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EXHIBIT 1.1
▇▇▇▇▇▇▇ INC.
2,000,000 Shares Common Stock*
UNDERWRITING AGREEMENT
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_____, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Alex. ▇▇▇▇▇ & Sons Incorporated
As Representatives of the
Several Underwriters Named
in Schedule A
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. ▇▇▇▇▇▇▇ Inc., a Delaware corporation
(the "Company"), has an authorized capital stock consisting of 10,000,000 shares
of Preferred Stock, $0.10 par value, of which immediately prior to the closing
of the offering of the shares contemplated by this Agreement 1,271,000 shares of
Series A Non-Voting Convertible Preferred Stock (the "Series A Preferred Stock")
will be outstanding, and 40,000,000 shares of Common Stock, $0.01 par value (the
"Common Stock"), of which immediately prior to the closing of the offering of
shares contemplated by this Agreement 14,398,000 shares will be outstanding. The
Company proposes to issue and sell 500,000 shares of its authorized but unissued
Common Stock, and Waxman USA Inc., a Delaware corporation and a stockholder of
the Company (the "Selling Stockholder"), which is a direct wholly-owned
subsidiary of Waxman Industries, Inc., a Delaware corporation ("Waxman
Industries"), proposes to sell 1,500,000 shares of the Company's issued and
outstanding Common Stock, to the several underwriters named in Schedule A as it
may be amended by the Pricing Agreement hereinafter defined (the
"Underwriters"), who are acting severally and not jointly. Collectively, such
total of 2,000,000 shares of Common Stock proposed to be sold by the Company and
the Selling Stockholder are hereinafter referred to as the "Firm Shares." In
addition, the Selling Stockholder proposes to grant to the Underwriters an
option to purchase up to 150,000 additional shares of Common Stock (the "Option
Shares") as provided in Section 5 hereof. The Firm Shares and, to the extent
such option is exercised, the Option Shares, are hereinafter collectively
referred to as the "Shares."
You have advised the Company and the Selling Stockholder
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* Plus an option to acquire up to 150,000 additional shares
from the Selling Stockholder to cover overallotments.
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that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon as you deem advisable after the registration
statement hereinafter referred to becomes effective, if it has not yet become
effective, and the Pricing Agreement hereinafter defined has been executed and
delivered.
Prior to the purchase and public offering of the Shares by the
several Underwriters, the Company, the Selling Stockholder, Waxman Industries
and the Representatives, acting on behalf of the several Underwriters, shall
enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement may take the form of an exchange of
any standard form of written telecommunication between the Company, the Selling
Stockholder, Waxman Industries and the Representatives and shall specify such
applicable information as is indicated in Exhibit A hereto. The offering of the
Shares will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Company, the Selling Stockholder and Waxman Industries
hereby confirm their agreements with the Underwriters as follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY, THE
SELLING STOCKHOLDER AND WAXMAN INDUSTRIES. The Company, the Selling Stockholder
and Waxman Industries, jointly and severally, represent and warrant to the
several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333- ____)
and a related preliminary prospectus with respect to the Shares have
been prepared and filed with the Securities and Exchange Commission
(the "Commission") by the Company in conformity with the requirements
of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "1933 Act;"
unless indicated to the contrary, all references herein to specific
rules are rules promulgated under the ▇▇▇▇ ▇▇▇); and the Company has so
prepared and has filed such amendments thereto, if any, and such
amended preliminary prospectuses as may have been required to the date
hereof and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. There have been or
will promptly be delivered to you three signed copies of such
registration statement and amendments, three copies of each exhibit
filed therewith, and conformed copies of such registration statement
and amendments (but without exhibits) and of the related preliminary
prospectus or prospectuses and final forms of prospectus for each of
the Underwriters.
Such registration statement (as amended, if applicable) at the
time it becomes effective and the prospectus constituting a part
thereof (including the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) and/or Rule 434), as from time to time amended
or supplemented, are hereinafter referred to as the "Registration
Statement," and the "Prospectus," respectively, except that if any
revised
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prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Shares which differs from
the Prospectus on file at the Commission at the time the
Registration Statement became or becomes effective (whether or not
such revised prospectus is required to be filed by the Company
pursuant to Rule 424(b)), the term Prospectus shall refer to such
revised prospectus from and after the time it was provided to the
Underwriters for such use. If the Company elects to rely on Rule 434
of the 1933 Act, all references to "Prospectus" shall be deemed to
include, without limitation, the form of prospectus and the term
sheet, taken together, provided to the Underwriters by the Company in
accordance with Rule 434 of the 1933 Act (the "Rule 434 Prospectus").
Any registration statement (including any amendment or supplement
thereto or information which is deemed part thereof) filed by the
Company under Rule 462(b) (the "Rule 462(b) Registration Statement")
shall be deemed to be part of the "Registration Statement" as defined
herein, and any prospectus (including any amendment or supplement
thereto or information which is deemed part thereof) included in such
registration statement shall be deemed to be part of the "Prospectus,"
as defined herein, as appropriate. The Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
thereunder are hereinafter collectively referred to as the "Exchange
Act."
(b) The Commission has not issued any order preventing or
suspending the use of any preliminary prospectus, and when the
Registration Statement became or becomes effective, and at all times
subsequent thereto, up to the First Closing Date or the Second Closing
Date hereinafter defined, as the case may be, the Registration
Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule
430A(b), if applicable, and the Prospectus and any amendments or
supplements thereto, contained or will contain all statements that are
required to be stated therein in accordance with the 1933 Act and in
all material respects conformed or will in all material respects
conform to the requirements of the 1933 Act, and neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omitted or will omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that none of the Company, the Selling
Stockholder or Waxman Industries makes any representation or warranty
as to information contained in or omitted from any preliminary
prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter
through the Representatives specifically for use in the preparation
thereof.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the corporate power and authority to own its
properties and conduct its business as described in the Prospectus; the
Company is duly qualified to
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do business as a foreign corporation under the corporation law of, and
is in good standing as such in, each jurisdiction in which it owns or
leases properties, has an office, or in which it conducts business and
such qualification is required except in any such case where the
failure to so qualify or be in good standing would not have a material
adverse effect upon the Company; and no proceeding of which the
Company has knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification.
(d) As of the date of this Agreement, the Company has an
authorized and outstanding capitalization as set forth under the
heading "Actual" beneath the caption "Capitalization" in the Prospectus
and immediately following the purchase of the Firm Shares hereunder,
the Company will have an authorized and outstanding capitalization as
set forth under the heading "As Adjusted" beneath the caption
"Capitalization" in the Prospectus; the issued and outstanding shares
of capital stock of the Company as set forth in the Prospectus have
been duly authorized and validly issued, are fully paid and
nonassessable, and conform to the description thereof contained in the
Prospectus; and there is no commitment, plan or arrangement to issue,
and no outstanding option, warrant, or other right calling for the
issuance of, any share of capital stock of the Company, or any security
or other instrument which by its terms is convertible into or
exchangeable for capital stock of the Company, except as described in
the Prospectus. Except as described in the Prospectus, there is
outstanding no security or other instrument that by its terms is
convertible into or exchangeable for capital stock of the Company.
(e) The Shares to be sold by the Company have been duly
authorized and when issued, delivered and paid for pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, and
will conform to the description thereof contained in the Prospectus.
(f) The making and performance by the Company of this
Agreement and the Pricing Agreement have been duly authorized by all
necessary corporate action and will not violate any provision of the
Company's charter or bylaws and will not result in the breach, or be in
contravention, of any provision of any agreement, franchise, license,
indenture, mortgage, deed of trust, or other instrument to which the
Company is a party or by which the Company or its property may be bound
or affected, except where such breach or contravention would have no
effect on the Company, or any order, rule or regulation applicable to
the Company of any court or regulatory body, administrative agency or
other governmental body having jurisdiction over the Company or any of
its properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company was or is now
a party or by which it is bound. No consent, approval, authorization or
other order of any court, regulatory body, administrative agency or
other governmental body is required for the execution and delivery of
this Agreement or the Pricing
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Agreement or the consummation of the transactions contemplated herein
or therein, except for compliance with the 1933 Act and blue sky laws
applicable to the public offering of the Shares by the several
Underwriters and clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD"). This Agreement
has been duly executed and delivered by the Company.
(g) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed their opinion with
respect to certain of the financial statements and schedules included
in the Registration Statement, are independent accountants as required
by the 1933 Act.
