1,000,000 Shares*
▇▇▇▇▇▇▇▇ Corporation
Common Stock
UNDERWRITING AGREEMENT
July ___, 1998
ABN AMRO Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
As Representatives of the
several Underwriters named
in Schedule I hereto
c/o ABN AMRO Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pursuant to the terms of this Underwriting Agreement (this "Agreement"),
▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the "Company"), proposes, subject
to the terms and conditions set forth herein, to issue and sell an aggregate of
1,000,000 shares of Common Stock, par value $0.01 per share (the "Common
Stock"), of the Company to the several underwriters named in Schedule I hereto
(collectively, the "Underwriters"). The Company has agreed to sell to the
several Underwriters, upon the terms and conditions set forth in Section 2
hereof, up to an additional 150,000 shares of Common Stock. The aggregate of
1,000,000 shares to be sold by the Company are herein called the "Firm Shares"
and the aggregate of 150,000 additional shares to be sold by the Company are
herein called the "Additional Shares." The Firm Shares and the Additional Shares
are hereinafter collectively referred to as the "Shares." ABN AMRO Incorporated
and ▇▇▇▇▇▇▇▇ & Company Securities, Inc. are acting individually and as
representatives of the several Underwriters and in such capacity are hereinafter
referred to as the "Representatives."
------------------
*Plus an option to purchase up to 150,000 Additional Shares to cover over-
allotments.
Prior to the purchase and public offering of the Shares by the several
Underwriters, the Company and the Representatives 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 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 is advised by the Representatives that the Underwriters have
agreed to make a public offering of their respective portions of the Shares as
soon after the Registration Statement has become effective and the Pricing
Agreement has been executed as in the reasonable judgment of the Representatives
is advisable and to first offer the Shares upon the terms set forth in the
Prospectus.
The Company, the Representatives and the other Underwriters hereby agree to
the following matters with respect to the purchase and sale of the Shares:
Section 1. (a) Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(i) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-2 (File No. 333-57313), including a preliminary prospectus, relating to
the Shares and certain amendments thereto. The Company will next file with the
Commission one of the following: (A) prior to effectiveness of such registration
statement, a further amendment thereto, including the form of final prospectus,
(B) a final prospectus in accordance with Rules 430A and 424(b) under the Act or
(C) a term sheet (the "Term Sheet") as described in and in accordance with Rules
434 and 424(b) under the Act. As filed, the final prospectus, if one is used, or
the Term Sheet and the latest Preliminary Prospectus, if a final prospectus is
not used, shall include all Rule 430A Information (as defined below). There have
been or will promptly be delivered to you three signed copies of such
registration statement and amendments, together with three copies of all
documents incorporated by reference therein, 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 or Term Sheet, if a Term Sheet is used, for each
of the Underwriters. The term "Registration Statement" as used in this Agreement
shall mean such registration statement at the time such registration statement
becomes effective and, in the event any amendment thereto becomes effective
prior to the Closing Date (as hereinafter defined), shall also mean such
registration statement as so amended; provided, however, that such term shall
also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A and, if a Term Sheet is used, shall also include all
information
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deemed to be included in such registration statement at the time such
registration statement becomes effective as provided by Rule 434; provided,
further, that if the Company files a registration statement under the Act to
register a portion of the Shares and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule 462
Registration Statement"), then any reference to "Registration Statement" herein
shall be deemed to be to both the registration statement referred to above (No.
333-57313) and the Rule 462 Registration Statement, as each such registration
statement may be amended pursuant to the Act. The term "Preliminary Prospectus"
as used in this Agreement shall mean any preliminary prospectus relating to the
Shares filed with the Commission under the Act and the rules and regulations
thereunder, including any preliminary prospectus included in the Registration
Statement at the time it becomes effective that omits Rule 430A Information. The
term "Prospectus" as used in this Agreement shall mean: (X) the prospectus
relating to the Shares in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act; (Y) if a Term Sheet is not
used and no filing pursuant to Rule 424(b) under the Act is required, the form
of final prospectus included in the Registration Statement at the time the
Registration Statement becomes effective; or (Z) if a Term Sheet is used in lieu
of a prospectus, the Term Sheet in the form in which it is first filed with the
Commission pursuant to Rule 424(b) under the Act, together with the latest
Preliminary Prospectus included in the Registration Statement at the time it
becomes effective (such Term Sheet and Preliminary Prospectus are sometimes
collectively referred to herein as the "Rule 434 Prospectus"). The term "Rule
430A Information" as used in this Agreement shall mean information with respect
to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A under the
Act. 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." Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form S-2
under the Act ("Incorporated Documents"), as of the date of the Registration
Statement, any such Preliminary Prospectus or Prospectus, as the case may be.
The Incorporated Documents, when they were filed with the Commission, conformed
in all material respects to the requirements of the Exchange Act and none of
such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(ii) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus complied in all material respects when so filed with the requirements
of the Act (except to the extent that, in conformity with the Act, such
Preliminary Prospectus is subject to completion).
(iii) The Registration Statement in the form in which it becomes
effective and also in such form as it may be when the Pricing Agreement is
executed or any post-effective amendment to the Registration Statement shall
become effective, and the Prospectus when and in the form last filed with the
Commission as part of the Registration Statement prior to effectiveness or, if
applicable, first filed pursuant to Rule 424(b) under the Act, and when any
supplement or amendment thereto is filed with the Commission, each will comply
in all material respects with the
3
requirements of the Act, will not at any such time contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. This representation
and warranty does not apply to statements in or omissions from the Registration
Statement or the Prospectus (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to any Underwriter
furnished to the Company in writing by or on behalf of such Underwriter through
the Representatives specifically for use in the Registration Statement.
(iv) There is no contract or other document of a character required
to be described in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.
(v) The accountants who have expressed their opinions with respect
to certain of the financial statements of the Company included or incorporated
by reference in the Registration Statement and the Prospectus, are independent
public accountants as required by the Act.
(vi) The consolidated financial statements, together with the notes
thereto, of the Company included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material respects with
the Act and present fairly the consolidated financial position of the Company as
of the dates indicated, and the consolidated results of operations, cash flows
and changes in financial position of the Company for the periods specified. Such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the entire period
involved except to the extent disclosed therein.
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware, with
full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement and Prospectus.
The Company is duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except in
any such case in which the failure to so qualify or be in good standing would
not have a material adverse effect upon the business of the Company and its
subsidiaries, taken as a whole; 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.
