SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13d
Under the Securities Exchange Act of 1934
(Amendment No. 1)
PRICE/COSTCO, INC.
(Name of Issuer)
Common Stock, $0.01 par value per share
(Title of class of Securities)
74143W102
(CUSIP Number)
Jean-Francois Carreras
Sokolow, Dunaud, Mercadier & Carreras
1211 Avenue of the Americas
New York, New York 10036
(212) 768-5584
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 21, 1996
(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. 74143W102
1 NAME OF REPORTING PERSON S.S. OR IRS IDENTIFICATION NO. OF ABOVE
PERSON
FOURCAR B.V.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(c) et 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
7 SOLE VOTING POWER
NUMBER OF
SHARES
BENEFICIALLY 0
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14 TYPE OF REPORTING PERSON
00
SEE INSTRUCTIONS BEFORE FILLING OUT
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION
This Amendment No. 2 amends the Schedule 13D dated November 8, 1993, of
Fourcar B.V. ("Fourcar"), a corporation organized under the laws of the
Netherlands, with respect to the Common Stock, $0.01 par value (the "Stock"), of
Price/Costco, Inc. (the "Company"), as follows:
Items 4, 5, 6 and 7 to the Schedule 13D are hereby deleted in their
entirety and replaced with items 4, 5, 6 and 7 attached hereto.
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.
June 27, 1996 FOURCAR
By: /s/ Yves Sisteron
Name: Yves Sisteron
Title: Attorney-In-Fact
ITEM 4. Purpose of Transaction.
Fourcar acquired shares of Common Stock of the Company pursuant to a
transaction (the "Transaction") in which Costco merged with a wholly-owned
subsidiary of the Company (the "Costco Merger") and the Price Company merged
with a separate wholly-owned subsidiary of the Company.
Fourcar held and acquired shares of common stock of Costco for investment
purposes. Fourcar has now determined to dispose of all of its shares of Common
Stock of the Company pursuant to an underwriting agreement entered on June 18,
1996 with certain underwriters for whom Donaldson, Lufkin & Jenrette Securities
Corporation, Salomon Brothers Inc., UBS Securities LLC, UBS Limited and Salomon
Brothers International Limited acted as representatives (the "Underwriting
Agreement").
ITEM 5. Interest in Securities of the Issuer.
(a) - (b) As of the date hereof, Fourcar beneficially owns 0 share of
Common Stock of the Company, representing 0% of the shares of Common Stock of
the Company immediately after the transaction described below became effective.
At the date hereof, except as stated herein, neither Fourcar nor, to the
best of its knowledge, Carrefour B.V., Carrefour or any of the other persons
listed on Schedule 1 hereof beneficially owns any share of Common Stock of the
Company.
(c) On June 21, 1996, Fourcar sold 21,191,301 shares of Common Stock of
the Company on the public market. Except as set forth herein, no other
transaction in shares of Common Stock of the Company was effected during the
past 60 days by Fourcar or, to the best of its knowledge, by Carrefour B.V. or
any of the other persons listed on Schedule 1 hereof.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Subject to the terms and conditions of the Underwriting Agreement, the
underwriters for whom Donaldson, Lufkin & Jenrette Securities Corporation,
Salomon Brothers Inc., UBS Securities LLC, UBS Limited and Salomon Brothers
International Limited are acting as representatives (the "Underwriters") have
severally agreed to purchase from Fourcar, and Fourcar has agreed to sell to the
Underwriters, at $19.50 a share less the underwriting discounts and commissions,
the shares of Common Stock of the Company then owned by Fourcar.
The Underwriting Agreement provides that the obligations of the
Underwriters thereunder are subject to the approval of certain legal matters by
their counsel and to certain other conditions precedent. The Underwriting
Agreement also provides that the Company and Fourcar will indemnify the
Underwriters and certain persons controlling the Underwriters against certain
liabilities and expenses, including under the Securities Act of 1933, or will
contribute to payments the Underwriters are required to make in respect
thereof. The nature of the Underwriters' obligations under the Underwriting
Agreement is such that the Underwriters are committed to purchase all of the
shares of Common Stock of the Company then owned by Fourcar if they purchase
any of such shares.
The Company and Fourcar have agreed with the Underwriters, subject to
certain exceptions, not to, directly or indirectly, offer, sell, contract to
sell, grant any option to purchase or otherwise dispose of, without prior
written consent of the representatives of the Underwriters any shares of Common
Stock of the Company or any securities convertible into or exercisable or
exchangeable for, or warrants, options or rights to purchase or acquire Common
Stock of the Company or in any other manner transfer all or a portion of the
economic consequences associated with the ownership of any Common Stock of the
Company, or enter into any agreement to do any of the foregoing, for a period of
90 days after the date of the Underwriting Agreement.
The terms and conditions of the Underwriting Agreement, which is attached
hereto as Exhibit II, are incorporated by reference herein.
ITEM 7. Material to be Filed as Exhibits
The following documents are filed as Exhibits hereto:
Exhibit 99.1 Power of Attorney
Exhibit 99.2 Underwriting Agreement
SCHEDULE 1
Directors and Executive Officers of
Fourcar B.V.
Each of the individuals listed below is a Dutch citizen.
NAME ADDRESS OCCUPATION
Jacques Badin Overschrestraat 184 P Director/
1062 XK Amsterdam Executive Officer
SCHEDULE 2
Directors and Executive Officers of
Carrefour Nederland B.V.
NAME ADDRESS OCCUPATION
Jacques Badin Overschrestraat 184 P Managing Director
1062 XK Amsterdam President
SUPERVISORY BOARD
Herve Defforey 6, ave. Raymond Poincare Supervisor
75016 Paris, France
Sergio Ferreira Dias 6, ave. Raymond Poincare Supervisor
75016 Paris, France
Etienne Van Dyck 6, ave. Raymond Poincare Supervisor
75016 Paris, France
SCHEDULE 3
Directors and Executive Officers of CARREFOUR
NAME ADDRESS OCCUPATION
SUPERVISORY BOARD
Jacques Fournier 1, ave. des Tilleuls Chairman
75016 Paris, France
Carlos March Castello 77, 4 piso Vice Chairman
28006 Madrid, Spain Chairman of Banco March
Denis Defforey 8, ave. des Marroniers Member
75016 Paris, France
Jacques Badin Overschrestraat 184 P Member
1062 XK Amsterdam Chairman of de Noyange
The Netherlands
EXECUTIVE BOARD
Daniel Bernard 6, ave. Raymond Poincare Chairman
75016 Paris, France
Herve Defforey 6, ave. Raymond Poincare Finance
75016 Paris, France
Rene Brillet ZAE Saint Guenault Northern Europe
BP 75
91002 Evry, France
Philippe Jarry 6, ave. Raymond Poincare Executive Manager
75016 Paris, France France North East
Gerard Clerc Room 1601 Century Square Asia
1-13 Daguilar Street
Central Hong Kong
6, ave. Raymond Poincare The Americas
Michel Pinot 75016 Paris, France
EXHIBIT 99.1
POWER OF ATTORNEY
The undersigned:
the private company with limited liability FOURCAR B.V., with corporate seat in
Amsterdam and principle place of business in Amsterdam, Overschiestraat 184 P.
