in the
ordinary course of business, which would, in your
judgment, make it impracticable to market the Shares on
the terms and in the manner contemplated in the
Prospectus, (ii) any outbreak or escalation of
hostilities or other national or international calamity
or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that,
in your judgment, is material and adverse and would, in
your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the
Prospectus, (iii) the suspension or material limitation
of trading in securities on the New York Stock Exchange,
the American Stock Exchange or the NASDAQ National Market
System or limitation on prices for securities on any such
exchange or National Market System, (iv) the enactment,
publication, decree or other promulgation of any federal
or state statute, regulation, rule or order of any court
or other governmental authority which in your opinion
materially and adversely affects, or will materially and
adversely affect, the business or operations of the
Company or any Subsidiary, (v) the declaration of a
banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any
federal, state or local government or agency in respect
of its monetary or fiscal affairs which in your opinion
has a material adverse effect on the financial markets in
the United States.
If on the Closing Date or on an Option Closing
Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase the Firm
Shares or Additional Shares, as the case may be, which it
or they have agreed to purchase hereunder on such date
and the aggregate number of Firm Shares or Additional
Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase is not more than
one-tenth of the total number of Shares to be purchased
on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the
proportion which the number of Firm Shares set forth
opposite its name in Schedule I or Schedule II bears to
the total number of Firm Shares which all the
non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you
may specify, to purchase the Firm Shares or Additional
Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase on such date; provided
that in no event shall the number of Firm Shares or
Additional Shares, as the case may be, which any
Underwriter has agreed to purchase pursuant to Section 2
hereof be increased pursuant to this Section 10 by an
amount in excess of one-ninth of such number of Firm
Shares or Additional Shares, as the case may be, without
the written consent of such Underwriter. If on the
Closing Date or on an Option Closing Date, as the case
may be, any Underwriter or Underwriters shall fail or
refuse to purchase Firm Shares, or Additional Shares, as
the case may be, and the aggregate number of Firm Shares
or Additional Shares, as the case may be, with respect to
which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date
by all Underwriters and arrangements satisfactory to you
and the applicable Sellers for purchase of such Shares
are not made within 48 hours after such default, this
Agreement will terminate without liability on the part of
any non-defaulting Underwriter and the applicable Seller.
In any such case which does not result in termination of
this Agreement, either you or the Sellers shall have the
right to postpone the Closing Date or the applicable
Option Closing Date, as the case may be, but in no event
for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the
Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall
not relieve any defaulting Underwriter from liability in
respect of any default of any such Underwriter under this
Agreement.
11. Agreements of the Selling Shareholder.
The Selling Shareholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer
taxes with respect to the Shares to be sold by the
Selling Shareholder;
(b) To take all reasonable actions in
cooperation with the Company and the Underwriters to
cause the Registration Statement to become effective
at the earliest possible time, to do and perform all
things to be done and performed under this Agreement
prior to the Closing Date and any Option Closing
Date and to satisfy all conditions precedent to the
delivery of the Firm Shares pursuant to this
Agreement; and
(c) To pay all costs, expenses, fees and taxes
incident to (i) the preparation, printing, filing
and distribution under the Act of the Registration
Statement (including financial statements and
exhibits), each preliminary prospectus and all
amendments and supplements to any of them prior to
or during the period specified in paragraph (e),
(ii) the printing and delivery of the Prospectus and
all amendments or supplements to it during the
period specified in paragraph (e), (iii) the
printing and delivery of this Agreement, the
Preliminary and Supplemental Blue Sky Memoranda and
all other agreements, memoranda, correspondence and
other documents printed and delivered in connection
with the offering of the Shares (including in each
case any disbursements of counsel for the
Underwriters relating to such printing and
delivery), (iv) the registration or qualification of
the Shares for offer and sale under the securities
or Blue Sky laws of the several states (including in
each case the reasonable fees and disbursements of
counsel for the Underwriters relating to such
registration or qualification and memoranda relating
thereto), (v) filings with the National Association
of Securities Dealers, Inc. in connection with the
offering of the Shares, (vi) the listing of the
Shares on The New York Stock Exchange, (vii)
furnishing such copies of the Registration
Statement, the Prospectus and all amendments and
supplements thereto as may be reasonably requested
for use in connection with the offering or sale of
the Shares by the Underwriters or by dealers to whom
Shares may be sold and (viii) the performance by the
Sellers of their other obligations under this
Agreement.
12. Miscellaneous. Notices given pursuant to
any provision of this Agreement shall be addressed as
follows: (a) if to the Company, to OfficeMax, Inc., 3605
Warrensville Center Road, Shaker Heights, Ohio 44122,
Attention: Todd M. DuChene, Senior Vice President,
Secretary and General Counsel, (b) if to the Selling
Shareholder, to Kmart Corporation, 3100 West Big Beaver
Road, Troy, Michigan 48084, Attention: General Counsel,
and (c) if to any Underwriter or to you, to you c/o
Donaldson, Lufkin & Jenrette Securities Corporation, 140
Broadway, New York, New York 10005, Attention: Syndicate
Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution
agreements, representations, warranties and other
statements of the Selling Shareholder, the Company, its
officers and directors and of the several Underwriters
set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will
survive delivery of and payment for the Shares,
regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any
Underwriter or by or on behalf of the Sellers, the
officers or directors of the Company or any controlling
person of the Sellers, (ii) acceptance of the Shares and
payment for them hereunder and (iii) termination of this
Agreement.