(h) The financial statements and schedules of the Company
included in the Registration Statement present fairly the financial
position of the Company as of the respective dates of such financial
statements, and the results of operations and cash flows of the Company
for the respective periods covered thereby, all in conformity with
generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed in the Prospectus;
and the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein. The
financial information set forth in the Prospectus under the captions
"Summary Financial and Operating Data" and "Selected Financial
Information and Operating Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein; and the pro forma
financial statements and other pro forma information included in the
Prospectus present fairly the information shown therein, have been
prepared in accordance with generally accepted accounting principles
and the Commission's rules and guidelines with respect to pro forma
financial statements and other pro forma information, have been
properly compiled on the pro forma basis described therein, and, in the
opinion of the Company, the assumptions used in the preparation thereof
are reasonable and the adjustments used therein are appropriate under
the circumstances.
(i) The Company is not in violation of its charter or in
default under any consent decree, or in default with respect to any
material provision of any lease, loan agreement, franchise, license,
permit or other contract obligation to which it is a party; and there
does not exist any state of facts that constitutes an event of default
as defined in such documents or which, with notice or lapse of time or
both, would constitute such an event of default, in each case, except
for defaults that, neither singly nor in the aggregate, would not have
a material adverse effect on the Company.
(j) There are no material legal or governmental proceedings
pending, or to the Company's knowledge, threatened to which the Company
is or may be a party or of which material property owned or leased by
the Company is or may be the subject, or related to environmental or
discrimination matters that are not disclosed in the Prospectus, or
which question the validity of this Agreement or the Pricing Agreement
or any action taken or to be taken pursuant hereto or thereto.
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(k) Except as described in the Prospectus, there are no
holders of securities of the Company having rights to registration
thereof, preemptive rights or rights of first refusal to purchase
Common Stock.
(l) The Company has good and marketable title to all the
properties and assets reflected as owned in the financial statements
hereinabove described (or elsewhere in the Prospectus), subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except those,
if any, reflected in such financial statements, including the notes
thereto, (or elsewhere in the Prospectus) or which are not material to
the Company. The Company holds its leased properties that are material
to the Company under valid and binding leases.
(m) The Company has not taken and will not take, directly or
indirectly, any action designed to or that has constituted or that
might reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares.
(n) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
set forth or contemplated by the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or contingent,
nor entered into any material transactions not in the ordinary course
of business and there has not been any material adverse change in its
condition (financial or otherwise), business, assets, operations or
prospects, nor any change in its capital stock, short-term debt or
long-term debt.
(o) The Company agrees not to sell, contract to sell or
otherwise dispose of any Common Stock or securities convertible into
Common Stock (except the future grant to Company officers or employees
of options to purchase up to an aggregate of 1,117,000 shares of Common
Stock under the Company's 1996 Omnibus Incentive Plan, the Company's
1996 Employee Stock Purchase Plan and the Company's 1996 Stock Option
Plan for Non-Employee Directors) for a period of 180 days after this
Agreement becomes effective without the prior written consent of the
Representatives. The Company has obtained similar agreements from the
Selling Stockholder, Waxman Industries and each director and executive
officer of the Company with respect to such sales, copies of which have
been delivered to you.
(p) There is no material 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 which is not
described or filed as required.
(q) The Company owns and possesses all right, title and
interest in and to, or has duly licensed from third parties, all
trademarks, copyrights and other proprietary rights ("Trade Rights")
material to the business of the Company, and, except for liens to be
released concurrently with the Closing,
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the Company has not granted any lien or encumbrance on, or granted any
right of license(other than in the ordinary course of its business)
with respect to, any such Trade Rights. The Company has not received
any notice of infringement, misappropriation or conflict from any
third party as to such material Trade Rights that has not been
resolved or disposed of, and, to its knowledge, the Company has not
infringed, misappropriated or otherwise conflicted with material Trade
Rights of any third parties, which infringement, misappropriation or
conflict would have a material adverse effect upon the condition
(financial or otherwise), business, assets, operations or prospects of
the Company.
(r) The conduct of the business of the Company is in
compliance in all respects with applicable federal, state, local and
foreign laws and regulations, except where the failure to be in
compliance would not have a material adverse effect upon the condition
(financial or otherwise), business, assets, operations or prospects of
the Company.
(s) The Company has filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company might be, asserted against the Company or any
of its properties or assets that would or could be expected to
adversely affect the condition (financial or otherwise), business,
assets, operations or prospects of the Company.
(t) The Shares have been authorized for trading on the Nasdaq
National Market.
(u) The Company is not, and does not intend to conduct its
business in a manner in which it would become, an "investment company"
as defined in Section 3(a) of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(v) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter
92-198, AN ACT RELATING TO DISCLOSURE OF DOING BUSINESS WITH CUBA, and
that it is not doing business with the government of Cuba or with any
person or affiliate located in Cuba. The Company further agrees that if
it commences engaging in business with the government of Cuba or with
any person or affiliate located in Cuba after the date the Registration
Statement becomes or has become effective with the Commission or with
the Florida Department of Banking and Finance (the "Department"),
whichever date is later, or if the information reported in the
Prospectus, if any, concerning the Company's business with Cuba or with
any person or affiliate located in Cuba changes in any material way,
the Company will provide the Department notice of such business or
change, as appropriate, in a form acceptable to the Department.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS
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OF THE SELLING STOCKHOLDER AND WAXMAN INDUSTRIES.
(a) The Selling Stockholder and Waxman Industries,
jointly and severally, represent and warrant to, and agree
with, the Underwriters that:
(i) The Selling Stockholder has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with the
corporate power and authority to own its properties and
conduct its business; the Selling Stockholder is duly
qualified to do business as a foreign corporation under the
corporation law of, and is in good standing as such in, each
jurisdiction in which it owns or leases properties, has an
office, or in which it conducts business and such
qualification is required except in any such case where the
failure to so qualify or be in good standing would not have a
material adverse effect upon the Selling Stockholder; and no
proceeding of which the Selling Stockholder has knowledge has
been instituted in any such jurisdiction, revoking, limiting
or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(ii) The making and performance by the Selling
Stockholder of this Agreement and the Pricing Agreement have
been duly authorized by all necessary corporate action and
will not violate any provision of the Selling Stockholder's
charter or bylaws and will not result in the breach, or be in
contravention, of any provision of any agreement, franchise,
license, indenture, mortgage, deed of trust, or other
instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder or its property may be bound or
affected, except where such breach or contravention would have
no effect on the Selling Stockholder, or any order, rule or
regulation applicable to the Selling Stockholder of any court
or regulatory body, administrative agency or other
governmental body having jurisdiction over the Selling
Stockholder or any of its properties, or any order of any
court or governmental agency or authority entered in any
proceeding to which the Selling Stockholder was or is now a
party or by which it is bound. This Agreement has been duly
executed and delivered by the Selling Stockholder.
(iii) The Selling Stockholder has, and on the First
Closing Date or the Second Closing Date hereinafter defined,
as the case may be, will have, valid marketable title to the
Shares proposed to be sold by the Selling Stockholder
hereunder on such date and full right, power and authority to
enter into this Agreement and the Pricing Agreement and to
sell, assign, transfer and deliver such Shares hereunder, free
and clear of all voting trust arrangements, liens,
encumbrances, equities, claims and community property rights;
and upon delivery of and payment for such Shares hereunder,
the Underwriters will acquire valid marketable title thereto,
free and clear of all voting trust arrangements, liens,
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encumbrances, equities, claims and community property
rights whatsoever.
(iv) The Selling Stockholder has not taken and will
not take, directly or indirectly, any action designed to or
which might be reasonably expected to cause or result, under
the Exchange Act or otherwise, in stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(v) The Selling Stockholder agrees with the
Underwriters not to sell, contract to sell or otherwise
dispose of any Common Stock for a period of 180 days after
this Agreement becomes effective without the prior written
consent of the Representatives.
(b) Waxman Industries represents and warrants to, and agrees
with, the Underwriters that:
(i) Waxman Industries has been duly incorporated and
is validly existing as a corporation in good standing under
the laws of the State of Delaware, with the corporate power
and authority to own its properties and conduct its business;
Waxman Industries is duly qualified to do business as a
foreign corporation under the corporation law of, and is in
good standing as such in, each jurisdiction in which it owns
or leases properties, has an office, or in which it conducts
business and such qualification is required except in any such
case where the failure to so qualify or be in good standing
would not have a material adverse effect upon Waxman
Industries; and no proceeding of which Waxman Industries has
knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(ii) The making and performance by Waxman Industries
of this Agreement and the Pricing Agreement have been duly
authorized by all necessary corporate action and will not
violate any provision of Waxman Industries' charter or bylaws
and will not result in the breach, or be in contravention, of
any provision of any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument to which Waxman
Industries is a party or by which Waxman Industries or its
property may be bound or affected, except where such breach or
contravention would have no effect on Waxman Industries, or
any order, rule or regulation applicable to Waxman Industries
of any court or regulatory body, administrative agency or
other governmental body having jurisdiction over Waxman
Industries or any of its properties, or any order of any court
or governmental agency or authority entered in any proceeding
to which Waxman Industries was or is now a party or by which
it is bound. This Agreement has been duly executed and
delivered by Waxman Industries.