Autumn, (hereinafter to be referred to as "the Company") in the present matter
represented by:
Jacques Bruno Badin, living in Amsterdam acting as the Managing Director of the
Company.
Herewith grants Power of Attorney:
to Mr. Yves Sisteron to make an offering and to sell on behalf of the
undersigned up to 21,191,301 shares of the Common Stock of Price Costco, Inc.,
for the price and under the conditions as the holder of this Power of Attorney
may consider appropriate, and in that respect to file any documentation, to sign
any agreement, to deliver any stock certificate and generally, to do all things
required or necessary in connection with the foregoing.
Thus signed in 14 June 1996
on ________________________
/s/ Jacques Badin
EXHIBIT 99.2
19,500,000 Shares
PRICE/COSTCO, INC.
Common Stock
UNDERWRITING AGREEMENT
June 18, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
UBS SECURITIES LLC
As representatives of the several
U.S. Underwriters named in
Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INTERNATIONAL LIMITED
UBS LIMITED
As representatives of the several
International Managers named in
Schedule II hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Fourcar B.V. (the "Selling Stockholder"), an indirect wholly owned
subsidiary of Carrefour S.A., proposes to sell an aggregate of 19,500,000
shares (the "Firm Shares") of Common Stock, $.01 par value per share ("Common
Stock"), of Price/Costco, Inc., a Delaware corporation (the "Company").
It is understood that, subject to the conditions hereinafter
stated, 15,600,000 Firm 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 3,900,000 Firm 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 ("DLJ"), Salomon Brothers
Inc and UBS Securities LLC shall act as representatives (the "U.S. Repre-
sentatives") of the several U.S. Underwriters, and DLJ, UBS Limited and
Salomon Brothers International Limited shall act as representatives (the
"International Representatives" and, together with the U.S. Representatives,
the "Representatives") of the several International Managers. The U.S.
Underwriters and the International Managers are hereinafter collectively
referred to as the "Underwriters."
The Selling Stockholder also proposes to sell to the several U.S.
Underwriters an aggregate of not more than 1,691,301 additional shares of
Common Stock (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."
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-3 (No.
333-04355), 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. The
registration statement, as amended at the time when it becomes effective or,
if a post-effective amendment is filed with respect thereto, as amended by
such post-effective amendment at the time of its effectiveness, including in
each case any registration statement filed pursuant to Rule 462(b) under the
Act (the "Rule 462 Registration Statement") and all documents incorporated or
deemed to be incorporated by reference therein, financial statements and
exhibits and the information (if any) contained in a prospectus that is
deemed to be a part of the registration statement at the time of its
effectiveness pursuant to Rule 434 under the Act, is hereinafter referred to
as the "Registration Statement"; and the U.S. prospectus (including any
prospectus subject to completion meeting the requirements of Rule 434(c)
under the Act provided by the Company with any term sheet meeting the
requirements of Rule 434(c) as the prospectus provided to meet the re-
quirement of Section 10(a) of the Act) and the international prospectus, in
the respective forms first used to confirm sales of Shares, whether or not
filed with the Commission pursuant to Rule 424(b) under the Act, and in-
cluding all documents incorporated or deemed to be incorporated by reference
therein, are hereinafter referred to as the "Prospectus." As used herein,
the term "Incorporated Documents" means the documents that at the time are
incorporated by reference in the registration statement, the Registration
Statement, any prospectus, the Prospectus or any amendment or supplement
thereto.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Selling Stockholder agrees to sell, and each
U.S. Underwriter agrees, severally and not jointly, to purchase from the
Selling Stockholder at a price per share of $18.85 (the "Purchase Price"),
the number of Firm Shares set forth opposite the name of such U.S. Under-
writer in Schedule I hereto.
On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Selling
Stockholder agrees to sell, and each International Manager agrees, severally
and not jointly, to purchase from the Selling Stockholder at the Purchase
Price, the number of Firm 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 the terms and conditions hereof, the Selling
Stockholder agrees to sell to the U.S. Underwriters, and the U.S. Underwrit-
ers shall have a right to purchase, severally and not jointly, from time to
time, up to the total number of Additional Shares at the Purchase Price.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering
of the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter, severally and not jointly, agrees to purchase 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 as the number of Firm
Shares set forth opposite the name of such U.S. Underwriter in Schedule I
hereto bears to the total number of Firm Shares.
The Company and the Selling Stockholder each hereby agrees not to,
directly or indirectly, offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of any shares of Common Stock or any securi-
ties convertible into or exercisable or exchangeable for, or warrants,
options or rights to purchase or acquire, Common Stock or in any other manner
transfer all or a portion of the economic consequences associated with the
ownership of any Common Stock, or enter into any agreement to do any of the
foregoing, except pursuant to this Agreement, for a period of 90 days after
the date of this Agreement, without the prior written consent of DLJ. Not-
withstanding the foregoing, during such period (i) the Company may grant
stock options pursuant to the Company's existing stock option plans and (ii)
the Company may issue shares of its Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof.
3. Terms of Public Offering. The Company and the Selling
Stockholder are advised by you that the Underwriters propose (i) to make a
public offering 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.
Each U.S. Underwriter hereby makes to the Selling Stockholder and
the Company 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. Each
International Manager hereby makes to the Company the representations and
agreements of such International Underwriter contained in the seventh,
eighth, ninth and tenth paragraphs of Section 3 of such Agreement.
4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at 9:00 A.M., New York City time,
on the third business day (the "Closing Date") following the date of the
initial public offering, at such place as you shall designate. 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 Selling Stockholder.
Delivery to the U.S. Underwriters of and payment for any Additional
Shares to be purchased by the U.S. Underwriters shall be made at such place
as DLJ shall designate at 9:00 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 you and the Selling Stockholder.
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 or for your account on the Closing Date or an Option Closing Date, as
the case may be, with any transfer taxes thereon duly paid by the Selling
Stockholder, for the respective accounts of the several Underwriters, against
payment of the Purchase Price therefor by wire transfer of same day funds to
the account of the Selling Stockholder, specified in writing at least two
business days preceding the Closing Date or an Option Closing Date, as the
case may be.