If this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the
part of the Sellers to comply with the terms or to
fulfill any of the conditions of this Agreement, the
Sellers agree to reimburse the several Underwriters for
all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by them in
connection with the transactions contemplated by this
Agreement.
Except as otherwise provided, this Agreement
has been and is made solely for the benefit of and shall
be binding upon the Sellers, the Underwriters, any
controlling persons referred to herein and their
respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person
shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Shares from any of
the several Underwriters merely because of such purchase.
This Agreement shall be governed and construed
in accordance with the laws of the State of New York.
This Agreement may be signed in various
counterparts which together shall constitute one and the
same instrument.
Please confirm that the foregoing correctly
sets forth the agreement among the Company, the Selling
Shareholder and the several Underwriters.
Very truly yours,
OFFICEMAX, INC.
By/s/ Michael Feuer
_______________________
Title: Michael Feuer
Chairman and CEO
KMART CORPORATION
By/s/ Thomas F. Murasky
________________________
Title: Thomas F. Murasky
Executive Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INCORPORATED
DEAN WITTER REYNOLDS INC.
McDONALD & COMPANY SECURITIES, INC.
WILLIAM BLAIR & COMPANY
Acting severally on behalf of
themselves and the several
U.S. Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By/s/ James T. Sington
James T. Sington
Managing Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
DEAN WITTER INTERNATIONAL LTD.
McDONALD & COMPANY SECURITIES, INC.
WILLIAM BLAIR & COMPANY
Acting severally on behalf of
themselves and the several
International Managers
named in Schedule II hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By/s/ James T. Sington
James T. Sington
Managiing Director
SCHEDULE I
Number of U.S.
Number of U.S. Shareholder
Company Shares Shares to be
U.S. Underwriters to be Purchased Purchased
Donaldson, Lufkin & Jenrette
Securities Corporation 407,836 1,617,564
Morgan Stanley International 407,836 1,617,564
Dean Witter Capital Markets -
International Limited 407,836 1,617,564
McDonald & Company Securities, Inc. 407,836 1,617,564
William Blair & Company 407,836 1,617,564
Total 2,039,180
Bear, Stearns & Co. Inc. 210,000
Alex. Brown Sons Incorporated 210,000
A.G. Edwards Sons, Inc. 210,000
Goldman, Sachs & Co. 210,000
Lazard Freres & Co. LLC 210,000
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 210,000
J. P. Morgan Securities Inc. 210,000
Prudential Securities Incorporated 210,000
Robertson, Stephens & Company, L.P. 210,000
Salomon Brothers Inc. 210,000
Schroder Wertheim & Co. Incorporated 210,000
Smith Barney Inc. 210,000
UPS Securities Inc. 210,000
Sanford C. Bernstein & Co., Inc. 210,000
The Chicago Corporation 210,000
C.J. Lawrence/Deutsche Bank
Securities Corporation 210,000
The Robinson-Humphrey Company, Inc. 210,000
Advest, Inc. 125,000
Arnhold and S. Bleichroeder, Inc. 125,000
J. C. Bradford & Co. 125,000
Cowen & Company 125,000
Crowell, Weedon & Co. 125,000
First of Michigan Corporation 125,000
First Southwest Company 125,000
Furman Selz Incorporated 125,000
Gerard Klauer Mattison & Co. 125,000
Gruntal & Co., Incorporated 125,000
Interstate/Johnson Lane Corporation 125,000
Janney Montgomery Scott Inc. 125,000
Ladenburg, Thalmann & Co. Inc. 125,000
Legg Mason Wood Walker Incorporated 125,000
Neuberger & Berman 125,000
The Ohio Company 125,000
Parker/Hunter Incorporated 125,000
Pennsylvania Merchant Group Ltd 125,000
Ragen MacKenzie Incorporated 125,000
Rauscher Pierce Refsnes, Inc. 125,000
Raymond James & Associates, Inc. 125,000
Roney & Co. 125,000
Sutro & Co. Incorporated 125,000
Tucker Anthony Incorporated 125,000
Wheat First Butcher Singer 125,000
Blackford Securities Inc. 65,000
Brean Murray, Foster Securities Inc. 65,000
Luther, Smith & Small, Inc. 65,000
Pryor, McClendon, Counts & Co., Inc. 65,000
Total 15,042,820
SCHEDULE II
Number of
Number of Inter- International
national Company Shareholder
Shares to be Shares to be
International Manager Purchased Purchased
Donaldson, Lufkin & Jenrette
Securities Corporation 101,959 592,141
Morgan Stanley International 101,959 592,141
Dean Witter Capital Markets -
International Limited 101,959 592,141
McDonald & Company Securities, Inc. 101,959 592,141
William Blair & Company 101,959 592,141
Total 509,794
Banque Indosuez 100,000
Credit Lyonnais Securities 100,000
Deutsche Bank Aktiengesellschafi 100,000
Kleinwort Benson Limited 100,000
Paribas Capital Markets 100,000
Societe Generale 100,000
Sumitomo Finance International 100,000
UBS Limited 100,000
Total 3,760,706
ANNEX I
Each U.S. Underwriter represents that it has not
offered or sold, and agrees not to offer or sell, any Shares,
directly or indirectly, in Canada in contravention of the
securities laws of Canada or any province or territory thereof
and, without limiting the generality of the foregoing, represents
that any offer of Shares in Canada will be made only pursuant to
an exemption from the requirement to file a prospectus in the
province or territory of Canada in which such offer is made.