(viii) Each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with full corporate power and authority to own,
lease and operate its properties and conduct its business as described in the
Registration Statement and Prospectus. Each of the Company's subsidiaries is
duly qualified to do business as a foreign corporation in good standing in each
jurisdiction in which the ownership or leasing of its properties or the conduct
of its business requires such qualification, except in any such case in which
the failure to so qualify or be in good standing would not have a material
adverse effect on the business of the Company and its subsidiaries, taken as a
whole. Each of the Company's subsidiaries has all authorizations, approvals,
orders, certificates and permits of
4
and from all state, federal and other regulatory officials and bodies necessary
to own its properties and to conduct its business as described in the
Registration Statement and Prospectus, except where the failure to have any such
authorization, approval, order, certificate or permit would not have a material
adverse effect on the business affairs, business prospects, properties,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole. Except for the capital stock of the subsidiaries
and except as otherwise described in the Prospectus, the Company does not own
any capital stock of, or other securities evidencing an equity interest in, any
corporation, partnership or other entity. All of the issued and outstanding
shares of capital stock of the Company's subsidiaries have been duly and validly
authorized and issued, are fully paid and non-assessable, and except as
described in the Prospectus, are owned by the Company, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any nature.
Except as described in the Prospectus, there are no outstanding subscriptions,
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock of any of the Company's
subsidiaries.
(ix) The Company has an authorized and outstanding capitalization as
set forth in the Prospectus and the Shares conform to the description thereof
contained in the Prospectus. All of the issued and outstanding shares of Common
Stock have been duly authorized, validly issued and are fully paid and non-
assessable and free of preemptive or other similar rights and there are no
options, agreements, contracts or other rights in existence to acquire from the
Company any shares of Common Stock, except as set forth in the Prospectus.
(x) The Shares to be sold by the Company pursuant to this Agreement
and the Pricing Agreement have been duly authorized and, when issued and paid
for in accordance with this Agreement and the Pricing Agreement, will be validly
issued, fully paid and non-assessable; the holders of the Shares will not be
subject to personal liability by reason of being such holders; there are no
holders of securities of the Company having rights, contractual or otherwise, to
registration thereof or preemptive rights to purchase Common Stock; all
corporate actions required to be taken for the authorization, issue and sale of
the Shares have been validly and sufficiently taken; and upon delivery of and
payment for such Shares hereunder, the Underwriters will acquire valid and
marketable title thereto, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature.
(xi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated or
contemplated therein, there has not been (A) any material adverse change in the
financial condition, earnings, affairs, business or prospects of the Company and
its subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, (B) any material transaction entered into, or any material
liability or obligation incurred, by the Company or its subsidiaries other than
in the ordinary course of business, (C) any change in the capital stock, or
material increase in the short-term debt or long-term debt of the Company or its
subsidiaries, or (D) any dividend or distribution of any kind declared, paid or
made by the Company or its subsidiaries on its capital stock.
5
(xii) The Company and each of its subsidiaries have good and
marketable title to all properties and assets reflected as owned in the
financial statements hereinabove described or described in the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions of any kind, except such as are referred to in such financial
statements or the Prospectus or which are not material to the business of the
Company and its subsidiaries, taken as a whole; all of the leases and subleases
material to the business of the Company and its subsidiaries, taken as a whole
or under which the Company or its subsidiaries holds properties are in full
force and effect; and neither the Company nor any of its subsidiaries has
received any notice of any material claim of any sort which has been asserted by
anyone adverse to the rights of the Company or any subsidiary as owner or as
lessee or sublessee under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to the
continued possession of the leased or subleased premises under any such lease or
sublease.
(xiii) Neither the Company nor any of its subsidiaries is in default
in the observance of any provision of its Certificate of Incorporation or by-
laws, or in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by which it or any of
its properties may be bound, the effect of which could be materially adverse to
the financial condition, earnings, affairs, business or prospects of the Company
and its subsidiaries, taken as a whole.
(xiv) The execution and delivery of this Agreement and the Pricing
Agreement, the issuance and delivery of the Shares, the consummation of the
transactions contemplated herein and in the Registration Statement and
compliance with the terms of this Agreement and the Pricing Agreement have been
duly authorized by all necessary corporate action and will not result in any
violation of the Certificate of Incorporation or by-laws of the Company or any
of its subsidiaries, and will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge, encumbrance or restriction of any
kind upon any property or assets of the Company or any of its subsidiaries under
any contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries, or any of their
respective properties, is bound, or any existing applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties. No
approval, authorization or consent of any court, regulatory body, administrative
agency or other governmental body having jurisdiction over the Company or any of
its subsidiaries is required in connection with the sale of the Shares to the
Underwriters, except such as may be required under the Act, state securities or
Blue Sky laws or in connection with the clearance of the offering with the
National Association of Securities Dealers, Inc. (the "NASD").
(xv) Except as disclosed in the Registration Statement and the
Prospectus, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, or any arbitrator or
arbitration panel, now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its subsidiaries which could result
in any
6
material adverse change to the financial condition, earnings, affairs,
business or prospects of the Company and its subsidiaries, taken as whole; and
there is no decree, judgment or order of any kind in existence against or
restraining the Company or any of its subsidiaries, or any of their respective
officers, employees or directors, from taking any actions of any kind in
connection with the business of the Company or any such subsidiary.
(xvi) The Company and each of its subsidiaries own or possess or have
obtained all material governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to lease or own, as the case may
be, and to operate their properties and to carry on their businesses as
presently conducted, and neither the Company nor any such subsidiary has
received any notice of proceedings related to revocation or modification of any
such licenses, permits, consents, orders, approvals or authorizations which
singly or in the aggregate, if the subject of an unfavorable ruling or finding,
would be materially adverse to the financial condition, earnings, affairs,
business or prospects of the Company and its subsidiaries, taken as a whole.
(xvii) The conduct of the business of the Company and each of its
subsidiaries is in compliance with all applicable federal, state and local laws
and regulations that regulate or are concerned in any way with the business of
the Company or such subsidiaries, where the effect of the failure to comply
would be materially adverse to the financial condition, earnings, affairs,
business or prospects of the Company and its subsidiaries, taken as a whole.
(xviii) The Company together with its subsidiaries owns or possesses,
or can acquire on reasonable terms, all right, title and interest in or to, or
has duly licensed from third parties, all patents, trademarks, service marks,
copyrights, trade names, trade secrets and other proprietary rights ("Trade
Rights") necessary to conduct the business now or proposed to be conducted by
it, and neither the Company nor any of its subsidiaries has received any notice
of, and has no knowledge of, infringement of or conflict with asserted rights of
others with respect to any such Trade Rights which, singly or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would be
materially adverse to the financial condition, earnings, affairs, business or
prospects of the Company and its subsidiaries, taken as a whole.