5. Agreements of the Company. The Company and, with respect to
paragraph (k) only, the Selling Stockholder, agree with you:
(a) To use its best efforts to cause the Registration Statement to
become effective at the earliest possible time. The Company will comply
fully and in a timely manner with the applicable provisions of Rule 424
and Rule 434 under the Act.
(b) To advise you promptly and, if requested by you, confirm such
advice in writing, (i) if and when the Prospectus is sent for filing
pursuant to Rule 424 under the Act (including any term sheet within the
meaning of Rule 434 under the Act), when the Registration Statement has
become effective, when any Rule 462 Registration Statement is filed and
becomes effective, and when any post-effective amendment to the Regis-
tration Statement becomes effective, (ii) of the receipt of any comments
from the Commission that relate to the Registration Statement or re-
quests by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional informa-
tion, (iii) of the issuance by the Commission of any stop order sus-
pending 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 purpose by
the Commission or any state securities commission or other regulatory
authority, 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 (as amended or
supplemented from time to time) untrue or which requires the making of
any additions to or changes in the Registration Statement (as amended or
supplemented from time to time) in order to make the statements therein
not misleading or that makes any statement of a material fact made in
the Prospectus (as amended or supplemented from time to time) untrue or
which requires the making of any additions to or changes in the
Prospectus (as amended or supplemented from time to time) in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
of the Shares under any state securities or Blue Sky laws, the Company
shall use every reasonable effort to obtain the withdrawal or lifting of
such order at the earliest possible time.
(c) To furnish to you, without charge, four copies of the signed
copy of the Registration Statement as first filed with the Commission
and of each amendment to it, including all exhibits and Incorporated
Documents, and to furnish to 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 or to make any amendment or supplement to the Prospectus, or
to file any document which, when filed, will be incorporated or deemed
to be incorporated by reference in the Registration Statement or the
Prospectus (including the issuance or filing of any term sheet within
the meaning of Rule 434 under the Act), in each case 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 or filing of any
term sheet within the meaning of Rule 434 under the Act) which may be
necessary or advisable in connection with the distribution of the
Securities 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 as in your reasonable
judgment 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 each dealer, without charge, as many copies of the Prospectus (and
of any amendment or supplement to the Prospectus) as such Underwriter or
such 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 existing 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 existing 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 such
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 obligated to qualify as a
foreign corporation in any jurisdiction in which it is not so qualified
nor to take any action that would subject it to general consent to
service of process in any jurisdiction in which it is not now so
subject).
(h) To make generally available to its security holders 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 to advise you in writing when such statement has been so made
available.
(i) During the period of five 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 Stock a
financial report of the Company and its subsidiaries on a consolidated
basis, all 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 infor-
mation as of the end of and for the preceding year, certified by
independent certified public accountants, and (ii) to file with the
Commission as soon as practicable after the end of each quarterly period
(except for the last quarterly period of each fiscal year), a
consolidated balance sheet, a consolidated statement of operations and a
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
Stock or filed with the Commission and such other publicly available
information concerning the Company and its subsidiaries as you may
reasonably request.
(k) Whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, the Company and the Selling
Stockholder, jointly and severally, agree to pay all reasonable out-of-
pocket 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 prelimi-
nary 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, any memoranda describing state securities or
Blue Sky laws 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 registra-
tion or qualification of the Shares for offer and sale under the securi-
ties or Blue Sky laws of the several states (including in each case the
reasonable fees and out-of-pocket disbursements of counsel for the
Underwriters relating to such registration or qualification and memo-
randa relating thereto), (v) filings and clearance, if any, with the
National Association of Securities Dealers, Inc. in connection with the
offering (including the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith), (vi) the quotation of the
Shares on the Nasdaq National Market (the "NNM"), (vii) furnishing such
copies of the Registration Statement, the Prospectus and all amendments
and supplements thereto as may be 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 (vii) the performance by the Selling
Stockholder of its other obligations under this Agreement. Notwith-
standing the foregoing, nothing contained in this Agreement shall
affect, as between the Company and the Selling Stockholder, any
agreement which the Company and the Selling Stockholder have made or may
make regarding payment of any fees and expenses related to the
transactions contemplated by this Agreement.
(l) To use its best efforts to maintain the inclusion of the
Common Stock on the NNM (or, alternatively, the New York Stock Exchange
or the American Stock Exchange) for a period of five years after the
effective date of the Registration Statement.
(m) 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 and to satisfy all conditions prece-
dent to the delivery of the Shares.
6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter and the Selling Stockholder that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect;
and, to the best of its knowledge, no proceedings for such purpose are
pending before or threatened by the Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as 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 and, as amended or
supplemented, if applicable, will comply in all material respects with
the Act and (iii) the Prospectus does not contain and, as 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 and
in conformity with (x) information relating to any Underwriter furnished
to the Company in writing by or on behalf of such Underwriter through
you expressly for use therein or (y) any Selling Stockholder Information
(as defined in Section 11 hereof). The Company acknowledges for all
purposes under this Agreement (including this paragraph and Section 8
hereof) that the statements with respect to price and underwriting dis-
count and the last paragraph all as set forth on the cover page and in
paragraphs one, three, six, seven, eight and nine under the caption "Un-
derwriting" in the Prospectus (the "Underwriting Information") consti-
tute the only written information furnished to the Company by or on
behalf of the Underwriters expressly for use in the Registration State-
ment, the preliminary prospectus, or the Prospectus (or any amendment or
supplement to any of them) and that the Underwriters shall not be deemed
to have provided any other information (and therefore are not
responsible for any such statements or omissions). The Incorporated
Documents, at the time they were or hereafter are filed or last amended,
as the case may be, with the Commission, complied and will comply in all
material respects with the requirements of the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the "Exchange Act") and, when read together
and with the other information in the Prospectus, at the time the
Registration Statement became or becomes effective, will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were or are
made, not misleading.
(c) 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, 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.
(d) 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 corpora-
tion 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 could not
reasonably be expected to have a material adverse effect on the busi-
ness, prospects, financial condition or results of operations of the
Company and its subsidiaries, taken as a whole (a "Material Adverse Ef-
fect").
(e) All of the outstanding shares of capital stock of, or other
ownership interests in, each of the Company's subsidiaries have been
duly authorized and validly issued and are fully paid and non-
assessable, and are owned by the Company, free and clear of any security
interest, claim, lien, encumbrance or adverse interest of any nature
except as indicated in Schedule III hereto.
(f) All the outstanding shares of capital stock of the Company,
including the Shares, have been duly authorized and validly issued and
are fully paid, non-assessable and not subject to any preemptive or
similar rights;
(g) The authorized capital stock of the Company, including the
Common Stock, conforms to the description thereof contained in or
incorporated by reference into the Prospectus.