Each U.S. Underwriter further agrees to send to any dealer who
purchases from it any of the Shares a notice stating in substance
that, by purchasing such Shares, such dealer represents and
agrees that it has not offered or sold, and will not offer or
sell, directly or indirectly, any of such Shares in Canada or to,
or for the benefit of, any resident of Canada in contravention of
the securities laws of Canada or any province or territory
thereof and that any offer of Shares in Canada will be made only
pursuant to an exemption from the requirement to file a
prospectus in the province of Canada in which such offer is made,
and that such dealer will deliver to any other dealer to whom it
sells any of such Shares a notice containing substantially the
same statement as is contained in this sentence.
ANNEX II
Each International Manager agrees that it will comply
with all applicable laws and regulations, and make or obtain all
necessary filings, consents or approvals, in each jurisdiction in
which it purchases, offers, sells or delivers Shares (including,
without limitation, any applicable requirements relating to the
delivery of the international prospectus, in preliminary or final
form), in each case at its own expense. In connection with sales
of and offers to sell Shares made by it, such International
Manager will either furnish to each person to whom any such sale
or offer is made a copy of the then current international
prospectus (in preliminary or final form and as then amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto), or inform such person that such
international prospectus, in preliminary or final form, will be
made available upon request. Any offering material in addition
to the international prospectus furnished by any International
Manager to any person in connection with any offers or sales
referred to in the preceding sentence (i) shall be prepared and
so furnished at its sole risk and expense and (ii) shall not
contain any information relating to the Shares or the Company
which is inconsistent in any respect with the information
contained in the international prospectus (as then amended or
supplemented).
Each International Manager further represents that it
has not offered or sold, and agrees not to offer or sell,
directly or indirectly, in Japan or to or for the account of any
resident thereof, any of the Shares acquired in connection with
the distribution contemplated hereby, except for offers or sales
to Japanese International Managers or dealers and except pursuant
to an exemption from the registration requirements of the
Securities and Exchange Law of Japan and otherwise in compliance
with applicable provisions of Japanese law. Each International
Manager further agrees to send to any dealer who purchases from
it any of the Shares a notice stating in substance that, by
purchasing such Shares, such dealer represents and agrees that it
has not offered or sold, and will not offer or sell, any of such
Shares, directly or indirectly, in Japan or to or for the account
of any resident thereof except pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of
Japan and otherwise in compliance with applicable provisions of
Japanese law, and that such dealer will send to any other dealer
to whom it sells any of such Shares a notice containing
substantially the same statement as is contained in this
sentence.
Each International Manager further represents and
agrees that (i) it is not carrying on an investment business in
the United Kingdom in contravention of Section 3 of the Financial
Services Act of 1986 (the "1986 Act"), (ii) it has not offered or
sold prior to the date six months after the date of issue of the
Common Shares and will not offer or sell any Common Shares to
persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (iii) it has complied and will
comply with all applicable provisions of the 1986 Act with
respect to anything done by it in relation to the Shares in, from
or otherwise involving the United Kingdom, and (iv) it has not
issued or caused to be issued and will not issue or cause to be
issued in the United Kingdom any investment advertisement (within
the meaning of the 1986 Act) relating to Common Shares or
(subject to and upon Part V of the 1986 Act coming into
operation) any advertisement offering Common Shares, which
advertisement is a primary or secondary offer within the meaning
of the 1986 Act, except in any such case in compliance with
provisions applicable under the 1986 Act or pursuant to any
exemption thereunder and, in particular, it has not given and
will not give copies of any Prospectus to any person in the
United Kingdom who does not fall within Article 11(3) of the 1986
Act (Investment Advertisements) (Exemptions) Order 1995.
Each International Manager agrees to indemnify and hold
harmless the Company, the Selling Shareholder, each Underwriter
and each person controlling the Company, the Selling Shareholder
or any Underwriter from and against any and all losses, claims,
damages and liabilities (including fees and disbursements of
counsel) arising from any breach by it of any of the provisions
of paragraphs six, seven, eight and nine of this Section 3.