(xix) The Company has filed all tax returns required to be filed and
has paid all taxes which were payable pursuant to said returns or any
assessments with respect thereto, other than any tax returns which the Company
is contesting in good faith or which are not material to the Company and there
is no tax deficiency that has been, or to the knowledge of the Company might
reasonably be expected to be, asserted against the Company or any of its
properties or assets that would or could be expected to have a material adverse
affect upon the financial condition or results of operations of the Company and
its subsidiaries, taken as a whole.
(xx) This Agreement has been duly executed and delivered by the
Company.
(xxi) A registration statement relating to the Common Stock has been
declared effective by the Commission pursuant to the Exchange Act and the Common
Stock is duly registered
7
thereunder. The Shares have been authorized for trading on the Nasdaq National
Market of the Nasdaq Stock Market, subject to notice of issuance or sale, as the
case may be.
(xxii) 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").
(xxiii) All offers and sales of the Company's capital stock within
the three year period prior to the date hereof were at all relevant times
registered under the Act or exempt from the registration requirements of the Act
and were duly registered with, or the subject of an available exemption from,
the registration requirements of the applicable state securities or Blue Sky
laws.
(xxiv) The Company has not taken and will not take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company.
(xxv) Except as disclosed in the Registration Statement and the
Prospectus, no transaction has occurred between or among the Company, on the one
hand, and any of its officers or directors or any affiliate or affiliates of any
such officer or director, on the other hand, that is required to be so
disclosed, including, but not limited to, any outstanding loans, advances or
guaranties of indebtedness by the Company to or for the benefit of any
affiliates of the Company, or any of the officers or directors of the Company,
or any family member of any of them.
(xxvi) The Company has not, directly or indirectly, at any time (A)
made any contributions to any candidate for foreign political office, or if
made, failed to disclose fully any such contribution made in violation of law,
or (B) made any payment to any state, federal or foreign governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments or contributions required or allowed by applicable law. The
Company's internal accounting controls and procedures are sufficient to cause
the Company to comply in all material respects with the Foreign Corrupt
Practices Act of 1977, as amended.
(xxvii) Except as disclosed in the Registration Statement and the
Prospectus the Company and each of its subsidiaries (a) are in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (b) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (c) are in compliance with all terms and conditions of
any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
8
(xxviii) The Company reasonably believes that the costs and
liabilities associated with compliance with all Environmental Laws (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, and any related constraints on operating activities and any
potential liabilities to third parties) would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
9
Section 2. Agreement to Sell and Purchase.
(a) Subject to such adjustments to eliminate any fractional share sales or
purchases as the Representatives in their discretion may make, (i) the Company
hereby agrees to issue and sell to the Underwriters an aggregate of 1,000,000
Firm Shares,
10
and (ii) on the basis of the representations, warranties and agreements of the
Company herein contained and subject to the terms and conditions set forth
herein, each Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price per Share set forth in the Pricing Agreement (the
"Purchase Price per Share"), the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto (or such number of Firm Shares as
such Underwriter shall be obligated to purchase pursuant to the provisions of
Section 9 hereof).
(b) The Company agrees to sell to the Underwriters and, on the basis of
the representations, warranties and agreements of the Company set forth herein
and subject to the terms and conditions set forth herein, the Underwriters shall
have the right to purchase, severally and not jointly, from the Company up to
150,000 Additional Shares at the Purchase Price per Share upon delivery to the
Company of the notice hereinafter referred to. Such Additional Shares may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Shares. If any Additional Shares are to be
purchased, each Underwriter, severally and not jointly, agrees to purchase from
the Company the number of Additional Shares (subject to such adjustments to
eliminate fractional Shares as the Representatives may determine) which bears
the same proportion to the total number of Additional Shares to be purchased
from the Company as the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I (or such number of Firm Shares increased
pursuant to the terms set forth in Section 9 hereof) bears to the total number
of Firm Shares.
Section 3. Delivery of the Shares and Payment Therefor.
(a) Delivery to the Underwriters of the Firm Shares shall be made against
payment therefor at 9:00 a.m., Chicago, Illinois time, on the third full
business day following the date of the Pricing Agreement (the "Closing Date") at
the offices of ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, Chicago, Illinois. The place of the closing
and the Closing Date may be varied by agreement among the Representatives and
the Company.
(b) Delivery to the Underwriters of any Additional Shares to be purchased
by the several Underwriters shall be made in Chicago, Illinois against payment
therefor at the offices of Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, Chicago, Illinois,
at such time on such date (the "Option Closing Date"), which may be the same as
the Closing Date, but shall in no event be earlier than the Closing Date nor
earlier than three nor later than ten business days after the giving of the
notice hereinafter referred to, as shall be specified in written notice from the
Representatives to the Company and the Agents of the determination to purchase a
number, specified in said notice, of Additional Shares. Said notice may be given
at any time, but only one time, within 30 days after the date of the execution
of the Pricing Agreement. The place of the closing and the Option Closing Date
may be varied by agreement among the Representatives and the Company.
11
(c) If the Representatives and the Company have elected to enter into the
Pricing Agreement after the Registration Statement is effective, the Purchase
Price per Share to be paid by the several Underwriters for the Shares shall be
an amount equal to the public offering price, less an amount to be determined by
agreement among the Representatives and the Company. The public offering price
per Share of the Shares shall be a fixed price to be determined by agreement
among the Representatives, the Company. The public offering price and the
Purchase Price per Share, when so determined, shall be set forth in the Pricing
Agreement. If such prices have not been agreed upon and the Pricing Agreement
has not been executed and delivered by all parties thereto by the close of
business on the fourth business day following the date of this Agreement, this
Agreement shall terminate forthwith, without liability of any party to any other
party, unless otherwise agreed to by the Company and the Representatives and
except as otherwise provided in Section 5 hereof. If the Representatives and the
Company have elected to enter into the Pricing Agreement prior to the
Registration Statement becoming effective, the initial public offering price and
the Purchase Price per Share to be paid by the several Underwriters for the
Shares having each been determined and set forth in the Pricing Agreement, the
Company agrees to file an amendment to the Registration Statement and the
Prospectus before the Registration Statement becomes effective.