(h) This Agreement has been duly authorized, executed and deliv-
ered by the Company and is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms (except as
rights to indemnity and contribution hereunder may be limited by
applicable law).
(i) Neither the Company nor any of its subsidiaries is in viola-
tion of its respective charter or by-laws or in default in the perfor-
mance 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 consum-
mation 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 as such
may be required under the securities or Blue Sky laws of the various
states) 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 disclosed in the Registration Statement, 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 con-
tract 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 has violated
any foreign, federal, state or local law or regulation 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 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 Retire-
ment Income Security Act or the rules and regulations promulgated
thereunder, which in each case could reasonably be expected to 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 (a "Material Adverse Change").
(m) The Company and each of its subsidiaries has such 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 oper-
ate 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 such
permits contain no restrictions that are materially burdensome to the
Company or any of its subsidiaries.
(n) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities could not, singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(o) Except 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 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 could reasonably be expected
to result in any Material Adverse Change, 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 or proposed to be made by
the Company or such subsidiary.
(p) The Company and each of its subsidiaries maintains reasonably
adequate insurance.
(q) Arthur Andersen LLP are independent public accountants with
respect to the Company as required by the Act.
(r) The financial statements, together with related schedules and
notes, forming part of, or incorporated or deemed to be incorporated by
reference in, the Registration Statement and the Prospectus (and any
amendment or supplement thereto), present fairly the consolidated
financial position, results of operations and changes in financial posi-
tion of the Company and its subsidiaries at the respective dates or for
the respective periods to which they apply; such statements and related
schedules and notes comply as to form in all material respects with the
requirements of the Act and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in or
incorporated or deemed to be incorporated by reference in the Registra-
tion 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" or a company "con-
trolled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(t) No holder of any security of the Company (other than the
Selling Stockholder) has any right to require registration of shares of
Common Stock or any other security of the Company in this offering.
(u) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(v) There are no outstanding subscriptions, rights, warrants, op-
tions, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire
any shares of the capital stock of, or other ownership interest in, the
Company or any subsidiary thereof except as otherwise disclosed or
incorporated by reference in the Registration Statement or which have
been granted pursuant to the Company's stock option plans in amounts
which are immaterial.
(w) There is (i) no significant unfair labor practice complaint
pending against the Company or any of its subsidiaries or, to the best
knowledge of the Company, threatened against any of them, before the
National Labor Relations Board or any state or local labor relations
board, and no significant grievance or arbitration proceeding arising
out of or under any collective bargaining agreement is so pending
against the Company or any of its subsidiaries or, to the best knowledge
of the Company, threatened against any of them, and (ii) no significant
strike, labor dispute, slowdown or stoppage pending against the Company
or any of its subsidiaries or, to the best knowledge of the Company,
threatened against it or any of its subsidiaries except for such actions
specified in clause (i) or (ii) above, which, singly or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
(x) The Company, The Price Company and Costco Wholesale Corpora-
tion each 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 finan-
cial statements in conformity with generally accepted accounting princi-
ples and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific au-
thorization; 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.
(y) All material tax returns required to be filed by the Company
and each of its subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all material
taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of its subsidiaries have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided.
(z) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, the copyrights, know-how (including trade
secrets and other proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names presently
employed by them in connection with the business now operated by them,
and neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could
reasonably be expected to result in any Material Adverse Change.
(aa) No bid or purchase by the Company, and no bid or purchase that
could be attributed to the Company (as a result of bids or purchases by
an "affiliated purchaser" within the meaning of Rule 10b-6 under the
Exchange Act for or of the Common Stock, any securities of the same
class or series as the Common Stock or any securities immediately
convertible into or exchangeable for or that represent any right to
acquire Common Stock, is now pending or in progress or will have com-
menced at any time prior to the completion of the distribution of the
Shares.
7. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents and warrants to each Underwriter and the
Company that:
(a) The execution, delivery and performance of this Agreement by
the Selling Stockholder and the sale of the Shares, the performance of
this Agreement and the consummation of the transactions contemplated by
this Agreement will not (i) conflict with or result in a breach of any
of the terms or provisions, or constitute a default or cause an
acceleration of any obligation under, (A) the charter, bylaws or other
organizational documents of the Selling Stockholder or (B) any bond,
note, debenture or other evidence of indebtedness or any indenture,
mortgage, deed of trust or other material contract, lease, or other
instrument to which the Selling Stockholder is a party or by which the
Selling Stockholder is bound, or to which any of the property or assets
of the Selling Stockholder is subject, or (C) any order of any court or
governmental agency or authority entered in any proceeding to which the
Selling Stockholder was or is a party or by which the Selling Stock-
holder is bound or (ii) violate or conflict with any applicable Dutch,
French or U.S. federal, state or local law, rule, administrative regu-
lation or ordinance or administrative or court decree applicable to the
Selling Stockholder or its property, except in each such case as would
not, singly or in the aggregate, have a material adverse effect on the
business, results of operations, financial condition or prospects of the
Selling Stockholder.
(b) The Selling Stockholder has on the date of this Agreement and
will have at the Closing Date good and marketable title to the Shares to
be sold by the Selling Stockholder to the Underwriters, free and clear
of any liens, claims, encumbrances and restrictions on transfer other
than pursuant to this Agreement; and upon delivery to the Underwriters
of the Shares to be sold by the Selling Stockholder hereunder and
payment of the Purchase Price therefor by the Underwriters as herein
contemplated, the Underwriters will receive good and marketable title to
the Shares purchased by them from the Selling Stockholder, free and
clear of any pledge, lien, encumbrance, claim or equity.
(c) All authorizations, approvals and consents necessary for the
execution, delivery and performance by the Selling Stockholder of this
Agreement, and the sale and delivery by the Selling Stockholder to the
Underwriters of the Shares to be sold by the Selling Stockholder hereun-
der (other than such authorizations, approvals or consents as may be
necessary under state securities or Blue Sky laws) have been obtained
and are in full force and effect; the Selling Stockholder has all requi-
site right, power and authority to enter into and perform its obliga-
tions under this Agreement and to sell, transfer and deliver the Shares
to be sold by the Selling Stockholder to the Underwriters hereunder; and
this Agreement has been duly authorized, executed and delivered by the
Selling Stockholder and is a valid and binding agreement of the Selling
Stockholder enforceable in accordance with its terms (except as rights
to indemnity and contribution hereunder may be limited by applicable
law).
(d) The Selling Stockholder Information (as defined in Section 11
hereof) does not, and will not on the Closing Date, include an untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circum-
stances under which they were made, not misleading.
(e) The Selling Stockholder 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 Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Shares.
(f) No stamp duty or similar tax or duty is payable by or on
behalf of the Underwriters in connection with the sale and delivery of
the Shares by the Selling Stockholder as contemplated by this Agreement.