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(iii) Waxman Industries agrees with the Underwriters
not to sell, contract to sell or otherwise dispose of any
Common Stock for a period of 180 days after this Agreement
becomes effective without the prior written consent of the
Representatives.
In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Internal Revenue Code of 1986, as amended,
with respect to the transactions herein contemplated, the Selling Stockholder
agrees to deliver to you prior to or on the First Closing Date, as hereinafter
defined, a properly completed and executed United States Treasury Department
Form W-8 or W-9 (or other applicable form of statement specified by Treasury
Department regulations in lieu thereof).
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS.
The Representatives, on behalf of the several Underwriters, represent and
warrant to the Company and the Selling Stockholder that the information set
forth (a) on the cover page of the Prospectus with respect to price,
underwriting discount and terms of the offering and (b) under "Underwriting" in
the Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and is
correct and complete in all material respects.
SECTION 5. PURCHASE, SALE AND DELIVERY OF SHARES. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Company and the Selling
Stockholder, severally and not jointly, agree to sell to the Underwriters named
in Schedule A hereto, and the Underwriters agree, severally and not jointly, to
purchase from the Company and the Selling Stockholder, respectively, 500,000
Firm Shares from the Company and 1,500,000 Firm Shares from the Selling
Stockholder at the price per share set forth in the Pricing Agreement. The
obligation of each Underwriter to the Company shall be to purchase from the
Company that number of full shares which (as nearly as practicable, as
determined by you) bears to the number of Firm Shares to be sold by the Company,
the same proportion as the number of Shares set forth opposite the name of such
Underwriter in Schedule A hereto bears to the total number of Firm Shares to be
purchased by all Underwriters under this Agreement. The obligation of each
Underwriter to the Selling Stockholder shall be to purchase from the Selling
Stockholder that number of full shares which (as nearly as practicable, as
determined by you) bears to the number of Firm Shares to be sold by the Selling
Stockholder, the same proportion as the number of Shares set forth opposite the
name of such Underwriter in Schedule A hereto bears to the total number of Firm
Shares to be purchased by all Underwriters under this Agreement. The public
offering price and the purchase price shall be set forth in the Pricing
Agreement.
At 9:00 A.M., Chicago time, on the fourth business day, if
permitted under Rule 15c6-1 under the Exchange Act (or the third business day if
required under Rule 15c6-1 under the Exchange Act or unless postponed in
accordance with the provisions of Section 12), following the date the
Registration Statement becomes
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effective (or, if the Company has elected to rely upon Rule 430A, the fourth
business day, if permitted under Rule 15c6-1 under the Exchange Act (or the
third business day if required under Rule 15c6-1 under the Exchange Act) after
execution of the Pricing Agreement), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Company, the Company and the Selling Stockholder will deliver to you at the
offices of Shereff, Friedman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, 919 Third Avenue, New
York, New York, or through the facilities of The Depository Trust Company for
the accounts of the several Underwriters, certificates representing the Firm
Shares to be sold by them, respectively, against payment of the purchase price
therefor by Federal or other funds immediately available to an account or
accounts designated by the Company and the Selling Stockholder, respectively.
Such time of delivery and payment is herein referred to as the "First Closing
Date." The certificates for the Firm Shares so to be delivered will be in such
denominations and registered in such names as you request by notice to the
Company and the Selling Stockholder prior to 10:00 A.M., Chicago Time, on the
second full business day preceding the First Closing Date, and will be made
available at the Company's expense for checking and packaging by the
Representatives at 10:00 A.M., Chicago Time, on the first full business day
preceding the First Closing Date. Payment for the Firm Shares so to be delivered
shall be made at the time and in the manner described above at the offices of
Shereff, Friedman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP.
In addition, on the basis of the representations, warranties
and agreements herein contained, but subject to the terms and conditions herein
set forth, the Selling Stockholder hereby grants an option to the several
Underwriters to purchase, severally and not jointly, up to an aggregate of
150,000 Option Shares, at the same purchase price per share to be paid for the
Firm Shares, for use solely in covering any overallotments made by the
Underwriters in the sale and distribution of the Firm Shares. The option granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the date of the public offering upon notice by you to the Selling
Stockholder setting forth the aggregate number of Option Shares as to which the
Underwriters are exercising the option, the names and denominations in which the
certificates for such shares are to be registered and the time and place at
which such certificates will be delivered. Such time of delivery (which may not
be earlier than the First Closing Date), being herein referred to as the "Second
Closing Date," shall be determined by you, but if at any time other than the
First Closing Date, shall not be earlier than three nor later than 10 full
business days after delivery of such notice of exercise. The number of Option
Shares to be purchased by each Underwriter shall be determined by multiplying
the number of Option Shares to be sold by the Selling Stockholder pursuant to
such notice of exercise by a fraction, the numerator of which is the number of
Firm Shares to be purchased by such Underwriter as set forth opposite its name
in Schedule A and the denominator of which is the total number of Firm Shares
(subject to such adjustments to eliminate any fractional share purchases as you
in your absolute discretion may make). Certificates for the Option Shares will
be made available at the Company's expense for checking and packaging at 10:00
A.M., Chicago Time, on the first full business day
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preceding the Second Closing Date. The manner of payment for and delivery of
the Option Shares shall be the same as for the Firm Shares as specified in the
preceding paragraph.
You have advised the Company and the Selling Stockholder that
each Underwriter has authorized you to accept delivery of its Shares, to make
payment and to give receipt therefor. You, individually and not as the
Representatives of the Underwriters, may make payment for any Shares to be
purchased by any Underwriter whose funds shall not have been received by you by
the First Closing Date or the Second Closing Date, as the case may be, for the
account of such Underwriter, but any such payment shall not relieve such
Underwriter from any obligation hereunder.
SECTION 6. COVENANTS OF THE COMPANY. The Company covenants
and agrees that:
(a) The Company will advise you and the Selling Stockholder
promptly of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose, or of any notification of the
suspension of qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceedings for that purpose,
and will also advise you and the Selling Stockholder promptly of any
request of the Commission for amendment or supplement of the
Registration Statement, of any preliminary prospectus or of the
Prospectus, or for additional information.
(b) The Company will give you and the Selling Stockholder
notice of its intention to file or prepare any amendment to the
Registration Statement (including any post-effective amendment) or any
Rule 462(b) Registration Statement or any amendment or supplement to
the Prospectus (including any revised prospectus which the Company
proposes for use by the Underwriters in connection with the offering of
the Shares which differs from the prospectus on file at the Commission
at the time the Registration Statement became or becomes effective,
whether or not such revised prospectus is required to be filed pursuant
to Rule 424(b) and any term sheet as contemplated by Rule 434) and will
furnish you and the Selling Stockholder with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and will not file any such
amendment or supplement or use any such prospectus to which you or
counsel for the Underwriters shall reasonably object in writing.
(c) If the Company elects to rely on Rule 434 of the 1933 Act,
the Company will prepare a term sheet that complies with the
requirements of Rule 434. If the Company elects not to rely on Rule
434, the Company will provide the Underwriters with copies of the form
of prospectus, in such numbers as the Underwriters may reasonably
request, and file with the Commission such prospectus in accordance
with Rule 424(b) of the 1933 Act by the close of business in New York
City on the second business day immediately succeeding the date of the
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Pricing Agreement. If the Company elects to rely on Rule 434, the
Company will provide the Underwriters with copies of the form of Rule
434 Prospectus, in such numbers as the Underwriters may reasonably
request, by the close of business in New York City on the business day
immediately succeeding the date of the Pricing Agreement.
(d) If at any time when a prospectus relating to the Shares is
required to be delivered under the 1933 Act any event occurs as a
result of which the Prospectus, including any amendments or
supplements, would include an untrue statement of a material fact, or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus, including any amendments
or supplements thereto and including any revised prospectus which the
Company proposes for use by the Underwriters in connection with the
offering of the Shares which differs from the prospectus on file with
the Commission at the time of effectiveness of the Registration
Statement, whether or not such revised prospectus is required to be
filed pursuant to Rule 424(b), to comply with the 1933 Act, the Company
promptly will advise you thereof and will promptly prepare and file
with the Commission an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance; and, in case any Underwriter is required to deliver a
prospectus nine months or more after the effective date of the
Registration Statement, the Company upon request, but at the expense of
such Underwriter, will prepare promptly such prospectus or prospectuses
as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the 1933 Act.