(d) Certificates for the Firm Shares and for the Additional Shares shall
be registered in such names and in such denominations as the Representatives
shall request upon at least 48 hours prior notice to the Company and the
Custodian preceding the Closing Date or the Option Closing Date, as the case may
be. Such certificates shall be made available to the Representatives at the
office of The Depository Trust Company, New York, New York, for inspection and
packaging not later than at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Firm
Shares and the Additional Shares shall be delivered to the Representatives on
the Closing Date or the Option Closing Date, as the case may be, with any
transfer taxes thereon duly paid by the Company for the respective accounts of
the several Underwriters, against payment of the purchase price therefor by wire
or other immediately available funds. It is understood by the Company that each
of the Underwriters has authorized the Representatives, for its account, to
accept delivery of, receipt for and make payment of the purchase price for, the
Shares it has agreed to purchase.
Section 4. Agreements of the Company. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will endeavor to cause the Registration Statement to
become effective and will advise the Representatives promptly and, if requested
by the Representatives, will confirm such advice in writing, (i) when the
Registration Statement has become effective and when any post-effective
amendment to it becomes effective, and of the filing of any final prospectus or
supplement or amendment to the Prospectus, (ii) of any request by the Commission
for amendments or supplements to the Registration Statement or Prospectus or any
Preliminary Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the
12
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or the
initiation or contemplation of any proceeding for such purposes, and (iv) within
the period of time referred to in paragraph (f) below, of the happening of any
event which makes any statement made in the Registration Statement or Prospectus
(as then amended or supplemented) untrue in any material respect or which
requires the making of any additions to or changes in the Registration Statement
or Prospectus (as then amended or supplemented) in order to make the statements
therein, in light of the circumstances under which they were made (in the case
of the Prospectus), not misleading or the necessity to amend or supplement the
Prospectus to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment. If the Company
elects to rely on Rule 434 of the Act, the Company will prepare a Term Sheet
that complies with the requirements of Rule 434 of the Act and will provide the
Representatives with copies of the form of Rule 434 Prospectus in such numbers
as you may reasonably request and file or transmit for filing with the
Commission the form of Prospectus complying with Rule 434(c)(2) of the Act in
accordance with Rule 424(b) of the Act by the close of business in Chicago on
the business day immediately succeeding the date hereof. If the Company elects
not to rely on Rule 434, the Company will provide you with copies of the form of
Prospectus in such numbers as you may reasonably request and file or transmit
for filing with the Commission such Prospectus in accordance with Rule 424(b) of
the Act, by the close of business in Chicago on the business day immediately
succeeding the date hereof.
(b) If, at the time that the Registration Statement becomes effective, any
information shall have been omitted therefrom in reliance upon Rule 430A under
the Act, then promptly following the execution of the Pricing Agreement, the
Company will prepare and file with the Commission, in accordance with Rule 430A
and Rule 424(b) under the Act, copies of an amended Prospectus, or, if required
by Rule 430A, a post-effective amendment to the Registration Statement
(including an amended Prospectus) containing all information so omitted.
(c) Neither the Company nor any of its subsidiaries will, prior to the
earlier of the Option Closing Date or termination or expiration of the related
option, 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 in the Prospectus.
(d) The Company will not file any amendment to the Registration Statement
or make any amendment or supplement to the Prospectus of which the
Representatives shall not previously have been advised or to which the
Representatives shall promptly after being so advised reasonably object in
writing.
(e) Prior to the effective date of the Registration Statement, the Company
has delivered or will deliver to each of the Underwriters, without charge,
copies of each form of Preliminary Prospectus in such quantities as they have
reasonably requested or may hereafter reasonably request. The Company consents
to the use, in accordance with the provisions of the Act and with the securities
or Blue Sky laws of the jurisdictions in which the Shares are offered by the
several
13
Underwriters and by dealers, prior to the effective date of the Registration
Statement, of each Preliminary Prospectus so furnished by the Company.
(f) On the effective date of the Registration Statement and thereafter
from time to time during such period as in the opinion of counsel for the
Underwriters a prospectus relating to the Shares is required by law to be
delivered in connection with offers or sales of the Shares by an Underwriter or
a dealer, the Company will deliver to each Underwriter and dealer, without
charge, as many copies of the Registration Statement, the Prospectus and each
Preliminary Prospectus and the Incorporated Documents (and of any amendment or
supplement to such documents) as they may reasonably request. During such
period, if any event occurs which in the judgment of the Company, or in the
opinion of counsel for the Underwriters, should be set forth in the Prospectus
in order to ensure that no part of the Prospectus includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances at the time the
Prospectus is delivered to a purchaser, not misleading, the Company will
forthwith prepare, submit to the Representatives, file with the Commission and
deliver, without charge to the several Underwriters and dealers (whose names and
addresses will be furnished by the Representatives to the Company) to whom
shares have been sold by the Underwriters or to other dealers any amendments or
supplements to the Prospectus so that the statements in the Prospectus, as so
amended or supplemented, will comply with the standards set forth in this
sentence. The Company consents to the use of such Prospectus (and of any
amendments or supplements thereto) in accordance with the provisions of the Act
and with the securities or Blue Sky laws of the jurisdictions described in the
preliminary Blue Sky memorandum in which the Shares are lawfully offered by the
several Underwriters and by all dealers to whom Shares may be sold, both in
connection with the offering or sale of the Shares and for such period of time
thereafter as the Prospectus is required by law to be delivered in connection
therewith. In case any Underwriter is required to deliver a Prospectus (and any
amendment or supplement thereto) more than nine months after the first date upon
which the Shares are offered to the public, the Company will, upon request, but
at the expense of such Underwriter, promptly prepare and furnish such
Underwriter with reasonable quantities of a Prospectus complying with Section
10(a)(3) of the Act.
(g) The Company will cooperate with the Representatives and counsel for
the Underwriters in connection with the registration or qualification of the
Shares for offer and sale by the several Underwriters and by dealers under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
designate, will continue such registrations or qualifications in effect so long
as reasonably required for the distribution of the Shares and will file such
consents to service of process or other documents as may be necessary in order
to effect such registration or qualification; provided that in no event shall
the Company be obligated (i) to qualify to do business in any jurisdiction where
it is not now so qualified, (ii) to file any general consent to service of
process, or (iii) take any action that would subject it to income taxation in
any jurisdiction where it is not so qualified.