(g) At any time during the period described in Section 5(e)
hereof, if there is any change in the Selling Stockholder Information,
the Selling Stockholder will promptly notify you and the Company of such
change.
(h) The Selling Stockholder acknowledges for all purposes under
this Agreement that the Underwriting Information constitutes the only
written information furnished to the Company by or on behalf of the
Underwriters for use in the Registration Statement or the Prospectus (or
any amendment or supplement to them) and that the Underwriters shall not
be deemed to have provided any other information (and therefore are not
responsible for any such statement or omission).
8. Indemnification.
(a) The Company and the Selling Stockholder (but in the case of
the Selling Stockholder, only with respect to claims and actions based on
untrue statements or omissions made in reliance upon and in conformity with
the Selling Stockholder Information), severally and not jointly, agree to
indemnify and hold harmless (i) each of the Underwriters and (ii) each
person, if any, who controls (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) any of the Underwriters (any of the persons
referred to in this clause (ii) being hereinafter referred to as a "control-
ling person"), and (iii) the respective officers, directors, partners,
employees, representatives and agents of any of the Underwriters or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Person") to the fullest extent
lawful, from and against any and all losses, claims, damages, judgments, ac-
tions, costs, assessments, expenses and other liabilities (collectively,
"Liabilities"), including without limitation and as incurred, reimbursement
of all reasonable costs of investigating, preparing, pursuing or defending
any claim or action, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, including the reasonable fees and
expenses of counsel to any Indemnified Person, directly or indirectly caused
by, related to, based upon, arising out of or in connection with any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any supplement or amendment thereto), or the Pro-
spectus (including any amendment or supplement thereto) or any preliminary
prospectus, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements there-
in (in the case of the Prospectus, in light of the circumstances under which
they were made) not misleading, except insofar as such Liabilities are caused
by an untrue statement or omission or alleged untrue statement or omission
that is made in reliance upon and in conformity with any Underwriting
Information. The Company shall notify you promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental
investigation) or litigation in connection with the matters addressed by this
Agreement which involves the Company or an Indemnified Person.
Notwithstanding anything contained in this Section 8, the aggregate
liability of the Selling Stockholder pursuant to the provisions of this
Section 8 shall be limited to an amount equal to the aggregate proceeds
received by it from the sale of the Shares pursuant to this Agreement.
(b) In case any action or proceeding (for all purposes of this
Section 8, including any governmental investigation) shall be brought or
asserted against any of the Indemnified Persons with respect to which
indemnity may be sought against the Company or the Selling Stockholder (each
referred to respectively in this Section 8(b) as an "indemnifying party"),
such Indemnified Person promptly shall notify the indemnifying party in
writing (provided that the failure to give such notice shall not relieve the
indemnifying party of its obligations pursuant to this Agreement, except to
the extent that such indemnifying party shall have been prejudiced in any
material respect by such failure) and the Company and the Selling
Stockholder, as the case may be, shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person
and payment of all fees and expenses. Any Indemnified 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 Indemnified Person unless (i) the indemnifying party agrees
to pay such fees and expenses, or (ii) the indemnifying party fails promptly
to assume such defense or fails to employ counsel reasonably satisfactory to
such Indemnified Person, or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both such Indemnified
Person and the indemnifying party or an affiliate thereof, and either (x)
there may be one or more legal defenses available to such Indemnified Person
that are different from or additional to those available to the indemnifying
party or such affiliate or (y) a conflict may exist between such Indemnified
Person and the indemnifying party or such affiliate. In the event of any of
clause (i), (ii) and (iii) of the immediately preceding sentence, if such
Indemnified Person notifies the indemnifying party in writing, the indemnify-
ing party shall not have the right to assume the defense thereof and such
Indemnified Person shall have the right to employ its own counsel in any such
action and the reasonable fees and expenses of such counsel shall be paid, as
incurred, by the indemnifying party, regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings 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) at any time for each such Indemnified Person. No indemnifying
party shall be liable for any settlement of any such action or proceeding
effected without its prior written consent, and the Company agrees to
indemnify and hold harmless any Indemnified Person from and against any
Liabilities by reason of any settlement of any action effected with the
written consent of the Company. No indemnifying party shall, without the
prior written consent of each Indemnified Person, settle or compromise or
consent to the entry of any judgment in or otherwise seek to terminate any
pending or threatened action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought pursuant hereto (whether
or not any Indemnified Person is a party thereto), unless such settlement,
compromise, consent or termination includes an unconditional release of each
Indemnified Person from all Liabilities arising out of such action, claim,
litigation or proceeding.
(c) Each of the Underwriters agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholder, their
directors, the officers of the Company who sign the Registration Statement,
and any person controlling (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act) either the Company or the Selling Stock-
holder, to the same extent as the foregoing indemnity from the Company and
the Selling Stockholder to each of the Indemnified Persons, but only with
respect to claims and actions based on any Underwriting Information. In case
any action or proceeding (including any governmental investigation) shall be
brought or asserted against any of the Company, the Selling Stockholder, any
of their directors, any such officer, or any such controlling person based on
the Registration Statement, the Prospectus or any preliminary prospectus in
respect of which indemnity is sought against any Underwriter pursuant to the
foregoing sentence, such Underwriter shall have the rights and duties given
to the Company and the Selling Stockholder (except that if the Company or the
Selling Stockholder 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, the Selling
Stockholder, their directors, any such officers and each such controlling
person shall have the rights and duties given to each of the Indemnified
Person by Section 8(b) above.
(d) If the indemnification provided for in this Section 8 is
finally determined by a court of competent jurisdiction to be unavailable to
an indemnified party in respect of any Liabilities referred to herein, 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 Liabilities (i) in such proportion as is appropriate to re-
flect the relative benefits received by the indemnifying party on the one
hand and the indemnified party 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 indemnifying parties and the indemnified party, as well
as any other relevant equitable considerations. The relative benefits re-
ceived by the Company and the Selling Stockholder, on the one hand, and the
Underwriters (and their related Indemnified Persons), on the other hand,
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by the Selling Stockholder bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the Prospectus. The relative fault of the Company and the Selling
Stockholder, on the one hand, and the Underwriters, on the other hand, shall
be determined by reference to, among other things, whether the untrue or al-
leged untrue statement of a material fact or the omission or alleged omission
to state a material fact related to information supplied by the Company or
the Selling Stockholder, on the one hand, or the Underwriters, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The indemnity
and contribution obligations of the Company and the Selling Stockholder set
forth herein shall be in addition to any liability or obligation the Company
or the Selling Stockholder may otherwise have to any Indemnified Person.