(e) The Company will not, prior to the earlier of the Second
Closing Date or termination or expiration of the option relating to the
Option Shares, incur any liability or obligation, direct or contingent,
or enter into any material transaction, other than in the ordinary
course of business, except as contemplated by the Prospectus.
(f) The Company will not acquire any capital stock of the
Company prior to the earlier of the Second Closing Date or termination
or expiration of the option relating to the Option Shares nor will the
Company declare or pay any dividend or make any other distribution upon
the Common Stock payable to stockholders of record on a date prior to
the earlier of the Second Closing Date or termination or expiration of
the option relating to the Option Shares, except in either case as
contemplated by the Prospectus.
(g) As soon as practicable, but in any event not later than
November 15, 1998, the Company will make generally available to its
security holders and the Representatives an earnings statement (which
need not be audited) covering a period of at least 12 months beginning
after the effective date of the Registration Statement, which will
satisfy the provisions of the last paragraph of Section 11(a) of the
1933
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Act and Rule 158 under the 1933 Act.
(h) During such period as a prospectus is required by law to
be delivered in connection with offers and sales of the Shares by an
Underwriter or dealer, the Company will furnish to the Representatives
and counsel for the Underwriters at its expense, subject to the
provisions of subsection (d) hereof, signed copies of the Registration
Statement (including exhibits thereto), and to each Underwriter copies
of the Registration Statement (without exhibits thereto) and the
Prospectus, each preliminary prospectus and all amendments and
supplements to any such documents in each case as soon as available and
in such quantities as you may reasonably request, for the purposes
contemplated by the 1933 Act.
(i) The Company will cooperate with the Underwriters in
qualifying the Shares for sale under the blue sky laws of such
jurisdictions as you designate, and will continue such qualifications
in effect so long as reasonably required for the distribution of the
Shares. The Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
such jurisdiction where it is not currently qualified or where it would
be subject to taxation as a foreign corporation.
(j) During the period of two years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon
as practicable after the filing thereof, of each periodic report filed
by the Company with the Commission pursuant to the Exchange Act; (ii)
as soon as practicable after the release thereof, of each material
press release in respect of the Company; and (iii) as soon as
available, of each report of the Company mailed to its stockholders.
(k) The Company will use the net proceeds received by it
from the sale of the Shares being sold by it in the manner
specified in the Prospectus.
(l) If, at the time of effectiveness of the Registration
Statement, any information shall have been omitted therefrom in
reliance upon Rule 430A and/or Rule 434, then immediately following the
execution of the Pricing Agreement, the Company will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A, Rule 424(b) and/or Rule 434, copies of an amended Prospectus, or,
if required by such Rule 430A and/or Rule 434, a post-effective
amendment to the Registration Statement (including an amended
Prospectus), containing all information so omitted. If required, the
Company will prepare and file, or transmit for filing, a Rule 462(b)
Registration Statement not later than the date of the execution of the
Pricing Agreement. If a Rule 462(b) Registration Statement is filed,
the Company shall make payment of, or arrange for payment of, the
additional registration fee owing to the Commission required by Rule
111.
(m) The Company will use its best efforts to maintain the
designation of the Shares to be sold hereunder on the
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Nasdaq National Market, unless the Company's board of directors
determines otherwise. The Company will pay the fee of the NASD in
connection with the review of the offering.
(n) The Company will promptly deliver to the Representatives
copies of all correspondence to and from, and all documents issued to
and by, the Commission in connection with the registration of the
Shares under the ▇▇▇▇ ▇▇▇.
(o) Prior to the First Closing Date, the Company will issue no
press release or other public communication directly or indirectly and
hold no press conference with respect to the Company or with respect to
the financial condition, results of operations, business, properties,
assets or liabilities of any of them, or the offering of the Shares,
without your prior written consent, which consent shall not be
unreasonably withheld.
SECTION 7. PAYMENT OF EXPENSES. Whether or not the
transactions contemplated hereunder are consummated or this Agreement becomes
effective as to all of its provisions or is terminated, the Company, the Selling
Stockholder and Waxman Industries, jointly and severally, agree to pay (i) all
costs, fees and expenses (other than legal fees and disbursements of counsel for
the Underwriters and the expenses incurred by the Underwriters) incurred in
connection with the performance of the Company's obligations hereunder,
including, without limiting the generality of the foregoing, all fees and
expenses of legal counsel for the Company and of the Company's independent
accountants, all costs and expenses incurred in connection with the preparation,
printing, filing and distribution of the Registration Statement, each
preliminary prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, this
Agreement, the Pricing Agreement and any blue sky memorandum, (ii) all costs,
fees and expenses (including legal fees not to exceed $5,000 and disbursements
of counsel for the Underwriters) incurred by the Underwriters in connection with
qualifying all or any part of the Shares for offer and sale under blue sky laws,
including the preparation of a blue sky memorandum relating to the Shares and
clearance of such offering with the NASD; and (iii) all fees and expenses of the
Company's transfer agent, printing of the certificates for the Shares and all
transfer taxes, if any, with respect to the sale and delivery of the Shares to
the several Underwriters.
The provisions of this Section 7 shall not affect any
agreement which the Company, the Selling Stockholder and Waxman Industries may
make for the allocation or sharing of such expenses and costs.
SECTION 8. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the several Underwriters to purchase and pay for the Firm
Shares on the First Closing Date and the Option Shares on the Second Closing
Date shall be subject to the accuracy of the representations and warranties on
the part of the Company, the Selling Stockholder and Waxman Industries herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the
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statements of officers of the Company, the Selling Stockholder and Waxman
Industries made pursuant to the provisions hereof, to the performance by the
Company, the Selling Stockholder and Waxman Industries of their respective
obligations hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective
either prior to the execution of this Agreement or not later than 1:00
P.M., Chicago Time, on the first full business day after the date of
this Agreement, or such later time as shall have been consented to by
you but in no event later than 1:00 P.M., Chicago Time, on the third
full business day following the date hereof; and prior to the First
Closing Date or the Second Closing Date, as the case may be, no stop
order suspending the effectiveness of the Registration Statement shall
have been issued and no proceedings for that purpose shall have been
instituted or shall be pending or, to the knowledge of the Company, the
Selling Stockholder, Waxman Industries or you, shall be contemplated by
the Commission. If the Company has elected to rely upon Rule 430A
and/or Rule 434, the information concerning the public offering price
of the Shares and price-related information shall have been transmitted
to the Commission for filing pursuant to Rule 424(b) within the
prescribed period and the Company will provide evidence satisfactory to
the Representatives of such timely filing (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rules 430A and
424(b)). If a Rule 462(b) Registration Statement is required, such
Registration Statement shall have been transmitted to the Commission
for filing and become effective within the prescribed time period and,
prior to the First Closing Date, the Company shall have provided
evidence of such filing and effectiveness in accordance with Rule
462(b).
(b) The Shares shall have been qualified for sale under the
blue sky laws of such states as shall have been specified by the
Representatives.
(c) The legality and sufficiency of the authorization,
issuance and sale or transfer and sale of the Shares hereunder, the
validity and form of the certificates representing the Shares, the
execution and delivery of this Agreement and the Pricing Agreement, and
all corporate proceedings and other legal matters incident thereto, and
the form of the Registration Statement and the Prospectus (except
financial statements) shall have been approved by counsel for the
Underwriters exercising reasonable judgment.
(d) You shall not have advised the Company that the
Registration Statement or the Prospectus or any amendment or supplement
thereto, contains an untrue statement of fact, which, in the opinion of
counsel for the Underwriters, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to
be stated therein or necessary to make the statements therein not
misleading.
(e) Subsequent to the execution and delivery of this
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Agreement, there shall not have occurred any change, or any development
involving a prospective change, in or affecting particularly the
business or properties of the Company, whether or not arising in the
ordinary course of business, which, in the judgment of the
Representatives, makes it impractical or inadvisable to proceed with
the public offering or purchase of the Shares as contemplated hereby.