14
(h) For a period of three years after the date of the Pricing Agreement:
(i) the Company will furnish to the Representatives (A) as soon as
available, a copy of each report of the Company of general interest mailed to
any class of its security holders (B) copies of all annual reports and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K and any amendment
thereto or such other similar forms as may be designated by the Commission and
(C) from time to time, such other information concerning the Company as the
Representatives may reasonably request;
(ii) if at any time during such three year period, the Company shall
cease filing with the Commission the annual reports and current reports on Forms
10-K, 10-Q and 8-K or other similar forms referred to in clause (i) above, the
Company will forward to its stockholders generally and the Representatives and
upon request to each of the other Underwriters (A) as soon as practicable after
the end of each fiscal year, copies of a balance sheet and statements of income
and retained earnings of the Company as of the end of and for such fiscal year,
certified by independent public accountants, and (B) as soon as practicable
after the end of each quarterly fiscal period, except for the last quarterly
fiscal period in each fiscal year, a summary statement (which need not be
certified) of income and retained earnings of the Company for such period, which
shall also be made publicly available; and
(iii) the Company will furnish to the Representatives and to the
NASD, and by issuance of a press release, on the date of declaration, notice of
all dividends, including the amount and medium of payment, the record date
(which shall be not less than ten days subsequent to the declaration date) and
the payment date (which shall be not less than ten days subsequent to the record
date).
(i) The Company will make generally available to its security holders an
earnings statement of the Company, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which earnings statement shall satisfy the provisions of
Section 11(a) of the Act and the rules and regulations of the Commission
thereunder (including Rule 158).
(j) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than by notice given by the Representatives'
termination of this Agreement pursuant to Section 10 hereof), or if this
Agreement shall be terminated by the several Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any of
the conditions of this Agreement, the Company agrees to reimburse the several
Underwriters for all out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) reasonably incurred by them in
connection herewith but without any further obligation of the Company for lost
profits or otherwise. If this Agreement is terminated pursuant to Section 10
hereof, the several Underwriters shall themselves bear any such out-of-pocket
expenses incurred by them.
15
(k) The Company will not sell, contract to sell or otherwise dispose of any
Common Stock or rights to purchase Common Stock for a period of ninety (90) days
after the date of the Pricing Agreement without the prior written consent of the
Representatives, except that such consent is not required for the grant of stock
options under stock option plans of the Company or the issuance of Common Stock
upon exercise of stock options previously granted, upon exercise of Common Stock
purchase rights or the issuance of Common Stock as consideration for
acquisitions. The Company will also obtain similar agreements from each of its
officers and directors.
(l) The Company will apply the net proceeds from the sale of the shares to
be sold by it under this Agreement and the Pricing Agreement for the purposes
set forth in the Prospectus under the caption "Use of Proceeds."
(m) The Company will use its best efforts, subject to notice of issuance,
to cause the Shares to be approved for quotation on the Nasdaq Stock Market.
Section 5. Payment of Expenses. The Company will pay, or reimburse if paid
by the Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the performance by them of their obligations under this Agreement and the
Pricing Agreement, including, without limiting the generality of the foregoing,
(a) preparation, printing, filing and distribution (including postage, air
freight charges and charges for counting and packaging) of the original
registration statement, the Registration Statement, each Preliminary Prospectus,
the Prospectus (including all Incorporated Documents, exhibits and financial
statements and any Term Sheet delivered by the Company pursuant to Rule 434 of
the Act), each amendment and/or supplement to any of the foregoing, and this
Agreement, the Pricing Agreement, the Agreement Among Underwriters, Selected
Dealers Agreement, Powers of Attorney and Underwriters' Powers of Attorney and
Questionnaires, (b) furnishing to the several Underwriters and dealers copies of
the foregoing materials (provided, however, that any such copies furnished by
the Company more than nine months after the first date upon which the Shares are
offered to the public shall be at the expense of the several Underwriters or
dealers so requesting as provided in Section 4(f) above), (c) the registrations
or qualifications referred to in Section 4(g) above (including filing fees and
fees and disbursements of counsel in connection therewith) and expenses of
printing and delivering to the several Underwriters copies of the preliminary
and final Blue Sky memoranda, (d) the review of the terms of the public offering
of the Shares by the NASD (including the filing fees paid to the NASD in
connection therewith) and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith, (e) the performance by the Company of
its other obligations under this Agreement, including the fees of the Company's
counsel and accountants, (f) the issuance of the Shares and the preparation and
printing of the stock certificates representing the Shares, including any stamp
taxes payable in connection with the original issuance of the Shares, (g)
furnishing to the several Underwriters copies
16
of all reports and information required by Section 4(h) above, including
reasonable costs of shipping and mailing, and (h) the designation of the Common
Stock as a Nasdaq National Market security.
Section 6. Conditions of the Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:
(a) That the Registration Statement shall have become effective not later
than 1:00 p.m., Chicago time, on the first full business day after the date of
this Agreement, or at such later date and time as shall be consented to in
writing by the Representatives, and, if the Representatives and the Company have
elected to rely upon Rule 430A, the price of the Shares and any price-related or
other information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission for
filing pursuant to Rule 424(b) within the prescribed time period, and, if the
Representatives and the Company have elected to rely upon a Term Sheet, such
Term Sheet shall have been transmitted to the Commission for filing pursuant to
Rule 434 and Rule 424(b) within the prescribed time period, and on or prior to
the Closing Date, the Company shall have provided evidence satisfactory to the
Representatives of such timely filing, or a post-effective amendment providing
such information shall have been promptly filed and declared effective in
accordance with the requirements of Rule 430A. No stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for the purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, shall be contemplated by the Commission and
there shall not have come to the attention of the Representatives any facts that
would cause them to believe that the Prospectus, at the time it was required to
be delivered to purchasers of the Shares, contained any untrue statement of
material fact or omitted to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which there were
made, not misleading.
(b) That subsequent to the effective date of the Registration Statement,
(i) 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 or its subsidiaries not contemplated by the Prospectus, which, in
the Representatives' reasonable opinion, as Representatives of the several
Underwriters, would materially adversely affect the market for the Shares or
make it impracticable or inadvisable to proceed with the offering or the
delivery of the Shares, as contemplated herein and in the Prospectus, or to
attempt to enforce contracts for the purchase of Shares, and (ii) the business
and operations of the Company shall not have been adversely affected by strike,
fire, flood, accident or other calamity (whether or not insured).
(c) The Representatives shall have received from ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇,
counsel for the Company, a favorable opinion dated the Closing Date and
satisfactory to the Representatives and the Underwriters' counsel to the effect
that:
(i) 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
full corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Registration Statement. The Company is
duly qualified to do business as a foreign corporation and
17
in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except in
any such case where the failure to so qualify or be in good standing would not
have a material adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(ii) An opinion to the same general effect as clause (i) of this
subparagraph (c) in respect of each direct and indirect subsidiary of the
Company.