The Company, the Selling Stockholder 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 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,
judgments, liabilities or expenses 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 (nor any of
its related Indemnified Persons) shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total underwriting
discount applicable to the Shares purchased by such Underwriter exceeds the
amount of any damages or liabilities which such Underwriter (and its related
Indemnified Persons) has otherwise been required to pay or incur 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.
(e) The provisions of this Section 8 shall not affect, as between
the Company and the Selling Stockholder, any agreement which the Company and
the Selling Stockholder have made or may make regarding indemnification or
contribution with respect to the transactions contemplated by this Agreement.
9. Conditions of the Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Selling Stockholder contained in this Agreement shall be true and cor-
rect 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 (or, if
a post effective amendment is required to be filed pursuant to Rule 430A
under the Act, such post effective amendment shall have become
effective) and any Rule 462 Registration Statement that has been filed
shall have become effective, and at the Closing Date no stop order sus-
pending 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 contemplated by the Commission, every request
for additional information on the part of the Commission shall have been
complied with in all material respects, and no stop order suspending the
sale of the Shares in any jurisdiction referred to in Section 5(g) shall
have been issued and no proceeding for that purpose shall have been com-
menced or shall be pending or threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency, body or official which would, as of the Closing
Date, prevent the sale of the Shares; no injunction, restraining order
or order of any nature by a U.S. federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the sale of the Shares; and, except as disclosed in the
Prospectus, on the Closing Date, no action, suit or proceeding shall be
pending against, or, to the knowledge of the Company or the Selling
Stockholder, threatened against, the Company or any of its subsidiaries
or the Selling Stockholder, respectively, before any court or arbitrator
or any governmental body, agency or official which, if adversely deter-
mined, would interfere with or adversely affect the sale of the Shares
or could reasonably be expected to have a Material Adverse Effect, or in
any manner invalidate this Agreement or the sale of the Shares.
(d) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Registration Statement and the Pro-
spectus, 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 or incorporated by reference in the Registration
Statement and the Prospectus there shall not have been any change, or
any development involving a prospective material adverse change, in the
capital stock or in the long-term debt of the Company from that set
forth or incorporated by reference 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 re-
flected or incorporated by reference 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 the President and by the
Chief Financial Officer of the Company, confirming the matters set forth
in paragraphs (a), (b), (c) and (d) of this Section 9.
(e) You shall have received a certificate of the Selling Stock-
holder, dated the Closing Date, executed by the President or any Senior
Vice President and a principal financial or accounting officer of the
Selling Stockholder, confirming the matters relating to the Selling
Stockholder set forth in paragraph (a) and the last clause of paragraph
(c) of this Section 9 and, to their knowledge, with respect to the first
two clauses of paragraph (c) of this Section 9.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the
Closing Date, of:
(x) Foster, Pepper & Shefelman, counsel for the Company, to
the effect that:
(i) the Company and each of its subsidiaries that
constitutes a "Restricted Subsidiary" as defined in the Indenture,
dated as of June 7, 1995, between the Company and American Bank
National Association, as Trustee (other than those organized under
the laws of Canada or any of the provinces of Canada (collectively,
the "Canadian Subsidiaries") and PriceCostco Europe (UK) Ltd.) (all
of such subsidiaries, the "Restricted 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 Restricted 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
could not reasonably be expected to have a Material Adverse Effect;
(iii) all of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's Re-
stricted Subsidiaries have been duly and validly authorized and
issued and are fully paid and non-assessable, and are owned by the
Company, to the best of such counsel's knowledge after due inquiry,
free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature, except as indicated in Schedule
III hereto;
(iv) the Shares to be sold by the Selling Stockholder
hereunder have been duly authorized and validly issued and are
fully paid and non-assessable; and, to such counsel's knowledge,
except as otherwise set forth in the Prospectus, the sale of Shares
by the Selling Stockholder hereunder is not subject to any preemp-
tive or similar rights;
(v) the authorized capital stock of the Company,
including the Common Stock, conforms as to legal matters to the
description thereof contained or incorporated by reference in the
Prospectus;
(vi) this Agreement has been duly authorized, executed
and delivered by the Company;
(vii) 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 contemplated by the Commission;
(viii) the statements in Item 15 of Part II of the
Registration Statement, insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings;
(ix) the Company has full power and authority to execute,
deliver and perform this Agreement; each document filed pursuant to
the Exchange Act and incorporated by reference in the Prospectus,
at the time it was filed or last amended (except for financial
statements, the notes thereto and related schedules and other
financial, numerical, statistical or accounting data included or
incorporated by reference therein or omitted therefrom, as to which
such counsel need express no opinion), complied as to form to the
applicable requirements of the Exchange Act in all material
respects;
(x) neither the Company nor any of its subsidiaries is
in violation of its respective charter or by-laws and, to the best
of such counsel's knowledge, 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 and which
is identified on a schedule attached to such opinion;
(xi) the execution, delivery and performance of this
Agreement and 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 may be required under the federal
securities laws or the Blue Sky laws of the various states) 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 material agreement,
indenture or other material instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective properties is bound and which
is identified on a schedule attached to such opinion, or violate or
conflict with any laws, administrative regulations or rulings or
court decrees that are of the type that are, in the experience of
such counsel, applicable to the Company or any of its subsidiaries
or their respective properties and transactions of the type contem-
plated hereby (other than the federal securities laws or the Blue
Sky laws of the various states);
(xii) 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, no
holder of any security of the Company other than the Selling
Stockholder has any right to require registration of shares of Com-
mon Stock or any other security of the Company; and
(xiv) 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.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company and the Selling Stockholder, representatives of the independent
public accountants for the Company, representatives of the Underwriters and
counsel for the Underwriters at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and, although
such counsel is not passing upon, and does not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and has made no independent check or
verification thereof, during the course of such participation (relying as to
factual matters underlying the determination of materiality to a large extent
upon the statements of officers and other representatives of the Company), on
the basis of the foregoing, no facts have come to such counsel's attention
that caused such counsel to believe that the Registration Statement, at the
time such Registration Statement or any post-effective amendment became
effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus as amended or
supplemented, if applicable, as of its date and the Closing Date, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Such counsel need
express no belief with respect to the financial statements, the notes thereto
and related schedules and other financial, statistical, numerical, and
accounting data and financial forecasts included in, or omitted from, the
Registration Statement or the Prospectus; and
(y) Lapointe Rosenstein, Canadian counsel for the Company, to
the effect that:
(i) each of the Canadian 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) each of the Canadian 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 qualifica-
tion, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect; and
(iii) all of the outstanding shares of capital stock
of, or other ownership interests in, each of the Company's Canadian
Subsidiaries have been duly and validly authorized and issued and
are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance
or adverse interest of any nature.