(f) There shall have been furnished to you, as Representatives
of the Underwriters, on the First Closing Date or the Second Closing
Date, as the case may be, except as otherwise expressly provided below:
(i) An opinion of Shereff, Friedman, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, LLP, counsel for the Company, the Selling Stockholder
and Waxman Industries, addressed to the Underwriters and dated
the First Closing Date or the Second Closing Date, as the case
may be, to the effect that:
(1) the Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Delaware with
corporate power and authority to own its properties
and conduct its business as described in the
Prospectus; and, based solely upon a review of good
standing certificates of the appropriate state
officials, the Company is duly qualified to do
business as a foreign corporation under the
corporation law of, and is in good standing as such
in, each jurisdiction that has been certified by an
officer of the Company as a state where the Company
owns or leases property or where the conduct of its
business requires such qualification;
(2) the authorized capital stock of the
Company conforms as to legal matters in all
material respects to the description thereof in the
Registration Statement and Prospectus;
(3) the issued and outstanding capital
stock of the Company has been duly authorized and
validly issued and is fully paid and nonassessable
and free of statutory preemptive rights;
(4) the certificates for the Shares to be
sold hereunder by the Company are in due and proper
form, and when duly countersigned by the Company's
transfer agent and delivered to you or upon your
order against payment of the agreed consideration
therefor in accordance with the provisions of this
Agreement and the Pricing Agreement, the Shares
represented thereby will be duly authorized and
validly issued, fully paid and nonassessable and, to
our knowledge, will be free of any pledge, lien,
encumbrance, claim or right of first refusal; the
Shares to be sold hereunder have been duly and
validly authorized and qualified for trading on the
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Nasdaq National Market, subject to notice of
listing of additional shares;
(5) counsel has been orally advised by a
member of the staff of the Commission that the
Registration Statement has become effective under the
1933 Act, and, to the best knowledge of such counsel,
no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to our knowledge, are pending or contemplated under
the 1933 Act, and the Registration Statement
(including the information deemed to be part of the
Registration Statement at the time of effectiveness
pursuant to Rule 430A(b) and/or Rule 434, if
applicable), the Prospectus and each amendment or
supplement thereto (except for the financial
statements and other statistical or financial data
included therein as to which such counsel need
express no view) comply as to form in all material
respects with the requirements of the 1933 Act; such
counsel have no reason to believe that either the
Registration Statement (including the information
deemed to be part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A(b)
and/or Rule 434, if applicable) or the Prospectus, or
the Registration Statement or the Prospectus as
amended or supplemented (except as aforesaid), as of
their respective effective or issue dates, contained
any untrue statement of a material fact or omitted to
state a material fact required to be stated therein
or necessary to make the statements therein not
misleading in light of the circumstances under which
they were made or that the Prospectus as amended or
supplemented, if applicable, as of the First Closing
Date or the Second Closing Date, as the case may be,
contained any untrue statement of a material fact or
omitted to state any material fact necessary to make
the statements therein not misleading in light of the
circumstances under which they were made; the
statements in the Registration Statement and the
Prospectus summarizing statutes, rules and
regulations are accurate and fairly and correctly
present the information required to be presented by
the 1933 Act or the rules and regulations thereunder,
in all material respects and such counsel does not
know of any statutes, rules and regulations required
to be described or referred to in the Registration
Statement or the Prospectus that are not described or
referred to therein as required; and such counsel
does not know of any legal or governmental
proceedings pending or threatened required to be
described in the Prospectus which are not described
as required, nor of any contracts or documents of a
character required to be described in the
Registration Statement or Prospectus or to be filed
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as exhibits to the Registration Statement which are
not described or filed, as required;
(6) this Agreement and the Pricing
Agreement and the performance of the Company's
obligations hereunder have been duly authorized by
all necessary corporate action and this Agreement and
the Pricing Agreement have been duly executed and
delivered by and on behalf of the Company, and are
legal, valid and binding agreements of the Company,
except as enforceability of the same may be limited
by bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights and
by the exercise of judicial discretion in accordance
with general principles applicable to equitable and
similar remedies and except as to those provisions
relating to indemnities for liabilities arising under
the 1933 Act as to which no opinion need be
expressed; and no approval, order, authorization or
consent of any public board, agency, or
instrumentality of the United States or of any state
or other jurisdiction is necessary in connection with
the issue or sale of the Shares to be sold by the
Company pursuant to this Agreement (other than under
the 1933 Act, applicable blue sky laws and the rules
of the NASD);
(7) to the best of such counsel's
knowledge, the Company is not in breach of, or in
default under (nor has any event occurred which with
notice, lapse of time, or both would constitute a
breach of, or default under), any indenture,
mortgage, deed of trust, credit agreement or other
agreement or instrument to which the Company is
a party or by which the Company or its properties may
be bound or affected, where such breach or default
would have a material adverse effect on the condition
(financial or otherwise), business, assets or
operations of the Company;
(8) the execution, delivery and
performance of this Agreement and the issue or sale
of the Firm Shares will not contravene any of the
provisions of, or result in a default under, any
agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such
counsel, of the Company or by which its property may
be bound and which contravention or default would
have a material adverse effect on the condition
(financial or otherwise), business, assets or
operations of the Company; or violate any of the
provisions of the charter or bylaws of the Company
or, so far as is known to such counsel, violate any
statute, order, rule or regulation of any regulatory
or governmental body having jurisdiction over the
Company;
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(9) the descriptions in the Registration
Statement under the headings "Management --
Compensation Plans," "Relationship between the
Company and Waxman Industries," "Description of
Capital Stock" and "Shares Eligible for Future Sale,"
insofar as such statements constitute a summary of
documents referred to therein or matters of law,
fairly present, in all material respects, the
information called for with respect to such documents
and matters;
(10) except as disclosed in the Prospectus
and to our knowledge, no person has the right,
contractual or otherwise, to cause the Company to
issue, or register pursuant to the 1933 Act, any
shares of capital stock of the Company, or any
security or other instrument which by its terms is
convertible into or exchangeable for capital stock of
the Company, upon the issue and sale of the Shares to
be sold by the Company and the Selling Stockholder to
the Underwriters pursuant to this Agreement, nor does
any person have rights of first refusal, or other
rights to purchase any capital stock of the Company,
or any security or other instrument which by its
terms is convertible into or exchangeable for capital
stock of the Company;
(11) the Company is not an "investment
company" or a person "controlled by" an "investment
company" within the meaning of the Investment
Company Act;
(12) the Selling Stockholder has been
duly incorporated and is validly existing as a
corporation in good standing under the laws of the
State of Delaware with corporate power and authority
to own its properties and conduct its business; and,
based solely upon a review of good standing
certificates of the appropriate state officials, the
Selling Stockholder is duly qualified to do business
as a foreign corporation under the corporation law
of, and is in good standing as such in, each
jurisdiction that has been certified by an officer of
the Selling Stockholder as a state where the Selling
Stockholder owns or leases property or where the
conduct of its business requires such qualification;
(13) this Agreement and the Pricing
Agreement and the performance of the Selling
Stockholder's obligations hereunder have been duly
authorized by all necessary corporate action and this
Agreement and the Pricing Agreement have been duly
executed and delivered by and on behalf of the
Selling Stockholder, and are legal, valid and binding
agreements of the Selling Stockholder, except as
enforceability of the same may be limited by
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bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights and
by the exercise of judicial discretion in accordance
with general principles applicable to equitable and
similar remedies and except as to those provisions
relating to indemnities for liabilities arising under
the 1933 Act as to which no opinion need be
expressed; and no approval, order, authorization or
consent of any public board, agency, or
instrumentality of the United States or of any state
or other jurisdiction is necessary in connection with
the issue or sale of the Shares to be sold by the
Selling Stockholder pursuant to this Agreement (other
than under the 1933 Act, applicable blue sky laws and
the rules of the NASD);
(14) the execution, delivery and
performance of this Agreement and the issue or sale
of the Firm Shares will not contravene any of the
provisions of, or result in a default under, any
material agreement franchise, license, indenture,
mortgage, deed of trust, or other instrument known to
such counsel, of the Selling Stockholder or by which
its property may be bound and which contravention or
default would have a material adverse effect on the
condition (financial or otherwise), business, assets
or operations of the Selling Stockholder; or violate
any of the provisions of the charter or bylaws of the
Selling Stockholder or, so far as is known to such
counsel, violate any statute, order, rule or
regulation of any regulatory or governmental body
having jurisdiction over the Selling Stockholder;
(15) the Selling Stockholder is the sole
record holder of the Shares to be sold by it under
this Agreement and, to such counsel's knowledge,
possesses full right, power and authority to sell,
assign, transfer and deliver such Shares hereunder.