(iii) All of the issued and outstanding capital stock of the
subsidiaries of the Company has been duly authorized and validly issued and is
fully paid and non-assessable, and except as disclosed in the Registration
Statement, the Company owns directly or indirectly 100 percent of the
outstanding capital stock of each subsidiary and, to the best knowledge of such
counsel, such stock is owned free and clear of any security interests, claims,
liens, encumbrances or adverse interests of any nature.
(iv) The issued and outstanding capital stock of the Company has
been duly authorized and validly issued and is fully paid and non-assessable and
free of preemptive rights.
(v) The authorized capitalization of the Company consists entirely
of 25,000,000 shares of Common Stock, par value $0.01 per share of which
[__________] were issued and outstanding on the date of the Prospectus and
1,000,000 shares of Preferred Stock, par value $0.01 per share, none of which
were issued and outstanding on the date of the Prospectus and all of which
conform to the description thereof in the Registration Statement and the
Prospectus.
(vi) The certificates for the Shares to be delivered hereunder are
in due and proper form, and when duly countersigned by the Company's transfer
agent and delivered to the Representatives 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 free of preemptive rights
and, to the knowledge of such counsel, will be free of any security interest,
claim, lien, encumbrance or adverse interest of any nature, or rights of first
refusal in favor of, stockholders with respect to any of the Shares or the
issuance or sale thereof, pursuant to the Certificate of Incorporation or by-
laws of the Company and, to such counsel's knowledge, there are no contractual
preemptive rights, rights of first refusal, rights of co-sale or other similar
rights which exist with respect to any of the Shares or the issuance and sale
thereof; and the Shares to be sold hereunder have been duly and validly
authorized and qualified for inclusion on the Nasdaq National Market, subject to
notice of issuance and sale.
(vii) This Agreement and the Pricing Agreement have been duly and
validly authorized, executed and delivered by the Company and are legal, valid
and binding obligations of the Company, enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by general principles of equity, and except that such counsel need
express no opinion as to those provisions relating to indemnities or
contribution for liabilities under the Act.
18
(viii) No authorization, approval, order or consent of any
governmental authority or agency is required for the valid issuance and sale of
the Shares, except such as may be required under the Act or state securities
laws or by the NASD as to which such counsel need express no opinion.
(ix) The execution, delivery and performance of this Agreement and
the Pricing Agreement by the Company, the issue and sale of the Shares, and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach of any of the provisions of, or constitute a
default under (A) the Company's Certificate of Incorporation or by-laws or any
agreement, franchise, license, indenture, mortgage, deed of trust or other
instrument or agreement known to such counsel to which the Company or any of its
subsidiaries is a party or by which Company or any of its subsidiaries is bound
or to which any of their respective properties is subject or (B) so far as known
to such counsel, any statute, order, rule or regulation applicable to the
Company or any of its subsidiaries of any court or other governmental authority
or body having jurisdiction over the Company or any of its subsidiaries or any
of its properties.
(x) All documents incorporated by reference in the Prospectus, when
they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act; and such counsel have no
reason to believe that any of such documents, when they were so filed, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so filed, not
misleading; such counsel need express no opinion as to the financial statements
or other financial or statistical data contained in any such document.
(xi) The Registration Statement has become effective under the Act,
and, to the 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 are pending or contemplated under the
Act.
(xii) 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) as amended or supplemented (except for the
financial statements and notes thereto, the financial statement schedules and
other statistical or financial data included therein as to which such counsel
need express no opinion) and the Prospectus and any supplements or amendments
thereto (except for the financial statements and notes thereto, the financial
statement schedules and other statistical or financial data included therein, as
to which such counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules of the Commission
thereunder and nothing has come to the attention of such counsel that would
cause such counsel to believe that 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) as amended or
supplemented (except for the financial statements and notes thereto, the
financial statement schedules and other statistical or financial data included
therein as to which such counsel
19
need express no opinion) at the time it became effective, at the time the
Pricing Agreement was executed and at the Closing Date, contained any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that, as of its date, the Prospectus or any amendment or
supplement thereto (except for the financial statements and notes thereto, the
financial statement schedules and other statistical or financial data included
therein as to which such counsel need express no opinion) included or includes
any untrue statement of a material fact or omitted or omits to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Rule 434
Prospectus conforms to the requirements of Rule 434 of the Act.
(xiii) The statements in the Prospectus in the sections captioned
"Description of Capital Stock," in each case insofar as such statements reflect
a summary of the material legal matters or the documents referred to therein,
fairly and accurately present the information called for by the Act and the
applicable rules and regulations promulgated thereunder.
(xiv) To the knowledge of such counsel there are no statutes or
regulations, provisions of the Delaware General Corporation Law or any pending
or threatened litigation or governmental proceedings against the Company
required to be described in the Prospectus which are not so described, nor any
contracts or documents of a character required to be described in or filed as a
part of the Registration Statement which are not described or filed as required.
(xv) To such counsel's knowledge, except as disclosed in the
Prospectus, no person has the right, contractual or otherwise, to cause the
Company to register pursuant to the Act any shares of capital stock of the
Company, upon the issuance and sale of the Shares to be sold by the Company to
the Underwriters pursuant to this Agreement.
(xvi) Neither the Company nor any of its subsidiaries is an
"investment company" or a person "controlled by" an "investment company" within
the meaning of the Investment Company Act.
(xvii) To such counsel's knowledge, all offers and sales of the
Company's and each of its subsidiaries' capital stock during the three years
prior to the date hereof were at all relevant times registered under the Act or
exempt from the registration requirements of the Act and were duly registered or
the subject of an available exemption from the registration requirements of the
applicable state securities or blue sky laws.
20
In rendering such opinion, such counsel may state that they are relying
upon the certificate of officers of the Company and 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 (xii) 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
and of state officials, in which case their opinion is to state that they are so
doing and copies of such opinions or certificates are to be attached to the
opinion unless such opinions or certificates (or, in the case of certificates,
the information therein) have been furnished to the Representatives otherwise.
21
(d) That the Representatives shall have received on the Closing Date a
favorable opinion dated the Closing Date from Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz,
counsel for the Underwriters, as to such matters as the Representatives may
reasonably require.
(e) That the Representatives shall have received letters addressed to the
Representatives and dated the date hereof and the Closing Date from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, independent public accountants for the Company, to the effect set
forth in Schedule II. 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.