The opinions of Foster, Pepper & Shefelman and Lapointe Rosenstein
described in paragraph (f) above shall be rendered to you at the request of
the Company and shall so state therein.
(g) You shall have received on the Closing Date an opinion (sat-
isfactory to you and counsel for the Underwriters), dated the Closing
Date, of Sokolow, Dunaud, Mercadier & Carreras, counsel to the Selling
Stockholder, to the effect that:
(i) this Agreement has been duly and validly authorized by
all necessary action by the Selling Stockholder and has been duly
executed and delivered by the Selling Stockholder;
(ii) the Selling Stockholder has full legal right, power and
authority, and any approval required by law (other than any approv-
al imposed by the applicable state securities or Blue Sky laws), to
sell, assign, transfer and deliver the Shares in the manner
provided in this Agreement;
(iii) immediately prior to the Closing Date, the Selling
Stockholder was the sole registered owner of the Shares;
(iv) [Form of opinion assuming physical delivery] assuming
that each of the Underwriters acquired its interest in the Shares
to be sold by the Selling Stockholder pursuant to this Agreement in
good faith and without notice of any adverse claim within the
meaning of Section 8-302 of the New York Uniform Commercial Code,
upon delivery to the Representatives as agents for the Underwriters
of the Shares registered in the Underwriters' names, the Under-
writers will acquire all rights of the Selling Stockholder in the
Shares free and clear of any adverse claims, any lien in favor of
the Company, and any restrictions on transfer imposed by the Compa-
ny;
[Form of opinion assuming settlement through DTC] upon
transfer of the Shares to be sold by the Selling Stockholder
pursuant to this Agreement to [name of the Underwriter to whose
securities account such Shares will be credited by DTC], and
assuming such person has purchased the Shares in good faith and
without notice of any adverse claim within the meaning of Section
8-302 of the New York Uniform Commercial Code, such person will
acquire all rights of the Selling Stockholder in the Shares free
and clear of any adverse claims, any lien in favor of the Company,
and any restrictions on transfer imposed by the Company.
"Transfer" of such Shares to [name of the Underwriter to whose
securities account at DTC the Shares will be credited by DTC] will
occur by the making by The Depository Trust Company of appropriate
entries transferring such Shares on its books and records to the
account of [name of the Underwriter to whose securities account at
DTC the Shares will be credited by DTC] at The Depository Trust
Company; and
(v) neither the sale of the Shares nor the consummation of
the transactions contemplated by this Agreement will (A) conflict
with, result in a breach or violation of, or constitute a default
under the terms of any indenture or other agreement or instrument
of which such counsel has knowledge to which the Selling Stock-
holder is a party or bound, or any statute, rule or regulation to
which the Selling Stockholder is subject, or to which any of the
properties of the Selling Stockholder is subject, or any order of
which such counsel has knowledge of any court or governmental agen-
cy or body having jurisdiction over the Selling Stockholder or any
of its properties or (B) violate any of the provisions of the
charter, bylaws or other organizational documents of the Selling
Stockholder as in effect on the date of the opinion, except that
such counsel need express no opinion as to state securities or Blue
Sky laws or as to compliance with the antifraud provisions of
Federal and state securities laws.
(h) You shall have received on the Closing Date an opinion, dated
the Closing Date, of Skadden, Arps, Slate, Meagher & Flom, counsel for
the Underwriters, in form and substance reasonably satisfactory to you.
(i) You shall have received letters on and as of the date hereof
as well as on and as of the Closing Date, in form and substance
satisfactory to you, from Arthur Andersen LLP, independent public
accountants, with respect to the financial statements and certain finan-
cial information contained or incorporated by reference in the Registra-
tion Statement and the Prospectus and substantially in the form and sub-
stance of the letter delivered to you by Arthur Andersen LLP on the date
of this Agreement.
(j) The Company and the Selling Stockholder shall not have failed
in any material respect 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 at or prior to the Closing
Date.
(k) Prior to the Closing Date, the Company and the Selling
Stockholder shall have furnished to you such further information,
certificates and documents as you may reasonably request.
(l) The several obligations of the U.S. Underwriters to purchase
any Additional Shares hereunder are subject to satisfaction on and as of
each Option Closing Date of the conditions set forth in paragraphs (a)
through (k) except that the opinions called for in paragraphs (f), (g)
and (h) and the letters referred to in paragraph (i) shall be revised to
reflect the sale of the Additional Shares.
(m) Anything herein to the contrary notwithstanding, the respec-
tive closings under this Agreement of the issuance and sale of the U.S.
Firm Shares and the International Shares to the U.S. Underwriters and
the International Managers, respectively, are hereby expressly made
conditional on one another.
10. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement
(or, if a post effective amendment is required to be filed pursuant to Rule
430A under the Act, such post effective amendment) 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 Company and the Selling Stockholder 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 or inadvisable to market
the Shares on the terms and in the manner contemplated in the Prospectus or
to enforce contracts for the sale of the Shares, (ii) any outbreak or escala-
tion 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 or inadvisable to market the
Shares on the terms and in the manner contemplated in the Prospectus or to
enforce contracts for the sale of the Shares, (iii) the suspension or
material limitation of trading in securities on the New York Stock Exchange,
the American Stock Exchange or the NNM or limitation on prices for securities
on any such exchange or the NNM, (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 judgment
materially and adversely affects, or will materially and adversely affect,
the business or operations of the Company or any subsidiary of the Company,
(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 judgment has a material adverse effect on the financial markets in
the United States.
If on the Closing Date or any Option Closing Date, as the case may
be, any of the Underwriters shall fail or refuse to purchase Firm Shares or
Additional Shares, as the case may be, which it has agreed to purchase here-
under on such date, and the aggregate amount of Firm Shares or Additional
Shares, as the case may be, that such defaulting Underwriters agreed but
failed or refused to purchase does not exceed 10% of the total number of
Shares to be purchased on such date by all of the Underwriters, each non-de-
faulting Underwriter shall be obligated severally, in the proportion which
the number of Firm Shares set forth opposite its name in Schedules I and II
hereto 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, that 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, that 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 the Option Closing Date, as the case may be,
any of the Underwriters shall fail or refuse to purchase the Firm Shares or
the Additional Shares, as the case may be, and the aggregate number of Shares
with respect to such default exceeds 10% of such total number of the Shares -
to be purchased on such date by all Underwriters and arrangements satisfac-
tory to the other Underwriters, the Selling Stockholder and the Company for
the purchase of such Shares are not made within 48 hours after such default,
this Agreement shall terminate without liability on the part of the non-de-
faulting Underwriters, the Selling Stockholder or the Company, except as
otherwise provided in this Section 10. In any such case that does not result
in termination of this Agreement, the Underwriters, the Selling Stockholder
or the Company may postpone the Closing Date or the Option Closing Date, as
the case may be, for not longer than seven (7) days, in order that the re-
quired 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 a defaulting Underwriter from liability in
respect of any default by any such Underwriter under this Agreement.
11. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with each Underwriter and the Company:
(a) To take all reasonable actions in cooperation with the Company
and the Underwriters to do and perform all things to be done by it
pursuant to this Agreement prior to the Closing Date or reasonably
requested by the Company in connection herewith and to satisfy all
conditions precedent to the delivery of the Shares to be sold by it
pursuant to this Agreement.
(b) Prior to any public offering of the Shares to be sold by it to
the Underwriters pursuant to this Agreement, it will cooperate with the
Underwriters and counsel for the Underwriters in connection with the
registration or qualification of any such Shares for offer and sale by
the Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as the Underwriters may reasonably request, and will
continue such qualification in effect so long as reasonably required for
distribution of any such 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, however, that it shall not be
required to take any action that would subject it to the general service
of process in any jurisdiction where it is not now so subject.
(c) It agrees to deliver to the Underwriters prior to or at the
Closing Date, if applicable, a properly completed and executed United
States Treasury Department Form W-9 (or other form as may be required by
law).
(d) The Selling Stockholder acknowledges for all purposes under
this Agreement (including Section 8 hereof) that the information under
the caption "Selling Stockholder" set forth in the Prospectus has been
furnished by the Selling Stockholder in writing expressly for use in the
Registration Statement and the Prospectus (such information constituting
the "Selling Stockholder Information").
12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (a) if to the Company, to
Price/Costco, Inc., 999 Lake Drive, Issaquah, Washington 98027, Attention:
Richard Olin, with a copy to Foster, Pepper & Shefelman, Suite 3400, 1111
Third Avenue, Seattle, Washington 98101, Attention: David R. Wilson, (b) if
to any Underwriter or to you, c/o Donaldson, Lufkin & Jenrette Securities
Corporation, 277 Park Avenue, New York, New York 10172, Attention: Syndicate
Department, with a copy to Skadden, Arps, Slate, Meagher & Flom, 300 South
Grand Avenue, Suite 3400, Los Angeles, California 90071, Attention: Jeffrey
H. Cohen, and (c) if the Selling Stockholder, to Fourcar B.V. c/o Mr. Yves
Sisteron, 602 North Crescent Drive, Beverly Hills, California 90210, with a
copy to Sokolow, Dunaud, Mercadier & Carreras, 1211 Avenue of the Americas,
New York, New York 10036, Attention: Jean-Francois Carreras, or in any case
to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, repre-
sentations, warranties and other statements of the Company, the Selling
Stockholder, their respective officers and directors and of the 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
Company or the Selling Stockholder, the officers or directors of the Company
or the Selling Stockholder or any controlling person of the Company or the
Selling Stockholder, (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 Company or the Selling
Stockholder to comply with the terms or to fulfill any of the conditions of
this Agreement, the party whose failure or refusal to comply with such terms
or fulfill such conditions shall reimburse the Underwriters for all out-of-
pocket expenses (including the fees and disbursements of counsel) reasonably
incurred by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholder, the Underwriters, any indemnified party 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 INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS MADE AND
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW. EACH OF THE COMPANY AND THE SELLING STOCKHOLDER HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK
STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY SUIT,
ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEM-
PLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH OF
THE COMPANY AND THE SELLING STOCKHOLDER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
Any determination that any provision of this Agreement may be, or
is, unenforceable shall not affect the enforceability of the remainder of
this Agreement.
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 between the Company, the Selling Stockholder and the several
Underwriters.
Very truly yours,
PRICE/COSTCO, INC.
By: /s/ James D. Sinegal
Name: James D. Sinegal
Title: President and CEO
FOURCAR B.V.
By: /s/ Yves Sisteron
Name: Yves Sisteron
Title: Attorney-in-Fact for
Fourcar B.V.
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SALOMON BROTHERS INC
UBS SECURITIES LLC
Acting on severally on behalf of
themselves and as representatives of
the several U.S. Underwriters named in
Schedule I hereto:
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Steven E. Lebow
Name: Steven E. Lebow
Its: Managing Director
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
UBS LIMITED
SALOMON BROTHERS INTERNATIONAL LIMITED
Acting on severally on behalf of
themselves and as representatives of
the several International Managers named in
Schedule II hereto:
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Steven E. Lebow
Name: Steven E. Lebow
Its: Managing Director
SCHEDULE I
Number of
Firm Shares
U.S. Underwriters to be Purchased
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . 4,160,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . . 4,160,000
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . 4,160,000
CS First Boston Corporation . . . . . . . . . . . . . . . . . . . . . 195,000
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . . . . 195,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . . . 195,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . . . 195,000
Lazard Freres & Co. LLC . . . . . . . . . . . . . . . . . . . . . . . 195,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . . . . . . . . 195,000
Montgomery Securities . . . . . . . . . . . . . . . . . . . . . . . . 195,000
J. P. Morgan Securities Inc. . . . . . . . . . . . . . . . . . . . . 195,000
PaineWebber Incorporated . . . . . . . . . . . . . . . . . . . . . . 195,000
Prudential Securities Incorporated . . . . . . . . . . . . . . . . . 195,000
Schroder Wertheim & Co. Incorporated . . . . . . . . . . . . . . . . 195,000
Ragen MacKenzie Incorporated . . . . . . . . . . . . . . . . . . . . 195,000
Sanford C. Bernstein & Co., Inc. . . . . . . . . . . . . . . . . . . 195,000
William Blair & Company, L.L.C. . . . . . . . . . . . . . . . . . . . 97,500
Furman Selz LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,500
Jensen Securities Co. . . . . . . . . . . . . . . . . . . . . . . . . 97,500
Neuberger & Berman . . . . . . . . . . . . . . . . . . . . . . . . . 97,500
Pacific Crest Securities, Inc. . . . . . . . . . . . . . . . . . . . 97,500
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 97,500
Total . . . . . . . . 15,600,000
SCHEDULE II
Number of
Firm Shares
International Managers to be Purchased
Donaldson, Lufkin & Jenrette
Securities Corporation . . . . . . . . . . . . . . . . . . . . . 1,300,000
UBS Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000
Salomon Brothers International Limited . . . . . . . . . . . . . . 1,300,000
Total . . . . . . . . . 3,900,000
SCHEDULE III
Pricesub Inc. (P) (Joint Venture with Ivanhoe, Inc.)
PriceCostco Europe (UK) Ltd. (C)
(European Operations)
(60% Costco Wholesale International)
Price Club de Mexico (Operating Company)
Controladora Price Club (Holding Company)
(50% Price Venture Mexico)
PriceCostco President (South), Inc.
(51% Price International, Inc.)