Immediately prior to the consummation of the
transactions described in this Agreement, the Selling
Stockholder was the sole registered owner of the
Shares to be sold hereunder by it. Upon registration
of such Shares in the Underwriters' name(s) in the
stock records of the Company and assuming the
Underwriters have purchased such Shares in good faith
and without notice of any adverse claim, the
Underwriters will have acquired good and marketable
title to such Shares;
(16) Waxman Industries has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of the State of
Delaware with corporate power and authority to own
its properties and conduct its business; and Waxman
Industries has been duly qualified to do business as
a foreign corporation
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under the corporation law of, and is in good
standing as such in the State of Ohio;
(17) this Agreement and the Pricing
Agreement and the performance of Waxman Industries'
obligations hereunder have been duly authorized by
all necessary corporate action and this Agreement and
the Pricing Agreement have been duly executed and
delivered by and on behalf of Waxman Industries, and
are legal, valid and binding agreements of Waxman
Industries, except as enforceability of the same may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors'
rights and by the exercise of judicial discretion in
accordance with general principles applicable to
equitable and similar remedies and except as to those
provisions relating to indemnities for liabilities
arising under the 1933 Act as to which no opinion
need be expressed; and no approval, order,
authorization or consent of any public board, agency,
or instrumentality of the United States or of any
state or other jurisdiction is necessary in
connection with the consummation by Waxman Industries
of any of the transactions contemplated by this
Agreement; and
(18) the execution, delivery and
performance of this Agreement will not contravene
any of the provisions of, or result in a default
under, any material agreement, franchise, license,
indenture, mortgage, deed of trust, or other
instrument known to such counsel, of Waxman
Industries or by which its property may be bound and
which contravention or default would have a material
adverse effect on the condition (financial or
otherwise), business, assets or operations of Waxman
Industries; or violate any of the provisions of the
charter or bylaws of Waxman Industries or, so far as
is known to such counsel, violate any statute, order,
rule or regulation of any regulatory or governmental
body having jurisdiction over Waxman Industries.
In rendering such opinion, such counsel may state
that they are relying upon the certificate of American Stock
Transfer & Trust Company, the transfer agent for the Common
Stock, as to the number of shares of Common Stock at any time
or times outstanding, and that insofar as their opinion under
clause (5) above relates to the accuracy and completeness of
the Prospectus and Registration Statement, it is based upon a
general review with the Company's representatives and
independent accountants of the information contained therein,
without independent verification by such counsel of the
accuracy or completeness of such information. Such counsel may
also rely upon the opinions of other competent counsel and, as
to factual matters, on certificates of officers of the
Company, the Selling Stockholder or Waxman
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Industries and of state officials, in which case their opinion
is to state that they are so doing and copies of said opinions
or certificates are to be attached to the opinion unless said
opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the
Representatives in other form.
(ii) Such opinion or opinions of Winston & ▇▇▇▇▇▇,
counsel for the Underwriters, dated the First Closing Date or
the Second Closing Date, as the case may be, with respect to
the incorporation of the Company, the validity of the Shares
to be sold by the Company, the Registration Statement and the
Prospectus and other related matters as you may reasonably
require, and the Company shall have furnished to such counsel
such documents and shall have exhibited to them such papers
and records as they request for the purpose of enabling them
to pass upon such matters.
(iii) A certificate of the Chief Executive Officer
and the Chief Financial Officer of the Company, dated the
First Closing Date or the Second Closing Date, as the case may
be, to the effect that:
(1) the representations and warranties of
the Company set forth in Section 2 of this Agreement
are true and correct as of the date of this Agreement
and as of the First Closing Date or the Second
Closing Date, as the case may be, and the Company has
complied with all the agreements and satisfied all
the conditions on its part to be performed or
satisfied at or prior to such Closing Date;
(2) the Commission has not issued an order
preventing or suspending the use of the Prospectus or
any preliminary prospectus filed as a part of the
Registration Statement or any amendment thereto; no
stop order suspending the effectiveness of the
Registration Statement has been issued; and no
proceedings for that purpose have been instituted or,
to the best knowledge of the respective signers, are
pending or contemplated under the 1933 Act; and
(3) subsequent to the date of the most
recent financial statements included in the
Registration Statement and the Prospectus (exclusive
of any supplement thereto), and except as set forth
or contemplated in the Prospectus (exclusive of any
supplement thereto), (A) the Company has not incurred
any material liabilities or obligations, direct or
contingent, nor entered into any material
transactions not in the ordinary course of business,
and (B) there has not been any material adverse
change in the condition (financial or otherwise),
business, assets, operations or prospects of the
Company, or any change in the
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capital stock or short-term indebtedness for
borrowed money or long-term debt of the Company.
The delivery of the certificate provided for in this
subparagraph shall be and constitute a representation and
warranty of the Company as to the facts required in the
immediately foregoing clauses (1), (2) and (3) of this
subparagraph to be set forth in said certificate.
(iv) A certificate of the Chief Executive Officer and
Vice President-Finance of the Selling Stockholder dated the
First Closing Date or the Second Closing Date, as the case may
be, to the effect that the representations and warranties of
the Selling Stockholder set forth in Sections 2 and 3(a) of
this Agreement are true and correct as of such date and the
Selling Stockholder has complied with all the agreements and
satisfied all the conditions on the part of the Selling
Stockholder to be performed or satisfied at or prior to such
date.
(v) A certificate of the Chief Executive Officer and
Vice President-Finance of Waxman Industries dated the First
Closing Date or the Second Closing Date, as the case may be,
to the effect that the representations and warranties of
Waxman Industries set forth in Sections 2, 3(a) and 3(b) of
this Agreement are true and correct as of such date and Waxman
Industries has complied with all the agreements and satisfied
all the conditions on the part of Waxman Industries to be
performed or satisfied at or prior to such date.
(vi) At the time the Pricing Agreement is executed
and also on the First Closing Date or the Second Closing Date,
as the case may be, there shall be delivered to you a letter
addressed to you, as Representatives of the Underwriters, from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent accountants, the first one to
be dated the date of the Pricing Agreement, the second one to
be dated the First Closing Date and the third one (in the
event of a second closing) to be dated the Second Closing
Date, to the effect set forth in Schedule B. There shall not
have been any change or decrease specified in the letters
referred to in this subparagraph which makes it impractical or
inadvisable in the judgment of the Representatives to proceed
with the public offering or purchase of the Shares as
contemplated hereby.
(vii) At the time the Pricing Agreement is executed,
there shall be delivered to you a letter substantially in the
form of Exhibit B hereto from each director and executive
officer of the Company, in which each such person agrees not
to sell, contract to sell or otherwise dispose of any Common
Stock or securities convertible into Common Stock for a period
of 180 days after the date of such letter without the prior
written consent of the Representatives.
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(viii) Payment for all legal fees and disbursements
of counsel for the Underwriters pursuant to and in accordance
with clause (ii) of Section 7 hereof.
(ix) Such further information, certificates and
documents as you may reasonably request.
All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are satisfactory to you
and to counsel for the Underwriters, which approval shall not be unreasonably
withheld. The Company shall furnish you with such manually signed or conformed
copies of such opinions, certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to
be satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification to the Company, the
Selling Stockholder and Waxman Industries without liability on the part of any
Underwriter or the Company, the Selling Stockholder or Waxman Industries, except
for the expenses to be paid or reimbursed pursuant to Sections 7 and 9 hereof
and except to the extent provided in Section 11 hereof.
SECTION 9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale
to the underwriters of the Shares on the First Closing Date is not consummated
because any condition of the Underwriters' obligations hereunder is not
satisfied or because of any refusal, inability or failure on the part of the
Company, the Selling Stockholder or Waxman Industries to perform any
agreement herein or to comply with any provision hereof, unless such failure to
satisfy such condition or to comply with any provision hereof is due to the
default or omission of any Underwriter, the Company, the Selling Stockholder and
Waxman Industries, jointly and severally, agree to reimburse you and the other
Underwriters upon demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been reasonably incurred by
you and them in connection with the proposed purchase and the sale of the
Shares. Any such termination shall be without liability of any party to any
other party except that the provisions of this Section 9, Section 7 and Section
11 shall at all times be effective and shall apply.
The provisions of this Section 9 shall not affect any
agreement which the Company, the Selling Stockholder and Waxman Industries may
make for the allocation or sharing of such reimbursement expenses.
SECTION 10. EFFECTIVENESS OF REGISTRATION STATEMENT. You, the
Company, the Selling Stockholder and Waxman Industries will use your, its and
their best efforts to cause the Registration Statement to become effective, if
it has not yet become effective, and to prevent the issuance of any stop order
suspending the effectiveness of the Registration Statement and, if such stop
order be issued, to obtain as soon as possible the lifting thereof.