(f) That (i) no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short or long-term debt of the Company from that set forth or contemplated in
the Registration Statement; (iii) there shall not have been, since the
respective dates as to which information is given in the Registration Statement
and the Prospectus, except as may otherwise be set forth or contemplated in the
Registration Statement and the Prospectus, any material adverse change in the
financial condition or results of operations of the Company; (iv) the Company
shall not have incurred any material liabilities or obligations, direct or
contingent (whether or not in the ordinary course of business), other than those
reflected in the Registration Statement, and (v) all of the representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on and as of the date hereof and the Closing Date as if
made on and as of each such date, and the Representatives shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the principal financial officer (or such other officers as are acceptable to
the Representatives) to the effect set forth in this Section 6(f) and in Section
6(g) hereof.
(g) That the Company shall not have failed at or prior to the Closing Date
to have performed or complied in all material respects with any of the
agreements herein contained and required to be performed or complied with by it
at or prior to the Closing Date.
(h) Within 24 hours after the Registration Statement becomes effective, or
within such longer period as to which the Representatives shall have consented,
the Shares shall have been qualified for sale or exempted from such
qualification under the securities laws of such jurisdictions as the
Representatives shall have designated prior to the time of execution of the
Pricing Agreement and such qualification or exemption shall continue in effect
to and including the Closing Date.
22
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the satisfaction on and as of the Option Closing Date
of the conditions set forth in paragraphs (a) through (h); except that the
opinions called for in paragraphs (c) and (d) shall be revised to reflect the
sale of Additional Shares by the Company and shall be dated the Option Closing
Date, if different from the Closing Date.
Section 7. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of the Act
or the Exchange Act from and against any and all losses, claims, damages or
liabilities, joint or several, whatsoever (including any investigation, legal or
other expenses incurred in connection with, and any amount paid in settlement
of, any action, suit or proceeding or any claim asserted) to which such
Underwriter, or such controlling person may become subject, arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Registration Statement or the
Prospectus or in any amendment or supplement thereto or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred, except insofar as such
losses, claims, damages or liabilities arise out of or are based upon any such
untrue statement or omission or allegation thereof which has been made therein
or omitted therefrom in reliance upon and in conformity with information
relating to such Underwriter furnished in writing to the Company by or on behalf
of any Underwriter through the Representatives expressly for use therein;
provided, however, that the indemnification contained in this paragraph with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or of any person controlling such Underwriter) with respect to any
action or claim arising from the sale of the Shares by such Underwriter brought
by any person who purchased Shares from such Underwriter if (i) a copy of the
Prospectus (as amended or supplemented if any amendments or supplements thereto
shall have been furnished to the Underwriter prior to the written confirmation
of the sale involved) shall not have been given or sent to such person by or on
behalf of the Underwriter with or prior to the written confirmation of the sale
involved and (ii) the untrue statement or omission of a material fact contained
in such Preliminary Prospectus was corrected in the Prospectus (as amended or
supplemented if amended or supplemented as aforesaid).
(b) If any action or claim shall be brought against any Underwriter or any
person controlling such Underwriter, in respect of which indemnity may be sought
against the Company, such Underwriter shall promptly notify the Company in
writing, and the Company shall assume the defense thereof, including the
employment of counsel and payment of all fees and expenses. Any Underwriter or
any such person controlling such Underwriter shall have the right to employ
separate
23
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Underwriter or such
controlling person and shall be reimbursed as they are incurred unless (i) the
Company has agreed in writing to pay such fees and expenses, (ii) the Company
has failed to assume the defense and employ counsel, or (iii) the named parties
to any such action (including any impleaded party) included such Underwriter or
controlling person and the Company and such Underwriter or controlling person
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company and which may also result in a conflict of interest (in
which case if such Underwriter or controlling person notifies the Company, the
Company shall not have the right to assume the defense of such action on behalf
of such Underwriter or controlling person, it being understood, however, that
the Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys for all such
Underwriters and controlling persons, which firm shall be designated in writing
by the Representatives). The Company shall not be liable for any settlement or
any such action effected without the written consent of the Company, but if
settled with the written consent of the Company, or if there shall be a final
judgment for the plaintiff in any such action and the time for filing all
appeals has expired, the Company agrees to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement or judgment.
(c) Each Underwriter will severally indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and any
person controlling the Company within the meaning of the Act or the Exchange Act
to the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with respect to information relating to such Underwriter
furnished in writing to the Company by or on behalf of such Underwriter through
the Representatives expressly for use in the Registration Statement, the
Prospectus or any Preliminary Prospectus. If any action or claim shall be
brought or asserted against the Company, any of its directors, any such officer,
or any such controlling person based on the Registration Statement, the
Prospectus or any Preliminary Prospectus and in respect of which indemnity may
be sought against any Underwriter, such Underwriter shall have the rights and
duties given to the Company pursuant to Section 7(b) hereof (except that if the
Company shall have assumed the defense thereof, such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), and the Company, its directors, any such officer,
and any such controlling person shall have the rights and duties give to the
Underwriters by Section 7(b) hereof.
(d) (i) If the indemnification provided for in this Section 7 is
unavailable as a matter of law to any indemnified party under this Section 7 in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable by damages,
liabilities or expenses (A) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Underwriters from the offering
of the Shares or (B) if
24
the allocation provided by clause (A) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (A) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The respective relative benefits received by
the Company and the Underwriters shall be deemed to be in the same proportion in
the case of the Company as the total price paid to the Company by the
Underwriters (net of underwriting discount but before deducting expenses) for
the Shares, 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
received by the Underwriters as underwriting discount, in each case as
contemplated by the Prospectus. The relative fault of the Company 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 or
alleged omission to state a material fact relates to information supplied by the
Company or by 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 an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in this Section
shall be deemed to include, subject to the limitations set forth in this
Section, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim.
(ii) The Company and the Underwriters agree that the determination of
contribution pursuant to this Section based on 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 would not be
just and equitable (even if the several Underwriters were treated as one entity
for such purpose). Notwithstanding the provisions of this Section, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to indemnification or contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section are several in proportion to their
respective underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section and
the representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company or its directors or officers (or any person
controlling the Company), (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any
25
termination of this Agreement. A successor or assign of an Underwriter, the
Company or its directors or officers, and their legal and personal
representatives (or of any person controlling an Underwriter or the Company)
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Section.
Section 8. Effective Date of Agreement. This Agreement shall become
effective immediately as to Sections 5, 7, 10 and 11 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 or by release of any Shares for sale
to the public. For the purposes of this Section, 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 the Shares for sale to securities dealers, whichever may occur first.
Section 9. Default of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase Firm Shares which it or they have agreed to
purchase under this Agreement and the Pricing Agreement and the aggregate number
of Firm Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase is not more than one-tenth of the aggregate number
of Firm Shares, each non-defaulting Underwriter shall be obligated, severally,
in the proportion which the number of Firm Shares set forth opposite its name in
Schedule I bears to the aggregate number of Firm Shares set forth opposite the
names of all non-defaulting Underwriters or in such other proportion as the
Representatives may specify in accordance with the Agreement Among Underwriters
to purchase the Firm Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase. If any Underwriter or Underwriters
shall fail or refuse to purchase Firm Shares and the aggregate number of Firm
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Firm Shares and arrangements satisfactory to the
Representatives and the Company for the purchase of such Firm Shares are not
made within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case which does not result in termination of this Agreement, either the
Representatives or the Company shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement and the Prospectus or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
such default of any such Underwriter under this Agreement.
(b) Any notice under this Section 9 may be made by telecopy or telephone
but shall be subsequently confirmed by letter.
26
Section 10. Termination of Agreement. This Agreement and the Pricing
Agreement shall be subject to termination by notice given by you to the Company,
if (a) after the execution and delivery of this Agreement and the Pricing
Agreement and prior to the Closing Date (and with respect to the Additional
Shares, the Option Closing Date) (i) trading generally shall have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange or the National Association of Securities Dealers, Inc., (ii) trading
of any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York or in Chicago shall have been declared by either Federal,
New York or Illinois State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your reasonable judgment, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv), such event, singly or together with any other such event, makes it, in
your reasonable judgment, impracticable to market the Shares on the terms and in
the manner contemplated in the Prospectus. Notice of such cancellation shall be
given to the Company by telecopy or telephone but shall be subsequently
confirmed by letter.
Section 11. Reimbursement of Underwriters' Expenses. If the sale to the
Underwriters of the Shares on the Closing Date is not consummated because any
condition to the Underwriters' obligations hereunder is not satisfied or because
of any refusal, inability or failure on the part of the Company 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 agrees 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, Section 5 and
Section 7 shall at all times be effective and shall apply.
Section 12. Notices. Except as otherwise provided in Sections 9 and 10
hereof, notice given pursuant to any of the provisions of this Agreement shall
be in writing and shall be delivered (a) if to the Company, at the office of the
Company at ▇▇▇▇▇▇▇▇ Corporation, ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President, with a copy to ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq., ▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, Three First National Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or (b) if to the Representatives, at the offices
of ABN AMRO Incorporated, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Finance Department, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇,
Esq., Vedder, Price, ▇▇▇▇▇▇▇ & Kammholz, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, or in any case to such other address as the person to be notified may
have requested in writing.
Section 13. Successors. The Agreement and the Pricing Agreement are made
solely for the benefit of the several Underwriters, the Company, their directors
and officers and other
27
controlling persons referred to in Section 7 hereof, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or the Pricing Agreement. The term
"successors and assigns" as used in this Agreement shall not include a purchaser
from any of the several Underwriters of any of the Shares in his status as such
purchaser.
Section 14. Representation of Underwriters. The Representatives will act
for the several Underwriters in connection with the purchase, offering and sale
of the Shares, and any action taken by the Representatives will be binding upon
all the Underwriters.
Section 15. 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 16. Applicable Law. This Agreement and the Pricing Agreement shall
be governed by and construed in accordance with the internal laws of the State
of Illinois.
Section 17. Counterparts. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
28
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
▇▇▇▇▇▇▇▇ CORPORATION
By:_________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
Accepted and delivered as of
the date first written above.
ABN AMRO Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Acting as Representatives of
the Several Underwriters named
in Schedule I hereto.
ABN AMRO INCORPORATED
By: ____________________________
29
▇▇▇▇▇▇▇▇ CORPORATION
SCHEDULE I
Underwriters
------------
Number of
Name Firm Shares
---- -----------
ABN AMRO Incorporated.................
▇▇▇▇▇▇▇▇ & Company Securities, Inc....
TOTAL............................... 1,000,000
=========
▇▇▇▇▇▇▇▇ CORPORATION
SCHEDULE II
Comfort Letter of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
-------------------------------------
(1) They are independent public accountants with respect to the Company and
its subsidiaries within the meaning of the Act.
(2) In their opinion the consolidated financial statements of the Company
and its subsidiaries included or incorporated by reference in the Registration
Statement and the consolidated financial statements of the Company from which
the information presented under the caption "Selected Consolidated Financial
Information" 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 Act and the Exchange 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 and its subsidiaries responsible for financial
and accounting matters as to transactions and events subsequent to December 31,
1997, a reading of minutes of meetings of the stockholders and directors of the
Company and its subsidiaries since December 31, 1997, a reading of the latest
available interim unaudited consolidated financial statements of the Company and
its subsidiaries (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 consolidated financial statements of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange 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, if applicable, cover pro forma financial statements 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 and its subsidiaries on a consolidated basis or any
decrease in consolidated net current assets or consolidated 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 day 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
consolidated net sales, consolidated income before income taxes or in the total
or per share amounts of consolidated 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) 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 and its subsidiaries.
2
Exhibit A
1,000,000 Shares
▇▇▇▇▇▇▇▇ CORPORATION
COMMON STOCK
PRICING AGREEMENT
July ___, 1998
ABN AMRO Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Individually and as Representatives of the
Several Underwriters Named in Schedule I
to the Underwriting Agreement
c/o ABN AMRO Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated July __, 1998 (the
"Underwriting Agreement"), relating to the purchase by the several Underwriters
named in Schedule I thereto (collectively, the "Underwriters"), for whom you are
acting individually and as representatives (the "Representatives"), of the above
referenced Common Stock (the "Shares") of ▇▇▇▇▇▇▇▇ Corporation (the "Company").
Pursuant to Section 3 of the Underwriting Agreement, the Company agrees
with each of the Underwriters as follows:
1. The initial public offering price per share of the Shares determined
as provided in said Section 3 shall be $_______.
2. The purchase price per share of the Shares to be paid by the several
Underwriters shall be $________, being an amount equal to the initial public
offering price set forth above, less $_______ per Share.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts,
will become a binding agreement among the Underwriters and the Company in
accordance with its terms.
Very truly yours,
▇▇▇▇▇▇▇▇ CORPORATION
By:
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive Officer
Confirmed and Accepted, as of the date
first above written for themselves and
as Representatives of the other Underwriters
named in the Underwriting Agreement:
ABN AMRO Incorporated
▇▇▇▇▇▇▇▇ & Company Securities, Inc.
Acting as Representatives of the Several
Underwriters named in Schedule I to
the Underwriting Agreement
ABN AMRO INCORPORATED
By:
2