SECTION 11. INDEMNIFICATION. (a) The Company, the Selling
Stockholder and Waxman Industries, jointly and severally,
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agree to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of the 1933 Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter or such controlling person may become
subject under the 1933 Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company, the Selling Stockholder and/or Waxman Industries, as
the case may be), insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the information deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A
and/or Rule 434, if applicable, any preliminary prospectus, the Prospectus,
or any amendment or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action or pursuing its
rights to indemnification provided by this Section 11; provided, however,
that none of the Company, the Selling Stockholder or Waxman Industries will
be liable in any such case, and the foregoing indemnity shall not apply, to
the extent that (i) any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives,
specifically for use therein; or (ii) if such statement or omission was
contained or made in any preliminary prospectus and corrected in the
Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Shares
that are the subject thereof from such Underwriter in the offering and (2)
such Underwriter failed to deliver or provide a copy of the Prospectus to
such person at or prior to the confirmation of the sale of such Shares in
any case where such delivery is required by the 1933 Act. In addition to
their other obligations under this Section 11(a), the Company, the Selling
Stockholder and Waxman Industries agree that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(a), they will
reimburse the Underwriters on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of the Company's, the Selling Stockholder's and Waxman
Industries' obligation to reimburse the Underwriters for such expenses and
the possibility that such
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payments might later be held to have been improper by a court of competent
jurisdiction. This indemnity agreement will be in addition to any liability
that the Company, the Selling Stockholder and Waxman Industries may otherwise
have.
(b) Each Underwriter will severally indemnify and hold
harmless the Company, the Selling Stockholder, Waxman Industries, each of their
respective directors, each of their respective officers who signed the
Registration Statement and each person, if any, who controls the Company, the
Selling Stockholder or Waxman Industries within the meaning of the 1933 Act or
the Exchange Act, against any losses, claims, damages or liabilities to which
the Company, the Selling Stockholder, Waxman Industries, or any such director,
officer or controlling person, may become subject under the 1933 Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of such Underwriter), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with Section
4 of this Agreement or any other written information furnished to the Company by
such Underwriter through the Representatives specifically for use in the
preparation thereof; and will reimburse any legal or other expenses reasonably
incurred by the Company, the Selling Stockholder, Waxman Industries, or any such
director, officer or controlling person, in connection with investigating or
defending any such loss, claim, damage, liability or action. In addition to
their other obligations under this Section 11(b), the Underwriters agree that,
as an interim measure during the pendency of any claim, action, investigation,
inquiry or other proceeding arising out of or based upon any statement or
omission, or any alleged statement or omission, described in this Section 11(b),
they will reimburse the Company, the Selling Stockholder and Waxman Industries
on a monthly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the
Underwriters' obligation to reimburse the Company, the Selling Stockholder and
Waxman Industries for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in addition to any liability which such Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 11 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made
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against an indemnifying party under this Section 11, notify the indemnifying
party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have
to any indemnified party except to the extent that the indemnifying party
was prejudiced by such failure to notify. In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with all other indemnifying
parties similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if the defendants
in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, or the indemnified and indemnifying parties may have conflicting
interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the
right to select separate counsel to assume such legal defense and otherwise
to participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action
and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 11 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed such counsel in connection with the assumption of legal
defense in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel, approved by the
Representatives in the case of paragraph (a) representing all indemnified
parties not having different or additional defenses or potential conflicting
interest among themselves who are parties to such action), (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at
the expense of the indemnifying party. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising
out of such proceeding.
(d) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under paragraph (a) or (b) hereof in respect
of any losses, claims, damages or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the
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Company, the Selling Stockholder, Waxman Industries and the Underwriters 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 Company, the Selling
Stockholder, Waxman Industries and the Underwriters in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
respective relative benefits received by the Company, the Selling
Stockholder, Waxman Industries and the Underwriters shall be deemed to be in
the same proportion in the case of the Company, the Selling Stockholder and
Waxman Industries, as the total price paid to the Company and the Selling
Stockholder for the Shares by the Underwriters (net of underwriting discount
but before deducting expenses), and in the case of the Underwriters as the
underwriting discount received by them bears to the total of such amounts
paid to the Company and the Selling Stockholder and received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company, the Selling Stockholder,
Waxman Industries and the Underwriters shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder, Waxman
Industries or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, the Selling Stockholder, Waxman Industries and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 11 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.
Notwithstanding the provisions of this Section 11, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
underwriting discount applicable to the Shares underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 11 are several in proportion to their respective
underwriting commitments and not joint.
(e) The provisions of this Section 11 shall survive any
termination of this Agreement.
SECTION 12. DEFAULT OF UNDERWRITERS. It shall be a
condition to the agreement and obligation of the Company and the
Selling Stockholder to sell and deliver the Shares hereunder, and
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of each Underwriter to purchase the Shares hereunder, that, except as
hereinafter in this paragraph provided, each of the Underwriters shall
purchase and pay for all Shares agreed to be purchased by such Underwriter
hereunder upon tender to the Representatives of all such Shares in
accordance with the terms hereof. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder on the First Closing Date
or the Second Closing Date, as the case may be, and the aggregate number of
Shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase does not exceed 10 percent of the total number of Shares which
the Underwriters are obligated to purchase on the First Closing Date or the
Second Closing Date, as the case may be, the Representatives may make
arrangements satisfactory to the Company and the Selling Stockholder for the
purchase of such Shares by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Shares which such defaulting
Underwriters agreed but failed to purchase on such date. If any Underwriter
or Underwriters so default and the aggregate number of Shares with respect
to which such default or defaults occur is more than the above percentage
and arrangements satisfactory to the Representatives and the Company and the
Selling Stockholder for the purchase of such Shares by other persons are not
made within 36 hours after such default, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter or the
Company, the Selling Stockholder or Waxman Industries, except for the
expenses to be paid pursuant to Section 7 hereof and except to the extent
provided in Section 11 hereof.
In the event that Shares to which a default relates are to be
purchased by the nondefaulting Underwriters or by another party or parties, the
Representatives, the Company or the Selling Stockholder shall have the right to
postpone the First Closing Date or the Second Closing Date, as the case may be,
for not more than seven business days in order that the necessary changes in the
Registration Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 12.
Nothing herein will relieve a defaulting Underwriter from liability for its
default.
SECTION 13. EFFECTIVE DATE. This Agreement shall become
effective immediately as to Sections 7, 9, 11 and 14 and as to all other
provisions at 10:00 A.M., Chicago Time, on the day following the date upon which
the Pricing Agreement is executed and delivered, unless such a day is a
Saturday, Sunday or holiday (and in that event this Agreement shall become
effective at such hour on the business day next succeeding such Saturday, Sunday
or holiday); but this Agreement shall nevertheless become effective at such
earlier time after the Pricing Agreement is executed and delivered as you may
determine on and by notice to the Company, the Selling Stockholder and Waxman
Industries or by release of any Shares for sale to the public. For the purposes
of this Section 13, the Shares shall be deemed to have been so released upon the
release for publication of any newspaper advertisement relating to the Shares or
upon the release by you of telegrams (i) advising Underwriters that the Shares
are released for public offering, or (ii) offering
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the Shares for sale to securities dealers, whichever may occur first.
SECTION 14. TERMINATION. Without limiting the right to
terminate this Agreement pursuant to any other provision hereof:
(a) This Agreement may be terminated by the Company by notice
to you, the Selling Stockholder and Waxman Industries or by you by notice to the
Company, the Selling Stockholder and Waxman Industries at any time prior to the
time this Agreement shall become effective as to all its provisions, and any
such termination shall be without liability on the part of the Company, the
Selling Stockholder or Waxman Industries to any Underwriter (except for the
expenses to be paid or reimbursed pursuant to Section 7 hereof and except to the
extent provided in Section 11 hereof) or of any Underwriter to the Company, the
Selling Stockholder or Waxman Industries.
(b) This Agreement may also be terminated by you prior to the
First Closing Date, and the option referred to in Section 5, if exercised, may
be cancelled at any time prior to the Second Closing Date, if (i) trading in
securities on the New York Stock Exchange shall have been suspended or minimum
prices shall have been established on such exchange, or (ii) a banking
moratorium shall have been declared by Illinois, New York, or United States
authorities, or (iii) there shall have been any change in financial markets or
in political, economic or financial conditions which, in the opinion of the
Representatives, either renders it impracticable or inadvisable to proceed with
the offering and sale of the Shares on the terms set forth in the Prospectus or
materially and adversely affects the market for the Shares, or (iv) there shall
have been an outbreak of major armed hostilities between the United States and
any foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Shares. Any termination pursuant
to this paragraph (b) shall be without liability on the part of any Underwriter
to the Company, the Selling Stockholder or Waxman Industries or on the part of
the Company to any Underwriter, the Selling Stockholder or Waxman Industries
(except for expenses to be paid or reimbursed pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof).
SECTION 15. REPRESENTATIONS AND INDEMNITIES TO SURVIVE
DELIVERY. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and
Waxman Industries, of any of their respective officers, and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Underwriter, the Company, the Selling Stockholder or Waxman Industries, or any
of its or their partners, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Shares sold
hereunder.
SECTION 16. NOTICES. All communications hereunder will be in
writing and, if sent to the Underwriters will be mailed, delivered or telecopied
and confirmed to you, c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
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Fax (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Winston & ▇▇▇▇▇▇, ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇; if sent to
the Company will be mailed, delivered or telecopied and confirmed to ▇▇▇▇▇▇▇
Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, President and Chief Executive Officer, Fax (▇▇▇) ▇▇▇-▇▇▇▇, with a copy
to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Shereff, Friedman, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax (212) ▇▇▇- ▇▇▇▇; and if sent to
the Selling Stockholder or Waxman Industries will be mailed, delivered or
telecopied and confirmed to c/o Waxman Industries, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Chief Executive Officer, Fax (216)
▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Shereff, Friedman,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax
(▇▇▇) ▇▇▇-▇▇▇▇.
SECTION 17. SUCCESSORS. This Agreement and the Pricing
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors, personal representatives and assigns, and to
the benefit of the officers and directors and controlling persons referred to in
Section 11, and no other person will have any right or obligation hereunder. The
term "successors" shall not include any purchaser of the Shares as such from any
of the Underwriters merely by reason of such purchase.
SECTION 18. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 19. PARTIAL UNENFORCEABILITy. If any section,
paragraph or provision of this Agreement is for any reason determined to be
invalid or unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 20. APPLICABLE LAW. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of Illinois, without giving effect to principles of conflicts of laws.
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholder, Waxman Industries and the several Underwriters including you, all
in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ INC.,
a Delaware corporation
By:
-----------------------
Name: ________________
Title:________________
WAXMAN USA INC.,
a Delaware corporation
By:
-----------------------
Name: _______________
Title:_______________
WAXMAN INDUSTRIES, INC.,
a Delaware corporation
By:
------------------------
Name:________________
Title:_______________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
Acting as Representatives of the
several Underwriters named in
Schedule A.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
------------------------
Partner
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EXHIBIT A
---------
▇▇▇▇▇▇▇ INC.
2,000,000 Shares Common Stock*
PRICING AGREEMENT
-----------------
______, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Alex. ▇▇▇▇▇ & Sons Incorporated
As Representatives of the
Several Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated ______, 1997
(the "Underwriting Agreement") by and among ▇▇▇▇▇▇▇ Inc, a Delaware
corporation (the "Company"), Waxman USA Inc., a Delaware corporation (the
"Selling Stockholder"), Waxman Industries, Inc., a Delaware corporation ("Waxman
Industries"), and you, as representatives (the "Representatives") of a group of
Underwriters named therein (the "Underwriters"), relating to the sale by the
Company and the Selling Stockholder and the purchase by the Underwriters of the
above Shares. All terms herein shall have the definitions contained in the
Underwriting Agreement except as otherwise defined herein.
Pursuant to Section 5 of the Underwriting Agreement, the
Company, the Selling Stockholder and Waxman Industries agree with the
Representatives as follows:
1. The public offering price per share for the Shares
shall be $_____.
2. The purchase price per share for the Shares to be paid by
the several Underwriters shall be $_____, being an amount equal to the public
offering price set forth above less $_____ per share.
--------
* Plus an option to acquire up to 150,000 additional shares
from the Selling Stockholder to cover overallotments.
35
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company, the Selling
Stockholder, Waxman Industries and the several Underwriters, including you, all
in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇ INC.,
a Delaware corporation
By:
-----------------------
Name:__________________
Title:_________________
WAXMAN USA INC.,
a Delaware corporation
By:
-----------------------
Name:__________________
Title:_________________
WAXMAN INDUSTRIES, INC.,
a Delaware corporation
By:
-----------------------
Name:__________________
Title:_________________
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
Acting as Representatives of the
several Underwriters named in
Schedule A to the Underwriting Agreement.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
By:
--------------------------
Partner
36
EXHIBIT B
---------
[Letterhead of each director and executive officer of ▇▇▇▇▇▇▇ Inc.]
▇▇▇▇▇▇▇ Inc.
Public Offering of Common Stock
_______ __, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
Alex. ▇▇▇▇▇ & Sons Incorporated
As Representatives of the
Several Underwriters
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement") by and among ▇▇▇▇▇▇▇ Inc,
a Delaware corporation (the "Company"), Waxman USA Inc., a Delaware corporation,
Waxman Industries, Inc., a Delaware corporation, and you, as representatives of
a group of Underwriters named therein, relating to an underwritten public
offering of Common Stock, $.01 par value (the "Common Stock"), of the Company.
Each capitalized term used, but not otherwise defined, herein shall have the
meaning ascribed to such term in the Underwriting Agreement.
In order to induce the Underwriters to enter into the Underwriting
Agreement, the undersigned agrees that he, she or it, as the case may be, will
not during the period of 180 days following the date of the Prospectus issued
pursuant to this offering, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Company, L.L.C., on behalf of the Representatives, offer, sell or contract to
sell, or otherwise dispose of, directly or indirectly, or announce the offering
of, any shares of Common Stock beneficially owned by such person, or any
securities convertible into, or exchangeable for, shares of Common Stock, other
than shares of Common Stock disposed of as bona fide gifts; provided, however,
that any shares of Common Stock sold, converted, disposed of or otherwise
transferred pursuant to this letter shall be subject to the same 180 day
restriction set forth in this letter and prior to such transfer the transferor
thereof shall deliver to the Representatives the written acknowledgment of the
transferee that it has received such shares of Common Stock subject to such
restrictions.
37
If for any reason the Underwriting Agreement shall be terminated prior
to the First Closing Date, the agreement set forth above shall likewise be
terminated.
Very truly yours,
[Signature of each director and
executive officer of ▇▇▇▇▇▇▇
Inc.]
[Name and address of each
director and executive officer
of ▇▇▇▇▇▇▇ Inc.]
38
SCHEDULE A
----------
Number of
Firm Shares
to be
Purchased
---------
Underwriter
-----------
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C..................... _________
Alex. ▇▇▇▇▇ & Sons Incorporated.................... _________
_________
----------
Total ......................... 2,000,000
39
SCHEDULE B
----------
Comfort Letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
(1) They are independent public accountants with respect to
the Company within the meaning of the 1933 Act and the answer to Item 10 of the
Registration Statement, insofar as it relates to them, is correct.
(2) In their opinion the financial statements and schedules of
▇▇▇▇▇▇▇ Inc. included in the Registration Statement and the financial statements
of the Company from which the information presented under the captions "Summary
Financial and Operating Data" and "Selected Financial Information and Operating
Data" has been derived, which are stated therein to have been examined by them,
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act.
(3) On the basis of specified procedures (but not an
examination in accordance with generally accepted auditing standards), including
inquiries of certain officers of the Company responsible for financial and
accounting matters as to transactions and events subsequent to June 30, 1996, a
reading of minutes of meetings of the stockholders and directors of the Company
since June 30, 1996, a reading of the latest available interim unaudited
financial statements of the Company (with an indication of the date thereof) and
other procedures as specified in such letter, nothing came to their attention
which caused them to believe that (i) the unaudited financial statements of the
Company included in the Registration Statement do not comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act or
that such unaudited financial statements are not fairly presented in accordance
with generally accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included in the
Registration Statement, and (ii) at a specified date not more than five days
prior to the date thereof in the case of the first letter and not more than two
business days prior to the date thereof in the case of the second and third
letters, there was any change in the capital stock or long-term debt or
short-term debt (other than normal payments) of the Company or any decrease in
net current assets or stockholders' equity as compared with amounts shown on the
latest unaudited balance sheet of the Company included in the Registration
Statement or for the period from the date of such balance sheet to a date not
more than five days prior to the date thereof in the case of the first letter
and not more than two business days prior to the date thereof in the case of the
second and third letters, there were any decreases, as compared with the
corresponding period of the prior year, in net sales, income before income taxes
or in the total or per share amounts of net income except, in all instances, for
changes or decreases which the Prospectus discloses have occurred or may occur
or which are set forth in such letter.
(4) On the basis of reading the unaudited pro forma financial
statement data included in the Registration Statement and the Prospectus,
carrying out specified procedures, inquiries of certain officials of the Company
who have responsibility for
40
financial and accounting matters, and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical amounts in the pro
forma financial statement data, nothing came to their attention that caused them
to believe that the pro forma financial statement data does not comply in form
in all material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X of or that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of such
statements.
(5) They have carried out specified procedures, which have
been agreed to by the Representatives, with respect to certain information in
the Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the general
accounting records of the Company.